The trojan horse of Ron Paul-style libertarianism

The Occupy movement has brought together people from a variety of places along the political spectrum, generally somewhere on the Left. The main exception are Ron Paul followers — or perhaps it might be more accurate to say Ron Paul fanatics, as “follower” falls well short of capturing the zeal of those whom the Texas libertarian attracts.

But what is it that attracts Ron Paul followers who, in whatever disjointed fashion, align themselves with the Occupy movement and articulate what is perhaps the most basic Occupy critique: Corporations have far too much power.

Let’s start with the basic libertarian philosophy, which boils down to “government is always bad.” (Ron Paul followers thus would seem to be more at home among tea partiers or the business wing of the Republican Party, where indeed many gravitate.) To put a bit of flesh on the bones, libertarianism can be described as a belief in complete freedom of commerce, of minimal government involvement in the economy or social affairs, and of allowing the “market” to determine economic and social outcomes. An intellectually honest libertarian, then, would be against government laws interfering in adults’ personal lives.

“The Bosses of the Senate” by Joseph Keppler

The typical conservative opposes government regulations, but only when it comes to commerce; such beliefs suddenly vanish when it comes to social issues, and thus we have the towering hypocrisy of Republicans thundering against government simultaneous with demands that government control women’s bodies, regulate what happens in the bedroom and decide who can or can’t have a full legal partnership with the person they love.

Representative Paul is not consistent, either — he, too, believes that women are not capable of making decisions about their own bodies and thus opposes abortion. The again, if one sees women as simply carriers of fetuses, and thus lesser beings or commodities rather than full-fledged human beings, maybe it isn’t necessarily inconsistent. (One clue as to why his followers skew heavily toward men. Actually, straight White men, as will see presently.) And his belief in ending military adventures overseas is based on old-fashioned isolationism, not on any notion of solidarity or of a common humanity.

It pays to check under the hood. Having spent many days at the Occupy Wall Street encampment in New York City’s financial district, I did have the chance to talk to a few Ron Paul followers; there always seemed to be one among the sign-holders that daily lined the Broadway side of the encampment. Reluctant as I am to generalize, they were consistently the most fixed in their beliefs. What none of those to whom I talked would consider is what the result would be should their libertarian utopia actually be implemented.

The system is called capitalism for a reason

A brief sojourn on the nature of power in a capitalist country. A short-hand way of describing power relations might be that the possessors of capital rule. The system is called “capitalism” and those who succeed in it accumulate a massive amount of capital.

Any one person, no matter how industrious, can only do so much work, so businesses are formed and employees hired. When the business gets big enough, it is incorporated as a corporation. (There are many suffixes, but let’s stick to one word.) The founder, the founder’s immediate top executives, and eventually their successors, run the corporation to make money. The corporation has to produce a product or service that customers are willing to buy, yes, but to do so in a manner that enables the executives at the top to earn big money and, if the company is big enough to be listed on a stock exchange, the shareholders are expecting a share of the profits, too.

This pot of money is created because the executives pay the employees much less than the value of what they produce. The difference between the value produced and the wage paid is the source of corporate profit, the extraordinary salaries and bonuses paid to those at the top and the dividends paid out to shareholders.

Graphic by Bryan Helfrich

Those few who benefit from the work others perform — the one percent, to use the Occupy Wall Street formulation — quite naturally like the arrangement. And since we have the most greedy lusting for ever bigger pots of money, and competition between the executives of the corporation and the shareholders of the corporation as to which gets the bigger portion of the pot, ways must be found to extract more money (i.e, “capital”).

Competition plays an indispensable role; if a corporation doesn’t increase its profits, the financiers who constitute most of the shareholders will dump its stock and buy the competitors’ stock. The competitor will be better positioned, and might put the first corporation out of business. There are various paths to boosting profits, but ultimately the corporation has to cut costs. At first, cost-cutting can be done through buying machinery or developing more efficient production techniques. But competitors will do the same. Given enough time, the path to boosting profits must rest on reducing the cost of labor — cutting wages, cutting benefits and moving production to countries with much lower labor costs. We are paying the collective price for all this right now.

As more money concentrates into fewer hands, an elite develops that accumulates more money than it can possibly spend on yachts, mansions and other luxuries. Some of their money will spent on buying political influence — “market forces” work in their favor, but they want to be sure that “political forces” do so as well. There may be vastly more working people than elites, but those elites have the money to give to political office holders, to buy and control mass media outlets, to create “think tanks” and other institutions to disseminate their preferred message, and (because of their ability to make big donations) to control non-economic institutions such as schools. We working people sure can’t do any of that.

The only check against that process — which accelerates as more flows to the top, leaving still less for everybody else — is political and social activism. But as the power of the one percent grows, and the struggle of working people to survive becomes more acute, the ability of the elites to further bend the rules in their favor and the difficulty of working people to influence public policy increases, the power of corporations steadily grows. A corporation is not an abstract entity — it is an organization that is run in a dictatorial fashion from the top, and the structure that enables the concentration of wealth. The corporation is simply the legal entity to accomplish that, as would be the case with or without the added benefit of “corporate personhood.”

Removing checks on the most powerful

Now, back to libertarianism. If corporate power (really the concentrated power of a minuscule elite) has become so strong despite the checks and balances built into the modern political system, and that power continues to strengthen, what would happen if the checks and balances were removed? What would happen if we allowed “markets” to determine all outcomes?

The answer should be obvious. A “free market paradise” such as that advocated by Rep. Paul and other libertarians, would mean the end of what is left of our social safety net. No more minimum wage, no more Social Security, no more laws against discrimination in the workplace, no more safety rules, no more consumer-protection laws, no more environmental protection. Indeed, Rep. Paul again said the Civil Rights Act of 1964 was wrong because it “destroyed the principle of private property,” according to a Jan. 1, 2012, report in The Huffington Post.

One Ron Paul supporter I talked to was certain that “property rights” would safeguard us in lieu of laws enforced by government. We’re a few blocks from the Hudson River, I said to him, then asked what would stop a chemical company from building a plant on the river, dumping its waste into the river and belching toxic substances from smokestacks. “Property rights” would come to the rescue, he replied, because the “owner” wouldn’t allow that. The owner of the property would be the company operating the hypothetical chemical plant, and it is precisely “property rights” that would enable the company to build the plant and the lack of government oversight that would enable it to pollute in a dangerous manner. To this answer, he replied that “the owner of the river wouldn’t allow that to happen.”

Photo by Alex Proimos

The river does not have an “owner,” I pointed out, and I should have added that, without any government, there would not be an official entity to defend the integrity of the river. He didn’t have a response, and allowed the discussion to lapse. His belief that there should not be a federal government rested on a conviction that state government would be better because it is more local. He might have wished that a state government might be the “owner” of the river (although his actual belief system would require that the river should have a private owner), but that would be no good here, either, because the Hudson is, after all, half in New York and half in New Jersey as it nears its outlet. Pollution is not likely to observe state boundaries. And rivers should not be privatized.

This conversation had begun when I asked him what he thought of the racism in Ron Paul’s newsletters of the past; they were full of vicious White-supremacist and homophobic comments. His answer was a near perfect neologism: “I could write anything under your name and send it out without your knowing.” I replied that wouldn’t be possible as I would swiftly take legal and other action against someone doing that and put a fast end to it. Rep. Paul’s claims that he had no knowledge of what went out under his name for a period of several years is quite simply as lame an excuse as could be put forth — and his followers blindly repeat it.

What we have here is the “true believer” syndrome: I want to believe it, therefore it is. Such a thing is hardly unknown elsewhere, it must be admitted, but rarely does it achieve such perfection. Incidentally, the above conversation was by no means the most fruitless; other Ron Paul followers were still more relentless. (A discussion of “End the Fed” in this post.)

Governments reflect balance of strengths within society

Part of the confusion arises from the demonization of that concept known as “government.” The “government” is not a disembodied entity somehow detached from society, but rather is a reflection of the social forces within society. In a society in which “free markets” are the basis on which most outcomes are decided, those people and institutions that accumulate the most money — and therefore control employment, bend the political process to their preferred outcome and wield their wealth to influence or control other institutions — will be the decisive agents. Their decisions will be to benefit themselves, inevitably at the expense of everybody else.

Such dominance does not mean absolute control. Popular pressure can, on occasion, assert itself as last month’s online campaign to halt the Stop Online Piracy Act demonstrated. But sweeping away government — or reducing government to two functions (enforcing contracts and maintaining a military force) as Chicago School ideologues demand — means that the “market” will determine all outcomes. The “market” would mean concentrated corporate power would decide all outcomes, especially economic outcomes. Life would be much harder than it is now, with no recourse.

That industrialists and financiers would love such an outcome is quite understandable. What isn’t is why any working person would want it. And the scenario just sketched it precisely what libertarians, Ron Paul included, would deliver if they actually were handed power.

The magic elixir that makes so many working people believe that government is source of all problems (although it was a corporation that laid you off or moved your job to the Global South) is that mystical word “freedom.”

“Freedom” is equated with individualism — but as a specific form of individualism that is shorn of responsibility. Industrialists and financiers are presented as individuals to be emulated, and their special interests are presented as the interest of all of society. More wealth for the rich (regardless of the specific ideologies used to promote that goal, including demands for ever lower taxes) is advertised as good for everybody despite the shredding of social safety nets that accompanies the concentration of wealth. Those who have the most — obtained on the backs of those with far less — have no responsibility to the society that enabled them to amass such wealth.

Imposing harsher working conditions is another aspect of this individualistic “freedom,” but freedom for who? “Freedom” for industrialists and financiers is freedom to rule over, control and exploit others; “justice” is the unfettered ability to enjoy this freedom, a justice reflected in legal structures. Working people are “free” to compete in a race to the bottom set up by capitalists — this is the freedom loftily extolled across the corporate media.

Utopias have a way of becoming dystopias, and the corporate utopia on offer by libertarians — be they in the Cato Institute, in corporate boardrooms, in the tea parties or in the Ron Paul campaign — is a most dystopian trojan horse.

10 comments on “The trojan horse of Ron Paul-style libertarianism

  1. ofarock says:

    Not so fast, you’ve got some major flaws in your argument. lets start with this one. you seem to be of the impression that capitalism and corporations are mechanisms by which power and control are concentrated into the hands of a few, “the one percent”.
    In real life, economics prevents this from occurring. Sure, employees are paid less than the value of what they produce. The difference goes towards the expenses of running the business. Raw materials, the equipment used, and yes…paying the owner back for the time and money they spent starting/buying, and managing the corporation.
    If an owner gets greedy lusting for ever bigger pots of money, and ultimately accomplishes this by cutting the costs of labor, that labor will leave his company to work somewhere else. Labor is not an infinite resource, a company needs employees willing and able to do the jobs they’re paid to do.

    • I am very much afraid you have forgotten (conveniently) that labor is a commodity in capitalism. And if all the difference between what the employer pays the employee went to raw materials, expenses, equipment and other costs, there would be no profit. Zero. Such an employer would make no money and would not remain an employer for long.

      When jobs are moved overseas to China, Vietnam or where ever, not only do those new employees make a tiny fraction of what the employees in an advanced capitalist country had earned, but unemployment goes up, forcing employees to accept lower wages. As more jobs are shipped overseas, more are thrown out of work or fearful of losing their jobs, creating more competition for the remaining jobs and forcing wages down further. This, ofarock, is what is known as the law of supply and demand.

      When the owner pays for costs such as machines and pays interest on loans, the owner is sharing the surplus value that he/she extracted from the employees. When some of the profits are distributed among the shareholders, that too is sharing surplus value. And the owner of the factory that made the equipment in turn earlier extracted surplus value from his/her employees. In summation, if the owner pays the employee four dollars to make a widget and sells the widget for 12 dollars, but has costs of four dollars for equipment, raw materials and other items, then the owner pocketed four bucks for every widget someone else made. If your employees produce a lot of widgets, you’ll pocket a lot of bucks. Selling the widget is the realization of profit, not the source. I’ll have posts on this topic in the future.

      • ofarock says:

        You’re getting closer. I’m not saying there would be no profit, I’m saying that there would be no economic profit. The entire difference between the value of the good the laborer produces and the cost of labor goes to raw materials, equipment, other required expenses, and the owners rightful compensation.

        I’m not saying the owner/shareholders make nothing. I’m saying they make only what they deserve and they can’t make any excess profit by paying the laborers less than they deserve. Lets look at your example. The owner pays the laborer $4 to make a widget that’s sold for $12. If $4 also goes towards materials, equipment etc and the owner pockets $4, then that must be what his/her time and investment are worth.

        Lets now take a look at what happens when the owner tries to make more than they deserve by paying the laborers less than they deserve. Let’s say the owner decides to pay the laborer $2 and pocket $6. A person of similar skill and abilities to the owner comes along and says gee, I can do this and I’m only making the equivilent of $4 per widget. They then proceed to take owner #1’s laborers by paying them $3 per widget and pocketing $5. Person of similar skill and ability #3 then comes along and pays the laborers $3.50, pocketing $4.50. It continues on until equilibrium is hit.

        You’re correct in you’re assessment of what happens in the U.S. when jobs are moved overseas, but you have forgotten (conveniently) what is happening in China and Vietnam. In China and Vietnam, employees make a tiny fraction of what the employees in an advanced capitalist country had earned, but unemployment goes down, forcing employers to pay higher wages. As more jobs are shipped overseas, less people are out of work or fearfull of losing their jobs, creating more competition for the remaining employees and forcing wages up further. This, Systemic Disorder, is what is known as the law of supply and demand.
        As advancing technology makes the world smaller, supply and demand have to be equal over ever increasing areas, but they always end up being equal.

        • Ah, neoclassical equilibrium theory. Sounds nice in theory, but does not happen over long terms in real life. There are periods when an industry is either young, or in a strong growth mode because of expansion in markets, and during these times owners will tolerate rising wages because their profits are rising at the same time. But eventually the market becomes mature, or there are not new markets in which expansion is reasonable realistic. Profits will not stagnate, or decline, unless the owner reduces costs. Lowering costs means lowering the price of labor. So the new owner #2 only comes into existence during the period of strong growth, and ditto for any other new owners. But owners #2 and #3 aren’t going to be satisfied with earning lower profits and are going to squeeze their workers. In fact, they jumped in because they saw the big profits made by owner #1 and want that, too.

          Moreover, the market will eventually become saturated, and owners #1, 2 and 3 are each going to find the same problem, and competitive pressures are going to force them to the same solution. And if they don’t, their shareholders are going to pressure them to get with it. As workers in the new low-wage countries to which production is transferred make a small fraction of what the original workers in the advanced capitalist country made, that developing-country low wage is going to become the standard because that is what the market dictates. More people may be employed in China or Vietnam, but that does nothing to loosen the supply of labor in, say, the United States. Capital is mobile, people are not — that’s why countries have strict immigration laws but capital freely roams the globe.

          Back in the original advanced-capitalist country, the widget markers are unemployed, and there are thrown in the growing pool of workers also out of work. With high unemployment, all market pressure is for wages to decline. When they decline enough, some workers will be rehired, but at lower wages. But with lower wages, people can’t afford to buy the products, demand declines, more layoffs ensue and the cycle begins anew. Owner #1 who pocketed $4 per widget got that money because that was the level of exploitation he/she could get away, not because it is the value of time and investment. If the workers kicked out the owner and sold the widgets themselves, the widget’s market value would still be $12. The workers could divvy that among themselves, or sell the widget for $10 and still make more than they had earlier. Maybe $10 would then become the market value of a widget. The previous higher price of $12 represented profit-gouging by owner #1. And workers aren’t going to move their jobs to a country thousands of miles away, so the jobs stay home if they run the widget business themselves.

  2. jackie says:

    good analysis, pete. that whole “they put it under my name & i didn’t know” farce re the newsletters was a lose/lose proposition, though the Paul campaign didn’t seem to realize that. naturally, no one not already a hard-core Paulite was buying it. but what if we did? HQ staff of an activist, non-mainstream politician is not so big — nowhere near as big as, say, the US Government. if he can’t even manage such a small number of people, why the hell should anybody trust him to manage something several orders of magnitude larger?

    i’ve long been puzzled by the whole Ron Paul phenomena, as a number of people that i hold in high regard are on the bandwagon. never took the time, until this campaign, to look under the hood a bit. it’s ugly down there.

    and no anti-choice candidate will ever get a vote of any kind from me. but with RP, that’s just the icing on the cake. man is crazy!

    • A completely absent manager or a believer in what went out under his name. Maybe he’s both. I too have been amazed at some of the people who have joined the Ron Paul bandwagon. Check under the hood, folks!

  3. Joel Meyers says:

    Jackie says she is puzzled about Ron Paul supporters for whom she otherewise has high regard, wonders why they don’t see the ugly stuff under the hood, which to be sure is there.

    I myself see mcuh of the ugly stuff. But what about the fact that the most liberal of the Republican presidential candidates, the incumbent O’Bomber, just signed away any and all of our Constitutional rights with the new National Defense Authorization Act. For those who may not know, because very few commentators focus on that fact, which I find shocking and discrediting, it mandates that the military is mandated to lock down anyone including American citizens, permanently, without any semblance of a trial or other due process, if the dictator in the White House labels the victim an enemy combatant.

    Ron Paul, I believe at the risk of his life, is the only major-party candidate who has called attention to this total destruction of our Constitutional and human rights. He is attacked by all the other Republocrat White House hopelesses as trying to deny the government the tools he needs to protect us from terrorists.

    But who protects us from the terrorists running the government. Only Ron Paul has said a peep against what those Naziistic measures. That is what pushed me over the line towards supporting the undoubted author of the vile racist tracts bearing his name only a decade ago, and who still considers the Civil Rights act an unconstitutional infringement on private property.

    On the other hand he is the only candidate who opposes the war on drugs as a war on the poor and a racist one at that, and promises that if he becomes president, he will free all the 90% racially oppressed imprisoned as drug possessors and drug users.

    Whatever his vile racial prejudices, this alone makes all his major-party opponents effectively racist than he is.

    Ron Paul is the only antiwar candidate running. Even if you can label his motivating ideology “isolationist”, that does not negate the fact that he is opposed to the ever expanding wars, invasions, occupations and forcible and subversive regime changes around the world, prettifed as the “War on terror”.

    Talk about ugly stuff, this is the ugliest feature in the world today, the alliance of neo-cons, neo-liberals, paleo-cons, and just-plain con-artist butchers, spearheaded by Schachtmanite renegades who split with Trotsky to turn his outlook of permanent, proletarian revolution into perpetual imperialist war for counterrevolution.

    You can also ridicule him on his anti-Federal Reserve Banking positions, but why not call attention to that runaway, finance-capital engine, which secretively controls the system’s generation of currency, in secret, without the Congress or President allowed to scrutinize its day-to-day operations, when the secrecy is to shield the outrageous robbery and malfeasance, the biggest criminal conspiracy and operation in the world, behind all the wars and genocide?

    No other lunatic candidate is doing that!

    Ron Paul has said that beause of the NDAA, the office of the President has crossed a line, and is no longer the same office as it was when he started his campaign. It is now the office of a dictator. We are up against new Caesars.

    If you want to fight against the ugly side of Ron Paul, his racial prejudices, etc. (where he actually agrees with his opponents), you need the Bill of Rights and Constituitionally guaranteed freedoms. If you want to defend public school, social security and unemployment insurance funding, you had better defend those rights, and oppose the wars that are devouring them.

    I wish there were another candidate who had accepldtable positions on those issue, who were also acceptable on the overriding, principal issues of peace and freedom, but there aren’t any others in which a vote for them would register.

    And incidentally, you don’t have to worry about him implementing any of his ugly-side programs: He is only a protest candidate, who I doubt would ever be allowed in the White House as a tourist. Even JFlK had his head blown off for less,

    • Joel is a serious activist of the Left, so his viewpoints are worth a fair airing, and a fair response. But I will have to disagree.

      The National Defense Authorization Act, which does indeed allow a president to designate anyone an “enemy combatant,” is disgraceful and should be opposed in the most vigorous fashion. But I have to point out that George W. Bush was already doing that without any law to back him, hardly better, and I do not believe it a stretch to believe that previous administrations have not always resisted the temptation to do the same. Actually codifying it into law is arguably a step forward by the state, and is no trifle. But a protest vote in the ballot booth is not the solution to this real problem, a massive movement from below is the solution. Joel, I do know you know this, so it makes me all the more puzzled that you express support for Ron Paul, even if for strictly tactical reasons and as a form of protest.

      Moreover, we have to ask ourselves: What is the real source of oppression? Is it this or that political leader? Is it this or that law? Or is it a system that has us all caught in its web? All capitalist states are class states, and none more than the United States. Ultimately, laws and statutes are designed and bent to reinforce the power of the capitalist elite (industrialists and financiers) that form the true center of power in this country. Those elites’ economic institutions – corporations – are able to dominate government institutions. Ron Paul’s libertarianism is manna from heaven for those capitalist elites — their corporations would be able to run wild. We can rest easy; Ron Paul is in absolutely no physical jeopardy. Quite the contrary, corporate money would swing behind him if he had a legitimate chance of winning the presidency. And Congress would be sure to prevent him from easing drug laws in any meaningful ways without a massive grassroots campaign, and even then Congress might not yield.

      As to Ron Paul’s “End the Fed” mantra, which has become popular among many on the Left as well, I’ll take up that in my March 7 post. But to summarize, the Federal Reserve is not the problem, however much you, I and others dislike its secrecy, its policies and its lack of democratic accountability. A central bank is a necessity for the running of a capitalist economy. So the problem is not the central bank, it’s the system it serves.

      If we want to defend public schools, Social Security and unemployment insurance funding, we had all better organize a much bigger movement, through Occupy Wall Street and the myriad of other groups out there. Neither Barack Obama or Ron Paul or any other political leader is going to do that for us.

  4. […] is welcome, libertarians are motivated by an irrational hatred of government — they would rather have the market decide all social questions. But the market is merely the aggregate interests of the most powerful industrialists and […]

  5. Jeff Peress says:

    This sounds like what I learned this past semester in my labour economics class that if it is cheaper for a corporation to produce and invent with capital rather that labour costs than there is no need for labour and the machinery that was invested by these corporations are replaced and labour is no longer needed. This sounds like if there is an elasticity of labour supple and the scale shifts rightward the cost of capital comes down and the cost of labour rises and vice versa.

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