Unbundling Government, by Arnold Kling. EconLog (2010-06-29).
This week is Secession Week at Let a Thousand Nations Bloom. I have no problems with the S word, but I also use the economic expression “unbundling.” For example, Ed Glaeser writes, In a sense, the gulf between the political attitudes of New York City and Montana can be understood…(Linked Wednesday 2010-06-30.)
The Power to Tax is the Power to Destroy. Unqualified Offerings (2010-06-30). This is actually not primarily about taxes. Or about destroying. Or about Dave Weigel. But it is an interesting point from Jim Henley about what’s new — and what’s not new — in the ethos of journalistic bloggers, and why newspapers don’t understand it. (Linked Wednesday 2010-06-30.)
apology not accepted. Dinosaur Comics (2010-06-30). “So hey did you guys hear about the G20 in Toronto last weekend? The event itself was kinda a non-event but the 1 billion dollars Canadians spent on security was kinda – insane? We built a big wall around the downtown core of the city, and the chief of police announced that there was a new secret law passed wherein anyone within 5 meters of this fence had to produce ID or be arrested. And then, after the event, he announced that he made the law up because it suited his purposes? HILARIOUS. Toronto police Chief Bill Blair, ladies and gentlemen.” (Linked Wednesday 2010-06-30.)
eye of the storm 2010-06-30 11:05:51. Captain Capitulation, Anarchoblogs (2010-06-30).
one thing that occurs watching the kagan hearings: i am very glad i have not lived her life. so when they ask her about memos she wrote in the clinton admin, strategizing on avoiding a ban on partial-birth abortion, she's all like 'i was working for a president who had…(Linked Wednesday 2010-06-30.)
Parking Lots. Dorothy, Cat and Girl (2010-06-30). (Linked Wednesday 2010-06-30.)
Porkymandias. Roderick, Austro-Athenian Empire (2010-07-01).
And on the pedestal these words appear: My name is Robert C. Byrd, Senator of Senators: look on my works, ye mighty, and despair! Nothing beside remains: round the decay of that colossal wreck, boundless and bare, the lone and level sands stretch far away.(Linked Friday 2010-07-02.)
First they taught us to depend
On their Nation-States to mend
Our tired minds, our broken bones, our failing limbs;
And now they’ve sold off all the splints,
and contracted out the tourniquets,
And if we jump through hoops, then we might just survive.
–Propagandhi, The State Lottery
There has been some interesting discussion among Jim Henley (2008-02-21), Tom Knapp (2008-02-29), and Kevin Carson over left-libertarian political programmes, strategic priorities, gradualism, and the welfare state. The debate began with an argument over Knapp’s World’s Smallest Political Platform for the Libertarian Party, and Henley’s worries that the platform, as expressed, doesn’t allow much room for gradualist approaches to repeal, or nuance in strategic priorities. Now, I don’t have much of a dog in that fight, because I’m not a gradualist, but I’m not in the least bit interested about limited-statist party-building or political platforms, either. At the level of moral principle, I have a very simple approach to taxation, government welfare programs, regulation, etc. If I had a platform, it would be three words — Smash the State — and the programme I favor for implementing that is for each and every government program to be be abolished immediately, completely, and forever, whenever, wherever, in whatever order, and to whatever extent that we can, by hook, by crook, slingshot, canoe, wherever the political opportunity to do so presents itself. Political coercion is an evil against which it may sometimes be prudent to retreat, but with which there can be no negotiated compromise. (All such compromises, so-called, are really just conditional surrender.)
In other words, on the one hand, I am an ultra-immediatist, in the sense that I believe that everything’s got to go, and that libertarians and anarchists should make no bones about saying so; and, on the other, I also — unlike certain gradualist anarcho-statists like Noam Chomsky or Ursula K. LeGuin — am an ultra-incrementalist, in the sense that I don’t think that we ought to put our efforts to abolish anything on hold until we’ve somehow (how?) managed to abolish just about everything.
I’m not actually sure whether Henley really is advocating gradualism in the sense that I oppose it; there’s a difference between gradualism in ideals and incrementalism in strategy, which language makes unfortunately easy to overlook. Defending immediate and complete abolition on principle, and the abolition of any coercive program you may get the opportunity to abolish, doesn’t entail any particular order of priorities in terms of the scope or order in which you might concentrate your own limited resources towards making opportunities for abolition that didn’t previously exist. And that’s where I think the interesting part comes in, and where there is a lot of room for interesting discussion about freedom, class, and strategic priorities when it comes to government interventions with distinctive class profiles. Here’s Henley:
… I have a sequencing objection. Figure the state as Annie Wilkes in Stephen King’s novel, Misery. She wants to help the patient so much she’ll never willingly let him go. To a libertarian, much of what the state does looks like providing crutches or shackles. To an anarchist, I suppose everything the state does looks like that. Crutches are actually important for the injured. If you’re to completely heal, though, you have to give them up at the right time. And some badly injured people are never going to be able to do without them – e.g. my mother with her walker.
But the crazy nurse wants you to keep your crutches whether you need them or not, and she’ll chain you to the bed, if necessary, to keep you in hercare.If she has to, she’ll cut off your foot, for your own good. … So we want to remove most or all crutches and shed most or all shackles, depending on how, for lack of a better term, anarchistic we are. But which shackles and which crutches when? Theliberallibertariananswer is: first take the crutches from those best able to bear their own weight, and remove the shackles from the weak before the strong. So: corporate welfare before Social Security before Aid to Families with Dependent Children. Drug prohibition before marginal income tax rates.
Most libertarians would agree that it’s a messed-up state that:
Creates a massive crime problem in poor minority neighborhoods with a futile, vicious and every more far-reaching attempt to prevent commerce in popular, highly portable intoxicants that leaves absurd numbers of young men with felony records, making them marginally employable.
Fails to provide adequate policing for such neighborhoods.
Fails to provide effective education in such neighborhoods after installing itself as the educator of first resort.
Uses regulatory power to sharply curtail entry into lines of business from hair-care to ride provision, further limiting the employment options of people in such neighborhoods.
Has in the past actively fostered the oppression of said minority, up to and including spending state money and time in keeping its members in bondage.
To make up for all of the above, provides a nominal amount of tax-financed welfare for the afflicted.
But it’s a messed-up libertarianism that looks at that situation and says,Man, first thing we gotta do is get rid of that welfare!
Kevin Carson takes sympathetic notice of Henley’s metaphor of crutches and shackles, quoting an earlier passage in which he’d used quite similar language to make the point:
If the privilege remains, statistcorrectiveaction will be the inevitable result. That’s why I don’t get too bent out of shape about the statism of the minimum wage or overtime laws–in my list of statist evils, the guys who are breaking legs rank considerably higher than the ones handing out government crutches. All too many libertarians could care less about the statism that causes the problems of income disparity, but go ballistic over the statism intended to alleviate it. It’s another example of the general rule that statism that helps the rich is kinda sorta bad, maybe, I guess, but statism that helps the poor is flaming red ruin on wheels.
I agree a lot with the broad point that Henley and Carson are both making here. In setting strategic priorities, we have to look at which forms of government coercion do the most concrete damage, which forms of government coercion has intended victims who are most vulnerable to it, which forms have intended victims who can more easily evade or game the system on their own, and, perhaps most importantly, which forms serve as the real historical and ideological anchors for establishing and sustaining the distorted statist social order, and which forms are relatively superficial efforts to stabilize or ameliorate the effects of those anchors. I think that on all these counts, a serious look at how calls the shots and who takes the bullets will show that the welfare state, such as it is, is a fairly small and superficial effort to ameliorate the effects of deep, pervasive, and incredibly destructive economic and institutional privilege for big, centralized, bureaucratic state capitalism, and (as much or more so) for the class power of the State itself over the poor folks that it beats up, locks up, institutionalizes, bombs, robs of their homes and livelihoods, and so on. Moreover, it’s a fairly small and superficial effort which doesn’t violate anybody’s rights per se; it’s the coercive funding of government doles, not their mere existence, that involves government violence, and in that respect, while I think they should be abolished, they’re on quite a different footing from things like the warfare state and the underlying government monopolies and privileges that the welfare state is intended to
correct for, which involve coercion both in funding and in the very things that the funding is used for. All this tends to support strategic priorities in favor of (as Tom Knapp himself originally put it)
cutting welfare from the top down and cutting taxes from the bottom up.
That’s all well and good. But I want to sound a note of caution. When we’re setting our strategic priorities, one thing that we need to keep an eye out for is the fact that not all of what the government passes out as a
crutch really is one; the enemy we’re fighting, after all, is a consolidated mass not only of force, but also of fraud. Lots of so-called
crutches really have a secret shackle attached to them — welfare per se is a crutch, but remember that welfare comes with a professional busybody social worker attached. Moreover, lots of so-called
crutches are themselves crowbars; they’re the tools that the State uses to break your legs, and then have the supreme impudence to claim that they’re helping you to walk by doing it. As I said to Kevin (internal links added for this post):
Broadly speaking, I agree with your and Henley’s point about strategic priorities. It’s an odd form of libertarianism, and a damned foolish one, that operates by trying to pitch itself to the classes that control all the levers of power in both the market and the State, and to play off their fears and class resentment against those who have virtually no power, no access to legislators, are disproportionately likely not to even be able to vote, and who are trodden upon by the State at virtually every turn. It makes just about as much sense as trying to launch a feminist movement whose first campaign would be to organize a bunch of men against theircrazy ex-girlfriends.
But … Aren’t there a lot of so-called social programs out there which the government fraudulently passes off as crutches, when in fact they are crowbars? Since you mentioned it, consider the minimum wage–the primary effect of which is simply to force willing workers out of work. If it benefits any workers, then it benefits the better-off workers at the expense of marginal workers who can less afford to lose the job. Or, to take another example, consider every gradualist’s favorite program — the government schools — which in fact function as highly regimented, thoroughly stifling, and unbearably unpleasant detention-indoctrination-humiliation camps for the vast majority of children and adolescents for whose benefit these edu-prisons are supposedly being maintained.
Or for that matter, consider phonypro-laborlegislation like the Wagner Act, the primary function of which is actually to capture unions with government patronage and bring them under greater government regulation.
Aren’t there a lot of so-calledcrutches,usually defended by corporate liberals and excoriated by conservatives, which really ought to be pressured and resisted and limited and abolished as quickly as possible, precisely because, bogus liberal and conservative arguments notwithstanding, they actually work to shackle the poor or otherwise powerlessfor their own good?
Really, to keep my metaphors straight, I should have said
cripple the poor or otherwise powerless. Oh well. In any case, Kevin agreed, and added some quite true and important points:
I agree entirely. That’s why I think the setting of priorities for dismantling the state must be combined with educational efforts and building counter-institutions.
Frankly, eliminating the minimum wage and food stamps is at the very bottom of my list of priorities. My guess is that when the landlord and banking monopolies are eliminated, along withintellectual property,Taft-Hartley, and all the regulatory barriers to mutual insurance, eliminating the minimum wage and food stamps will be a moot point because it will be so hard to find anybody on them.
But I also advocate vigorous ideological struggle to counteract the matrix version of reality parroted by the vulgar liberals at Daily Kos, and to expose the role of the state capitalist ruling class in creating the regulatory-welfare state.
And that’s especially true in the case ofcrutchesthat play a central role in serious exploitation, likeprofessionallicensing andsafetycodes whose main purpose is to enforce the power of cartels to bleed consumers dry and shut workers out of opportunities for self-employment.
But while I agree with him on almost all the details of his reply, I think there’s an important distinction that it misses:
I agree with you on food stamps, but not on the minimum wage. In fact it’s laws like the minimum wage which I especially had in mind when I mentioned crowbars being passed off as crutches. While I agree that a free market would almost certainly result in substantial increases in real income and substantial decreases in cost of living for virtually all workers — to the point where they would either be making well above the current minimum wage, or at least where fixed costs of living would have dropped enough that it amounts to the same — there’s also the question of what we should be pushing for in the meantime in-betweentime, when there aren’t fully free markets in labor, capital, ideas, and land. In that context, the minimum wage law is, I think, actively destructive. Conditional give-aways, like foodstamps, are one thing; the program itself doesn’t violate anyone’s rights (it’s the tax funding that’s the problem), and people can always choose not to go on foodstamps if they decide (for whatever reason) that it’s doing them more harm than good. Not so with minimum wage; the only way to shake off this so-called protection is to seek out someone who’ll let you work under the table, and hope the government doesn’t catch on. The result is forcing one class of workers out of work in favor of another, more privileged class of workers. Hence, I’d argue we should treat abolition of the minimum wage a lot differently, in terms of strategic priorities, from how we treat government welfare, food stamps, etc.
I’m not sure the minimum wage really has that effect (and again, my purpose is not to defend the MW, but to move its abolition to the bottom of the priority list).
I know the arguments on how they reduce employment, but they all carry an impliedceteris paribus; and most of the polemicists at Mises.Org and the like strenuously advoid any suggestion that things might not be equal.
It’s most likely that, in an industry that employs minimum wage workers, there is little or no competitive pressure to minimize wage costs because all the local employers in that industry are paying the same wage. And if there’s a high elasticity of demand for fast food, etc., it will probably be passed on to customers unnoticed, as one small component in the price of a Big Mac.
In addition, the argument assumes a competitive labor market and cost-minimizing firms, and neglects the possiblity that minimum wage increases may come out of quasi-rents and simply reduce profit. That’s unlikely to be the case for minimum wage employers per se, which tend to be small businesses with narrow profit margins; but it’s more likely to be true in better paying employers who peg wages to the minimum wage plus some differential.
I didn’t mean to suggest that Kevin was trying to defend the minimum wage, and I’m sorry if I inadvertently gave the impression that that’s what I’m arguing against. I take it that he’s not trying to defend government welfare, either; just suggesting that libertarians re-order their strategic priorities in terms of which evils to first and most intently put their limited resources towards combating. The point I’m urging is in a similar vein; I’d like to encourage left libertarians, in particular, to make a further distinction of priorities, and put minimum wage laws higher up the To-Agitate-Against list than they put government dole programs. They’re both objectionable, and I’d argue that both should be abolished (immediately, completely) at the first opportunity. But they’re objectionable in different ways, and shouldn’t be considered as part of a single
welfare state package when anarchists look at what kind of opportunities to try to drum up for ourselves. The bare existence directly coerces individual workers, and for the most part tends to hurt the most economically vulnerable workers the most, in ways that the existence of welfare state programs (where the problem is not the program per se, but the coercive funding) do not.
I’m not sure I understand Kevin’s argument when he says,
And if there’s a high elasticity of demand for fast food, etc., it will probably be passed on to customers unnoticed, as one small component in the price of a Big Mac, and I wonder whether he meant to write low elasticity of demand. If there’s a high price-elasticity of demand for fast food, then that would mean that quantity demanded is highly sensitive to price increases; in that kind of industry that bosses should be more likely, not less, to try to make up the difference in labor costs by stopping new hires, firing workers, reducing hours, and instituting work speed-ups.
And this isn’t just at the level of ceteris-paribus theory. There is that, and it’s important, but on this one, I can speak from the shop floor. I was working at a pizza joint in Michigan when the governor pushed a minimum wage bill through the state legislature, hiking the state price floor on labor to $6.95 per hour — with a tiered plan that raised it again to $7.15 per hour last July, and will raise it to $7.45 per hour this year. I was an inside cook at the time, and most of us already made above minimum wage, except for a couple of high schoolers.
In our shop, the main issue was the drivers. They got the minimum hourly wage for non-tipped employees on their paycheck (mainly so that the corporate office could invoke some plausible deniability on not reporting and paying FICA tax on their tips). When the increase went through, one of the immediate results was that corporate sent their know-nothing goons down from the office to start chewing out our GM over the hours for our regular late-night driver, who worked about 20 hours of overtime every week, because it’s hard to find other drivers who are willing to regularly work a 5:00pm-4:00am shift.
The other immediate result is that corporate forced our store to institute a $1.00 delivery fee — and to change the compensation structure for drivers. Drivers used to get $1.00 per run plus a commission based on the size (in dollars) of the order; after the change-over, they got a higher hourly wage and a flat commission of $0.75 per run, no matter what the size of the order. The result was that if you took more than four deliveries in an hour — or if you took just about any large-order deliveries — then you actually made less money that hour than you would have before Jennifer Granholm gave us all her government-mandated
The delivery fee might make it look like a significant part of the cost of the minimum wage hike was being shifted onto customers, rather than onto workers. But (1) most of it was taken out on workers; the change in compensation for runs reduced pay to drivers, especially lunchtime drivers, by far more than the price increase increased store revenue. And (2) the fact is that customers usually just deducted the cost of the delivery fee from they would normally give as a tip to the driver. I know from questions that a few of them asked me after the delivery fee was instituted that a lot of them were under the mistaken impression that the delivery fee went to the driver. Thus the total costs to the customer didn’t budge; they just got re-allocated so that more would go to the boss instead of to the driver.
So at our store, at least, we could thank Jennifer Granholm’s
raise for imposed hours-reductions, reduced tips, and providing management with the pretext for a really massive screwjob on effective pay for those who were working at the minimum hourly wage.
In other shops, there aren’t always the same opportunities for chiseling workers on non-hourly pay in the way drivers at our shop got chiseled. But in a broader sense, I don’t think our shop’s experience was atypical. Any retail or food service company, even if all pay comes from fixed hourly wages, can use hours reductions, halting new hires, and death-march speed-ups for those still on the crew. And that they will do that sort of thing, rather than adding cents onto meal specials that already focus on 99-cent deals and nickel-and-dime savings, seems like a perfectly predictable pattern that a lot of bosses in the low-wage service sector are going to follow, as long as there’s a lot more of us looking for hours than there are of them dangling the hours in front of us.
Of course, that last bit there is the root cause of the problem — government-imposed distortions of the markets in labor, capital, land, and ideas (inter alia) artificially constrain opportunities for people to make a living for themselves, distorting the labor market to keep disproportionate power in the hands of a small and privileged class of rentiers. Without those market distortions, a law against paying workers $4 an hour would matter about as much as a law against selling pork-chops in Mecca — objectionable on principle, but mainly negligible as a strategic matter, due to a dearth of identifiable victims. But as long as those coercive distortions are substantially in place, we do have to keep in mind how bosses will predictably react to additional coercive counter-distortions that are piled on top to
correct for the predictable effects of the first distortion, without actually changing anything about the root causes. And with the predictable patterns of reaction in mind, and their current position of power within the labor market, I don’t think we have to turn into a bunch of vulgar Friedmaniacs or Misoids to agree with them that the effects of keeping, or worse, raising legally-enforced price floors on labor are going to be generally quite destructive, and most destructive to those who need most badly to find a place to sell their labor.
Now, when it comes to workers in my position, who were already working at above minimum wage, I agree that they might well see some wage increases from a minimum wage increase, by way of pegging and ripple effects. I never did, but maybe others might. There are some cases in which minimum wage increases might benefit relatively more privileged workers, but it’s the marginal workers — the ones who are working right at, or right above, or would be willing to work below the current minimum wage — who I’m most concerned about, because they are the ones whose backs it’s taken out on. Usually not in the form of firing existing workers — which is highly visible and has a significant marginal cost for the boss — but very often in the form of hours reductions and by simply not making new hires — which call much less attention to themselves and have much lower marginal costs, but can effect just as much in the way of ratcheting down labor costs.
I have lots of other strategic priorities that are higher on my list than the minimum wage. It’s enough work for me trying to take on war, government policing, international apartheid, the American Stasi, government schooling, institutional psychiatry, violence against women, gay-bashing, trans-bashing, government regimentation of healthcare, land-grabbing and privateering, government-enforced licensure cartels, the IRS, and the Wagner-Taft-Hartley framework, and trying to sell all of this to Leftists who mostly get only about half of it and libertarians who mostly get only the other half, without adding yet another windmill-charge at the pet notions of ACORN types and the corporate liberal consensus! But I do think that there’s a big asymmetry between government relief projects like TANF or food stamps, on the one hand, and the minimum wage and other coercively
protective labor legislation, on the other.
I agree with Kevin more or less completely on the former. But the point I’m trying to stress is that, in spite of fact that the anti-minimum-wage argument has mainly been promulgated with a vulgar libertarian tone, the thing for left libertarians to do in response is not to kick it back down to the bottom of the priorities ladder, but rather to take it up themselves and re-conceptualize the debate — to treat minimum wage laws and the rest of coercively
protective labor legislation as of a piece with government licensure cartels, zoning laws, the health and building codes favored by the Public Interest and Private Property Values racket, etc., as an integral part of the corporate liberal system of coercive power, which coercively ratchet up poor folks’ fixed costs of living while coercively ratcheting down their opportunities to scratch up a living.