Corporate State or Laissez Faire?
This picks up on a running theme of Kevin Carson's: Vulgar Libertarianism. We free-market folks can sometimes be confusing to the rest of the world. One moment we complain (properly) about all the deep-seated government intervention, but the next moment we act like we live under laissez faire. Almost in knee-jerk fashion we scoff at reports that income is not growing at all levels, or that income mobility is not what it ought to be, or that CEO pay, severance deals, or retirement packages are ominously high. But if we really live in such an interventionist economy, then shouldn't we expect some undesirable consequences to show up in the data? E.g., if the market for corporate management -- i.e., the hostile takeover -- is stifled by protectionist intervention, as Henry Manne shows, then can't we conclude that CEO compensation might be higher than it would be in a free market? There might be some measure of freedom inside the corral, but let's not forget that there's a corral! In this connection, I refer readers to my latest column in The Freeman: "Full Context" (pdf).
Cross-posted at Free Association.
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Sheldon Richman - 4/25/2006
Carson sums it up perfectly in the latest Journal of Libertarian Studies:
"I think a description of the functioning of a free market calls for the subjunctive case, not the indicative."
Sheldon Richman - 4/25/2006
Another example is the defense of the oil companies. While I am skeptical that there is explicit collusion going on, we should not forget that the companies work in a neomercantilist context full of privilege and protection, not least of which is the tax-funded program to secure their sources of crude. This not to say that supply and demand don't operate, but rather that they operate under unnatural state-sponsored constraints.
Common Sense - 4/25/2006
Thank you, Sheldon, for highlighting this issue for readers of this blog. I agree with the views you express. The issue is quite complicated, but libertarians ignore it at our own peril.
Kevin Carson - 4/23/2006
Thanks for the link, Sheldon. Speaking of corporate culture, incidentally, I've seen Fish! Philosophy banners cropping up all over the place where I work in the past few weeks. Much like being told you've got "a real purty mouth," Fish! is an indication you're about to have something done to you you probably won't like.
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