Vulgar Libertarianism Watch, Part XVIII
Via Tim Hilton at the Globalisation Institute blog. An absolutely awful article by--who else--Madsen Pirie of the Adam Smith Institute: "Big business — it's mankind's biggest boon."
The article attempts a sleight of hand, jumping back and forth from a defense of "business" and voluntary exchange in general, and a critique of the zero-sum assumptions of collectivists, to a defense of the giant corporation--for the most part the creature of the state's zero-sum intervention in the economy.
Whether these things are currently done by large corporations is beside the point. An apologist for the old state-owned and -planned economy in the USSR might just as easily have said, "it is state industry that brings you your food and medicine." The proper question is whether the large corporation is necessary to provide them, and whether it acts in collusion with the state to crowd out other ways of providing them.
Most of Pirie's choices of examples are unfortunate, not to say comical, from the standpoint of his "free market" rhetoric. Consider, for example, the origins of the jumbo jet in the Cold War military-industrial complex. The aircraft industry was spiralling into the red after WWII, until Truman's heavy bomber program breathed life into it. The jumbo jet itself would have been impossible without taxpayer-funded heavy bombers, because the production runs for jumbo jets alone were too short to pay for the expensive machine tools required to build them. The aircraft industry is the most state-dependent welfare bum of any industry in America--well, except perhaps the drug industry, another one of Pirie's examples. Consider, again, the extent of government funding of drug research, the government's patent system, and the government's reimportation bans. A major part of the development costs that patents were supposedly intended to recoup are actually the costs of gaming the patent system: developing "me, too" versions of drugs about to go off-patent, or establishing patent lock-down on alternative forms of a drug. The entertainment industry is also an unfortunate choice for an example, given the RIAA and MPAA lips firmly clamped around the nipples of Congress.
And I wonder why Pirie puts so much emphasis on "large corporations." Most consumer goods like microwaves, vacuum cleaners and refrigerators could be made more efficiently by smaller factories producing for local markets. The problem is that the state subsidizes so many of the inefficiency costs of large size, and so restrains competition, that inefficiency doesn't carry the competitive disadvantages it would in a free market.
The constant reference to large corporations, and not just to business as such, gives away Pirie's real agenda. This little puff piece was designed, not to defend business as such, but as propaganda on behalf of some of the most powerful institutions in the world. Anyone with the gall to use language about "the spontaneous nature of economic activity, and the free trade and choices that it brings" in a defense of the state capitalist corporation (that includes the aircraft, drug and entertainment industries, no less) is a master of disingenuity. But it's no surprise, coming from the ASI. The ASI's mission is to defend, not the principles of the free market as such, but the interests of the large corporation. The "free market" language is just protective coloring.
The article attempts a sleight of hand, jumping back and forth from a defense of "business" and voluntary exchange in general, and a critique of the zero-sum assumptions of collectivists, to a defense of the giant corporation--for the most part the creature of the state's zero-sum intervention in the economy.
It is all very well for film-makers and NGO zealots to sneer at business, but it is businesses that bring the food to their tables and make the drugs available when they are sick. It is the large corporations that add cultural richness to our lives by enabling, say, a recording of folk-singers from Mali to be downloaded on to an iPod in Sydney. It is big business that liberates people to widen their horizons by jumping on a jumbo jet to a far-flung part of the world. It is the large corporations that have diminished domestic drudgery by providing vacuum cleaners, microwaves and refrigerators. For that matter, it is large corporations that help to finance, produce, distribute and market anti-corporation movies, watched on TV screens or cut on to DVDs made by big businesses.
Whether these things are currently done by large corporations is beside the point. An apologist for the old state-owned and -planned economy in the USSR might just as easily have said, "it is state industry that brings you your food and medicine." The proper question is whether the large corporation is necessary to provide them, and whether it acts in collusion with the state to crowd out other ways of providing them.
Most of Pirie's choices of examples are unfortunate, not to say comical, from the standpoint of his "free market" rhetoric. Consider, for example, the origins of the jumbo jet in the Cold War military-industrial complex. The aircraft industry was spiralling into the red after WWII, until Truman's heavy bomber program breathed life into it. The jumbo jet itself would have been impossible without taxpayer-funded heavy bombers, because the production runs for jumbo jets alone were too short to pay for the expensive machine tools required to build them. The aircraft industry is the most state-dependent welfare bum of any industry in America--well, except perhaps the drug industry, another one of Pirie's examples. Consider, again, the extent of government funding of drug research, the government's patent system, and the government's reimportation bans. A major part of the development costs that patents were supposedly intended to recoup are actually the costs of gaming the patent system: developing "me, too" versions of drugs about to go off-patent, or establishing patent lock-down on alternative forms of a drug. The entertainment industry is also an unfortunate choice for an example, given the RIAA and MPAA lips firmly clamped around the nipples of Congress.
And I wonder why Pirie puts so much emphasis on "large corporations." Most consumer goods like microwaves, vacuum cleaners and refrigerators could be made more efficiently by smaller factories producing for local markets. The problem is that the state subsidizes so many of the inefficiency costs of large size, and so restrains competition, that inefficiency doesn't carry the competitive disadvantages it would in a free market.
The constant reference to large corporations, and not just to business as such, gives away Pirie's real agenda. This little puff piece was designed, not to defend business as such, but as propaganda on behalf of some of the most powerful institutions in the world. Anyone with the gall to use language about "the spontaneous nature of economic activity, and the free trade and choices that it brings" in a defense of the state capitalist corporation (that includes the aircraft, drug and entertainment industries, no less) is a master of disingenuity. But it's no surprise, coming from the ASI. The ASI's mission is to defend, not the principles of the free market as such, but the interests of the large corporation. The "free market" language is just protective coloring.
posted by Kevin Carson | 9:55 PM
6 Comments:
It is all very well for right-wingers and corporate state zealots to sneer at coops, but it is farming coops that bring the food to their tables and heal them when they are sick thanks to mutual aid societies. There are the coops that add cultural richness to our lives by enabling, say, a recording of folk-singers from Mali to heard on a coop radio station. It is the credit union that liberates people from banks by providing loans and mortgages...
I think some heads just exploded at the ASI.
The jumbo jet itself would have been impossible without taxpayer-funded heavy bombers, because the production runs for jumbo jets alone were too short to pay for the expensive machine tools required to build them.
Most consumer goods like microwaves, vacuum cleaners and refrigerators could be made more efficiently by smaller factories producing for local markets.
How do you reconcile these statements?
- Josh
With the word "Most" at the beginning of the second quote. Some especially capital-intensive forms of production require large scale. And some are so capital-intensive and costly that they just wouldn't pay for themselves without having an artificial market created for themselves.
If jumbo jets couldn't be produced without an artificial market how would I get quick transportation to the other side of the world or even the other side of the country in a mutualist/anarchist society?
You probably couldn't. That's a good that simply wouldn't be economical to produce without government help. If it hadn't been for the Cold War economy, the fastest means of transoceanic transportation would probably be an airship.
Of course, without subsidies to transportation and the large market areas that go with them, there'd be a lot less need for international business flights at all.
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