PostHeaderIcon Liberty vs. Corporatism

The Cato Institute has published an interesting essay by an obviously Left-leaning libertarian named Roderick Long entitled, “Corporations Versus The Market; Or, Whip Conflation Now.”

While I would take issue with some of his examples of “corporate welfare” (e.g. Walmart’s competitors use the same roads they do to ship their inventory), I got more out of the essay than I initially expected to. As a devout Capitalist, I used to have somewhat of a knee-jerk defense reaction to Leftist bashing of Corporations of any size, even though I am a small businessman. That business of late (past 12 years) has been a private Montessori school, so the condition of the public school system in America has been a particular focus of mine.

Then, I read a mind blowing (and opening) book by John Taylor Gatto entitled, “The Underground History of American Education,” which is available as a free e-book at that link. The scales started dropping from my eyes. It explains in excruciating detail how and why our children are being deliberately dumbed down. Almost more importantly, SO WERE WE! The process has been underway for over a hundred years! It still pisses me off when I think about it.

The history of the Progressive Movement is covered well in Jonah Goldberg’s “Liberal Fascism” and Amity Shlaes’ “The Forgotten Man“; but if I only had time for one of the three, I would recommend Gatto’s. Further to the detailed history of the Progressives, it documents how the early industrialists like Rockefeller, Carnegie, et al, were very much behind the effort to create mindless little cogs for the tedious chores in their corporate machinery.

There is a reason that public schools resemble factories in so many ways. Humans have to be programmed to accept the tedium of spending the day metaphorically chained to a desk or machine in a cubical or factory, and the younger one starts, the easier the chore. Further, the industrialists didn’t want us to be educated any more than absolutely necessary to perform the required tasks and be easily persuaded to desire their products. Thinkers tend to become entrepreneurs and eventually bothersome competitors who can disrupt their well laid plans with innovation and guerrilla tactics unsuited to the behemoths.

This is the reason that the Montessori Method of education is eschewed by the factory schools in America. Children are given freedom of movement and learn how to think – critically and for themselves – not what to think in a Montessori classroom, and these are dangerous notions to the oligarchy. It almost makes me want to cry when I think of what this nation could be like, if the minds of our children were unleashed, and the government got the hell out of our way.

The thing I got most out of Long’s essay was a clearer picture of how the Right slope, away from individual Liberty in my Political Circle Chart, represents not just the trend toward theocracy; but embodies corporatism, which can be as statist as Marxism, and almost as dangerous to our Liberty. Example:

Consider the conservative virtue-term “privatization,” which has two distinct, indeed opposed, meanings. On the one hand, it can mean returning some service or industry from the monopolistic government sector to the competitive private sector—getting government out of it; this would be the libertarian meaning. On the other hand, it can mean “contracting out,” i.e., granting to some private firm a monopoly privilege in the provision some service previously provided by government directly. There is nothing free-market about privatization in this latter sense, since the monopoly power is merely transferred from one set of hands to another; this is corporatism, or pro-business intervention, not laissez-faire. (To be sure, there may be competition in the bidding for such monopoly contracts, but competition to establish a legal monopoly is no more genuine market competition than voting—one last time—to establish a dictator is genuine democracy.)

I must admit he has a point. Further:

This conflation in turn tends to bolster the power of the political establishment by rendering genuine libertarianism invisible: Those who are attracted to free markets are lured into supporting plutocracy, thus helping to prop up statism’s right or corporatist wing; those who are repelled by plutocracy are lured into opposing free markets, thus helping to prop up statism’s left or social-democratic wing. But as these two wings have more in common than not, the political establishment wins either way.

I hadn’t looked at it that way. Statism to the Left of me and statism to the Right of me, which has nothing to do with the religious Right. And:

In the nineteenth century, it was far more common than it is today for libertarians to see themselves as opponents of big business.[20] The long 20th-century alliance of libertarians with conservatives against the common enemy of state-socialism probably had much to do with reorienting libertarian thought toward the right; and the brief rapprochement between libertarians and the left during the 1960s foundered when the New Left imploded.[21] As a result, libertarians have been ill-placed to combat left-wing and right-wing conflation of markets with privilege, because they have not been entirely free of the conflation themselves.

Another piece of the puzzle falls into place in my mind, and I need to now modify my chart to reflect the economic spectrum. Laissez-faire Capitalism would be at the top, with Marxism / Socialism on the Left and corporatism on the Right. ◄Dave►

4 Responses to “Liberty vs. Corporatism”

  • Daedalus says:

    As far as Rand’s views, I always noticed a big distinction in her writings between Laissez Faire Capitalism and government regulated capitalism. In Atlas Shrugged gaining public (government) favors for ones business was always viewed negatively. My own views are not fully formed on the corporation that is not owner owned and controlled. I see many problems relating to fraud and misrepresentation when the corporation executives don’t have a direct stake in the success or failure of the corporation. I am not saying that there “is” a problem here, just that I have not thought it through.
    Pertaining to this topic of corporatism/capitalism see Balko

  • ◄Dave► says:

    A very well written article, John. Thanks for sharing it. In my view, “government regulated capitalism” isn’t capitalism at all. I reckon the term makes about as much sense as “government regulated liberty.” ◄Dave►

  • Phil says:

    Enjoyed Balko’s article. In light of current events would it not be more “Capitalistic Regulated Government” at least with economic issues? Our Government in some ways has blurred the lines between Public and Private Sector. The development of Policies towards Corporations places the corporate need above the individuals need. Laws are written to support corporations, ex: bankruptcy laws, pharmaceutical laws and other laws that favor corporations over the individual. It was their own greed, (corporations), that brought many of them down. All of the Laissez Faire and Free Market Theory tossed around by our leaders is just that, talk. The marriage between corporations and government seems so tightly intertwined that if one fails the other will fail as well. I am not the expert but it is out there for all to see in my estimation.
    I need to read some more on the Libertarian movement of the 1900’s. Perhaps enmeshing itself with the Conservatives was a mistake, especially in light of the NeoCons we have today.

  • ◄Dave► says:


    As Long’s essay points out, it wasn’t so much a tactical decision for libertarians to lean to the Right as it was their political impotence standing alone, and the “the enemy of my enemy is my friend” syndrome:

    The long 20th-century alliance of libertarians with conservatives against the common enemy of state-socialism probably had much to do with reorienting libertarian thought toward the right; and the brief rapprochement between libertarians and the left during the 1960s foundered when the New Left imploded.

    Further, the word Capitalism has been Orwellized and without the qualifier “laissez-faire“, does not mean the same as “free market“:

    In addition, many libertarians are beginning to rethink the way they present their views, and in particular their use of terminology. Take, for example, the word “capitalism,” which libertarians during the past century have tended to apply to the system they favor. As I’ve argued elsewhere, this term is somewhat problematic; some use it to mean free markets, others to mean corporate privilege, and still others (perhaps the majority) to mean some confused amalgamation of the two:

    By “capitalism” most people mean neither the free market simpliciter nor the prevailing neomercantilist system simpliciter. Rather, what most people mean by “capitalism” is this free-market system that currently prevails in the western world. In short, the term “capitalism” as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business.[23]

    Hence clinging to the term “capitalism” may be one of the factors reinforcing the conflation of libertarianism with corporatist advocacy.[24] In any case, if libertarianism advocacy is not to be misperceived—or worse yet, correctly perceived! —as pro-corporate apologetics, the antithetical relationship between free markets and corporate power must be continually highlighted.

    This is the nub of my “ah ha” that promises to clear some of the cobwebs regarding knee-jerk defense of corporations from my future thoughts and remarks as an advocate of free market economics. ◄Dave►

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