Freedom and Equality are Not Tradeoffs

The modern facets of inequality are completely artificial by any standard. As Carson says, there are intrinsically linked to massive state-based robbery of common land and collective assets and are reliant upon a range of monopolies. Overall, he is correct in asserting the artificiality of modern inequalities and the economic hierarchies that come with them. However, the exposition of the mill-owner as related by Thompson is not necessarily a recognition of inequality, but rather of a voluntary redistributive mechanism that puts upon the rich an obligation. In fact in an anarchist setting, accrued wealth and capital may well lead toward voluntary redistribution not because of any sort of pitying of the lower classes but because of the engendered obligations that higher levels of wealth would entail. Church’s short exploration into the Big Men of Papua New Guinea shows this to be the case. When higher levels of wealth are accrued and maintained, the wider community effectively enforces a redistributive mechanism whereby that wealth is more equally shared. This effectively placed within a weird form of voluntary hierarchy. What this says to me is that while equality is a natural phenomenon, hierarchy through forms of obligation is also natural. Indeed taking from E.P. Thompson’s investigation of the moral economy, what was found was a maintained deference to mill-owners, some landowners, and bakers by the peasant classes, but with the simple of aim of maintaining the fair price and thus a form of equality that didn’t destroy tradition or norms, but rather made such a society viable for everyone. (by the blog author)

by Kevin Carson

In most American political discourse, freedom and equality are treated as inversely related:  that is, economic freedom can only be increased at the expense of raising inequality, and economic equality can only be increased at the expense of reducing economic freedom. But at Stumbling and Mumbling blog, Chris Dillow (“Inequality against freedom,” Feb. 23) shows that it’s just the opposite. Economic freedom (as measured by the Heritage Foundation’s index of business freedom) tends to correlate with economic equality: the less regulated the economy, the smaller the share of total income that’s likely to go to the top 10%.

According to the standard American framing, this is counter-intuitive. Not only do high levels of inequality and concentration of wealth spontaneously emerge from a free economy, unless the state interferes with the process; but extreme inequality actually contributes to economic growth. A good example is a recent column by Jacob Hornberger (“What’s Wrong With Inequality?” Future of Freedom, Feb. 11). On the one hand he treats the Gilded Age — “[w]hen America had no income tax or welfare-warfare state,” and before “the federal government was charged with the task of equalizing wealth by taking from the rich to give to the poor” — as a basically laissez-faire period in which high levels of inequality appeared as a matter of course. On the other, this extreme level of inequality benefited everybody by letting the wealthy accumulate unlimited amounts of capital that increased economic productivity. And — a point Hornberger seems to be fond of bringing up — the super-rich used their wealth to benefit the poor in ways “such as building churches that didn’t charge an admission fee to anyone.”

But in reality it’s Hornberger’s right-libertarian framing that violates common sense — and it makes perfect sense that economic freedom correlates with economic equality. Large concentrations of wealth that result from robbery or government intervention (the increasingly popular “crony capitalism” or “corporatism” theme) are not some kind of outlier, as Hornberger suggests, irrelevant to the majority of giant fortunes that resulted from serving the free market in his mythically “laissez-faire” Gilded Age. Gilded Age capitalism itself, far from being the product of “laissez-faire,” was an edifice built on centuries of land enclosure and other massive robberies, colonial conquest and enslavement.

Government intervention in the market is the main source of large fortunes. Inequality is driven by large concentrations of wealth that derive almost entirely from rents created by the government: monopolies, entry barriers, regulatory cartels, and socialization of operating costs. The differences in wealth that resulted from genuine entrepreneurship, or variation in individual ability, would probably be several orders of magnitude smaller than at present if all those state-enforced monopolies and their resulting rents were abolished. And far from it being a matter of the 20th century state “equalizing wealth,” as Hornberger puts it, the main function of the capitalist state — including the U.S. government in the Gilded Age — has always been to promote inequality.

Rather than economic growth and technological progress being driven by giant accumulations of capital, it’s more often the case that those accumulations of capital — in league with the state — sidetrack technological development onto a path skewed towards artificially high levels of capital intensiveness and enterprise scale. In the late 19th century, when the invention of the electric motor arguably made decentralized local production on the industrial district model the optimal organization of manufacturing, the American state in alliance with industrial interests instead diverted economic development towards mass production and oligopoly industry.

Since the primary purpose of government intervention in the economy is to guarantee profits to big business and increase the rents accruing to the already wealthy — after all, government is basically the enforcement arm of the plutocracy — it stands to reason that the main effect of government intervention is to shift income upwards from workers and consumers to the propertied classes, and increase the inequality of wealth. Therefore we should expect, as a matter of course, a reduction in government intervention to reduce the upward redistribution of income — robbery — responsible for high levels of inequality.

As for those churches “that (gasp!) didn’t charge an admission fee to anyone,” I can’t help thinking of an anecdote from E.P. Thompson’s Making of the English Working Class. A group of workers passing a Methodist chapel built for them by Mr. Sutcliffe, the mill owner, “looked towards the chapel and wished it might sink into hell, and Mr. Sutcliffe go with it.” Hornberger’s churches are a prime example of what Bastiat called “the unseen.” We can see the big churches, which the robber barons built as monuments to themselves. What we can’t see is what the working classes might have built for themselves with their own money, had it not been extracted from them in the form of rents.

Rather than an economy in which the super-rich use the state to extract wealth from the rest of us, I would gladly give up those big churches for a more equal society in which workers kept the wealth they created by their own effort and used it for ends of their own choosing.

6 thoughts on “Freedom and Equality are Not Tradeoffs

    • This is interesting. But there are issues with the platforms that are used. You mention things like Youtube and AirBNB. The issue with these is they rely on a combination of current monopolistic laws (such as planning laws and non-negotiatable contracts that benefit AirBNB) and copyright laws which means that platforms are very difficult to set up in the current system. This leads to the issues of conformity that you also mention due to them being effectively corporate entities.

      To allow for the developments of entrepreneurial misfits, much of the current barriers to start-ups need to be removed, thus blurring the distinction between producer and consumer, and between a worker and an entrepreneur. Allowing the benefits of business creation to accrue to everyone is the best way of developing individualism that is enveloped by a welcoming community.

      Liked by 1 person

      • Great comment. Your input is greatly appreciated. The platforms mentioned are good examples for my point of increased visibility and meritocratic, widespread ‘fame’, but in regards to your point about the constricting barriers, I’d like to know what you mean more specifically by how they are actually limiting. Don’t AirBNB contracts, copyrights laws, and the like benefit the original entrepreneurs, artists, and other creators for their work and protect it from being exploited? If anything this would seem to encourage misfit pioneers, having a system in place to keep their work from slipping out of their grips. The benefits of AirBNB has indeed dispersed across everyone involved, giving people the power to generate income somewhat outside of the system. The shared economy requires a free market, yes, but I am uncertain about the extent to which contracts and copyright limits sharing. Without secured profit, what incentive do entrepreneurs have?


      • I’ll have a good reply to this in about 3-4 hours if that’s ok. I’m intending to write a blogpost about the role of entrepreneurs in society which should cover the questions you’ve asked


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