My stalker is forever going on about how my lack of detail shows how bad Libertarianism is going to be for the world, because I'm somehow seen as a great policy maker for the LPUK. Well, yesterday, I had a fairly sharp disagreement with the Chairman of the LPUK, so I guess my ability to "dictate policy" is going to be even smaller than it was before.
Patrick made an impassioned
post defending protection of British business over globalisation and of British agricultural self-sufficiency over free trade.
The contention by the OP, which is the de facto position of many modern economists, that specialisation and trade is always beneficial is also fallacious. It both presumes perfect access to markets, and that those markets are operating efficiently. This is rarely (ever?) the case
My response is unequivocal: that's just crap. If a trade doesn't benefit you, why do it? That argument goes all the way along the line. If at any step the trade was not to both parties' benefit, the trade would not occur.
I feel that Patrick, like many other people, is confusing the idea of a beneficial trade with the idea of an optimal trade. And it's true that trade will rarely be optimal, but if it's not beneficial, then the party making the trade without benefit or utility is an idiot, and you can't spend your life catering for them.
No system will ever offer optimal trade, but the free market, corporate or no, offers the opportunity for beneficial trade.
I've written previously, for example, about why it might make perfect sense for a nation state to impose protectionist measures on trade. In the idealised neoliberal view of the world, such measures are seen as frustratingly unnecessary and a restraint to trade; for the government of the nation state in question they are perfectly reasonable mechanisms to ensure the growth and long-term health of their economy. This is one of the reasons why this party might not always see eye to eye with certain other proponents of 'free-markets' -- our interests our focused solely upon the well-being of the UK, whilst theirs see the existence of nation states as an inconvenience to the realisation of the global market.
The arguments in favour of protectionism do not convince me, either. One may argue that you are "ensuring the growth and long-term health of your economy", but actually, you're just making your own people pay more for those things you are protecting, now and for ever more. How that helps anyone, I don't know. Well, apart from the people who are in the industries that cannot compete without protection, of course.
I struggle to see the logic of favouring a system which punishes the individual while favouring ineffective, benefit-seeking corporates, in a post attacking ineffective, benefit-seeking corporates and their abuse of the state.
The final point that I want to touch on (in this interconnected, if somewhat wandering post) was brilliantly expressed by Robert Heinlein, in the quote that this post takes it's title from, and which I've used previously:
"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects."
To economists, the politicians who seek to plan our lives, and the companies that employ us, we are nowadays 'human capital'. We're a resource to be used in the manufacturing process, whether the 'goods' produced be something tangible like a new kettle or, as is largely the case in the UK, a 'service', or a mere financial transaction.
The deleterious effects of specialisation have long been recognised, including by Adam Smith:
"In the progress of the division of labour, the employment of the far greater part of those who live by labour, that is, of the great body of the people, comes to be confined to a few very simple operations, frequently to one or two. But the understandings of the greater part of men are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life."
Perhaps modern economists are happy to view themselves, as Heinlein puts it, as 'insects' -- if so, it would probably be fair to suggest the wasp as their arthropod equivalent.
But I'm not happy with being perceived as 'human capital', grist to some greater mill, part of some gigantic corporate clockwork mechanism. I'm an individual human being, with my own wants, needs and desires. My own hopes and fears. This simple fact is something that the classical economists well understood, but which has been tossed away in the last 60 or so years with the neoliberal rush to profits at all costs. And it is another reason why a Libertarian Party, an expression of a political ideology that puts the individual at the very centre of things, will always be in a position of conflict with those who wish to put 'the group' foremost in their considerations; whether those seeking to ride roughshod over the individual human being are socialist politicians, or those pushing the corporatist business agenda.
Heinlein's comment is not invalidated by people specialising in trades or things they're good at. I'm buggered if I'm going to learn how to service my car when I have a perfectly good dealer less than a mile away. I can still change a nappy, write a limerick, program a computer, etc., etc.
The days of people straightening wire to make pins is long gone. Over the course of my career, I have gone from being incredibly generalist to incredibly specialist. I do not find my job in the least bit repetitive, however.
And in a broader sense, it's a bit pointless saying that the UK needs to be self-sufficient in every kind of food we need, there isn't enough agricultural space for us to do it. There are some things we just cannot grow, or cannot possibly grow enough of.
I feel that good Libertarian economics would revolve around the removal of barriers to smaller businesses or individuals, allowing to partake of the market more easily. The massive regulatory burden that we currently have in this country favours large corporates, who can afford to devote manpower to coping with and understanding the regulations imposed. Smaller businesses cannot devote the necessary effort to work with all the regulations and this is really what penalises the individual and benefits the corporate.
I feel that it's important to highlight the fact that government is the guilty party in all this for encouraging business to get co-opted in the government power play. The government wants to grow in power, and it does this,
inter alia, by adding more regulation to markets. Big companies like regulations, because coping with regulation is a relatively small part of their cost base, but can potentially ruin a start-up competitor. It also allows them to charge more: "See all this terrible regulation we have to cope with? It requires whole departments we have to pay for!" You pay more
and you feel sympathy for them!
Protectionism justifies the government taxing people more and redistributing wealth to the chosen few who have lobbied the hardest for some kickbacks. Businesses of whatever size will naturally and quite rationally indulge in "rent-seeking" if it is offered. (Rent seeking is the business of making money by manipulating the economic and / or legal environment rather than by trade and production of wealth.) Protectionism is classic rent-seeking: "We can't compete with those Chinese, they don't get paid a living wage!" "OK, we'll stick an extra tax on imports from China / give you some extra subsidies of taxpayer money." "Great, now we don't have to worry about containing costs / reducing profits / improving efficiency, and we'll still be cheaper than the Chinese!"
Who in their right mind would turn down the chance of free money? Who in their right mind would not ask the government for free money if the government had a history of giving free money to people who asked nicely? As much as I hate the soulless corporate, they're just playing the game by the rules that the government has set.
Who is paying for this? Only individual taxpayers and voters, who are paying more than they need to or directly subsiding a business that wouldn't survive without the handout. This specific issue is one that I find particularly difficult to reconcile with Libertarianism.
(Read Timmy for genuine sense on matters economic.)