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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Thursday, February 10, 2005

Vulgar Libertarianism Watch, Part 6

John Stossel has managed to catapult himself to the top of the vulgar libertarian usual suspects list--no mean feat, with the kind of fierce competition the Adam Smith Institute puts up. Among the "myths" he has chosen to debunk are the following:


No. 4 — MYTH: Outsourcing Is Bad for American Workers

We've been hearing a lot lately about how American workers are suffering because companies are "outsourcing" their jobs to other countries. During the presidential campaign, both President Bush and Sen. John Kerry, D-Mass., told voters they were concerned about keeping jobs here at home. And CNN anchor Lou Dobbs has made complaints about outsourcing a running theme of his nightly news program.

Dobbs' new book, "Exporting America," says the government should limit free trade and immediately outlaw outsourcing of government contracts.

"Just because of cheap labor, we're destroying our middle class. That is just stupid," Dobbs said, adding, "Being stupid is un-American."

Wait a second. It's restricting outsourcing that would be un-American and stupid....
In the course of making his point, Stossel can't resist using a Tom Friedmanesque anecdote about an outsourced employee who wound up with a better job. Of course, whether that anecdote is truly representative--whether the average outsourced employee winds up with a better real wage when he gets new work--he doesn't say. He sure as hell implies, though!

But what's really important is Stossel's heavy reliance on a strawman. He begs the question of why so much outsourcing is going on. Stossel implies, without making any attempt to demonstrate, that the relocation of production overseas is the natural outcome of a free market; and that the only way to reduce it is by positive government action.

Neither could be further from the truth. In fact, present levels of outsourcing reflect massive government subsidies to the export of capital. And the only thing necessary to reduce those levels drastically is to corporations pay all the costs of investment on their own dime--what used to be known as free trade, I believe.

Of course, both the vulgar libertarians and the big government liberals have a common interest in presenting the issue that way. Big business interests benefit from the myth that their wealth and power comes from their success in the market, rather than from suckling at the government teat; they also benefit from the pretense that they fear government intervention in the economy and desire only to be left alone. Big government liberals, on the other hand, benefit from the myth that a laissez-faire era ever existed, and that the era of trusts and robber barons was a direct outgrowth of laissez-faire capitalism; they benefit from the myth that the "progressive" state stepped in to act as a "countervailing power" to big business, and to regulate it against its will. Compare the mirror-imaging in these two quotes:


Liberalism in America has ordinarily been the movement on the part of the other sections of society to restrain the power of the business community.--Art Schlesinger, The Age of Jackson.

Business has not really won or had its way in connection with even a single piece of proposed regulatory or social legislation in the last three-quarters of a century. Theodore Leavitt, "Why Business Always Loses," Harvard Business Review (1968).

Uh, yeah. I guess that explains the army of corporation lawyers and investment bankers (not to mention GE's Gerard Swope) involved in formulating the New Deal.

Both the capitalist plutes and the New Class planners have a common interests in passing off a phony version of history on the American people; and New Left revisionist historians of corporate liberalism, like Gabriel Kolko, are dynamite to that phony version of history.


No. 2 — MYTH — Urban Sprawl Is Ruining America

Suburban sprawl is evil.

The unplanned growth, cookie cutter developments is gobbling up all the space and ruining America. Right?

Wrong.

But in town after town, civic leaders talk about going to war! They want "smart growth." They say sprawl has wrecked lives.

So-called experts on TV say all sorts of nasty things about the changing suburban landscape.

Stossel puts forth Jim Kunstler as an example of the carping experts. Interestingly, though, there are some bits of information in Kunstler's The Geography of Nowhere that don't quite gibe with Stossel's cartoony "market sprawl vs. elitist planners" picture of the world. If you read the book, you'll find that suburban sprawl was, in fact, mandated by the planners. Car-centered bedroom communities, huge front lawns, and the whole split-level cul-de-sac shebang, were all the rage among urban planners in the postwar era. Large setbacks were actually mandated by design plattes. Mixed use development--with neighborhood grocers and other small businesses within easy walking distance of residential streets--was prohibited by the planners. Similarly, walk-up apartments and other forms of low-cost housing in downtown business districts were also prohibited by law. Simply put, living with walking or bicycle distance of where you worked or shopped, for all intents and purposes, was made illegal.

For another kind of government benefit to sprawl, consider the role of government at all levels in subsidizing the automobile-highway complex. For starters, Kunstler's chapter on Robert Moses and Long Island is quite instructive. Urban freeway systems, massively subsidized by the same people who gasp in horror at the market-distorting effects of public transportation subsidies, are in effect subsidies to suburban sprawl.

Here in Northwest Arkansas, another form of government subsidy to sprawl has been an issue lately. The Fayetteville school system has already closed down one old neighborhood elementary school, to the dismay the communities served by it; more closings are likely in the works, for reasons of "efficiency." Of course, new "replacement" schools are also part of the picture--where this gets really interesting. Because those new schools are being built out on the western edge of town, close to the new real estate developments fed by assorted U.S. 471 exits. Golly, that must do wonders for the property values of a certain local real estate baron, whose names appears on half the "For Sale" signs in the two-county area. Surprise, surprise, surprise!

And let's not even get into FHA redlining of already-built houses in old, inlying residential neighborhoods. Or the fact that utility ratepayers in those older areas pay higher electric and water bills to subsidize the extension of services to the new developments.

This issue presents the same spectacle of mirror-imaging between two contending sides in alleged disagreement, as we witnessed in our discussion of outsourcing above. The real estate industry's apologists have a vested interest in pretending that suburban sprawl is the outcome of people's choices in the free market, and that the only way to stop it is through coercive and paternalistic interference by elitist planners. The elitist planners, meanwhile, have a vested interest of their own--in pretending that sprawl is a result of the free market, and that the only way to stop it is by hiring more people like them to tell us what to do.

In the words of a regular feature in a certain vulgar libertarian journal of record, "It Just Ain't So!"

Stossel continues:

What upsets many critics most is the loss of open space.

But is open space disappearing in America? No, that's a total myth. More than 95 percent of the country is still undeveloped.

You see it if you cross this country. Only a small percentage is developed. Yes, in some places, like some suburbs, there are often huge traffic jams.
Ah! When somebody like Stossel drops something like this into my lap, I know that God is good. All that open, undeveloped space--wonder why that is? Which brings us back to yet another reason for sprawl.

You see, there are two forms of property, according to Thomas Hodgskin [Natual and Artificial Right of Property Contrasted]: labor-made property, and law-made property. Whether you're a good Lockean, a Georgist, or a mutualist like me, you probably agree that the only legitimate way to acquire unowned land is to appropriate it by labor--to alter or develop it in some way, and thereby mix your labor with it. Simply having a government give you title to land, with no "labor" involved beyond that of drawing a line a map, is akin to a feudal land grant. The recipient of such a grant, in effect, is enabled to tax those who homestead within his feudal domain, and to charge a rent on the rightful owner who legitimately appropriates the land by his own labor. And whether you're a mutualist, a Georgist, or just a Lockean who actually believes what you profess to believe, the vast majority of property in this country was appropriated by law rather than by labor. That's why so much of this country is vacant--the land was politically appropriated, fenced off (or simply marked off on a map) and claimed by people who probably never even saw it in person.

As the Georgist Nock pointed out (after an observation on the amount of undeveloped land in language almost identical to Stossel's),

If our geographical development had been determined in a natural way, by the demands of use instead of the demands of speculation, our western frontier would not yet be anywhere near the Mississippi River.... All discussions of "over-population" from Malthus down, are based on the premise of legal occupancy instead of actual occupancy, and are therefore utterly incompetent and worthless. [Our Enemy, the State]


Or in the words of that old right-winger Mises, ordinarily nobody's idea of a land reformer:

Nowhere and at no time has the large-scale ownership of land come into being through the working of economic forces in the market. It is the result of military and political effort.... The great landed fortunes did not arise through the economic superiority of large-scale ownership, but by violent annexation outside the area of trade.... [Socialism]


4 Comments:

Anonymous Ian said...

I have always found it highly amusing that the US version of planning is so much more restrictive and prescriptive than the version we have here in the UK. This isn't to say that either version works particularly well of course...

February 17, 2005 1:55 PM  
Blogger Richard said...

Hm. I had considered asking LFB if they had any Stossel DVDs viewable in my region as an anti-dote to Michael Moore, but now I might give him a miss. Land is one of the most heavily state-controlled resources there is - infact, here in the UK the Conservative party revealed just how unlibertarian they are by regailing against Gypsies who broke planning law buy building on their own land before their planning applications had been accepted. The state basically decides how land should be used.

June 14, 2005 3:44 PM  
Anonymous Vince Daliessio said...

The thing about becoming a libertarian (or a mutualist, or a free-market radical, or an anarcho-capitalist, whatever) is that it's a bit like peeling an onion. Stossel, while very good on everyday applications of individual liberty, has a very big blind spot when it comes to merchantilism and state capitalism.

With regard to "sprawl", my own case is illustrative - I moved to my small community in southern New Jersey 11 years ago. At that time, it was undergoing slow, steady growth. After the "Mount Laurel" decision by the NJ state Supreme Court however, the town drew up a "Master Plan". The developers converged on the town like vultures, with the result that it is now called the fastest-growing (sprawling) town on the East Coast.

October 24, 2005 10:14 AM  
Anonymous Julius Blumfeld said...

"the US version of planning is so much more restrictive and prescriptive than the version we have here in the UK"

No way. Land use in the UK has been nationalised for half a century. The Government gets to decide what you can build, where you can build it, what it must look like and what you can do with it, with disastrous consequences.

January 12, 2006 5:48 AM  

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