Mises Wire

Home | Blog | Left Anarchists and Progressive Taxation

Left Anarchists and Progressive Taxation

September 18, 2008

I previously criticized (2) the anti-market anarchists' ("vandarchists") breaking of Macy's windows (and the apparent defense of this by even some left "market" anarchists).

I was reminded of this when I read Joe Biden's obscene statements that it's the patriotic duty of the rich--well, those who make more than $250k a year, I guess--to consent to the imposition of higher progressive income tax (so that the state can "take" their money "and put it back in the pocket of middle-class people"--put it back?). Now I would have thought libertarians are of course opposed not only to taxation, but also--especially--to progressive taxation, since the latter is punitive, redistributionist, etc.

On another thread, I noted that the vandarchists--these anti-market "anarchists," and perhaps some left anarchists--seem to assume that any "big" corporation is basically part of the state. Roderick Long replied that the problem is the "high degree of statist involvement. But under present conditions the two tend to be correlated." I accused the vandarchists of believing that any large firm is suspect because it could not exist in a real free market.

Long offered one possible defense of the Macy's window smashers as follows (I don't think he necessarily agrees with it):

Maybe they do think that, but in order to think that bigness is suspect, one doesn't have to believe that bigness couldn't be achieved under a free market. All one has to believe is that under a system like ours, bigness can't be achieved without statist involvement. By analogy: there's no correlation in general between being well-fed and being a rat fink, but among concentration-camp prisoners there probably is."

Now, while this is an interesting analogy, I don't think it's apt. I don't regard our society as analogous to a concentration camp; indeed, according to Mises's insightful test that an economy is not socialist if it has a functioning stock market, the economy, hampered and regulated though it is, is essentially free market. But consider the implications of this argument. If leftists think that "bigness can't be achieved without statist involvement ... under a system like ours," then wouldn't affluence also be suspect? Anyone who is wealthy presumptively must have cooperated with the state to basically expropriate the workers. Of course, this is the same old leftist tripe--the view that the west got rich by exploiting the third-world countries. But if you have this view of bigness, of corporations, of society, then you would have to regard wealthy individuals are presumptively corrupt and part of the state. And as not entitled to their ill-gotten loot. Thus, progressive taxation would have to be favored, as a way of taking stolen loot from the robber-rich and returning it to the alienated, exploited workers. Vive la revolucion!

Clarification: Several people have commented that just because an economy is not socialist does not mean it is a "free market". Sure. I could have been a bit more clear. You can have a free market; a regulated free market; and outright socialism. My point above is not affected. Here is Rothbard's recounting of Mises's observation:

One time I asked Professor von Mises, the great expert on the economics of socialism, at what point on this spectrum of statism would he designate a country as "socialist" or not. At that time, I wasn't sure that any definite criterion existed to make that sort of clear-cut judgment.

And so I was pleasantly surprised at the clarity and decisiveness of Mises's answer. "A stock market," he answered promptly. "A stock market is crucial to the existence of capitalism and private property. For it means that there is a functioning market in the exchange of private titles to the means of production. There can be no genuine private ownership of capital without a stock market: there can be no true socialism if such a market is allowed to exist."

I think Mises was right: if there is a functioning stock market, you cannot have true socialism. Now I was using Mises's point here analogously to Roderick Long's example of how those who are fat in a concentration camp are probably collaborating with the guards. I would say that the extreme case of a "concentration camp" is analogous to the extreme case of "true socialism." Since we have a functioning stock market, we do not have true socialism yet. Yes, our market is hampered and regulated; no, it is not totally free. Of course. But it is not such an outright socialist economy that the only way to prosper is to be part of the exploiting class. Rather, in our very productive economy, it is private enterprise that is productive, despite the shackles imposed on it by the state. There may be reason to presume that a successful corporation "plays by the state's rules", but not to conclude that it is part of the exploiting class.

Follow Mises Institute

Add Comment