Why I am not a Libertarian

If one is asked what is the best way to explain Libertarianism, and that one is familiar with political philosophy, s/he will immediately point out to Robert Nozick’s example of Wilt Chamberlain, the famous 70’s basketball player.

Let’s assume, in a hypothetical example, that we have a society of some kind of distribution of wealth, could be complete equal distribution of wealth, or any other distribution (for the sake of example, let’s take the equal distribution). And, let’s assume that Wilt Chamberlain is a very successful basketball player in that society, which attracts a lot of people. Since people like good basketball players, they are willing to pay a certain amount of money to see him play, and let’s say that they pay him some amount of money directly to see his matches.

I think we all believe that nothing unjust or wrong has happened: People have simply chosen, freely, to give some of their wealth to Chamberlain, and there is nothing wrong with that. But now, Chamberlain is a very wealthy man. Why, in this case, some of us think that it is just to tax him on his rightfully earned money? Was it not the case that our starting point could be “any” distribution of wealth possible, and the people willingly chose to give their money to him, making him wealthy by their free choice?

The above argument and example does indeed seem compelling for Libertarianism. So, why am I not a Libertarian?

Let’s say that our Libertarian society above exists, and Chamberlain becomes “very” rich. Of course, it is only rational for the rich to try and make themselves even richer, and that could be achieved by clever investments. And now that Chamberlain is so rich that he can do a lot of things that normally people cannot do, why not buy a whole industry? Let’s say that he buys the whole food industry, thereby creating a monopoly over it, and affecting the prices.

Of course, we cannot “not” buy food. We, citizens of that society, need to live, therefore we have to pay for whatever prices Chamberlain asks for the food. On the other hand, there are no government regulation on the prices in a Libertarian society, and there is nothing to stop Chamberlain from asking a lot more than we normally pay for food (this is the nature of monopoly).

In the end, we will be giving money that we didn’t want to give, to Chamberlain. And all because he became the authority which Libertarians despised that much in the first place. He gained power equal to that of taxation by the government, even more: Because a democratic government is not self-interested business, by definition it is more or less none-beneficial.

A Libertarian society, hypothetical or practical, will turn out to be self refuting. It will end up breaking the same rules that it was based upon, and that’s why I am not a Libertarian.*

________________________________

* I am not by any means a socialist either.

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thetruthfulheretic

Dear fellow Homo sapiens, or if you prefer conscious mammals! And of course, friends nonetheless: I created my blog in order to speak my very weird mind, mostly about three subjects (as I identify myself and my state of mind with them): Atheism, as I was born in the Middle East and saw and felt the affects of Islam; Homosexuality and equal rights, as a gay man who has tasted the Homophobia and also Sexism in that society; and Liberalism and political philosophy, which I think is a good ground for secular values and criticism of fundamentalism. If you wish, visit and join your state of mind to mine. I hope they don't short circuit!

16 thoughts on “Why I am not a Libertarian”

  1. yes you have a good point indeed………..i suppose some thing inbetween liberal and authoritive is the ideal….but where exactly is the line drawn……

  2. I think you have failed to think this through carefully. Let us say there are 101 people in this world, Wilt and 100 other people all having an equal share of the food. It is conceivable that Wilt might successfully acquire the food shares of 40 or 50 of the other people but as the food became more and more concentrated the remaining holders would raise their prices. That is the nature of supply and demand. Truly the only way an individual can acquire a monopoly of a desirable good is through violence. Of course in the real world food is more than a single product, and is technically impossible to obtain a monopoly on. You could corner the market on dairy but substitutes would be found and diminish the value of dairy foiling Wilt’s master plan. Another wrinkle would be Wilts other needs. He may play a great game of hoops but can he make shoes, generate electricity, convert trees to lumber or any of the other tasks provided by the market. If you are a carpenter would you work for the man who denies you food? Libertarianism is not self defeating because it is founded in the market, he markets laws are as concrete and consistent as physics

    1. Thank you for your comment.

      One shall not go after the hypothetical example with a new set of rules, and that was not what I did. I continued with the exact set that was given by Nozick, and frankly, this is what very much could happen in any market, under the exact market forces that you name (which may or may not be concrete, but that’s not the issue here).

      One should ask, how is it, that we “do” have monopolies in markets then? In microeconomic models we immediately see that monopolies, of any sort, destroy the consumer surplus. And that is the exact point: Markets “allow” monopolies to be created and continued (on any kind of goods or services, maybe unlikely on agricultural commodities, but that’s not the point), and all monopolies destroy consumer surplus in the exact way that Libertarianism despises and rejects. It is because their economical position gives them authority over consumers, they can “ask” for an unreasonable price, and consumers, those who can afford it, have no way but to comply.

      Economists of the Neoclassical school would all tell you that monopolies are bad, many of them would suggest regulation by the government, since there seems to be no other way. So, now we should wonder: Should the government interfere, or not? Should monopolies be taxed, or even be shattered into small scale businesses by the government, or not? If yes, then that is not Libertarianism; if no, then monopolies will continue to take people’s money (or property) away from them, by the authority given to them because of their monopolistic powers (which comes from what they own), which is the very first thing that Libertarians reject and despise.

      Either way, the results are self refuting (in argument) and self defeating (in reality) for Libertarianism.

  3. You ask the important question “how is it that we “do” have monopolies then”…they are always a result of violence or threat of violence. This violence either comes from or is eventually changed into a state. This is of course possible in Nozicks vision of libertarianism which prefers a small state to anarchy. Outside of the state/violence a monopoly is impossible or ineffective due to substitution, so the market does not allow them. I would ask that you find a single example where a monopoly could exist for any product on this planet that would effectively enslave us as the Wilt Chamberlain food model does. If the premise you argue from is faulty than it is likely that your conclusion is as well. Nozick and neoclassical economists create the potential for monopolies because they create/accept the monopoly on violence that is the state.

    I accept that they have, in their opinions, valid reasons for requiring a state, but at that point they have also agreed to accept the thorny problem of taxation. A just dessert for those who wish to become only a little bit pregnant.

    Lucky me, as an anarchist, I only need to find technical flaws in reality, while I argue for my impossible utopia.

    1. Well you seem to have partially answered yourself in the end.

      You see, as I said, my point was to prove Liberatarianism (particularly that of Nozick) is self refuting (defeating). I did that by applying to same rules of competition, what Nozick had provided himself, to another hypothetical situation. And I showed that the results were against Libertarian beliefs, while as you see, Nozick asked us to begine with “any” hypothetical situation. Why, monopoly is not one of those “any”?

      You see that in the first paragraph here you yourself point out that “This is of course possible in Nozicks vision of libertarianism which prefers a small state to anarchy”, and then “Nozick and neoclassical economists create the potential for monopolies because they create/accept the monopoly on violence that is the state.” Whilst in the previouse post you said that “Libertarianism is not self defeating because it is founded in the market, he markets laws are as concrete and consistent as physics.”

      Which is it then, I wonder?

  4. I thought I would offer a quick response, and thanks for the interesting discussion.

    Of course, we cannot “not” buy food. We, citizens of that society, need to live, therefore we have to pay for whatever prices Chamberlain asks for the food. On the other hand, there are no government regulation on the prices in a Libertarian society, and there is nothing to stop Chamberlain from asking a lot more than we normally pay for food (this is the nature of monopoly).

    Libertarians support free markets, which includes free entry into competition. So how could it be that no one else is willing to provide food after Wilt raised his prices? I do not understand why that would be a reasonable response by entrepreneurs looking to profit. The only time I can think that happens is when the government confers a legal monopoly. According to New Left historian Gabriel Kolko’s book “The Triumph of Conservatism,” in fact, big businesses found it exceedingly difficult to concentrate their economic power, so during the business-government alliance of the Progressive Era, they began lobbying for increased federal regulation to put a cramp on smaller competitors (through increased regulation) and more efficient competitors (through anti-trust laws).

    You might be interested to lean about John D. Rockefeller’s experience trying to maintain a free-market (voluntary) monopoly like the one in the hypothetical. The complaint by competitors was that prices were too low. Kolko’s book offer further accounts for why business and industry leaders decried “unrestricted” competition and called for “rational” competition. Their attempts to form trusts failed repeatedly, either because participants had an incentive to cheat or because new participants would enter the market. Kolko documents attempts to “rationalize” the iron and steel, the oil, the automobile, the agriculture machinery, the telephone, the copper, and the meat packing industries were failures that resulted in less profit and more competition. Big business finally came around to the idea that only government regulation of competition (or, “political capitalism,” as Kolko described it) could maintain their status.

    Because a democratic government is not self-interested business, by definition it is more or less none-beneficial.

    If you mean to say that the government in and of itself is not self-interested, it would seem that a government is interested in maintaining its authority or at least the people who compose the government are interested in doing so. Neverthelsss, public choice economists contend that government officials are very much self-interested. What do you think of their claim?

    Moreover, if we can dismiss a political theory by thinking of an unfortunate consequence that might ensue, I am afraid we would have to dismiss all political theories. In other words, utopia is not an option. I think the more meaningful question would be what alternative to libertarianism would reasonably produce a better outcome than the one elicited from the hypothetical’s assumptions (including the one that no one finds it worthwhile to compete with Wilt).

    1. “Libertarians support free markets, which includes free entry into competition. So how could it be that no one else is willing to provide food after Wilt raised his prices?”

      His prices are too low? 😉

      I’m not contradicting myself: they may be too low, or too high. Just not at the same time! The average costs (AC) of a monopoly are low enough to prevent competitors to enter the market (one reason is economies of scale). He can maintain his position if he fears that competitors are at his doorstep, but normally a monopoly destroys consumer surplus by charging them much more than a complete competition market (refer to microeconomic models).

      Besides, we have different types of monopoly. If Wilt has bought all the farms, unless “he” wants (or needs) to sell them, he has natural monopoly over raw food. If he buys the only silver mine of our hypothetical society, he has natural monopoly over raw silver, and so on.

      Trusts are a different story from monopolies. Trusts are very fragile because of the cheating incentive. They are not a single producer (monopoly), they are a combination of two or more.

      //

      I knew when writing that sentence about government that it would be controversial. What I meant by that was the government is more politically self interested than economically, and peoples votes in a democratic system worry the politicians, so they do not always act “economically” correct for the institution of government. They act “politically” correct which may or may not be economically beneficial for the government. (I do not wish to linger on this issue much here, since it is not very essential to the point I made in my post, I may write about it later though.)

      //

      I think the last paragraph is an Ad Hominem: I was not pointing out the unfortunate, I was pointing out internally inconsistent.

      1. The average costs (AC) of a monopoly are low enough to prevent competitors to enter the market (one reason is economies of scale). He can maintain his position if he fears that competitors are at his doorstep, but normally a monopoly destroys consumer surplus by charging them much more than a complete competition market (refer to microeconomic models).

        If Wilt would have to keep his prices low enough to discourage competition, it seems you are now saying that potential competition would mean that consumers would not have to pay “whatever prices Chamberlain asks for the food” and that there likely would be something preventing him from charging “a lot more than we normally pay.” So would you agree that the existence of a monopoly is not typically a sufficient condition for the ability of a monopolist to charge monopoly prices?

        Libertarians have argued that the other, typically necessary condition for the ability to charge monopoly prices is government intervention. There may be relatively unimportant instances in which monopoly prices can be charged even in the absence of government intervention, but it does not follow that government intervention would improve upon that situation either. Libertarians may be wrong in that regard, but it would exclude the possibility that support for the free market is self-contradictory (if libertarians believed that government intervention would make an unfortunate situation worse).

        Furthermore, there are also diseconomies of scale, but for the sake of discussion let’s say those are insignificant. Just so we are clear, this is what I understand your argument against libertarianism to be: that, in a free-market monopoly, consumers expect to benefit from their exchange with a monopolist*, but they do not benefit as much as they otherwise could. If this is not your position, please correct me. My only other idea why you might think libertarianism would be self-contradictory is where you said that libertarians despise authority. But typical libertarians do not despise authority; they oppose authority acquired by coercion, which Wilt did not commit in the hypothetical. Libertarians oppose authoritarianism, the idea that someone is ethically or politically superior because he or she has such authority, but typical libertarians support the existence of their own authority over their own lives.

        Nevertheless, let’s say that the consumer surplus is severely diminished by Wilt’s free-market monopoly. Would that necessarily be a bad thing for the community? If that were taking place, it means that resources in the community were being put to different uses that provided a greater return that what they otherwise would have under the control of Wilt’s competitors. I do not see that putting resources to their higher-valued uses to be a failure of the free market. However, I do think Wilt’s behavior is highly objectionable, and I imagine that others would agree with me and be willing to base their purchasing decisions on things other than simply price, thereby shifting the supply and demand equilibrium to a point that smaller competitors were economically viable.

        In monopolies established by political privilege there is even less alternative for consumers to choose. For example, occupational licensing laws grants special privileges to a monopoly (an individual or a group of individuals) by excluding others from taking part in that occupation. Are there occasions where you support granting those monopoly privileges?

        Trusts are a different story from monopolies. Trusts are very fragile because of the cheating incentive. They are not a single producer (monopoly), they are a combination of two or more.

        If there is a significant example of such a monopolist firm coming about by free competition, I have never heard of it. That may be because, as firms occupy a larger portion of the market, their massive size means they are less flexible to technological changes and market innovation.

        I think the last paragraph is an Ad Hominem: I was not pointing out the unfortunate, I was pointing out internally inconsistent.

        It would be an ad hominem if I had said your argument is mistaken, not because the argument is flawed, but because of some personal trait the person making the argument may have.

        (*) I am assuming you would agree that consumers nevertheless expect to experience some positive benefit from non-invasive exchanges, including non-invasive exchanges with monopolists.

  5. No.

    The key part was “not at the same time”. Wilt has just bought a whole industry. If one is to even think of entering the market, one needs to be “very” resourceful, more than Wilt. Most people don’t have that (have in mind that in our hypothetical example nobody has that, everybody was equal, right?). But let’s say that Nevil (Chamberlain?) “does” have that, and is “willing” to enter the market. Of course in the beginning he won’t have the advantage (no share of the market). Wilt is not stupid, he will not sit back with his high prices so that Nevil easily gain advantage (you see clearly that high prices at this stage are crucial for Nevil, since his whole profit will be affected by that), he will temporarily lower the prices so that Nevil is doomed, then after the potential comptetition is gone, again high prices will be back. Remember the case of Microsoft and Netscape? That’s a good example of “Do not enter, or you will be hurt!”. Something that Microsoft could not do to Google, fortunately I might add.

    You assume there are always wolves at the doorstep that are “able” and “willing” to enter the market as a competition with a monopoly, it is not so.*

    And no, Wilt did not get his position by coercion, but with his position, he earned money by coertion. Why “no” to the government that taxes people (some of them more than others, for redestribution), AND “no” to the benefits lost by the consumers (refer to the likes of Hayek and Friedman)? Why no to that authority, and no to the other, while the latter should be legitimate according to their own rules? And if we are to protect monopolies, then we are protecting the exact equivalant to what we didn’t want to have: Someone with an authority who practically taxes people out of their money.

    //

    My mistake, I don’t know where my head was at the time. Though the explanation is the same: Not ad hominem, but straw man.

    //

    * Add to that the part about different types of monopoly, like over land.

    1. Sorry, but I had a hard time following.

      Investors open businesses even if they expect to lose money for some initial period, and they could begin differentiating their products somehow. Slogans like “Potatoes over profits” might do.

      But assuming that were not the case here, consumers could still pool their resources into a (non-profit) cooperative if they found it worthwhile to do so. At some point of capitalization, Wilt’s resources are going to be experiencing diminishing returns. By raising enough resources to exceed Wilt’s marginal productivity, the cooperative would be able to out compete in terms of price (since its average costs would be lower).

      If Wilt wanted to raise his marginal productivity to compete with the cooperative, he would have to sell some of his resources, which means other firms could begin competing.

      If Wilt began selling his products below his production cost, consumers would just shift to consuming Wilt’s products instead of their cooperative’s products, thereby accelerating Wilt’s demise.

      Of course, the cooperative would likely not have to invest that level of resources, since many people would not be basing their purchasing decisions on price alone.

      In real life, we only need to look at the number of monopolies created by government decree and the number of monopolies that existed without government favoritism to find out which system poses a greater threat. Speaking of that, I was unsure if you in fact favor monopoly privileges like occupational licensing laws.

      And no, Wilt did not get his position by coercion, but with his position, he earned money by coertion.

      For the sake of discussion, I will accept that is true.

      If Wilt initiated coercion against consumers or anyone else, that is not a free-market behavior. It would not be germane to libertarianism’s support for the free market, so such support for the free market would not be self-contradictory. Indeed, libertarians typically support government regulation against coercion, such as murder and fraud.

      I really do think I will have to leave my comments at that. Thanks for the discussion.

  6. I gave at least one good example in the real world: The case for Microsoft and Netscape (add the case of ALCOA). What is not real is “consumers could still pool their resources into a (non-profit) cooperative if they found it worthwhile to do so.” I find it really hard to believe that consumers may have any way but revolution to take back what is theirs, specifically in case of land for instance. (Remember? We have different types of monopoly.)

    //

    I favour institutions that prove necessary and/or just. Some are social (such as the existance of authoritive power in the first place, or norms and values) and some are official (government authority based). To justify them I also favour John Rawls’s arguments (more or less).

    None of this is relevant here though.
    Surely I do not favour monopolies. You say some laws are “monopoly privilages”, I say not necessarily. And this actually goes for the thing you said yourself: If we can dismiss a law by thinking of an unfortunate consequence that might ensue, I am afraid we would have to dismiss all laws.

    //

    When one has authority, one has power. And “using” that power as a monopoly is actually “abusing” it. That’s why Wilt needs to be dealt with, since he is a monopoly. That is the coertion part, and that is the part that creates that dilemma (which I think I wrote two times above).

    “I really do think I will have to leave my comments at that. Thanks for the discussion.”

    Thank you for your comments.

  7. Hi there, I’m just curious whether by “slightly to the right” of Rawls (and by “liberal”) you mean classically liberal, or modern US social-democrat style liberal, or what? Interesting discussion though, and FWIW, I tend to agree that conceptually libertarianism has problems (although my personal politics runs pretty strongly libertarian). If I may be so presumptuous, I quite liked Jan Narveson’s “The Libertarian Idea” (another systematic outline of the view, but one I find preferable to Nozick’s in many ways).

    1. Hello and thank you for commenting dear James,

      Well I am not very familiar with the details of US political system, but I think social-democrat style is where I belong (more or less). Rawls to me makes the most sense among these different schools of thought, but some of his ideas I find practically insufficient. For instance when he talks about how we should shape the redistribution in favour of the poorest, however it seems reasonable, but why not change this slightly into “making a bigger middle class”?

      This has been tested I think in a survey, and people have mostly chosen this option. Now, a Rawlsian, like maybe myself, would say this is almost not different at all from what Rawls himself puts forward. That may be true, but in practice, when we want to for example make laws to institutionalise this, it seems more practically doable. And more importantly, this seems to eliminate the issue of free riding as well, since there is more incentive for the poor to try for themselves, not be baby-sited.

      I actually have re-written this peace and soon will put a much more detailed and cited version here.

  8. I was genuinely excited to read this but I’m afraid I just couldn’t your hypothetical premises about Libertarian viewpoints. Your arguments went right off the rails with your extreme “slippery slope” fallacy about Chamberlain becoming so rich that he becomes a monopoly Libertarian’s don’t like monopolies which are capable of destroying any sense of market forces.

    1. Thank you for the comment dear Michael.

      I shall advise you to read again, since it seems you completely missed the point. I shall not say that I am free of fallacies, but if you see my other posts you’d realize I try my best to know and avoid them . And slippery slope did not happen here, and if it did it’s not relevant (you should also know that it is not always a fallacy).

      Nozick asks an important question: How can a government dare to tax the rich out of their income, when people have made their choices freely to give their money to them in the first place? He starts with saying that “any” situation will do, but in reality, what we end up with is the fact that “monopolies are bad”. Why? Are they not a part of that “any”?

      People can make choices freely (desiarable), and still end up in a monopoly (undesirable). That’s the core of the argument. As it happens we have had such things going on, ALCOA and Microsoft are both good examples that market does need regulation by the government and should not be left alone as Lebertarians suggest.

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