Yglesias on Libertarians and Corporate Power

Today at Cato Unbound, Matthew Yglesias replies to Roderick Long's plea for distinguishing devotion to genuinely free markets from corporatism. Matt agrees with the general point, but thinks that it is absurdly utopian to think we can somehow keep the economy untainted by political power. So libertarians don't really do anything to help by pointing out that it would be better to keep politics out of the economy. Here's what I take to be the core of Matt's argument:

… the larger problem is that libertarianism, even at its very best, tends to suffer from an impoverished set of ideas about how corporate domination of the public policy space might be prevented. The political left has, by contrast, the tradition of community organizing, a set of public interest advocacy organizations, allies in the trade union movement, efforts to improve the quality and independence of the civil service, and various notions about changing the methods by which campaigns are financed in the United States. This is hardly a perfect toolkit, and it can be enhanced in some ways by drawing on libertarian insights, but it’s something. And libertarians tend to be either indifferent or hostile to it, campaigning against public financing, strong labor unions, and the civil service.
In practice, libertarianism seems to have little to say about how to bring about political change except to work hand-in-hand with business lobbies when the interests of business and free markets are aligned, or else when business interests are masquerading as libertarianism.

I think this is an interesting challenge. My own view, which I take from Hayek and Buchanan, is that we need constitutional reform that requires redistributive policy to meet certain conditions of generality or non-discrimination. I don't think this would will work perfectly, and I'm sure that any paper barrier to special-interest payoffs would be interpretatively eroded over time. But I think it would be a barrier to corporate abuse of political power.
I agree with Matt when he says:

Much of the world labors under hopelessly corrupt governments, wherein the police and security services are little more than shakedown operations or enforcers for local bigwigs. But elsewhere, justice is administered with a modicum of efficacy. Similarly, there are real alternatives to run-amok corporate dominance of the policy environment. There are better and worse civil services in the world, and even within individual countries some agencies work better than others.

Government in the U.S. is in fact relatively limited by constitution and custom. We have our free speech and our guns and cops still can't come into our houses uninvited, etc. And it could be even more limited. I don't think Matt takes seriously enough the degree to which progressives and New Dealers opened the way for today's government-saturated corporatist markets. His position seems to be that we should keep all that regulatory and redistributive discretion for the government, I guess on the off-chance that his favorite political coalition might use it for something other than the benefit of corporations and other narrow interests. But, since we all know that's not going to happen, we should promote “countervailing forces” within government and without. Yet if Matt is right, and justice can be administered with a modicum of efficiency and government can work relatively well, then why not simplify matters a lot and put stricter limits on the government's power to rig the economic system?  We may not be able to get politics out of the economy altogether, but Matt seems to agree in principle that we could do a lot better, so I wonder why is he making such a big deal out of campaign finance reform, community organizing, and labor unions, as if there is simply no hope of more directly reining in the use of government power for private advantage.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center

18 thoughts

  1. Mazel Tov! Any chance you will rethink your anti-breeder stance? Or at least adopt some cool Southeast Asian kids and turn them into rabid Rothbardians and/or Objectivists?

  2. Congratulations and best wishes to you both! Also, welcome back…glad the Junta failed utterly to ruin your holiday…

  3. R Pointer – Currently a graduate student at the University of Toronto. My interests are varied. I love reading and playing chess. Both are addictions. And I am trying to find a way to make a living from both.
    Richard Pointer says:

    I congratulate you both. Do you both consider marriage a successful evolutionary culturo-traditional institution? That answer must ‘yes’ considering your engagement.

  4. Congratulations!
    My one piece of wedding advice – if you decide to have a big photo of all your guests, have the photographer up high looking down on the guests, not the guests arranged on steps above the photographer.

  5. avatar299 – In the 2008 Presidential elections, a republican candidate by the name Ron Paul inspired millions of Americans. he called for a revolution, based on libertarian thinking and theory. Sadly, after scandal and failure, the Ron Paul Revolutions, composed of young Americans intrigued by the ideas of libertarianism are left stranded. This blog is for you. Libertarianism is a theory that needs to updated, by new blood and new ideas. Peace, Prosperity and Freedom are what we live and die for
    obo says:

    Does this mean i should expect to see “Kerry Wilkinson” in my Blogginghead podcasts now

Comments are closed.