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The London Libertarian

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Commentary and debate on politics, economics and culture from a libertarian perspective. To Libertarian Alliance Website >

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Politics Posted on Wed, April 09, 2014 20:03:15

The two main meanings for this term are
1) using for gain (i.e., without intending any *moral evaluation
of the process), and 2) unfairly using for gain (possibly by “taking advantage
of someone’s weakness”). The main issue here is whether using *persons
within the framework of the *free market, is ever exploitation in the unfair sense;
and, if so, whether this is *rights-violating unfairness.

There is no ‘surplus value’
that the employer or ‘capitalist’ ‘extracts’ from the employee or ‘worker’, as *Marxist
theory has it. *Marginalist theory explains that the employee tends to
be paid his marginal product: exactly what he contributes to the business. Employers
and employees use each other to their mutual benefit. In particular, the
employer tends to offer the least wage he can to attract the necessary employees,
and the employees tend to take the greatest wages they can find. Typically, the
employers have a choice of employees and vice versa. Even where the choice of
either is severely restricted, by no unlibertarian means, it is hard to see how
it can be unfair (let alone rights-violating) for an employer to offer a ‘low’ wage
or for an employee to require a ‘high’ one. Both sides freely participate; both sides gain; there is no moral
obligation to pay more, or work for less, than we can; and flouting the market
rate of pay would disrupt *economic efficiency.

Mutual and voluntary ‘exploitation’
among persons is cooperation, not *oppression. The alternatives are 1) *aggressively
to impose a *privilege for one of the parties, or 2) aggressively
to prohibit such cooperation. The *state, by contrast, necessitates *proactively
imposed exploitation of its *subjects and this is both immoral and *criminal.

See also *competition and cooperation; *factors of production; *sweatshops; *unions.

A Dictionary of Libertarianism


Politics Posted on Wed, April 09, 2014 19:40:41

healthcare Healthcare is a very broad category that
begins with self-preservation, including safety, diet, and—to a far lesser extent—exercise.
If ill health occurs, then remedies can sometimes be found at a local health
food shop or a pharmacy. More serious conditions might require the assistance
of health specialists of one kind or another. The primary issue here, is
whether the various natural or pharmaceutical *drugs and
health specialists ought to be regulated and subsidized by the *state. The
*libertarian position is that the *competitive
*efficiency of the *market and *charity
is the more efficient option.

particular, in the UK, this should replace the inefficient *state
monolith that is the National Health Service (NHS): the UK’s *tax-funded
state healthcare provider (with around 1.6 million employees in 2011). It is a
popular myth that the NHS was ever the ‘envy of the world’—or why did every
other state not try to copy it? The World Health Organization’s evaluation of
healthcare systems in 2000 placed France first and the UK eighteenth. It is another
popular myth that in the USA, although very far from *depoliticized
in its healthcare, the sick and injured are turned away to die if they have no
insurance; in fact, US hospitals never turn away emergency cases (albeit that *legislation
obliges this).

Like *education,
healthcare in the UK (as with the US) was growing in all its forms before state
intervention. There were mutual aid societies, various kinds of insurance, and
a significant charitable sector. There is no reason to think that the
politicization of healthcare has improved it or extended healthcare to those
who would otherwise have gone without. Quite the reverse. Apart from the
notoriously wasteful *bureaucracy of the NHS, part of the problem is the
‘free’ *universal provision. Even compulsory insurance, where
possible, might be an improvement on tax-funding. There are also the problems
of damaging *professionalization and excessive *qualifications.
In partial acknowledgement of these problems in recent years, there have been
some token gestures in the direction of depoliticization. Complete
depoliticization has not yet been accepted by a majority of the *intellectuals,
which ultimately determines the policy direction of the UK’s elected oligarchy
(see *democracy).

A Dictionary of Libertarianism


Politics Posted on Wed, April 09, 2014 19:36:25

welfare *Libertarianism
is not a theory of welfare in the sense of quality of life. It is, however,
compatible in practice with preference *utilitarianism, which definitely is a theory of
welfare. However, this is an unusual theory of welfare in that what we prefer
need not relate to how we feel when it is achieved or even to ourselves at all.
But if people regard themselves as being better off to the extent that they get
what they spontaneously want (i.e., without *proactive imposition),
then this seems to be the conception of welfare that they would choose for
themselves (or choose above ‘welfare’, for those essentialists who deny that
this can be a conception of welfare). And *liberty and the *free
market give us more of what we individually want. *Politics involves
politicians attempting to give us more of what they think we ought to want, and
they often even fail at that. See *consequentialism;

A Dictionary of Libertarianism


Politics Posted on Wed, April 09, 2014 14:22:46

need *Commonsense opinion
often has it that our needs are few, obvious and easy to satisfy, but the wants
of the *greedy are infinite and uncontrolled, thereby causing the needy to go
without. The reality is the reverse: our needs are infinite, often unknown and
ultimately impossible to satisfy; our wants will always be finite and subject
to our control; trying to satisfy our wants is what most helps the needy.

It can be useful to distinguish between a biological
need (something that is required for an organism’s healthy survival, which this
entry discusses) and a hypothetical need (something that is required to achieve
a particular chosen goal). Some biological needs are unknown (as the need for
vitamin C was once disastrously unknown by sailors) and they are literally infinite
(we shall all eventually die because we shall not receive something required
for our survival).

Almost everyone makes trade-offs between their known
needs and wants unrelated to those needs. Only those who are doing everything
they possibly can to live as long as possible are attempting to have perfectly
congruent needs and wants. On average they will not live much longer than most
people, but it may well seem longer—including for those people whom they insist
on telling about their efforts. Anyone who approves of using the *state to *coerce people to
meet certain of their own needs, whether by making them do something or not do
something, is to some degree a *health *fascist.

The view that the state should provide, or guarantee,
opportunities for people to meet their needs falls foul of their infinite and
sometimes unknown *nature, as well as *economic calculation
(as competing needs have to be balanced in an *economic way, as
only the *market is capable of doing, even if we ignore what people actually want).

Generally, people obtain more of what they need plus
more of what they actually want via the *free market. State
intervention replaces the *invisible hand of the market with the manifest jackboot
of *politics. And it is
in *countries in dire *poverty that the
state will do the most harm by trying to assist with needs (see *famine; *less-developed countries).

A Dictionary of Libertarianism


Politics Posted on Wed, April 09, 2014 14:19:44

poverty There are various competing accounts and
criteria of poverty. Some have an absolute conception often in terms of *need, but there are
problems with that (discussed in the entry on need). Others prefer a relative
conception, but there are great problems with that too. In particular it can
entail that there will always be poverty as long as there is inequality (so
this definition suits *politically correct *ideologues), and
that means while humans exist (which suits those *academics and *charity-workers
living off the ‘poverty industry’: the overclass that needs to maintain the existence
of the underclass). Also the degree of the alleviation of poverty, and to what
extent it matters, might not be clear as the goal posts keep being moved.

Assume an absolute conception that is not needlessly precise: poverty is
some low and desperate standard of living such that normal human flourishing is
difficult or impossible. This is undoubtedly a severe *welfare problem,
but one that might ultimately be solved. We can distinguish the two most important
questions. What is the cause of poverty? What is the cure for poverty? A
plethora of answers have been forthcoming from different academic disciplines
and different *ideologies. Rather than attempt to list and discuss them all, this entry
will give the answers that might be expected from *libertarianism. The
overwhelming proximate cause of poverty is severe *political
interference in an *economy. And the fastest and most complete solution to
poverty is *free-market *anarchy.

Thus this is just an extreme example of the general point that the more
political interference you suffer the more your welfare and *liberty will be
destroyed; and the more you approach free-market anarchy the more that welfare
and liberty will be enhanced. So it is not necessary to abolish *politics completely
to, start to, solve the problem of poverty. Any moves in the right direction should
help: significantly lowering *taxes, abolishing *minimum wage legislation;
allowing *free trade, *depoliticizing industry, scrapping building codes that
cause *homelessness; *freedom of travel and migration, etc. See the relevant
entries for explanations.

Even if we take a relative conception of poverty, then poverty is alleviated by the fact that the market tends
toward long-run *equality
while the state tends to create an underclass that falls ever lower behind the
average. So cutting welfare benefits is, ironically but utterly, germane to
raising the standards of this artificial underclass.

See *aid, foreign; *democide; *famine; *less-developed countries.

A Dictionary of Libertarianism

morally arbitrary

Philosophy Posted on Wed, April 09, 2014 14:08:53

morally arbitrary Much *politically correct
*moralizing rests on
the supposed axiom that it is *morally ‘unjustified’ (or
indefensible, at least; see *critical rationalism) that people be allowed the
fruits of any of their contingent and undeserved advantages; whether genetic, financial,
social or whatever. In other words, it is assumed that there is a moral default
position of *equality and that any deviations from it require adequate defense before
they can *justly be *tolerated.

However, it does not follow that because one did not
deserve to receive certain advantages, that it is morally arbitrary that one be
allowed to benefit from them. To epitomize: a gift to a friend that he did not
deserve is, nevertheless, *rightfully his. It is morally arbitrary that this be
thought in need of defense from forced redistribution to achieve equality. It
is not as though equality is even a desirable ideal. And any attempts at *proactively
imposing it will destroy *liberty and *welfare.

Further, if it is morally arbitrary that a *person be allowed
the advantages of his greater-than-average inherited intelligence, say, then there
is no reason to restrict this principle to human beings. Those conscious beings
that are born as other *animals, assuming that karmic reincarnation is not to
be taken seriously, are presumably even more in need of ‘just compensation’ for
their relatively poor outcome in the genetic lottery. But this would clearly be
absurd. And this reductio ad absurdum ought to make it even plainer that undeserved
advantages do not entail that it is moral to redistribute on the basis of those
advantages. On the contrary, it is a morally arbitrary whim to hold that any
such thing is desirable.

A Dictionary of Libertarianism

Justice for the 1%!

Economics Posted on Wed, April 09, 2014 14:07:20

One of the many tired arguments left-wing intellectuals have been making for well over 100 years (including the uneducated man in the street) is based on the idea that the entire capital of the wealthy 1% (or 10%) is available for redistribution to the poor and middle-classes. All that need be done is to leave just enough money for the capitalists so that the incentives are calibrated to induce them to produce at (close to) the same rate as before. But this view is quite false, as explained below.

The wealthiest man in the world is Bill Gates, who is worth about $76 billion dollars. He consumes a small fraction of his fortune in the form of dividends (a lot of his consumption is charity). Let’s imagine he decided to become a monk tomorrow and chooses to give away his entire fortune. To do this, he would need to liquidate all his investments — funds that are currently being used to purchase labor and/or factors of production — and distribute those funds to various charitable causes. Assuming nothing was saved, the recipients of the money would spend 100% of the funds on various goods and services. (And there is the additional factor that in order to liquidate his funds, someone must lower his/her cash holdings, or liquidate his/her investments, in order to purchase Bill Gates’ stocks/bonds/real estate, etc.)

Yes, this money would find its way back into the economy, thereby generating some new jobs to “replace” the lost jobs, but it wouldn’t change the fact that the public had consumed $76 billion in capital funds — funds that would have been invested in new technologies, leading to expanded production and increased real wages. This expended capital would be gone forever (unless recycled — but always at a cost of more expended capital).

The middle-class and poor obviously wants higher real wages in the form of more and better goods and services. Capital, in the form of machines/factors of production, is what is used to create these goods and services. However — and this is the crucial point — it is not the goods and services in themselves. The error of confusing the money value of capital with the actual goods and services allegedly “available” for redistribution has terrible consequences. Redistributing capital does not put more goods and services into the hands of the middle-class or poor; on the contrary, consuming capital, as Ludwig von Mises argued, is essentially equivalent to burning your furniture to heat your house.

When the left presents statistics (true or otherwise) about how the profits/incomes of the wealthy have increased in the past few decades, this is an implicit call for capital consumption. They want the rich to “share” (sound of gun cocking) more of their income with the poor but confuse their capital with their consumption (about 10% of their capital). But this “sharing” is really only capital consumption and this is a disaster for the economy.

An additional error relates to the fact that the left seems to be comparing the rich with the poor in a sort of mental “one-to-one” comparison. Of course, in this artificial scenario it looks like every rich person could easily boost the incomes of every poor person. But the left is forgetting their own propaganda: the rich only comprise 1% (10%?) of society. How can the tiny fraction of income consumed by the rich be distributed to benefit the 99% in any significant way? The answer is that it can’t.

Many on the left will attempt to counter points like these by pointing out that the Nordic countries have massive welfare states with (allegedly) no ill effects. However, the Nordic countries (apparently) do not consume their capital at the level of the e.g. U.S. In fact, taxes fall much more heavily on consumption. And this is reflected in the fact that the Nordic countries have lower levels of consumption than the U.S. Robbing Peter to pay Peter is no great feat. The capitalist engine powers the welfare state in the Nordic countries (and Europe).

It should also be pointed out that the Nordic countries have taken in far fewer immigrants than the U.S. Since its founding, the U.S. has literally rescued millions of immigrants from poverty in their native lands. Naturally, this makes the U.S. appear to be more unequal compared to the Nordic countries because many fresh immigrants, not surprisingly, do not start out as middle-class. But this is hardly a valid criticism of capitalism. The welfare states of the Nordic countries would likely collapse if they took in vast numbers of immigrants. So they don’t. Should we really celebrate how well they take care of their own poor when they choose to leave millions of Third World people wallowing in poverty? Were it not for Godwin’s Law that states that those who are the first to invoke Hitler automatically lose the argument, I might be tempted to make an invidious comparison here.

What is also forgotten by the left is that it is the capital (including increased profits) of the wealthy that is employed to create nearly all the goods and services available to the poor. Without entrepreneurs who save and then put their capital at risk there would be stark poverty. This is one reason libertarians see entrepreneurs as heroes to be celebrated — as opposed to how the left sees them: cash cows. Of course, entrepreneurs are typically motivated by self-interest but this doesn’t diminish the fact that most of us have escaped wretched poverty due to their efforts. As libertarian philosopher Jan Lester argues, “The failure to grasp that intentions do not matter is the pons asinorum of all social theory”.

When I was a teenager I watched Norma Rae (1979), a movie based on a real-life union organizer (starring Sally Field). I haven’t seen the movie in years but I do recall that the standard of living she enjoyed was far above the factory conditions documented by Karl Marx in Das Kapital. Nevertheless, is it fair, even in the face of a dramatic rise in real wages, that millions of workers “struggle to get by” while factory owners live lives of grand opulence? No, it’s just plain ol’ bad luck. Furthermore, there is no “exploitation” (or even bad luck) involved when someone who would have likely lived at the level of an 14th. Century farmer/field hand in the absence of capitalism is now living better than kings and queens of that era. Most of us living under capitalism today were born with stainless steel spoons in our mouths.

Unfortunately, even Austrian and other free-market economists have perpetuated the myth of “exploitation” by teaching that interest is “deducted” from workers’ wages, i.e. the “discounted marginal productivity” doctrine — the theory that wealthy savers receive interest as a “reward” for advancing workers their wages out of savings — as if workers would be entitled to all profits from sales in the absence of an act of abstention by savers. Although it is true that time preference plays a part, the implication that interest is deducted from wages has been an intellectual disaster for free market ideology. (For a more complete explication and criticism of this view, see George Reisman’s Capitalism, pp. 484ff. and pp.666ff., available free online.)

Wages are funded out of savings and these saving are derived from prior sales, or from wages earned by workers who later become entrepreneurs, which means that profits are analytically prior to wages. Profits would be “infinite” in the absence of costs (this strange outcome results from dividing the profit numerator by zero costs in the denominator). In other words, wages are deducted from profits, not the other way round. Therefore, the income of the capitalist is derived from consuming his capital in the form of mansions, Jaguars, caviar, etc., not from the workers’ wages. Were it not for capitalists, there would be no significant division of labor and, therefore, no surplus value to squeeze out of the workers (as Marx alleged). Egalitarianism is really just a cry for the wealthy to provide more of what they have already made possible.

Of course, few if any capitalist undertakings could take place without the help of workers, but the capitalists are the ones who provide the capital, take the risks, and provide the labor of direction. They are workers too! Perhaps we could argue it is the workers who are “exploiting” the capitalists who, as a class, consume so little relative to the capital they contribute to the workers. And what about the externalities resulting from so many benefiting from so few? I demand justice for the 1%! Market failure indeed.

For the left, the existence of virtually any (even relative) poverty is an indictment of capitalism in and of itself, even though real wages have climbed dramatically over the last 100 years. But no free-market economist has ever argued that capitalism would cure all poverty overnight. It takes time. But there is no other solution. Socialism does not work unless you like the equality of poverty. Ironically, the redistributionist schemes of the left, because they involve massive capital consumption, have actually led to either a (relative) decline in real wages or, at the very least, drastically slowed economic progress.

As we can see, the left’s worldview is rife with major intellectual errors.


Politics Posted on Wed, April 09, 2014 11:48:46

impartiality Various *ideologies—including some *religions, *animal *rightists, and the *politically correct—interpret partial treatment as
in some way inherently immoral and unjust. It is true that *morality and *justice
require a form of impartiality. But the sense in which they do is that any such
rules must be applied without any bias that flouts the rules themselves. Thus
if the rule is that theft is wrong or unjust, then one cannot consistently make
exceptions such as for oneself or for an *organization
such as the *state. Pure impartiality, as
with pure *toleration, makes no sense:
one must first have a rule or principle toward which one is partial. And all
rules *discriminate in some way, so
discrimination cannot be inherently unjust or immoral unless there are to be no
rules (which risks falling into paradox: a rule against rules).

For instance, to hold that
it is immoral to kill *persons but not immoral to
kill non-persons (including other animals) does not flout moral impartiality
despite being partial to persons. Nor does impartiality as such require that,
1) there be *objective criteria for
differences in treatment, 2) all persons are treated as *equals in any way, or 3) any differences in their
treatment must be deserved. I may simply choose to favour someone with
something that he does not deserve (my patronage, a gift, a job, or whatever)
without thereby being immoral or unjust. In fact, being partial to some, such
as family and friends, can be morally admirable and even a *duty.

See *fairness; *prejudice.

A Dictionary of Libertarianism