Tuesday, 11 November 2008

'Free markets' and corporations

. Jock Coats gleefully publishes a link to an essay by Roderick Long and says 'look, look markets are good for people after all'. So, let's have a look at what Long says; firstly on the charge that champions of the free market champion the corporate elite he says;

"Is this a fair charge?

No and yes."

We could equally ask is it a fair charge that people who recognise that the state has a role to play in economic life are in favour of a state dictatorship? Long's contention that corporations fear competition because they exert an 'downward pressure on prices and upward pressure on wages'. Firstly, the 'upward pressure on wages' is simply not the entire truth; it's as if trade unions don't exist and minimum wage legislation never happened. Similarly competition is not the sole determinant of prices. This is a telling absence because people and specifically labour simply does not enter the libertarian equation.

Of course, it is true that corporations are offered tax breaks by central governments but they are also restricted by regulatory bodies. In other words the state plays a duel role. I found it rather puzzling that "inflationary monetary policies on the part of central banks" was cited when, in Britain at least, the central bank has been pursuing the opposite policy. Noticeably absent from Long's article is any mention of the necessary social provision that the state must provide.

Basically, the crux of left-libertarianism can be found in this sentence;

"Corporate power depends crucially on government intervention in the marketplace".

So, remove the state from economic life and corporations come tumbling down to be replaced by a free market where;

"firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles."

Of course, this is totally Utopian and depends on a market mechanism when in reality the key factor in more companies being employee owned would be it being demanded by people and calls for an extension in economic democracy. Corporations assets would not vanish overnight and their entrenched power would remain unless the state was willing to assist this flourishing. Necessarily the state would be the only power large enough with enough assets to 'enable' a transition to a situation where people have more economic control of their lives. So, the left-libertarian war on the state is counterproductive to it's own stated ends.

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