News & Analysis
How Real Freedom Works
Managerialist America ... Mark Roe ... a professor at Harvard Law School, asks how capitalist America really is in a stimulating Project Syndicate piece. Mr. Roe suggests that the level of state ownership of capital, or the level of government intervention in the economy, may offer a misleading picture of America's political economy. – The Economist
Dominant Social Theme: America is not as free as it seems to be. The government needs to pass laws to empower shareholders. Then shareholders will run corporations and America's Constitutional republic shall blossom once more.
Free-Market Analysis: The Economist is a miserable, elitist newspaper; its standards continue to decline. Read the first sentence, above (excerpted). The professor "asks how capitalist America really is." What does that mean? How America really IS? The colloquialism is so inexact that we had to read the sentence three or four times before we decided it wasn't some sort of typo.
Then there's the anonymity that The Economist continues to adopt. Anonymity has an ancient and respectable history, but The Economist regularly runs anonymous first person articles. This is ludicrous. This column, "American politics – Democracy in America," provides us with the following sentence: "To my mind, all this suggests a structural antagonism not between the rich and the not-rich, but between the corporate managerial class, the diffuse crowd of individuals who actually own the companies the managerial class so jealously control, and the rest of us ..."
Whose mind is this exactly? The Economist isn't telling, or if it is, we couldn't find the byline. Usually, anonymous articles, if they introduce a personal perspective, do so using "we." This is how the New Yorker offered its witty, anonymous columns. But to run an anonymous first-person column is a kind of literary degradation in our view. Sure, it's done – but why? It's a perversion of the anonymity that the magazine seeks to use.
The Economist is increasingly perverse in any case. As a publication that was once, a hundred years ago, republican and is now a solidly ensconced elitist mouthpiece, The Economist has come on hard times from an editorial standpoint. During the current resurgence of free-market thinking, The Economist is in the unenviable position (as a self-styled thought-leadership magazine) of having to square the proverbial circle.
It has to pretend to be free-market oriented when in fact it is entirely corporatist. It is through corporations and capitalism that the powers-that-be disguise their authoritarian and anti-freedom agenda, and nowhere is this more evident and obvious than in the pages of this eminent publication.
It is, in fact, a major dominant social theme of the Anglosphere power elite – that corporations and capitalism are analogous to free-market, agrarian republicanism. We sometimes use capitalism interchangeably with free-markets, but we shouldn't. Capitalism has some fairly specific overtones and the two terms are increasingly differentiated.
A free-market is simply that, an untrammeled venue. Capitalism is much different. Capitalism implies corporatism, and the corporate state. Corporations are essentially artificial creatures, brought to life by judicial decision-making. In a free-market republic, corporations likely wouldn't exist. Business, as we have pointed out before, would have a partnership orientation (as it once did). Commerce would be a good deal more accountable.
Corporatism is in fact the great bane of free markets. Corporations shove free-markets toward gigantism and away from transparency. Without corporations, business would likely be conducted by flexible linkages of entrepreneurial partnerships. That's not how The Economist sees things, though. For Economist journos and big thinkers, capitalism CONSTITUTES a free market. The problem from The Economist's perspective is how to rationalize capitalism so that it can be further perfected.
In fact, anybody who wants to look at Western society would conclude that both Europe and America are increasingly authoritarian, police states. Corporations function within consumerist parameters set by federal governments. (See other article, this issue.) The Economist sees none of this. "One might infer that America is very capitalist," the article informs us. Really? "Capital largely controls the economy," the article adds." This is true, though the bigger question is ... who controls the capital?
That's not an issue The Economist is ever likely to touch. What does concern the writer of this column, whoever he/she is, is that the current system become ever-more amenable to marketplace dictates. To this end, it quotes Mark Roe's recent research approvingly.
What concerns Roe apparently is that the ownership of capital is often extremely diffuse, "spread over many thousands of shareholders." Thus, these shareholders really have little say over the corporations they own. "The people with real power are the class of managers and executives," Roe writes disapprovingly.
Being a sincere sort, Roe wants to fix this. What America has now, he believes is a "managerial" society and he wants to give power back to the "owners." He is dissatisfied with things as they are. "The law is clear: the corporation's board of directors, not its shareholders, runs the business," he observes. Managers are insulated from market authority.
There are problems with such a managerialist society. "Managers of established firms continue money-losing ventures for too long, pay themselves too much relative to their and the company's performance, and too often fail to act aggressively enough to enter new but risky markets. "
What's the solution? "An 'ownership society' worth the name would both increase shareholders control in corporate governance and make it much easier to push out incumbent managers by means of 'hostile' takeovers."
Actually, Roe doesn't come right out and say this in the article from which The Economist column is drawn. But the conclusion is warranted; Roe implies this solution in his own article.
Ironically – there are so very many ironies inherent in modern regulatory democracy – the solution to managerial-capitalist excess is to be found not in the market but in ... government regulatory authorities!
It is very clear from both The Economist column and Roe's article that the Securities and Exchange Commission in particular would have to change the rules to make corporations more responsive to shareholders.
This conclusion of course is not surprising. America has traveled almost as far away from a free-market economy as the rest of the West at this point. Between a plethora of licenses, lack of available capital, aggressive regulation, environmental laws, terrorist "concerns," hyper-active taxation and central-bank initiated price-inflation, there is not much leeway left for someone who wishes to work entrepreneurially within the system as it's constituted.
There is a solution, though. It is not strictly-speaking a formal libertarian one (as libertarianism has been formalized in recent years) and does not necessarily partake of the finer points of the non-aggression principle. It is very simple, however, and hews to what we understand of natural law.
The idea is actually based on what is already happening. In America especially, people hoping to live in a freer manner are dropping out of the system as best they can. They are reasserting their anonymity and in some cases attempting to return to agrarian roots.
This was in fact the vision of Thomas Jefferson's agrarian republicanism. It was a vision that was repudiated only by the force of the American Civil War that initiated the authoritarian and statist perspective of Alexander Hamilton and the vision of the European banks that apparently backed him.
The idea would be to return as much as possible to small, voluntary, familial oriented communities that exist outside the ambit of the regulatory state. These familial units would surely be armed for defensive purposes, use honest money and would partake of private justice wherever possible.
This sort of solution removes the libertarian conversation from the sterility of the "non aggression principal" – a principal that sounds good but that in practice seems to us increasingly unworkable. What WOULD work is to simply observe history, natural law, and how human are biologically prompted to live – in small, familial-oriented communities. In such communities, historically, there was not much conversation about the non-aggression principle.
Smaller is better, correct? (Within this context, anyway.) Family is the fundament of freedom and most people biologically can't support more than 150 relationships anyway. It is no coincidence that Western power elites have attacked farming communities and emphasized urban environments. China is doing the same, even today. And nowadays, grandparents are supposed to live separately from the family in their own retirement communities. Children are aggressively provided with their own culture to separate from their parents.
Public schools and universities undermine the age-old concept of apprenticeship and enmesh the child in a network of state-approved, authoritarian notions. Religion, a communal glue, has also been undermined. Price inflation along with "women's lib" has been engendered to ensure that both husband and wife have to work, and in fact wish for the female to work, removing her from the family.
Above all, the elites have endlessly emphasized the judicial component of the state. The state is both parent and teacher; judge and jury; enforcer and incarcerator. Morality within this context is what the state says it is. We prefer Mises' definition: morality is personal.
In fact, justice can be delivered in numerous ways. Private justice would be the preferred default in our view. What is private justice? It is justice as it was practiced for thousands of years before the modern state introduced its brand of authoritarian, monopoly justice. Private justice is likely based on the principle of the honor duel and family vendettas.
It is the threat of force that impels people to a judicial negotiation, whether one wishes to negotiate face-to-face or utilize a private third-party adjudicator. Societies that practice private justice tend to be very polite. Such a communal structure may also obviate the need for a formal non aggression principle.
If the culture is organized properly, the need for such elegant conceptualizations is greatly diminished. People, in fact, are emotional and passionate beings. Conflict is a fact of life; the Ten Commandments are regularly traduced, even though people understand them well enough and try to live by all or most of them. Conflict resolution within this context is perhaps a good deal more important than first principles.
Such private justice is laissez faire and informal. Decisions reached one time may not be reached again the same way. This sort of justice is still practiced, especially in some Islamic countries where even murder is negotiated via monetary payments. Sometimes such practices may be referred to as "common law," but the modern legal industry has done its best to confuse people over what is common law.
Today, common law is said to refer to British Common Law of the past 500-1,000 years. Such Common Law actually encompassed a fairly complex system. But REAL common law is even more basic and simpler to enforce. It was a kind of unspoken contract law, and one could argue it made no differentiation between "civil" and criminal." When a contract was broken, justice might be demanded. If justice was not sufficient, violence might ensue.
Much of the effort of modern Western jurisprudence is spent demonizing private justice in our view. Words have been coined to describe it. "Vigilante" is one of them. The repetitive element of American Westerns is that bad eggs are eventually brought to justice by government enforces. Civilization is dependent on state authority.
Next to central banking itself, modern monopoly justice is perhaps the most important dominant social theme that Western elites have implemented. We have always predicted it will be the last meme to come under attack in this era of Internet Reformation. Most people simply cannot imagine life without state monopoly justice. And even the anarchy movement seems to prefer the non-aggression principal as a communal building block.
We suggest natural law and, as necessary, agrarian emphases. But our proposal is aspirational, not didactic. We are not trying to preach, only point out that there is more than one kind of jurisprudence and even more than one kind of justice. We think Anglosphere elites have perverted much that is decent and good in Western culture and that a harkening back to what worked once upon a time, even referentially, isn't such a bad idea.
Most people also conflate justice with a single outcome. It is not "just" that some people end up being punished differently for the same "crime." Of course, this brings up specific questions about what crime is and how the state should go about enforcing morality. The standard answer is that the state enforces one's debt to society. But one could reasonably ask what is a "debt to society," exactly, and how is to be erased by incarceration, etc.
Conclusion: The Economist article is a good example of how the assumption of monopoly justice taints almost every observable aspect of the modern conversation as regards law, business and commerce. And mainstream media literally cannot and will not conceive of an unregulated environment. Even when the conversation turns to empowerment, it is assumed – stated – that such empowerment is a regulatory function. From The Economist, we would expect nothing else.
Edited on date of publication.
l 
|
You must be a site member to submit suggested edits or post feedback. In addition to submitting edit suggestions and posting feedback, your Free Membership to The Daily Bell gives you access to our Member Zone where you will discover a plethora of other member benefits. Want to learn more? click here |
|||||
|
|
||||
 |
Posted by William3 on 06/30/11 05:59 AM
"Capitalism implies corporatism, and the corporate state."
I assume DB means here that in the mainstream media capitalism is always linked to the large corporations, not that capitalism per se is about corporatism. Capitalism has been around much longer than the corporation, and undergirds how free markets work, I would think.
Otherwise, I thoroughly enjoyed the philosophical discussion in this article!
Reply from The Daily Bell
OK. But capitalism in the modern consciousness is directly linked to Marx - and thus to wielders of big capital. That's how we presented the term.
 |
Posted by Avatar on 06/29/11 11:16 AM
This is wishful thinking. Even during the Civil Rebellion (War) in the USA. Lincoln established basic martial law. He started the war without a declaration of war from Congress. He stopped free speech. He taxed like the British in the mid-1700's. He printed fiat money and in 1863 established the forerunner of the FED. He shut down newspapers and induced mandatory military service. This was pretty much a dictatorship. A marriage of government and Corporations. After all the War was fought to keep the northern industries tariff's secure and safe from the south. Today they could shut down the internet, track most people by their cell phones and with the vast US military system, subjugate the masses very efficiently. Most people do not even get their news from the internet.
 |
Posted by CelticFire69 on 06/29/11 10:00 AM
Great Piece!
|
Posted by John Danforth on 06/29/11 09:57 AM
"...let not the perfect be the enemy of the good."
I agree wholeheartedly. And I thank you for the patience, tolerance, kindness and generosity with which you share your wisdom and examine different concepts as they are presented. Another lesson in civility, demonstrated by your example.
|
Posted by John Danforth on 06/29/11 08:21 AM
"A free society is not necessarily compromised by this or that occasional infringement of this or that principal. It is the STRUCTURE of a community, its compactness, the reality of kinship, etc., that provide the fundamentals."
A free society that occasionally burns witches in a bonfire might not consider itself compromised, but the victims might disagree.
The structure, compactness, and kinship of a gang, a cannibalistic tribe, a pirate community, downtown Detroit neighborhoods, etc. are unquestionable but do not seem to me to provide the fundamentals. Something is missing in these. These are places where my life is not worth a dime or a moment's thought to the inhabitants. I'd definitely prefer the company of people here. We'd make a great community. Isn't it our shared values, our common sense of justice that would make it great?
Reply from The Daily Bell
John, despite our joy at sharing what is a version of the wisdom of the ages provided by insightful feedbackers such as yourself, there is a big difference between a physical community and online one; there is a big difference between an electronic family and a real one. And let not the perfect be the enemy of the good.
|
Posted by NAPpy on 06/28/11 10:01 PM
DB,
It is valuable to discuss the structure of a workable freedom, like this article does. A principle like the NAP probably is understood instinctively. It's good that I came to the conversation late because Adam, John Danforth and BM already brought forth your elaboration with their comments. In fact, in the context of the stated point of your article, I don't really disagree at all.
However, given the points made by other feedbackers, I feel safe to say that the structures of freedom you mention are ALSO not enough. I can't help thinking that I'd rather live in an agrarian-based community, like you describe, TODAY, rather than in one in the past. Technology isn't the only thing that humans have a better understanding of now. The agrarian-based communities that you mentioned were still stifled with a church-dictated morality, kids were highly likely to be abused, and the cultural language was based on dominance.
In The Economics and Ethics of Private Property by Hans Herman Hoppe, Click to view link, Hoppe elaborates on Mises' concept of human action as not only key for economics, but also shows that praxeology is the base for epistemology. In other words praxeology is the key to the rebirth of the rationalist philosophy, and underlies Hoppe's theory of discourse ethics. Ideas matter-not alone, and stale, agreed. Since everyone's good in their own mind, and most of the evil today uses relativism as it's excuse--I'd rather be introduced to a 2 page summary of rational philosophy, ethics and economics as a kid, than some fuzzy religious dictate. Lloyd deMause, in his Psychohistory Institute, says that the trend of better parenting underlies much of the progress people made in the 1700 and 1800's. The dark age of the 20th century that you mention was also a step back in parenting--2 working parents, one parent families, disemphasis on the family, etc. Molyneux thinks that poor parenting is the reason why the cause of freedom has declined despite the explosion of freedom literature. Afterall, if you're abused, don't learn how to think critically, then odds are you will repeat that cycle with the next generation. Dr. Marshall Rosenburg's Center for Nonviolent Communication teaches that the vast majority of people today that use or condone violence do so because they literally do not have the words and concepts to interact peacefully.
To summarize, I agree that small/familial/voluntary communities, possibly founded on tribes, private justice, and honest money would likely be fundamental structures that would help implement freedom, but only given the understanding that this is a guess, and the market should decide. In addition, a derived-morality in the libertarian tradition, the art and science of peaceful parenting, and the evolving skillset of Nonviolent Communication are additional fundamental structures that would help implement freedom.
 |
Posted by Gpond on 06/28/11 08:27 PM
DB, Thanks for the highest quality articles on the web today, and for providing this lively forum which attracts such high quality readers and contributors. To paraphrase something I heard elsewhere: I came for the great articles, I stayed for the great posters/discussions.
And a final word from me on NAP, it is simply a principle that can be employed (or not, I guess) for the settlement of disputes in a free world. I like the tribal idea and am learning on that one. Imagine as did Rothbard once, a time of cascading waterfall secessions, where some regions seceded from the Federals, then some states got the idea that they could secede from the Region, and some counties got the idea to secede from the various states, some cities seceded from the counties, and perhaps your neighborhood decided to secede from the city. What a wondrous experiment in decentralization that would be. Rothbard, being who he is would have you later decide to secede from your neighborhood and form whatever voluntary associations (tribe?) that you felt beneficial to you and yours.
Cheers, all.
Reply from The Daily Bell
Very kind. Thanks for participating.
 |
Posted by Dave Jr on 06/28/11 08:07 PM
Resistance is futile.
|
Posted by free on 06/28/11 07:58 PM
A road to serfdom we are traveling.
|
Posted by Dave Jr on 06/28/11 06:58 PM
It is a fine line as to what is considered crossing the line, and I suppose that may be one reason for the controversy? I too feel much comfortable with absolutes, a clear line between right and wrong.
Thank you for lending an ear. This really is a touchy subject.
 |
Posted by Summer on 06/28/11 06:47 PM
Agreed. I thought occasionally one could joke!
I don't think one should 'go beyond' what force is being used against oneself, that was my point.
Say, someone attacks me with a knife, I could grab a vase to hit him or use a knife. Using a knife would be an agressive stance, but in self-defence and not going beyong the force appled to me, reasonable, no?
|
Posted by Summer on 06/28/11 06:41 PM
DB, you da man! I really liked this article.
DB: Religion, a communal glue, has also been undermined.
Spot on!
DB: Price inflation along with "women's lib" has been engendered to ensure that both husband and wife have to work, and in fact wish for the female to work, removing her from the family.
You've done it again!
DB: Decisions reached one time may not be reached again the same way. This sort of justice is still practiced, especially in some Islamic countries where even murder is negotiated via monetary payments.
Yes. I'm going to say something I sense may be controversial: some victims, of having had a murdered relative, would be more consoled by money than the killing the murderer or forgiveness. I don't think this is heartless, I think all people have different needs and different ways of finding comfort in difficult times.
DB: Sometimes such practices may be referred to as "common law," but the modern legal industry has done its best to confuse people over what is common law.
Excellent point, I wondered about this during my law degree!
DB: Click to view link made no differentiation between "civil" and criminal
Precisely, hence no need for incarceration etc. All crimes are torts in Islamic law too.
DB: Much of the effort of modern Western jurisprudence is spent demonizing private justice in our view. Words have been coined to describe it. "Vigilante" is one of them.
How about 'pre-legal' - one of H L A Hart's gems, when describing a society that cannot implement secondary rules, oh so backward!
DB: We think Anglosphere elites have perverted much that is decent and good in Western culture and that a harkening back to what worked once upon a time, even referentially, isn't such a bad idea.
Absolutely agree, bring back men such as 'a man for all seasons'!
DB: Most people also conflate justice with a single outcome. It is not "just" that some people end up being punished differently for the same "crime." Of course, this brings up specific questions about what crime is and how the state should go about enforcing morality. The standard answer is that the state enforces one's debt to society. But one could reasonably ask what is a "debt to society," exactly, and how is to be erased by incarceration, etc.
A 'wrong' is committed:
1. Against one's own soul/standards = no 'human' justice.
2. Against another soul, but not taking or inflicting anything (negative) substantial from them = no 'human' justice.
3. Taking something substantial or inflicting something negative, being substantial, or breaking a contract = 'human' justice enforced, a matter where a PARTY is wronged and will be compensated.
DB: But is NAP really the thing to concentrate on in this day and age? In other words, is so much theoretical cogitation sterile after a point? ... Is it possible that the STRUCTURE of society creates freedom (an inherent belief structure) rather than an imposed elegant theory?
Correct. It's a valuable principle not 'a comprehensive way of life'.
DB: We think people are born with an INHERENT understanding of morality. It can be expressed as NAP, or it can be expressed religiously. It can be offered and accepted 100 ways.
Absolutely correct.
DB: What people need is a way to IMPLEMENT freedom personally and for the families and their communities. They can do this by concentrating on the apparent STRUCTURAL FUNDAMENTALS of freedom, which have to do with small communities, shared decision making, self-reliance and private (as opposed to state) justice.
DB, you are o so smart, refreshing, and logical. I really enjoy exploring the issues beyond the issues - that is your unique quality. Just excellent.
Reply from The Daily Bell
Thanks for the feedback and kind words.
|
Posted by Dave Jr on 06/28/11 06:36 PM
If one defends agressively, meaning he goes beyond what is needed to thwart the life threatening act against him, then he is guilty of aggression and in breach of the NAP, and should be held accountable. It is a very serious responsibility that no one should take lightly.
|
Posted by Dave Jr on 06/28/11 06:30 PM
Well stated. It truely is the wish bone. If this basic principle can not be up held, then none can. Then we will live under barbarism.
|
Posted by bionic mosquito on 06/28/11 06:29 PM
DB: What people need is a way to IMPLEMENT freedom personally and for the families and their communities. They can do this by concentrating on the apparent STRUCTURAL FUNDAMENTALS of freedom, which have to do with small communities, shared decision making, self-reliance and private (as opposed to state) justice....Thus the larger question is not what morality allows us to be free but, more practically, how can people live together in ways that support and perpetuate freedom.
BM: One way or another, I think we are headed toward having an opportunity to try this out. Greater decentralization is coming; let's see what comes of it. Inherently, with the decentralization will come more options for individual choice about "community." This can only be a good thing.
DB: We are perhaps suggesting an alteration of emphasis when it comes to the larger freedom conversation.
BM: This was a very thought provoking article and conversation. Thanks.
|
Posted by Summer on 06/28/11 06:25 PM
Thanks for your points.
NAP is 'good' as a principle. I do think that one can agressively defend oneself, no? I know I have!
Tis true what you say about contracts - innapropriate in this situation. But life is not perfect eh?
Malcolm X:
Be peaceful, be courteous, obey the law, respect everyone; but if someone puts his hand on you, send him to the cemetery.
I wouldn't go this far though!
|
Posted by Summer on 06/28/11 06:02 PM
DB: "So PNA is a kind of fancy restatement of previous moral codes? We would agree with that, if that if is your point ..."
Yep, and PNA is a wishbone of the skeleton of a moral code...
|
Posted by Dave Jr on 06/28/11 06:02 PM
Thanks Summer. Violence is an act, aggression is a state of mind. I am all for the NAP and would have absolutely no trouble living under that philosophy. The problem arises when someone else can't? How then am I to conduct myself? Isn't it like a breech of contract? If one party breaks the contract is the other still to be held to his side? Does he then become a slave? What use would contracts then be?
|
Posted by Summer on 06/28/11 05:30 PM
Non-aggression principle
From Wikipedia:
The non-aggression principle (also called the non-aggression axiom, or the anti-coercion or zero aggression principle or non-initiation of force) is an ethical stance which asserts that "aggression" is inherently illegitimate. "Aggression" is defined as the "initiation" of physical force against persons or property, the threat of such, or fraud upon persons or their property. In contrast to pacifism, the non-aggression principle does not preclude violent self-defense. The principle is a deontological (or rule-based) ethical stance.
Origin:
The principle has a long tradition but has been mostly popularized by market anarchists and other schools of libertarianism (consequentialist libertarians do not base their libertarianism on it, but some derive it from consequentalist arguments and thereafter use it at less fundamental stages of their thinking).[1] It is an axiom of some forms of anarchism, and traces of it can be found in Judaism, Christianity, and Islam, as well as in Eastern philosophies such as Taoism.[2]
Moi: It's A principle found in codes of morality.
Reply from The Daily Bell
So PNA is a kind of fancy restatement of previous moral codes? We would agree with that, if that if is your point ...
|
Posted by Dave Jr on 06/28/11 04:59 PM
"What is your point, Dave Jr.?"
Ida know, I guess only that you can only support free market capitalism if: 1) you are alive. 2) If you are allowed to own the goods or services you produce and intend to trade. If I have to stand still while being aggressed against, well then it all goes out the window because tomarrow I will not produce. Either because I am dead, or because I have decided "whats the point".
|
|
