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The Walmart Question, or, the Unsupported Assertions of Left-Libertarianism

April 26, 2009

In Three notes for the critics of the critics of apologists for Wal-Mart, Charles Johnson/"Rad Geek" weighs in on this matter, criticizing, inter alia, Huebert and me. The following is not so much a direct reply to Johnson, but rather my own independent take on the ongoing disagreements between libertarians and soi-disant "left-libertarians."

First, I don't think any of us normal libertarians disagrees with the left-libertarians that every one of the state interventions they criticize should be abolished. (I say "normal" libertarians here for want of a better term: I reject the implication that the left-libertarians' opponents are "paleo" libertarians; but just non-left, or normal ones.) We all agree that eminent domain, government roads, pro-union legislation, minimum wage laws, and even state incorporation statutes (with their limited liability and corporate-legal-personality traits) should be abolished. We all agree that these various laws distort the economy and are unjust.

But the left libertarians keep making unsupported assertions pivoting off these fairly trivial, uncontroversial observations. For example, they seem to think some of these laws amount to a net benefit, at least for some corporations. I see no reason to assume this. I rather think that absent all these provisions (and other state interventions, such as taxation), the Macys and Walmarts would be on net much better off. Lockheed--maybe not. Federal employees--no. They'd be unemployed. But normal, productive firms? Call me crazy, but I think the state harms them, and harms the great bulk of people on net.

If you abolish the incorporation statutes, then per Hessen you'd still have corporations anyway, and probably still have limited liability, since there is no reason to attribute vicarious liability to "shareholders" anyway (see Corporations and Limited Liability for Torts). And even if you did succeed in holding them liable, corporate D&O insurance would simply be extended to cover shareholders too. This would lead to a very slight increase in costs to corporations, but no major systemic change that would lead us to expect international/long distance commerce and multinational enterprises would shrivel and die.

If you abolish eminent domain, then Walmart's costs would increase ever so slightly. This is because as far as I know eminent domain is used only occasionally--I've seen no reason to think it's even 1% of their stores; and even then, Walmart has to pay for the land. Yes, the price paid is presumably less than they would have had to have paid otherwise; or the land location is somewhat better than free market alternatives, but you can see this is all marginal: the location is a bit better; the price is a bit less--for a presumably very small number of stores. In my view, no sane person thinks Walmart's basic business model would be affected in the slightest if eminent domain were unavailable.

As for state roads--the left-libs keep asserting that these provide a disproportionate advantage to "big box" retailers and other aesthetically displeasingly "big" firms. This seems to be an assertion to me. The mom and pop hardware store near my home has its shelves stocked with products manufactured in China, shipped using the same transportation networks that "big box" retailers use.

(Now I will grant that the larger firms probably benefit disproportionately from the effects of minimum wage and pro-union legislation, but you don't hear the left-libertarians fulminating much about those laws--and certainly not against militant unions and "wildcat strikes" (see ch. 3 of Carson's book). To some libertarians, there may be a perception--how justified, I cannot say, but in any event not that surprising--that left-libertarianism is a bit tainted by what appears to be a sentimental, bizarre rhapsodizing over "localism" and quasi-Marxoid ideas like "wage-slavery," alienation from labor, "the workers," and so on.)

And so what if you are right? Let's say Walmart does receive some kind of net subsidy now. Well, so what? We all oppose the state actions that result in the subsidy. And here we come to what I think is perhaps the greatest weakness of the left-libertarian anti-corporate project. If their analysis merely led them to have different predictions than normal libertarians, who cares. We all agree that the state and its various interferences ought to be abolished; I'm sure we would all be willing to see what happens: whether we'd have a world of hippie hemp-wearing peace and love worker self-sufficient coop localist organic vegan acoustic guitar by campfire communes and kibbutzes, or a modern, vibrant, industrialized, capitalist world of international trade and multinational enterprises. Then this debate would be merely one of predictions and personal preferences; it would be similar to the way I think the debate between Rothbardians and freebankers on the fractional reserve "fraud" issue should be handled, namely, even though I agree with the former that fractional reserve banking is economically disastrous, I'd be happy to see fractional reserve banks compete with real banks so long as adequate disclosures were made to the customers.

But it is not merely a debate about predictions. It is used to inform their views of legitimate property holdings, and justice. In various debates, centered around the vandarchism issue--the legitimacy of hooligans' bashing in Macy's windows--the left-libertarians have steadfastly refused to grant that Macy's and Walmart are the legitimate owners of their property. They seem to think there is no need to carefully adumbrate a theory of responsibility and then to carefully apply this to particular cases. Walter Block has attempted the beginnings of such a theory, e.g. see his Toward a Libertarian Theory of Guilt and Punishment for the Crime of Statism. But the left-libertarians seem to think they can just hand-wave at some libertarian deviations of Walmart, as if this suffices to show that Walmart is not the real owner. They think the debate instantly turns to the question of who the owner is: is it the workers, or the brick-throwing hooligans, or taxpayers, or is it unowned and subject to homesteading? But the assumption is that the corporation is not the owner. They think this is uncontroversial--or, at least, that they don't need to provide an argument for this.

I think they do. Without a coherent theory, we are left with basically some kind of implicit unclean hands approach--if you can point to unlibertarian acts, then the actor or recipient has no rights. The problem is that if this theory is not spelled out, it can be used by anyone based on their pet preferences, to attack whoever they dislike. The thing is, we do live in an unfree world. Virtually every person, and every firm, is entangled in the state's web. No one is lily-white. We all use the roads. We all "benefit" directly or indirectly from state spending of stolen funds. Mindlessly adopting a stark unclean hands theory without nuance or adumbration results in nihilism and a war of all against all. Under such a theory, there are no rights left; everyone is criminal, and has no property rights.

Obviously, this is not libertarian. To declare a firm like Macys or Walmart to be criminal, to penalize it by removing its right to exist and to own property--to refuse to condemn, on principled grounds, those vandals and squatters who trespass on or vandalize its property--requires a coherent theory of justice applied to individuals living in an unfree world. To my knowledge, the left-libertarians have not done this; they have not even tried. (N.B.: authors of papers along these lines are welcome to submit them to me for consideration for publication in Libertarian Papers.) Until they do, their anti-corporate screeds will continue to be perceived as inexplicably hostile attacks on commerce and industry, based on merely personal (and somewhat quaint and naive, if not bizarre) preferences. I won't say put up or shut up--but I will say, put up, or expect to be relegated, in the minds of normal libertarians, to quasi-crank status.

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