Wednesday, May 21, 2014

Progressives get it wrong by making wrong assumptions about history

Major Fallacies of Progressives: #1

Progressives mistakenly believe that the state enacted progressive legislation in order to control large corporations
Major Fallacies of Progressives: #1
by Michael S. Rozeff | LewRockwell.com | May 21, 2014        

I would not bother with pointing out fallacies of progressivism, because others have already done so, except that these fallacies are being used to criticize and mis-characterize libertarian thought as in this quotation (of Kim Messick): “It doesn’t occur to our libertarian fabulists that economic conflict in this world would not involve one yeoman farmer contending with another, but working- and middle-class Americans contending with — Wal-Mart. Or Bank of America. Or Exxon.”


Progressives mistakenly believe that the state enacted progressive legislation in order to control large corporations, and that to this day the state is what protects average Americans from large corporations that they term powerful and rapacious. Here’s a sample of such thinking:
“The modern state arose, in large part, in reaction to the modern corporation…Like it or not, the simple fact is that the federal government is the only institution of sufficient scale to interpose itself between multinational corporations and American families. To remove it from the picture…would leave average Americans utterly exposed to the tender mercies of a rapacious global capitalism.”
The reality is the opposite, as explained by Radosh and Rothbard in A New History of Leviathan:
“As Gabriel Kolko has remarked in The Triumph of Conservatism, we have had regulation not by, of, and for the mass of the people against large business; rather we have had regulatory mechanisms designed, operated, and staffed by the men who run the corporations themselves—a form of corporate-inspired self-regulation carried on under government aegis.
“Furthermore, liberal historiography has generally depicted twentieth-century America as a conflict between good-guy Democrats, leading a farmer-labor Populist coalition against big business, in conflict with laissez-faire, business-minded Republicans. This book demonstrates that both parties have been dedicated to a large, business dominated corporate state, with the Democrats perhaps a bit more sophisticated and intense about establishing and advancing the corporatist system.”
Now, a few words about the power of corporations. Here is a throughly confused progressive’s view of this (again Kim Messick and again spun so as to criticize libertarianism):
“Economic power occasions few qualms in libertarian circles. They sound alarms about ‘big government’ and the growth of federal ambitions, but seem untroubled by big business and the growth of multinational corporations. On its face this is puzzling. Power, after all, is power, and offhand there seems no reason why my freedom isn’t just as threatened by the enormous material resources of Exxon as it is by the depredations of the NSA or the ATF.”
Economic power is heavily criticized by libertarians whenever it stems from the use of political power. Everything from Clay’s American System to canal subsidies to railroad subsidies to central banks to the military-industrial complex to oil politics to fiat money and more has been brought to light by one libertarian writer after another. On this score, Messick ignores the relevant libertarian literature. But suppose, as he thinks, that great size arising from economic success is “power” and, again as he thinks, that this “economic power” can be equated to political power (“power, after all is power”). This conceptual equation is fallacious. Pure economic power caused by large revenues in free markets to consumers depends entirely on their demand. Not being coercive, it differs in kind from political power. The NSA and the War on Drugs cannot be vetoed by any individual voter, but any individual buyer can stop buying the products of Exxon.
To the extent that their revenues depend on providing goods and services to consumers that they want, large corporations have no power if the markets are open to entry and free from the kinds of government regulations and institutions that give these corporations power. But the latter conditions are exactly those that Radosh and Rothbard tell us do not exist.
Hence, we have one of the most prominent libertarians putting together an entire book analyzing corporate power and its relation to the modern Leviathan state while progressive Messick, unable to distinguish revenues attributable to products in demand from revenues brought about by exploiting political cartelism, falsely paints libertarians as untroubled by big business.

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