Recommended Readings this Week – 6/7/2014

1. Jock Coats | An Uncompromising Liberal

Nick Clegg said at the launch of the 2010 Liberal Democrat Manifesto:

The tragedy is that we have a society where too many people never get to fulfil that extraordinary potential. My view – the liberal view – is that government’s job is to help them to do it. Not to tell people how to live their lives. But to make their choices possible, to release their potential, no matter who they are. The way to do that is to take power away from those who hoard it. To challenge vested interests. To break down privilege. To clear out the bottlenecks in our society that block opportunity and block progress. And so give everyone a chance to live the life they want.

Reading on from the fourth line onwards is a good description of what rigorous, for a better adjective, liberalism is about. Rigorous Liberalism ought to be about freeing and empowering individuals to make their own choices in life. If that means dismantling institutions that disallow individuals the right to control their own life, then so be it. 

But here lies the faults with Clegg’s quotes. The first three lines. As a market anarchist, Jock Coats does not share Nick Clegg’s support of using the state to allow people to make their own choices. It is the state that is restricting the choices in the first place. It is the state that enhances privilege by rigging markets to favour the privileged in society. As Coats rightfully notes, progress has been slow enough to not challenge the power of the elites in  society. The free society can only exist without a state. 

Even though I’m not a market anarchist, I completely share the belief that actions of the state within the market are allowing certain groups in society to prosper at the expense of others. Liberals are supposedly the opposer’s of privilege. Nick Clegg and the Economist magazine have declared such for themselves. Nick Clegg has abandoned such notions in favour of making the Liberal Democrats the centre ground party. The Economist fluctuates between a patronising conservative attitude to the vulnerable in society and progressivism.

The influence on Coats Rigorous Liberalism is an interview Georgist economist Fred Harrison made to a Liberal Democrat ALTER talk and Joseph Stiglitz’s The Price of Inequality, plus a couple of others I’m less familiar with. Fred Harrison talks about the failure to persuade the public and the elite of the need for a Land Value Tax. He describes the political system as developing a “culture of cheating”. Below is a section of Harrison’s talk.

Stiglitz’s book is a great work that demonstrates the extent that corporate welfare in the economy allows companies to effectively rent seek to gain profit. Not only is this bad economics, it unjust to allow such a system to occur. Even globalisation is used as tool to allow rent seeking by companies and other rich individuals to occur. Free trade isn’t particularly free when the North American Free Trade Agreement contains 1000 pages of legislation. Ultimately, Stiglitz is describing a world in which the state is a, or for Coats the, major problem facing a just market system.

Jock Coats blog is a call for liberals to abandon moderation and to apply the principles of liberalism thoroughly in the modern world. It means being the opponents of privilege, not merely using sophistry to appear like you are. Privileges in the market economy, usually granted by the state, are the source of the great economic evil known as rent seeking. It is the role of the liberal to find such privileges and dismantle them. Liberal are not moderates, they are radicals.

NOTE: It’s my intention to right a more detailed matter on this subject matter. This piece is more of a summary.

2. Stumbling and Mumbling | How I would defend inequality

The argument that Stumbling and Mumbling finds most convincing to defend the amount of inequality in the economy is to state that it it the least harmful way for narcissistic individuals at the top to fulfil their narcissism. Having a higher wage is better than allowing the CEO to abuse the power granted to them to harm the long-term ambitions of a company.

This itself is a poor argument. A good firm ought to ensure in the interview process that the potential employee will act in accordance to the code of conduct out of will. If  companies are hiring such narcissistic individuals, then that represents a failure in the labour market to attract workers suitable for the roles being advertised. Either that or there is a problem morally with the culture inside the business for allowing such people to not only be fostered but raise to the very top. On both accounts inequality cannot be justified.

The second reason is the most convincing reason to defend inequality and it still doesn’t particularly succeed. The argument is that tackling high income pay will mean that those who are asset rich will benefit more than those who are income rich. For instance, reducing Wayne Rooney’s wages will harm Rooney but mean the shareholders at Manchester United gain more money. So all that occurs is the transfer of money from the rich to the rich.

This argument is poor because it merely states that solving inequality will not work. First, that does not address the question of whether inequality is defensible. It’s not possible to stop murders from occurring, but we do not say that we should not make any attempt to stop murders from occurring, however doomed to fail. Second, the argument assumes that tackling inequality will be primarily focussed on income inequality, when in fact other forms of inequality may be addressed simultaneously. Which matters as we do not have an adequate proof that all measures to reduce inequality will fail. So the argument is criticising only one form of an anti-inequality measure.

Gareth Mawer
I consider myself a left libertarian committed to promoting the philosophy of liberty, even though I do not always support proposals that are normally considered libertarian. Georgism and mutualism have had profound influences over my beliefs, though I'm not afraid to digress from them were necessary. My mains interests are politics, economics and philosophy.