Monopoly, and the Legacy Benefits of State Intervention

Chris Wages, at My Quiet Life, quotes a statement I made in an earlier blog post:

The faux “free market” rhetoric of the ASI and other neoliberals will be nothing but bullshit until they first deal with initial questions of justice in the starting distribution of property titles. Otherwise, their version of the “free market” really just means a massive looting spree, followed by the proclamation “No coercive intervention in the market starting… NOW!”

He then ties this generalization in with his friendly critique of an article by Cato's Adam Thierer (quite good, on the whole) on the government role in creating the AT&T monopoly. As it applies to telecommunications, he says, my comment above can be restated as:

That is .. “NOW”, only after the government (read: the taxpayer) has funded and subsidized the industry to the point of total domination and competition-free self-sufficiency. “NOW” we can pretend to be in favor of the “free” market. This is the fallacy of the Cato Institute’s repeated professions of support for “free” market. The “free” market they are campaigning for is one in which the balance of power is tilted in favor of large oligarchies of corporations by decades of government funding and subsidization that continues to this day.

In the comment thread, t rev responded:

Look, of course the status quo isn’t fair, of course it’s the historical outcome of a series of what are quite arguably monstrous criminal activities. But, so what? Things are as they are. It’s not enough to say that crimes were committed unless you have a plan of action to rectify the situation that isn’t going to make things even worse. We just want to keep similar things from happening in the future.

And finally, my rejoinder to t rev:

Unfortunately, t. rev, the typical vulgar libertarian response to “things as they are now” is to adopt some policy that will lock the present winners into control of their ill-gotten gain. Adopting a formally libertarian policy, without regard to how it will affect the strategic distribution of power in the existing state capitalist system, is a lot like the Romans at Cannae welcoming the withdrawal of the Punic center as “a step in the right direction.” Any just free market regime must take into account the present distribution of power, the desired end state, and how its steps toward that desired end state will strengthen or weaken the present distribution of power in the meantime. In other words, something like Chris Sciabarra’s “dialectical libertarianism.”

Now, whether (as Chris Wages says) the legacy benefits of past federal action are enough to lock telecom monopolies into a permanently privileged status, or whether the ostensibly "deregulated" industry still depends on an ongoing framework of hidden subsidies and privileges. I lean toward the latter alternative, although you can take the counter-factual speculation for what it's worth. My gut feeling is that most centralized corporate dinosaurs would simply collapse if subjected to a genuinely deregulated free market, without any taxpayer subsidies of any kind. Leaving that aside, though, I have some definite ideas on t rev's question of what to do now. One of them is treating corporations, the majority of whose profits depended on state intervention, as the property of their work force or clientele: transforming them into either producer or consumer cooperatives, preferably decentralized to the smallest feasible units of local control, and then coordinating their relations through some combination of unregulated markets and bottom-up federation.

telecommunications , telecom , subsidies , regulations , deregulation