Big Lizards:Blog:Entry “Is Slavery the Inevitable End Result of a Free Market?”

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July 27, 2006

Is Slavery the Inevitable End Result of a Free Market?

Hatched by Dafydd

What is a neocon? (This is not a diversion from the subject of this post; keep reading.)

The term is used so much as a simple pejorative these days that many folks, trying to deduce its meaning from context, are probably befuddled. In fact, as used by anti-neocons, the word really has no meaning apart from "people I don't like."

But they didn't invent the term; it has a long and honorable lineage. Up until the 2000 election, a "neoconservative" was, as the name implies, someone who was a liberal but switched to being conservative by the speeches and writings of Ronald Reagan (going back to his 1964 speech introducing Barry Goldwater in his "a Time for Choosing" televised address); it became more or less a synonym for "Reagan Democrat" after Reagan's first presidential run in 1976.

(I'm not sure when Irving Kristol first began using the term; it could possibly be when he was editor of Commentary in the 1940s. But the term didn't really catch on until the 1970s.)

I decided quite some time ago that this use was too time-bound: Reagan is gone, but the process continues; shouldn't the term be more open-ended? I suggested to my partner in slrime, Brad Linaweaver, that a better definition would be "a person who thinks like a liberal but arrives at conservative conclusions."

This seems to be a good working definition. It encompasses all those who would be "neocons" under the original definition, Dennis Prager, for example. Yet it also includes young people who come from a liberal background and still have those thought processes -- they grew up reading Maya Angelou, Edward Said, and Howard Zinn, rather than William F. Buckley, C.S. Lewis, Whittiker Chambers, or Ayn Rand -- yet who nevertheless vote as conservative as they effectively can.

Neocons by my definition think and react very differently from what we call "paleoconservatives," those who grew up thinking conservative from the git-go... people like Bill Kristol, who is often mislabeled a "neocon" by those for whom it means "Republican warmonger," but who actually grew up in the household of a paleo-neocon, if I can coin that term: Irving Kristol, like Chambers, was an actual Communist -- though in Kristol's case, a Trotskyite -- until sometime during World War II, when he converted.

Bill was born in 1952, after Irving Kristol had already seen the light. He was never a liberal and did not grow up thinking like one.

Here is a marvelous example of the distinction between true neocons and true economic conservatives. Today, Michael Medved, speaking on his radio show, explicitly agreed with a caller's statement that "the end result of a totally free market" was "slavery."

I rib you not. Slither on for more.

Because the market always pushes for the lowest possible price of labor, argued the caller, in the end, it always leads to slavery and indentured servitude (which are two completely different institutions, only one of which is uniformly bad). Medved agreed, arguing that we must have government "regulation" of business, one presumes to prevent slavery from sweeping across the nation again.

He did not specify what business practices need federal regulation; one is left with the disquieting idea that he may not be able to define "good" regulation, but he knows it when he sees it. But he could not have meant, e.g., the FDA or the FTC, because none of those affect the caller's syllogism. He must have been talking about some sort of control of employee compensation... minimum wage? defined-benefit pension plans? federally mandated promotion schedule for incompetent dolts?

Only somebody who thinks like a liberal could think this. And only a neocon could say this, then turn around and vote Republican.

From a free-market perspective, the statement itself is nonsensical. A "free market" is defined as one where buyer and seller are both free to set their own prices and buy from or sell to anyone willing to meet that price. But inherent in this definition is that the transaction is voluntary on all parties: if one party is forced into the deal, he is not "free" to set anything, and it's not a market transaction of any kind... the correct word for it is theft, the same as if I get to set the price of a new TV to "zero" by grabbing it at gunpoint.

Slavery is not in any way an example of a free market; in fact, by its very nature, slavery can only exist in a "market" that is heavily controlled by the government: only government collusion allows people to legally buy, sell, or hold captured human beings and legally prevent them from escaping -- which should be obvious on its face. A process leading to more and more freedom cannot logically have as its "endpoint" the complete lack of freedom.

Attributing such a quintessentially statist institution as slavery to the free market that it mocks and inverts is so nutty that only a man whose mind was warped by liberalism during vulnerable youth could think it.

And of course, slavery is one of the oldest institutions of mankind, long predating (by millennia) any conceptualization of a "market," free or otherwise, and surviving where the only markets are State-controlled: Nazis and Stalinists, who utterly reject the very idea of a free market, have no difficulty with slavery.

Reduce the Medved Thesis to its logical components: he is saying that a government that increasingly allows individuals the right to control their own labor will inevitably lead to the government giving all control to the labor buyer by forcing the seller to offer his labor for free. This is like saying that allowing GM to set its own prices for automobiles will inevitably lead to the government forcing GM to give its cars away gratis.

Such folly calls into question everything else Medved says, on any other subject. But he has demonstrated his fundamental inability to reason logically time and again. (For another example, he rejects the theory of evolution -- but he believes in Bigfoot!)

Sadly, neocons across the country reject the fundamental thesis that a free market regulates itself. For all the pressure of labor buyers to drive wages downward, there is equal pressure among potential employees driving them upward; the forces meet somewhere in between, and that is the market price (by definition).

If you don't believe it, try selling your labor for a million dollars an hour: your gross income will be zero. And try hiring some guy to paint your house for zero dollars per hour: your house will remain unpainted. Neither buyer nor seller has the final say in a free market... they must come to "a meeting of minds."

The market takes care of itself; if a company sells dangerous or defective products, it quickly loses its customer base. Too, a robust free market requires the rule of law, including a widely accepted civil judicial system, whether public or private: besides losing sales, a company that injures or damages its customers or innocent third parties will be sued into oblivion by its victims.

What neocons (and their liberal co-conspirators) resent is that the market doesn't move speedily enough for them. Government regulation, including that supported by Medved (whatever it is), is a shortcut for impatient pressure groups.

They want bad food off the market immediately... which sounds great, until you realize that the same mechanism that can do that, a federal Food and Drug Administration, can also pull good food like olestra and saccharine off the market immediately (or good medical devices, such as silicone breast implants), because they threaten the hegemony of established companies or the prevailing ideology of the federal administration.

The "cure" is worse than the disease; impatience is a terrible heuristic.

The same impatience for change drives demand for a minimum wage: all you need do to help the poor, the neocons and liberals think, is simply raise the minimum wage to a "living wage." If we would only mandate that WalMart pay its meanest employee at least $13/hour in wages and benefits, as the city of Chicago has just done, then every employee will live a better life.

But they ignore what should be obvious: legislation can control the price but not the cost of goods or services. Raising the price of labor doesn't produce money from nothing; somebody has to pay for that cost. Labor is typically the largest cost of any company... if you raise its price, the cost increases... probably more than the entire profit margin.

But a company is not voluntarily going to pursue bankruptcy; for one thing, its own shareholders would sue. Which means the company must reduce the cost to stay in business; and since the price of labor is controlled, the only way to reduce the cost is to buy less of it.

That means reduced hiring, more layoffs, or in the case of Chicago, the likely decision not to open a WalMart store inside the city limits. While every employee may live a better life, there are simply fewer employees and more unemployed workers collecting unemployment compensation and welfare.

Honest neocons like Dennis Prager brashly declare that "they" are willing to pay that price, though of course "they" are not the ones being laid off. Medved sometimes argues against the minimum wage (Prager supports it). But Medved does so unconvincingly, because he calls for many other forms of government regulation of essential market mechanisms, such as workplace health and safety codes, the FDA, the FCC; so he really has no principled case against government regulation of labor price.

Many free-marketeers accept the inevitability of OSHA, but they decry it nonetheless. But Medved actively supports such regulation, and therein lies his rejection of capitalism. I accept the inevitability of racial preferences; we can't seem to get rid of them. But I call anathema upon them. Those who promote them under any circumstances or for any reason -- such as Dennis Prager (for blacks only) and George W. Bush (under some circumstances for college admissions) -- have no moral high ground by which to denounce racial preferences when they get out of hand, as they inevitably will.

Which brings me roundabout back to the title of this overly long rant: not only is slavery not the "end result" of a free market, they are diametric opposites: the market requires the rule of law; slavery requires machete-law. But slavery is, contrariwise, the endpoint of the slippery slope of statism, which elevates the State to a higher position on the heirarchy of hegemony than the individual... just as Kelo is the endpoint of the theory of eminent domain.

That does not mean that either slavery or mass government confiscation of property is "inevitable." But it does mean that if you see either one a-comin', the solution is not more regulation... it is less.

Hatched by Dafydd on this day, July 27, 2006, at the time of 5:18 PM

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Comments

The following hissed in response by: KarmiCommunist

Not "overly long" at all...well done in fact.

The above hissed in response by: KarmiCommunist at July 27, 2006 5:47 PM

The following hissed in response by: rightonq

Great post and I generally agree with it. I actually heard at least part of the Medved show today and part of the discussion you allude to. I didn't hear him say he supported a wealth of regulation - and as you said, he didn't define what regulation is "okay" - but he seemed to reluctanly suggest that there are a few things that made sense and specifically mentioned Child Labor Laws and one other set of regulations (OSHA?). But it still seems to me that he regards the current set of regulations as far too constraining on the free market.

Regardless, the one thing I might disagree with is that you said regulation is the gov's impatience. Maybe, but in a less mature free market, some of these controls might actually be more necessary. I wouldn't call that impatience so much as a temporary protection. For instance, child labor laws would be much less of an issue today than it was 60 or 70 years ago.

The above hissed in response by: rightonq at July 27, 2006 5:50 PM

The following hissed in response by: retiredcoastie

Thinking like a liberal but voting conservative, wouldn't that descibe a "south park conservative"? Or am I really offbase and should go back to lurking?

The above hissed in response by: retiredcoastie at July 27, 2006 6:00 PM

The following hissed in response by: Mr. Michael

No, don't go away Coastie... you are right. The term "South Park Conservative" is just a more recent label for the type of person Dafydd was describing.

The above hissed in response by: Mr. Michael at July 27, 2006 6:36 PM

The following hissed in response by: Captain Ned

Slowly but surely the essential truths of the Lochner decision begin to dawn again in a whole new generation.

The above hissed in response by: Captain Ned at July 27, 2006 6:51 PM

The following hissed in response by: cdquarles

Dafydd,

Yet another wonderful post. To those who think that they are God (logically you must do so if you reject the market mechanisms because you want your preferences to be implemented by force to the detriment of everyone else, whether they argee with these preferences or not), please answer this question. How can you help a poor man by hurting a rich one?

The above hissed in response by: cdquarles at July 27, 2006 8:31 PM

The following hissed in response by: Dafydd ab Hugh

CDQuarles:

How can you help a poor man by hurting a rich one?

Well, for one, you could kill the rich man, take all his money, and give half to the poor man.

That would, of course, make him a rich man... so you'd have to kill him, take all his money, and give half to a new poor man, ad infinitum.

Say, now there's an idea!

Dafydd

The above hissed in response by: Dafydd ab Hugh at July 27, 2006 10:34 PM

The following hissed in response by: cdquarles

But Dafydd,

Killing the rich man and giving the poor man said rich man's money didn't help the poor man. It only looks like it does, and only temporarily at best.

Give a man money, he eats for a day (allegorically); but teach a man how to make money, he eats for the rest of his life (allegorically).

Great try, but my question wasn't answered :). Oh yeah, I want a lefty to answer it.

The above hissed in response by: cdquarles at July 27, 2006 11:07 PM

The following hissed in response by: Dafydd ab Hugh

CDQ:

But if you kill the rich man, and you have a good-sized home freezer, the poor man can eat much longer than a single day.

Dafydd

The above hissed in response by: Dafydd ab Hugh at July 28, 2006 1:12 AM

The following hissed in response by: MTF

The Taliban seem to figured out how a free market can work to their benefit.

The above hissed in response by: MTF at July 28, 2006 9:52 AM

The following hissed in response by: Rod

I must be a Neocon. In 1962 I was President of my college YDs. Worked to defeat "Tricky Dick" in the Gov. election. In 1964 I watched "The Speech" and became a Ronnie man. Voted for Ronnie in 7 elections. Never regretted it. Medved is not a conservative; if you call Ronnie and Barry conservative. If you Call Bush (either) or Clinton a conservative then Medved may also be conservative. But then what do you call Ronnie and Barry?

The above hissed in response by: Rod at July 28, 2006 10:52 AM

The following hissed in response by: Dafydd ab Hugh

Rod:

I must be a Neocon.

Depends on the definition. If you're talking about mine, then I would have to know how you think.

Dennis Prager, for example, talks a lot about logic and rationality, but he seems far more concerned with how people "feel." This is a traditionally liberal mode of thought... yet he arrives at by and large conservative positions.

That makes him a neocon by my definition. He has also said that he was once a liberal, but Ronald Reagan's presidency turned him conservative, so he's a neocon by the traditional definition ca. late-1970s as well.

But Irving Kristol, who calls himself a "neoconservative" (and may even have invented the neologism), and who was a Trotskyite, is certainly not a neocon by my definition: he is a hard-edged logical rationalist... like most Marxists and ex-Marxists: he never "thought like a liberal," even when he was still a Leftist.

The same can be said of half the founders of National Review. A reporter once demanded of Buckley how a magazine like that could be founded by a bunch of Communists. "Ex-Communists," he answered... and anybody who knew any ex-Communists knew instantly what he meant.

(My friend and co-conspirator Brad Linaweaver is good friends with William F. Buckley, by the way, though I myself have never met Buckley. I wish I could meet him before he dies, for all that he has become remarkably crabbed and cranky in his dotage. And shh! -- don't tell him I used that word.)

Dafydd

The above hissed in response by: Dafydd ab Hugh at July 28, 2006 1:28 PM

The following hissed in response by: d_Brit

Dafydd,

I am a neocon, at least in the WoT. I am open to reasoned argument regarding other conservative positions, such as this one.

In this case, the 'heart' of your rationale appears in the following paragraph:

"If you don't believe it, try selling your labor for a million dollars an hour: your gross income will be zero. And try hiring some guy to paint your house for zero dollars per hour: your house will remain unpainted. Neither buyer nor seller has the final say in a free market... they must come to "a meeting of minds."

This is correct at first glance. Speaking in general terms, the buyer has a need and he has the dollars. The seller has a need ($) and presumably a commodity or service to sell.

Where my agreement with you breaks down is your avoidance of the underlying reality. That reality is that the buyer does have the final say in a 'free' market.

The sellers need, money, is greater than the buyers need, a fresh paintjob. (I realize that this may not be true individually but in the real world, the poor and middle classes need to 'pay the rent' greatly exceeds the buyers 'need' to get his house painted.)

By merely waiting out the seller, the buyer can place great pressure upon the seller to reduce his 'price' for his services. Faced with competition from other sellers who may and frequently are desperate for $, the seller is forced to reduce his fee to an amount greatly below the actual amount that an ideal free-market would set as the price.

Some will say that this is a free-market working and that the fee that the seller eventually settles for is the one that is correct for that time and place.

Fine, but that position in effect agrees with the statement that over time, this creates a market which always pushes for the lowest possible price of labor, which of necessity results in social classes working in a form of indentured servitude, never able to charge 'enough' to get ahead.

At least not able to get ahead without great sacrifice, and a certain amount of luck (no medical surprises, etc.) 'living within their means' meaning essentially 'permanently' living at a level not far above the poverty level.

I look forward to your demonstration of my error in reasoning.

The above hissed in response by: d_Brit at July 28, 2006 5:44 PM

The following hissed in response by: Dafydd ab Hugh

d_Brit:

I look forward to your demonstration of my error in reasoning.

Glad to oblige.

Where my agreement with you breaks down is your avoidance of the underlying reality. That reality is that the buyer does have the final say in a 'free' market.

The sellers need, money, is greater than the buyers need, a fresh paintjob. (I realize that this may not be true individually but in the real world, the poor and middle classes need to 'pay the rent' greatly exceeds the buyers 'need' to get his house painted.)

By merely waiting out the seller, the buyer can place great pressure upon the seller to reduce his 'price' for his services. Faced with competition from other sellers who may and frequently are desperate for $, the seller is forced to reduce his fee to an amount greatly below the actual amount that an ideal free-market would set as the price.

Some will say that this is a free-market working and that the fee that the seller eventually settles for is the one that is correct for that time and place.

Fine, but that position in effect agrees with the statement that over time, this creates a market which always pushes for the lowest possible price of labor, which of necessity results in social classes working in a form of indentured servitude, never able to charge 'enough' to get ahead.

The demonstration is twofold. First, the easiest: this simply is not how capitalism works in the real world. The price of labor is not dropping; in fact, real wages are up, and up considerably since, say, 1900 (measured in real dollars or in purchasing power, take your pick).

And in fact, we do not have rigid "social classes," in the meaning of the term in Marx's day in Germany and England, precisely because there is so much class mobility, even volatility: over time, those actual persons in the lowest quintile tend to move up strongly, while those in the highest quintile tend to drift downward, especially via inheritance, since we do not have primogeniture.

It's true that the price of utterly unskilled labor -- "hewers of wood and carriers of water" -- is low compared to what it was before industrialization; but that is because you are looking at an obsolete commodity.

The price of a tin of liver pills or a new car that cannot go faster than 15 mph and must be started with a crank is also greatly diminished from the turn of the last century, because those are likewise obsolete.

But just looking at the real world should tell you that there is something wrong with your analysis, since wages are not falling, "the poor" do not stay poor, and the rich often end up losing their money (look at the Kennedy fortune over the last three generations).

Thus, a large majority of American millionaires (somewhere north of 60%) were not born rich; they earned their money. Only a small percent inherited it. This is true, by the way, even for the richest people in America: of the ten richest Americans on the Forbes 400, the top five (50%) made their fortunes themselves.

Of the top 25, 14 made their own money; that's 56%. See how that percent rises? The further down you go, the higher the percentage who made their own fortunes.

Some, like Bill Gates, started as ordinary, middle-class kids. Others, such as John Werner Kluge (founder of Metromedia), were penniless immigrants.

Thus, the poor and working middle class can become rich (and in fact dominate those ranks), while the rich can lose much of their fortunes and become middle class or even poor. This is not what a "classist" society looks like, d_Brit.

So for empirical reasoning; now for the logical explanation:

You have assumed a multitude of sellers, so that the buyer can simply take his business to someone cheaper if the seller won't lower his price. This is accurate to the real world and to capitalist economics.

But it is also incomplete: there is also a multiplicity of buyers.

If Buyer 1 refuses to buy a house at, say, $500,000 -- figuring that's too much, and he can out-wait the seller -- then Buyer 2 comes along, decides that's not too much, and buys the house right out from underneath Buyer 1.

(After getting burned like that a couple of times, even smug, little Buyer 1 won't be so quick to turn down the next house.)

The point is that with millions of people, you have enough buyers and sellers that they will find each other. Maybe Buyer 1 will find someone willing to sell a fixer-upper for only $400,000, and he's willing to put in the labor on his own new house.

Buyer 2 is older, doesn't feel comfortable doing that, and would rather pay the extra hundred thousand to get a house that's ready for him to move in.

Neither buyer nor seller has the final word, because either can simply walk away and find another counterpart. You may need A job, but you do not need this particular job; not when there are other jobs available. I have frequently turned down a job offer and taken another one instead, and I'm sure you have, too.

If a person has few skills, then of course he has fewer options. But one option he always has is to better himself -- thereby opening up new vistas.

So there you go: both by reference to the real world, where buyers clearly do not have the final say (go try to buy a new BMW for $15,000); and also by direct demonstration of the logical fallacy, your error in reasoning is now clear.

Dafydd

P.S. Your claim that "the seller is forced to reduce his fee to an amount greatly below the actual amount that an ideal free-market would set as the price" is impossible, since the "ideal" value of anything in a capitalist (free market) economy is, in fact, what you can get for it.

If that happens to be less than you hoped, too bad. But by definition, the correct price cannot be greater than the agreed upon price; they are equal.

The above hissed in response by: Dafydd ab Hugh at July 29, 2006 1:42 AM

The following hissed in response by: Infidel

Why does no one suggest helping the poor by kicking their ass and giving them a big shove towards obtaining job skills, work ethic, responsibility, maturity, ambition...

Also, d_Brit conflated unskilled manual labor with highly skilled labor. How someone sane and mature could miss the distinction is beyond me unless it was deliberate and/or severe denial.

The above hissed in response by: Infidel at July 29, 2006 7:19 AM

The following hissed in response by: Dafydd ab Hugh

Infidel:

There is no reason to be rude. d_Brit has been writing calmly and logically; if you want to respond, please respond to him on that level, as I did.

Thanks,

Dafydd

The above hissed in response by: Dafydd ab Hugh at July 29, 2006 12:25 PM

The following hissed in response by: JGUNS

I listen to Prager nearly every day and I must have missed the one where he agrees with racial preferences for Blacks. I am pretty sure that he is against them since he argues all the time how Affirmative action HURTS blacks ala "soft racism of low expectations" as Bush has put it.
I am also not sure if the tone of this post is to convey that "feeling" as a conservative is a bad thing. I agree with nearly everything you say dafydd, but I believe I am more compassionate than 99% of most liberals and that is why I am a conservative.

Liberals and democrats have long insinuated that conservatives are unfeeling and selfish, and that alone is the biggest obstacle that Republicans face. Since Republicans don't have big government programs for minorities, or even segment society into groups of minorities with special dispensations for each, or the don't have special programs for the poor, or huge entitlements for every stripe of every race color or creed (except white and christian) and finally since republicans don't support the redistribution of wealth, the perception is they must not care!
I for one think that Conservatives and Republicans need to do a better job of articulating just how much they do care and why their caring means better things for all.

The above hissed in response by: JGUNS at July 31, 2006 8:49 AM

The following hissed in response by: Ned

It would seem the natural conclusion of a market with absolutely no government regulation is a monopoly. How is having a corporation run my world any better than a fascist government?

The above hissed in response by: Ned at March 22, 2008 6:47 PM