1 Long, Roderick T., “Immanent Liberalism: The Politics of Mutual Consent,” Social Philosophy and Policy, vol. 12, no. 2 (Summer 1995), p. 12, n. 26.
2 An alternative possibility would be to abbreviate them as LC, LS, and LP, respectively. But “LP” is so commonly used within LibCap circles to designate the U.S. Libertarian Party that its use to designate some other aspect of libertarianism would be likely to generate confusion.
3 Nozick, Robert, Anarchy, State, and Utopia (New York: Basic Books, 1974). Indeed, for many academics Anarchy, State, and Utopia is the definitive statement of, indeed virtually interchangeable with, the Libertarian Capitalist position in general. Within the LibCap community itself, however, Nozick's work, while respected, is quite controversial and is the target of frequent criticism. “Nozick's book has come to enjoy canonical status among academics, who normally assign it to students as ‘the’ libertarian book, with little appreciation of the broader tradition of libertarian thinking and scholarship within which Nozick's work took shape.” Palmer, Tom G., “The Literature of Liberty,” in Boaz, David, ed., The Libertarian Reader: Classic and Contemporary Readings from Lao-tzu to Milton Friedman (New York: The Free Press, 1997), p. 417.
4 Boaz, David, Libertarianism: A Primer (New York: The Free Press, 1997), pp. 22–26. A welcome exception to LibCap silence on the existence of LibSocs is Tuccille, Jerome, Radical Libertarianism (San Francisco: Cobden Press, 1985), p. 36ff.
5 Hence, a number of libertarians have hoped for a rapprochement between the LibCap and LibSoc approaches.
The issue of capitalism vs. socialism is irreconcilable if one views it in terms of political control. For whenever appeals are addressed to a central governing agency, an allpowerful, all-pervasive authority with the power to take away and dispense favors… the public will divide itself into two general camps and organize myriad lobby groups to pressure those in command for ‘favorable’ legislation.… [Both] capitalist and socialist schools of anarchy… are united on the most crucial question of all: the absolute necessity for people to take control over their own lives, and the dismantling and final elimination of state authority over the life of man.… Their major disagreement is one of personal attitudes concerning the makeup of human nature itself.… Who is right? Is there any way of reconciling these two opposing views of human nature without resorting to violence, pressure politics, or deceit?… The Left and Right can be harmonized only under anarchy.… Here is the broad spectrum of libertarianism, of voluntarism in the intellectual, economic, social, and spiritual life of society.… The main purpose here is to demonstrate the concept of radical decentralization as a viable alternative to our present centralized and chaotic system. It is to show how a bridge can be made between the individual and the collective, the socialist and the capitalist mentality, without resorting to force and coercion. (Tuccille, , Radical Libertarianism, pp. 31–58; cf. also my “Immanent Liberalism,” pp. 26–31)
6 The term “state capitalism” has been common for some time among political radicals of various ideological stripes, but it is frequently used in two different senses. In one sense, “state capitalism” refers to state intervention in the marketplace to promote the interests of the corporate elite; here it is synonymous with authoritarian capitalism. In the other sense, “state capitalism” refers to a state's monopolizing all economic activity and resources under its own control so that the nation as a whole may act as a single firm; here it is synonymous with authoritarian socialism. Kropotkin is using the term in this second sense.
7 Kropotkin, Peter, Anarchism and Anarchist Communism (London: Freedom Press, 1993), pp. 8–9.
8 Weaver, Paul H., The Suicidal Corporation (New York: Simon and Schuster, 1988), pp. 99–116.
9 Among the notable exceptions: in the 1920s, the anarcho-socialist couple Emma Goldman and Alexander Berkman were among the earliest critics of the Soviet regime. See Goldman, Emma, My Disillusionment in Russia (New York: Crowell, 1970); and Berkman, Alexander, The Bolshevik Myth (London: Pluto Press, 1989).
10 This is not to deny that there were genuinely LibCap elements to the programs of Reagan and Thatcher, though I think those elements have been greatly exaggerated.
11 There are still other sources of confusion. Libertarian and authoritarian versions of capitalism have both called themselves “socialist” upon occasion (e.g., Benjamin Tucker's “voluntary socialism” and Adolf Hitler's “National Socialism,” respectively). Indeed, some LibCaps claim to be the only true “socialists,” since they favor social power over state power. To add to the confusion, not only do LibCaps and LibSocs generally deny one another's libertarian credentials, but also within each movement one finds both writers who take anarchism as a prerequisite for being a libertarian, and writers who take the rejection of anarchism as a prerequisite for being a libertarian. Then there is the ongoing dispute about the relation between libertarianism and liberalism: Is either LibCap or LibSoc a version of liberalism? Is LibCap identical with classical liberalism, or is it a subset of it, or does it merely overlap with it? Do non-classical liberals count as genuine liberals? And so on!
12 Of course, these are only generalizations, with many individual exceptions. For example, I have certainly met LibCaps and LibSocs who opposed abortion rights, and LibPops who supported them.
13 Some examples may be helpful. Groups like the Aryan Nation and the Ku Klux Klan are obvious examples of authoritarian populism at its most racist extreme. The weekly populist newspaper The Spotlight is an unsettling mix of libertarian aspects with moderately authoritarian-racist aspects. The “militia movement,” broadly defined, also appears to include groups from both camps. By contrast, the U.S. Taxpayers Party and the secessionist “Republic of Texas” movement—as near as I can tell—appear to be predominantly LibPop and anti-racist, though these movements might not be a LibCap's or LibSoc's cup of tea. (By the “Republic of Texas” movement I mean the main organization, not the splinter group— repudiated by the main group—that made the news in 1997 by seizing hostages!)
14 In addition, canny politicians like Pat Buchanan have learned to pitch their message in such a way as to appeal to substantial numbers of populists in both the libertarian and authoritarian camps.
15 In a number of instances, peaceful, tolerant anti-statists (in some cases not even populist in orientation) have been labeled “white supremacists” or members of “Aryan hate groups” by critics who never bothered to discover that the persons so labeled were in fact Jewish or black.
16 For example, the contributors to Liberty, the leading American anarchist journal of the day, drew inspiration equally from Pierre-Joseph Proudhon and Herbert Spencer.
17 A few examples: Nation columnists Christopher Hitchens and Alexander Cockburn, both broadly LibSoc in orientation, have expressed some sympathy for the LibCap and LibPop movements, respectively; LibSoc Noam Chomsky acknowledges an intellectual debt to LibCap idol Adam Smith; U.S. Congressman Ron Paul has attracted a following that includes both LibCaps and LibPops; “community technologist” Karl Hess is admired by both LibCaps and LibSocs; followers of Henry George engage in dialogue with LibCaps and LibSocs; and the International Society for Individual Liberty, a LibCap organization, addresses concerns important to both LibSocs and LibPops. One might also include the highly influential LibCap theorist Murray Rothbard, who in the 1960s and 1970s made common cause with LibSocs, and in his later years became associated instead with LibPops. Unfortunately, Rothbard's outreach to socialists and populists did not always confine itself to the libertarian aspects of those movements. During his socialist-friendly days, Rothbard cheered the Communist sack of Saigon (on the rather dubious grounds that the fall of any state is an event to celebrate, regardless of what replaces it), while in his later, populist-friendly days he (along with his associates at the Ludwig von Mises Institute) condoned the Los Angeles Police Department's beating of Rodney King.
18 I am thinking in particular of the Laws, where Plato defends a version of the mixed constitution, as opposed to such earlier writings as the Republic (and, to a lesser extent, the Statesman), where Plato relies on virtuous rulers rather than on constitutional devices to safeguard the pubic interest.
19 The ancient liberals arguably had the better case; for discussion, see my “The Athenian Constitution: Government by Jury and Referendum,” Formulations, vol. 4, no. 1 (Autumn 1996), pp. 7–23, 35.
20 The most important in this context were Charles Comte, Charles Dunoyer, Augustin Thierry, Frédéric Bastiat, and Gustave de Molinari. For a good introduction, see Liggio, Leonard P., “Charles Dunoyer and French Classical Liberalism,” Journal of Libertarian Studies, vol. 1, no. 3 (Summer 1977), pp. 153–78; and Hart, David M., “Gustave de Molinari and the Anti-Statist Liberal Tradition: Part I,” Journal of Libertarian Studies, vol. 5, no. 3 (Summer 1981), pp. 263–90; cf. also Raico, Ralph, “Classical Liberal Exploitation Theory,” Journal of Libertarian Studies, vol. 1, no. 3 (Summer 1977), pp. 179–83; Weinburg, Mark, “The Social Analysis of Three Early Nineteenth Century French Liberals: Say, Comte, and Dunoyer,” Journal of Libertarian Studies, vol. 2, no. 1 (1978), pp. 45–63; and Salerno, Joseph T., “Comment on the French Liberal School,” Journal of Libertarian Studies, vol. 2, no. 1 (1978), pp. 65–68.
21 See Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations (William Benton Pub., 1952), p. 211:
The capricious ambition of kings and ministers has not, during the preceding century, been more fatal to the repose of Europe than the impertinent jealousy of merchants and manufacturers.… That it was the spirit of monopoly which originally both invented and propagated this [mercantilist] doctrine cannot be doubted; and they who first taught it were by no means such fools as they who believed it.… [T]he interested sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is, in this respect, directly opposed to that of the great body of the people.
22 McElroy, Wendy, “Introduction: The Roots of Individualist Feminism in Nineteenth-Century America,” in McElroy, , ed., Freedom, Feminism, and the State: An Overview of Individualist Feminism, 2d ed. (New York: Holmes and Meier, 1992), p. 23.
23 Rousseau, Jean-Jacques, Discourse on the Origin of Inequality, in Rousseau, The Social Contract and Discourses, trans. Cole, G. D. H. et al. (London: J. M. Dent, 1982), pp. 83–89.
24 Engels, Frederick, The Origin of the Family, Private Property, and the State, trans. West, Alec et al. (New York: International Publishers, 1985), pp. 224–31.
25 Rothbard, Murray N., Left and Right: The Prospects for Liberty (Washington, DC: Cato Institute, 1982), p. 7.
26 Rothbard, Murray N., “Concepts of the Role of Intellectuals in Social Change Toward Laissez Faire,” Journal of Libertarian Studies, vol. 9, no. 2 (Fall 1990), p. 66, n. 30; cf. Rothbard, , “The Laissez-Faire Radical: A Quest for the Historical Mises,” Journal of Libertarian Studies, vol. 5, no. 3 (Summer 1981), pp. 244–45.
27 Grinder, Walter E., “Introduction,” in Nock, Albert Jay, Our Enemy the State (New York: Free Life Editions, 1973), p. xx.
28 Rothbard, Murray N., For a New Liberty: The Libertarian Manifesto, rev. ed. (San Francisco: Fox and Wilkes, 1994), p. 52. Unfortunately, Rothbard does not go on to tell us much about the dynamic between these two components.
29 I borrow these terms from Bertrand de Jouvenel, who defines “statocrat” as “a man who derives his authority only from the position which he holds and the office which he performs in the service of the state.” See de Jouvenel, Bertrand, On Power: The Natural History of Its Growth, trans. Huntington, J. F. (Indianapolis: Liberty Fund, 1993), p. 174, n. 4.
30 These five are not the only possibilities, of course. Indeed, I shall be arguing that none of them gets it exactly right. But the sixth approach that I favor will not become salient until we see what is wrong with the initially salient five.
31 Chomsky, Noam, Keeping the Rabble in Line (Monroe: Common Courage Press, 1994), pp. 109–11.
32 Chomsky, Noam, Secrets, Lies, and Democracy (Tucson: Odonian Press, 1994), p. 37. Yet Chomsky does distinguish, as many LibCaps would, between a free-market system and the kind of economic system favored by plutocrats: “Any form of concentrated power, whatever it is, is not going to want to be subjected to popular democratic control or, for that matter, to market discipline. Powerful sectors, including corporate wealth, are naturally opposed to functioning democracy, just as they're opposed to functioning markets, for themselves, at least” (Keeping the Rabble in Line, p. 242).
33 See, for example, Buchanan, James M. and Tollison, Robert D., eds., The Theory of Public Choice: Political Applications of Economics (Ann Arbor: University of Michigan Press, 1972); and Tullock, Gordon, The Economics of Special Privilege and Rent Seeking (Boston: Kluwer, 1989).
34 See, for example, Higgs, Robert, Crisis and Leviathan: Critical Episodes in the Growth of American Government (Oxford: Oxford University Press, 1987).
35 Bakunin, , in “After the Revolution: Marx Debates Bakunin,” in Tucker, Robert C., ed., The Marx-Engels Reader, 2d ed. (New York: W. W. Norton, 1978), pp. 542–48.
36 Djilas, Milovan, The New Class: An Analysis of the Communist System (New York: Frederick A. Praeger, 1957). Interestingly, Djilas seems to regard the Plutocracy-Dominant position as a viable explanation of most class systems, while treating the Soviet regime as an exception: “In earlier epochs the coming to power of some class, some part of a class, or some party, was the final event resulting from its formation and development. The reverse was true in the U.S.S.R.” (p. 38).
37 Marx, quoted in ibid., p. 546.
38 Ayxsn Rand and her “Objectivist” followers (the orthodox ones, at least) would not accept the title “libertarian.” Indeed, one prominent Randian, Peter Schwartz, has authored a thundering condemnation of the entire LibCap movement. (See Schwartz, , Libertarianism: The Perversion of Liberty [New York: The Intellectual Activist, 1986]; a revised and condensed version appears in Rand, Ayn et al. , The Voice of Reason: Essays in Objectivist Thought, ed. Peikoff, Leonard [New York: Penguin, 1989], pp. 311–33.) But I challenge anyone to construct criteria that are simultaneously broad enough to include the major thinkers and traditions of the LibCap movement yet narrow enough to exclude Rand. In my judgment, Rand and her followers should be considered Libertarian Capitalists whether they like the label or not, since the features of the LibCap position they reject are either (a) held by only some LibCaps and therefore not essential to the LibCap position, or (b) not held by any LibCaps at all and therefore based on misunderstandings (often fantastic ones). Randians try to distance themselves from LibCaps on the grounds that the LibCap movement tolerates a number of different philosophical approaches to grounding libertarianism, while Randians insist that Ayn Rand's Objectivist approach provides the only acceptable grounding. But this is a bit like denying the existence of God yet declining to be called an atheist on the grounds that there are many different kinds of atheists with grounds for disbelief different from one's own; disbelief in God makes one an atheist, regardless of how one feels about other atheists.
39 Rand, Ayn, “America's Persecuted Minority: Big Business,” in Rand et al., Capitalism: The Unknown Ideal (New York: New American Library, 1970), pp. 44–62.
40 “Something called ‘the military-industrial complex’—which is a myth or worse—is being blamed for all this country's troubles.” Rand, Ayn, “Philosophy: Who Needs It,” in Rand, , Philosophy: Who Needs It (Indianapolis: Bobbs-Merrill, 1982), p. 10. On the same page, Rand wrote, breathtakingly, that “the United States Army [is] the army of the last semi-free country left on earth, yet [it is] accused of being a tool of imperialism—and ‘imperialism’ is the name given to the foreign policy of this country, which has never engaged in military conquest.… Our defence budget is being attacked, denounced, and undercut [and] a similar kind of campaign is conducted against the police force.” Despite Rand's fierce antistatism, her equally fierce Vietnam-era pro-American patriotism had a tendency to lead her into what can only be described as astonishingly naive statements, not only about the plutocracy but about the statocracy itself. (Most LibCaps would have a far more skeptical assessment of U.S. foreign policy, for example.)
41 Rand, , “America's Persecuted Minority,” pp. 48–49.
42 Rand, Ayn, “Notes on the History of American Free Enterprise,” in Rand, et al. , Capitalism, pp. 108–9.
44 For a LibSoc analysis, see Kolko, Gabriel, Railroads and Regulation (Princeton: Princeton University Press, 1965); and Kolko, , The Triumph of Conservatism (Chicago: Quadrangle Publishing, 1967). For a LibCap analysis, see Childs, Roy A. Jr., “Big Business and the Rise of American Statism,” in Taylor, Joan Kennedy, ed., Liberty against Power: Essays by Roy A. Childs, Jr. (San Francisco: Fox and Wilkes, 1994), pp. 15–47, as well as Weaver, The Suicidal Corporation.
45 Folsom, Burton W., The Myth of the Robber Barons (Herndon: Young America's Foundation, 1991), pp. 1–2:
Those [entrepreneurs] who tried to succeed… primarily through federal aid… we will classify as political entrepreneurs. Those who tried to succeed… primarily by creating and marketing a superior product at a low cost we will classify as market entrepreneurs. No entrepreneur fits perfectly into one category or the other, but most fall generally into one category or the other. The political entrepreneurs often fit the classic Robber Baron mold; they stifled productivity (through monopolies and pools), corrupted business and politics, and dulled America's competitive edge. Market entrepreneurs, by contrast, often made decisive and unpredictable contributions to American economic development.
46 In Liberty against Power, pp. 30, 38–39, 41–43, Roy Childs offers a LibCap analysis of Morgan less favorable than Rand's:
[S]uch key figures in the Progressive Era as J. P. Morgan got their starts in alliances with the government. … J. P. Morgan & Co. … sponsored legislation to promote the formation of “public utilities,” a special privilege monopoly granted by the state. … AT&T, controlled by J. P. Morgan as of 1907, also sought regulation. The company got what it wanted in 1910, when telephones were placed under the jurisdiction of the ICC, and rate wars became a thing of the past. … Morgan, because of his ownership or control of many major corporations, was in the fight for regulation from the earliest days onward. Morgan's financial power and reputation were largely the result of his operations with the American and European governments. … One crucial aspect of the banking system at the beginning of the 1900s was the relative decrease in New York's financial dominance and the rise of competitors. Morgan was fully aware of the diffusion of banking power that was taking place, and it disturbed him. … From very early days, Morgan had championed the cause of a central bank, of gaining control over the nation's credit through a board of leading bankers under government supervision. … J. P. Morgan, the key financial leader, was also a prime mover of American statism.
47 Rand, , “Notes,” p. 108.
48 In the same way, Folsom (in The Myth of the Robber Barons, p. 2), despite his caveat that “[n]o entrepreneur fits perfectly into one category or the other,” divides historical business figures rather too neatly into market entrepreneurs and political entrepreneurs, with the implausible result that John D. Rockefeller, of all people, comes out as a benign market entrepreneur untainted by political favoritism. One would scarcely guess from Folsom's presentation that Rockefeller, like Morgan, was a vigorous lobbyist for federal regulation of industry; see, e.g., Kolko, , The Triumph of Conservatism, pp. 63–64, 78.
49 Of course, from the fact that they became political entrepreneurs, it does not follow that they necessarily ceased to act as market entrepreneurs; many businessmen pursued both strategies simultaneously. Rand's assumption that no one who was succeeding by his own economic efforts would be interested in becoming a political parasite at the same time is unwarranted; her mistake was to read her own Manichaean ethical stance into other people's motivations. Real people are messier and more complicated than the streamlined characters of an Ayn Rand novel.
50 This is not to say that Rand herself would put it this way. Randians generally eschew the language of class; for example, when the Libertarian Party Radical Caucus issued a statement that “American society is divided into a government-oppressed class and a government-privileged class, and is ruled by a power elite,” so that a distinction must be drawn “between those who hold state power and those who do not — between those who rule and those who are ruled … between two opposing classes with mutually exclusive relations to the state” (quoted in Schwartz, , Libertarianism, p. 17), the response of Randian orthodoxy was to dismiss this clearly Smithian-liberal analysis as “blatantly Marxist” (ibid., p. 17), with no apparent recognition of its pre-Marxist historical provenance.
51 By the conservative wing of the LibCap movement I mean the wing that tends to soften libertarian principles in a direction congenial to mainstream conservatives. The conservative/radical distinction within the LibCap movement does not necessarily line up neatly with the division between minarchists and anarcho-capitalists.
52 Childs, , Liberty against Power, p. 45.
53 Charles Tilly has suggested an ingenious criterion to measure the degree to which one or the other of these classes is dominant. Drawing on categories developed by economic historian Frederic Lane, Tilly distinguishes between
(a) the monopoly profit, or tribute, coming to owners of the means of producing [governmental] violence as a result of the difference between production costs and the price exacted from ‘customers’ and (b) the protection rent accruing to those customers—for example, merchants—who drew effective protection against outside competitors. … If citizens in general exercised effective ownership of the government—O distant ideal!—we might expect the managers to minimize protection costs and tribute, thus maximizing protection rent. … If [instead] the managers owned the government, they would tend to keep costs high by maximizing their own wages, to maximize tribute over and above those costs by exacting a high price from their subjects, and … to be indifferent to the level of protection rent. … [This scheme] yields interesting empirical criteria for evaluating claims that a given government was “relatively autonomous” or strictly subordinate to the interests of a dominant class. Presumably, a subordinate government would tend to maximize monopoly profits—returns to the dominant class resulting from the difference between the costs of protection and the price received from it—as well as tuning protection rents nicely to the economic interests of the dominant class. An autonomous government, in contrast, would tend to maximize managers' wages and its own size as well and would be indifferent to protection rents.
See Tilly, Charles, “War Making and State Making as Organized Crime,” in Evans, Peter, Rueschemeyer, Dietrich, and Skocpol, Theda, eds., Bringing the State Back In (Cambridge: Cambridge University Press, 1985), pp. 175–76. While this criterion's validity can be no more than ceteris paribus, it does cast a most instructive light on the policy positions traditionally adopted by left-wing and right-wing political parries.
54 Long, , “Immanent Liberalism,” p. 27 (text and note 61):
Under [statocracy], vast quantities of resources and power are transferred to the bureaucratic state, on the theory that some of these benefits will trickle down to the common people — while under [plutocracy], the bureaucratic state follows a “supplyside” policy of granting special privileges and protections to favored corporations, once again on the theory that some of these benefits will trickle down to the common people. … For example, the current debate over health care in this country may be seen as a struggle over the precise balance of power between, on the one hand, the state bureaucracy, and, on the other hand, the quasi-private beneficiaries of state privilege. …
55 Milton Friedman's more radical, anarcho-capitalist son.
56 Friedman, David, The Machinery of Freedom: Guide to a Radical Capitalism, 2d ed. (La Salle: Open Court, 1989), pp. 154–55.
57 Grinder, , “Introduction,” pp. xviii–xix; cf. Hoppe, Hans-Hermann, “Marxist and Austrian Class Analysis,” Journal of Libertarian Studies, vol. 9, no. 2 (Fall 1990), pp. 86–87:
The state is not exploitative because it protects the capitalists' property rights, but because it itself is exempt from the restriction of having to acquire property productively and contractually. … Marxists are … correct in noticing the close association between the state and business, especially the banking elite—even though their explanation for it is faulty. The reason is not that the bourgeois establishment sees and supports the state as the guarantor of private property rights and contracrualism. On the contrary, the establishment correctly perceives the state as the very antithesis to private property that it is and takes a close interest in it for this reason. The more successful a business, the larger the potential danger of governmental exploitation, but the larger also the potential gains that can be achieved if it can come under government's special protection and is exempt from the full weight of capitalist competition. This is why the business establishment is interested in the state and its infiltration.
Cf. also Grinder, Walter E. and Hagel, John III, “Toward a Theory of State Capitalism: Ultimate Decision-Making and Class Structure,” Journal of Libertarian Studies, vol. 1, no. 1 (1977), pp. 59–79.
58 Berkman, Alexander, “The ABC of Anarchism,” in Fellner, Gene, ed., Life of an Anarchist: The Alexander Berkman Reader (New York: Four Walls Eight Windows, 1992), p. 300:
Individualist anarchists and Mutualists believe in individual ownership as against the communist anarchists who see in the institution of private property one of the main sources of injustice and inequality, of poverty and misery. … But, as stated, Individualist anarchists and Mutualists disagree with the communist anarchist on this point. They assert that the source of economic inequality is monopoly, and they argue that monopoly will disappear with the abolition of government, because it is special privilege — given and protected by government — which makes monopoly possible. Free competition, they claim, would do away with monopoly and its evils.
60 Engels, Friedrich, “Versus the Anarchists,” in Tucker, , ed., The Marx-Engels Reader, pp. 728–29:
Bakunin … has a peculiar theory of his own, a medley of Proudhonism and communism, the chief point of which is, in the first place, that he does not regard capital — and therefore the class antagonism between capitalists and wage-workers which has arisen through social development — but the state as the main evil to be abolished. While … our view [is] that the state power is nothing more than the organisation with which the ruling classes — landlords and capitalists — have provided themselves in order to protect their social privileges, Bakunin maintains that it is the state which has created capital, that the capitalist has his capital only by the grace of the state. As, therefore, the state is the chief evil, it is above all the state which must be done away with and then capitalism will go to blazes of itself. We, on the contrary, say: Do away with capital, the concentration of all means of production in the hands of the few, and the state will fall of itself.
61 We can identify optimistic and pessimistic versions of this thesis. The optimistic version is that plutocracy and statocracy arise together and depend on each other, so that to vanquish one is to vanquish both. The pessimistic version is that each one is capable of exercising domination even in the absence of the other. The optimistic version seems to have greater affinity with the Statocracy-Dominant view than the pessimistic version has. Henceforth when I speak of the Neither-Dominant view I shall mean the pessimistic version.
62 Martin, James J., Men against the State: The Expositors of Individualist Anarchism in America, 1827–1908 (Colorado Springs: Ralph Myles, 1970), pp. 271–73.
63 Another LibCap who may endorse a version of the Neither-Dominant position is Herbert Spencer, who, despite his well-known conquest theory of state origination, traces the origin of class domination not to the organized violence of a state or proto-state, but rather to the division of labor—above all, to the division of labor between the sexes, which leads to the oppression of women by men. It is with the subjection of women, Spencer argues, that a distinction between ruling and ruled classes first emerges. (Spencer, , The Principles of Sociology, vol. 2 [New York: D. Appleton, 1884], pp. 288–91, 643–46.) Spencer looks forward to an eventual end to class domination, but he puts his faith less in market forces than in the progressive moral development of the human race. (For other versions of the conquest theory of state origination, see Oppenheimer, Franz, The State, trans. Gitterman, John [Montreal: Black Rose, 1975]; and Rüstow, Alexander, Freedom and Domination: A Historical Critique of Civilization, trans. Attanasio, Salvator [Princeton: Princeton University Press, 1980].)
64 Conspiracy theories as such should not necessarily be regarded as inherently suspect. After all, the greater the extent to which power is concentrated in a society, the easier it is to form an effective conspiracy (because the number of people that need to be involved to pull off a major change is smaller); so we should predict that more conspiracies will indeed occur in societies with centralized power. However, it is also true that incentive structures can coordinate human activities in ways that involve no conscious cooperation. LibPops seem to see the visible hand everywhere; LibSocs are more aware of invisible-hand explanations, and thus tend to produce somewhat more sophisticated analyses.
65 McElroy, , Freedom, Feminism, and the State, pp. 21–22.
67 I am thinking in particular of Michael Levin and Charles Murray. See Levin, Michael E., Feminism and freedom (New Brunswick: Transaction Books, 1987); Herrnstein, Richard J. and Murray, Charles, The Bell Curve: Intelligence and Class Structure in American Life (New York: Free Press, 1994).
68 Currently each tends to accept a distorted stereotype of the other two. More specifically, each libertarian group tends to be seen, by the other two, through the lens of its authoritarian counterpart: LibSocs are seen as Stalinists, LibCaps as fascists, LibPops as neo-Nazis.
69 A regular police force was not introduced in Rome until the Empire, during the reign of Augustus.
70 Finley, M. I., Politics in the Ancient World (Cambridge: Cambridge University Press, 1994), pp. 18–24, 45.
72 Bell, Tom, “Polycentric Law,” Humane Studies Review, vol. 7, no. 1 (1991/1992), p. 5.
73 Livy, , The Early History of Rome, trans. de Sélincourt, Aubrey (London: Penguin, 1988), p. 269.
74 That is why in classical times aristocratic political parties in Greece and Rome always preferred elections over the Athenian practice of choosing officials by lot.
75 Boétie, Étienne de la, The Politics of Obedience: The Discourse of Voluntary Servitude, trans. Kurz, Harry (New York: Free Life Editions, 1975), pp. 77–78.
76 Two examples: urban black teenagers have been prosecuted for offering hair-braiding services without benefit of expensive beauticians' degrees; and in many cities, a taxi license costs as much as $100,000. Such low-capital enterprises as hair-braiding and taxi service are natural avenues for people of modest means to start earning money and achieving independence; but the coercive power of the state closes such avenues off.
77 I do not mean to imply that these results were consciously aimed at by the wealthy. Rather, plutocratic interests frequently shape public policy unintentionally, via the “malign invisible hand” mechanism described earlier (in Section IV).
78 This leads conservatives, and some conservative-leaning LibCaps, to see the poor as beneficiaries of statism — parasites feeding at the public trough. A more realistic assessment would see the poor as net losers, since the benefits received through welfare are rarely large enough to compensate for the harms inflicted through regulation.
79 For example, the recent debate over farm policy in the United States has largely ignored the fact that most agricultural subsidies go to giant agribusiness conglomerates rather than to family farms. Another example is government support for higher education — a benefit received disproportionately by members of the middle class, yet funded through taxes by lower-class workers who cannot afford to postpone their earnings for four years. But one of the worst instances of upward redistribution is inflation, caused by government manipulation of the currency. An increase in the money supply results in an increase in prices and wages – but not immediately. There is some lag time as the effects of the expansion radiate outward through the economy. Under central banking, the rich — i.e., banks, and those to whom banks lend — get the new money first, before prices have risen. They systematically benefit, because they get to spend their new money before prices have risen to reflect the expansion. The poor systematically lose out, since they get the new money last, and thus have to face higher prices before they have higher salaries. (Moreover, the asymmetrical effects of monetary expansion create artificial booms and busts, as different sectors of the economy are temporarily stimulated by early receipt of the new money, encouraging overinvestment that goes bust when the boom proves illusory. The unemployment caused by this misdirection hurts the poor most of all.)
80 “The high cost of aggression makes it a tool of the rich. Only the well-to-do can afford to lobby, bribe, or threaten our elected representatives effectively.” Ruwart, Mary, Healing Our World: The Other Piece of the Puzzle, rev. ed. (Kalamazoo: SunStar, 1993), p. 154. Ruwart's book is a rich source of examples of how big government tends to help the wealthy and hurt the poor.
81 An adequate theory of class would also have to distinguish more groups than just “rulers” and “ruled.” As Chomsky writes: “[T]o do a really serious class analysis, you can't just talk about the ruling class. Are the professors at Harvard part of the ruling class? Are the editors of the New York Times part of the ruling class? Are the bureaucrats in the State Department? There are differentiations, a lot of different categories of people” (Keeping the Rabble in Line, p. 109). Dividing the ruling class into statocratic and plutocratic factions is valuable as a start, but only as a start.
Libertarian sociologist Phil Jacobson, whose work draws on both the LibCap and LibSoc traditions, is making some valuable developments in this area. Jacobson distinguishes three main groups: the Idea, Force, and Wealth classes. These basically correspond to the priests, warriors, and merchants of traditional class theory: Plato's philosopher-kings, auxiliaries, and craftsmen; India's brahmins, kshatriyas, and vaishyas. In turn, each of these three groups is subdivided into two factions with somewhat divergent interests. The Wealth class is divided into a symbol-manipulation component (e.g., banking and finance) and a physicalreality component (e.g., actual manufacturing). The Force class is likewise divided into a symbol-manipulation component (e.g., politicians) and a physical-reality component (e.g., police and the military). The Idea class is all symbol-manipulation, but can be divided into elite-culture and popular-culture groups (i.e., intellectuals versus entertainers). Jacobson analyzes social change in terms of the interaction and shifting alliances among these six groups.
82 Perhaps the ancient republican theorists — particularly the Athenian democrats (as opposed to the more oligarchy-friendly proponents of the “mixed constitution”) — deserve a second look.
83 And when they were not Christian priests, they at least maintained exclusive control over Church lands — and their associated tithe revenues.
84 The role of ideology in supporting a ruling class is considerable. “An exploiter creates victims, and victims are potential enemies. It is possible that this resistance can be lastingly broken down by force, as, for example, in the case of a group of men exploiting another group of roughly the same size. However, more than force is needed to expand exploitation over a population many times [the exploiter's] own size. For this to happen, a firm must also have public support. A majority of the population must accept the exploitative actions as legitimate” (Hoppe, “Marxist and Austrian Class Analysis” [supra note 57], pp. 84–85).
85 If discrimination did not follow a common pattern, it would be far less problematic. That is, if it were a purely random matter which groups were discriminated against by any one employer, then those who experienced discrimination from a given employer could be sure of finding plenty of other employers who lacked that particular prejudice. The prejudice might still be a vice, to be sure, but it would at least be a harmless vice. It is only when there is a consistent and widespread prejudice throughout society against certain groups that members of those groups find themselves systematically disadvantaged across the board. This result is what makes discrimination so especially objectionable.
86 As defined, the three categories are meant to be exhaustive: one either aims to help, or aims to harm, or does not aim at either helping or harming. (The term “greed” is not meant to be pejorative; it is simply a useful shorthand for any motive that does not involve the welfare of others, whether or not that motive is “self-interested” in any strong sense.)
87 This now-you-see-it-now-you-don't phenomenon proves particularly embarrassing for LibCap defenders of free-market anarchism. What ensures that, in the absence of government, private protection agencies will choose to resolve their differences through arbitration rather than violent conflict? The typical answer is: Long-term greed, which recognizes that the value of maintaining a system of cooperation outweighs the value lost by submitting to arbitration. But what ensures that these protection agencies won't merge into a giant cartel, thus, in effect, bringing back government and a new ruling class? The typical answer is: Short-term greed, which undermines cartel agreements in the usual way.
88 That is why large corporations in America during the “Progressive Era,” and racists in South Africa at the beginning of apartheid, were such enthusiastic fans of government regulation.
89 The distinction was first brought to my attention by Bryan Caplan.
90 That is one reason that the most successful criminal organizations have been ones whose members shared some ethnic, religious, political, or family connections, making them less likely to defect vis-à-vis each other than vis-à-vis outsiders. That is also why the monarchies of different countries have sought to join their families by marriage.