Why Libertarians are wrong about economics

One of the founders of the Libertarian Party, David F. Nolan, is credited with creating the Nolan Chart, which has been used ever since as a guide to understanding various political positions. Here are two different versions of it:

The higher you are on the chart, the more freedom you beleive in. If you beleive in more economic freedom and less personal freedom, you will be on the right (Conservative) side of the chart. If you beleive in less economic freedom and more personal freedom, you will be on the left (Liberal) side of the chart. Libertarians beleive in more freedom for both and Statists beleive in less freedom for both, while centrists have a mix of all positions.

The real problem with the chart is that it is misleading. I beleive in maximum freedom for individuals, both in their personal dealings and as small business owners. Sole proprietorships and partnerships should be as free from government interference as possible, the only exception being that anyone wanting to start a small business should be able to apply for a loan from the government, which they can pay back five or ten years later with interest (thus enabling the government to make a profit from helping establish the businesses).

So I beleive that governments should be severely restricted in how they can treat individuals. But for some reason, Libertarians insist on corporations having the same rights of free speech and property rights as individuals. This is unacceptable to me, since I see corporations as being more like governments than individuals. Corporations can have an infinite lifespan and can acquire an infinite amount of property and money. In a “free market”, small businesses with individual owners cannot withstand competition with giant corporations;  it’s like a mouse trying to compete with an elephant. And when corporations become powerful enough, they are able to bribe or threaten the officials in the government to do their bidding by bailing them out when they face bankruptcy.

Bailouts and corporate mergers should be forbidden. Corporations, I beleive, should be treated the OPPOSITE of small business owners. They should be regulated and taxed heavily and never bailed out, but BOUGHT OUT by the government, which then may break up the corporation’s properties and sell to individuals who want to establish their own small businesses. Indeed, I would make it so that new corporations couldn’t even be established at all!

An industry with thousands of small business and no corporations would result in a far healthier economy than one dominated by a half dozen giant corporations, due to their being far more competition and less risk of massive economic damage from businesses failing. The thousands of small business owners would value their freedom and would translate that value into a classically liberal democratic government. But an economy dominated by giant corporations would consist mostly of people used to taking orders from a few powerful executives, the very essence of an authoritarian society.

And that is why Libertarianism is doomed to fail. It is absurd to put giant corporations and small businesses on the same playing field, for the corporations will inevitably crush them, just as giant empires tend to crush smaller nations. Quite simply, there is really no such things as a “free market”, nor will there ever be. The only true path to freedom and social justice is a Liberal or Centrist path. Not Libertarian. The very existence of giant corporations and their corrupting power makes Libertarianism a dream that will never become reality.

5 thoughts on “Why Libertarians are wrong about economics

  1. To understand what stealing is, you have to understand what value is, and who created the value in the first place, and who stole that value that was created originally, and condequently is rich because of this highway robbery of constant, stealing from the producers of wealth.
    Land is value, that was aquired by the conquering of weaker tribes and grabbing their land Those that profited from owning land profited because of the exploitation of chattel slaves, share croppers and feudal serfs. …
    After the industrial revolution owners of factorys, mines and mills, got rich profiting from the exploitation of cheap labor.
    People that own for a living, have only land, factories, mines, mills and stores, None of these investments by owners is creating new value, until a decision is made, to create new value. New value is only created by the purchase of people that are willing to work for a wage. The worker creates value and that value is measured by the amount of necessary time that is spent by that worker in the creation of that thing of value. That value could be exchanged for value that has an equal amount of socially necessary time attached to it.
    Because the worker that created a thing of value receives value in the form of a wage that is much less than the value that he or she created as a worker the amount of value produced by the worker and not received by the worker is the amount that was stolen by the owner from the worker.
    The evidence of this grand theft is the fact that due to this exploitation of labor power all over the world has encouraged workers all over the world to organize as a class so as to receive more of that pie known as the gross national product. This thievery by the private sector is a form of stealing that overshadows every other kind of stealing!
    Taxes is not thievery as some ignorant individuals would have you think!
    The Government that has the responsability of maintaining social order so that the society can run without disruption, must collect taxes to pay for what is necessary to maintain order and promote the general good!

    • Well said! There is no excuse for anyone making himself a billionaire off the sweat of his workers who live in small houses or apartments, while he sits in a comfortable office and lives in a luxurious mansion. I beleive the ones working the most difficult and dangerous jobs should be paid the most, including members of the military, coal miners, and police officers, but NOT corporate executives!

  2. What sort of planet are these people living on? Not the one I know!

    From the Advocates for Self Government website (which propagates Libertarianism):


    One area I feel libertarians do not address as much as they should is the effect that corporations have as a ‘government entity.’ They receive billions in government subsidies, use the government to legislate their profits and stomp on their competition, and their internal policies toward their employees are the least of any democratic institution in our society — all at tax payer’s expense. Opening up a free-market to this powerful lobby sounds scary. Any suggestions?

    A free-market is the only way to control corporations! As long as government has the power to regulate business, business will control government by funding the candidate that legislates in their favor. A free-market thwarts lobbying by taking the power that corporations seek away from government!

    For example, in a libertarian society, government could not give subsidies, legislate profits, or introduce legislation designed to favor big business as it does today. More regulation means that their smaller competitors are forced out of business.

    Free-markets, by encouraging competition, expand the economy and create more jobs. Employees would have more choice and flexibility to move if they weren’t treated well. Without the regulation that big business wants, employees could much more easily become their own bosses. Employers who didn’t treat employees well might find themselves creating competitors!

    This is an example of saying what people want to hear, not what is realistic. ANY deregulation that treats corporations and small businesses equally will benefit corporations more, obviously, because the corporations have more money, and therefore economic power, to begin with. That would be true even if the government did nothing to help the corporations.

  3. Very interesting post. I had not previously thought about the separation of small business from large business. and, like you, I am very concerned about the authoritarianism of large corporations and their hidden threat to democracy.

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