Libertarians, particularly those found in the Libertarian Party or within the major “libertarian” think tanks, always seem determined to glorify the rich as the creators and progenitors of the modern world. Whether it be by celebrating CEOs or defending the stupid, inefficient acts of corporations, many “libertarians” have a firm belief that modern wealth and its subsequent creations are somehow indicative of the magic of market processes and spontaneous order. But on economic and political fronts, this is just simply untrue. The modern rich as they exist predominantly maintain their wealth through networks and systems of rentierism.
Whether it be preferential access to debt and capital markets, the ability to rely on overly-inflated assets, the capacity for owning intellectual property “rights” or the use of influence in political networks and governance, the rich of today have acquired vast amounts of influence and power not through entrepreneurialism and economic success, but rather from political lobbying and having the capability to influence regulatory decision-making which creates entry barriers and restricts access to heterogeneous forms of capital. As Oxfam has reported, 75% of the world’s wealthiest acquire the majority of their wealth from these political avenues and rentier schemes. This can effectively be described as non-productive entrepreneurial activity, as at the individual level such political manoeuvring makes sense to an established corporation. They can limit competition and solidify their economic position. However, the systemic effects are wide-ranging, monopolising the economy and concentrating wealth in fewer and fewer hands.
By celebrating modern wealth, these libertarians are denigrating genuine entrepreneurship, and ignoring systemic state intervention which has invariably led to the monopolised capitalism of today. Markets naturally decentralise and destroy profit through their competitive mechanisms and limitation of regulatory entry barriers which are coercive. However, modern markets are not even remotely free, but are instead a collection of disenfranchised entrepreneurs and labourers and a capitalist class which happily holds wealth and maintains their own hegemony.
Historically, this has also been the case. Many small-scale industries and entrepreneurial desires existed during the Industrial Revolution. As David Graeber has pointed out, innovation came not from established manufacturers and industrialists but from cottage industries, family-owned firms and the eccentric inventors and aristocrats who helped develop new technology. Kropotkin noted similar occurrences throughout much of Europe where even in the unfree, statist markets of the early 20th century industries were naturally decentralising and were reliant on a vast network of interconnected workshops and small-scale manufacturers.
What changed this phenomenon. The state. Small manufacturers could not curry favour in the political establishments of parliamentary governments, and lost out when it came to protectionism, and the fake free trade that was implemented in the latter half of the 19th century. Small-scale industries didn’t have access to colonial economies of scale and their markets, and didn’t have access to the disenfranchised labourers which came about from the enclosure of common land and the smashing of the guilds and trade associations by the state. Kevin Carson has shown that during the days of the Industrial Revolution, there were two paths that could have been followed. The interstitial small-scale manufacturers that were the backbone of industrial economies (and were actually products of semi-free market forces) could have developed into networked, variably-scaled economies alongside empowered agricultural and city labourers. Even with the massive state intervention which tried to limit such empowerment, it still existed in the early Industrial Revolution. On the other hand, the actual path that was taken was the continued subsidisation of mercantile elites who could dominate their smaller competitors. Transport and communication infrastructures, and the disempowering of labour, was what flowed from this political decision.
Much of the modern rich rely on similar systems of power. Cheap labour is cherry picked from countries who suppress any attempts at collective bargaining and trade union establishment. Modern protectionism flows from regulated trade agreements which create stringent regulatory apparatuses of complex trade law and intellectual property regimes.
If libertarians are serious about developing a genuinely free economy internationally, they should not celebrate the rich. Modern wealth is not the product of genuine innovation. The iPhone, the erstwhile hero of pro-capitalist libertarians, relies on taxpayer grants and intellectual property subsidies to be developed and to stop competitors innovating with it, as Varoufakis and Mazzucato have both pointed out. Unfortunately, many libertarians, such as Mises, seem to see wealth in its modern guise as the apotheosis of market forces. Rather than cultivating truly open economies, they’re more interested in giving a free pass to rentiers to ideologise their political wealth. For libertarians to advocate for freedom, they should advocate for the rich to have their wealth outcompeted and destroyed, not held up as a godlike figure of “free” markets.