How to Talk to a Libertarian About Neoliberalism

Gary Johnson with his embrace of the TPP, which violates the basic tenets of Libertarian anti-imperialism (for those who unclear, TPP is a declaration of war on China) and esteem for nation-state sovereignty (TPP destroys that), as well of his embrace of a Clinton-friendly Bill Weld. Yet over the course of the past year I have come to understand that, if we are to have a united front from below between Greens (our modern social democrats) and Libertarians (our genuine liberals), we need to find things to agree on. Ralph Nader has previous laid out in a book the coordinates of such alliances, meaning I am not the only one proposing this.

I would offer that there is a plane of discourse we can engage on regarding economics that some would otherwise think untouchable. Michael Hudson, for example, has told me in private correspondence he had no luck with this due to something called “Georgism”, one of those instances of Libertarians vainly mimicking the Left academic discourse. However, this stems from a mistaken starting point, that there is something to discuss about alternative measures of value and debt.

That is simply untrue, the misunderstanding is that neoliberals are fake Libertarians yet are mistaken for being otherwise. They use verbiage about “fiscal responsibility” and what is considered in America the vocabulary of Conservatives. However, neoliberals are not serious about it and instead invert the logic of Keynesian economics to enrich the banking class behind closed doors, aptly demonstrated last year by IMF negotiations after the Greek Oxi vote. This is diametrically opposed to the logic of the Libertarian Party and free markets.

The Libertarian critique of our currently-existing capitalist system is that “cronyism” hinders the creation of a free market. This is correct to an extent, though the term “freed markets” bears some merit. What we have currently is a financial sector that functions as a cartel does when you are in the black market drug sales system. If you have a teenager who is selling a pound of marijuana a month, the cartel shrugs it off and does not bother you. But if the teenager gets too big for his britches and begins moving pounds per day, which is typical of a certain kind of male bravado in this age bracket, the cartel either has his goons rough the kid up or the police scare him a little.

That is how the financial system functions, the SEC and FBI go after the small-time chumps like Bernie Madoff but do not bother Goldman Sachs. The state is the enforcer for a monopolistic cartel of Wall Street crooks and nothing more.

When we look at Greece, Yanis Varoufakis has provided an impressive account into what happened. The Troika handed him a set of demands for legal policies that were so antithetical to Libertarian principles that Ron Paul would have had a fit. Instead of free-market competition, Varoufakis was told to raise taxes and enact other policies that were typical of a market interventionist government. What was actually going on was a massive bail-out of the German banks that was channeled through one of its “debtors” (I use quotes because the debt was illegitimate according to Libertarian logic).

Libertarians need to understand that neoliberal debt is not and cannot be seen as ontologically akin to the debt normally devised for typical consumer lending. The strictures and terms of these loans would never be allowed in a freed market. Student debt, as just one instance, is one of the most preposterous, Kafka-esque debaucheries of contemporary finance, demonstrated adequately by a recent story carried by the New York Times about the New Jersey lending racket. No sane human being in America would ever choose to take a mortgage on a house under such terms. Instead, neoliberal debt is predatory, monopolistic, and ultimately, on a macro level, a device of soft-power imperialism. Rather than engage in land warfare, the neoliberal power structure, centered in Washington, Wall Street, and Brussels, uses debt to trap a nation-state and pillage its natural resources. Rather than presenting colonial governors, gendarmerie, and native collaborator militias as was seen in British India, the three are rolled into one as an army of banking bureaucrats who can (and do) revoke the democratic wishes of a nation-state, whether it takes the form of a parliamentary election of a government with a mandate opposing these polices, case in point being the Greek Syriza party, or a plebiscite directly opposing the EU, as seen with last year’s Oxi vote. When nation-states do resist, the financial sector calls on its muscle, NATO, to blow the country to smithereens, as was the case in Yugoslavia, Libya, and elsewhere. Now it is true that this state of siege can bring about the rise of strongman leaders, who are called dictators and monsters by the press that does the bidding of neoliberalism, but that is symptomatic of imperialism and not the society.

One notion that continues to define Libertarian thought on economic policy is that somehow Wal-Mart is an example of the free market at work. Yet this is simply absurd on so many levels. First, the Clintons and Wal-Mart had a symbiotic relationship that bred preferential treatment in a variety of fashions while Bill was Governor in Arkansas. Libertarian principles about almost everything go out the window in this situation. Second, the venality of the political favors resulting from this relationship define the opposite of Libertarian ethics, a sort of perverse antithesis of the classic demagoguery of a union official paying off a political campaign. Third, a large amount of Wal-Mart’s business comes from low-income people who buy groceries using the Food Stamp program, meaning that they are aided and abetted in shuttering small business grocers by the state and federal government. Fourth, the groceries themselves are produced using GMO ingredients, which is an even crazier labyrinth of anti-Libertarian behaviors, laws, ethics, and principles. Wal-Mart would quite literally collapse on itself overnight if we had a genuine freed market. This and other “big box” enterprises (and even some medium-box ones, like McDonalds) are the opposite of freed markets. They define the coordinates of neoliberal as opposed to Libertarian market ideals. Bill Clinton is the exemplar of the neoliberal free market and everything that is wrong with it.

There is no need to try to engage in a discussion of Austrian economics or Georgism or any of this stuff. It is a massive systemic fraud that has as its basic foundations a set of ideas that are only able to be described as one thing by Varoufakis, utopian. In his recent conversation at the New York Public Library with Noam Chomsky, a video worth watching despite genuine qualms about electoral politics , Varoufakis explains that the basis of neoclassical economics over the past generation is the game theories of mathematicians like John Nash. Anyone who has seen the somewhat useful Ron Howard film A Beautiful Mind will recall that it includes a bare-bones definition of how game theory works, illustrated in the contexts of a bunch of grad school students trying to pick up women in a bar.

Yet within the game theory are no spaces for things like theories of value, monopoly, public versus private sector spending, inflation, or any typical hallmarks of political economy. It is not an issue of these things being managed by internal mechanisms that relieve such pressures, it is that the entire edifice does not account for them at all. It occupies the logical plane of a post-capitalist rather than capitalist social order. Libertarian thought, by contrast, carries within it the anarchist critique of capitalism that has evolved into their current ideas about the free market, though the neoliberal coopting of the vocabulary has significantly muddied the waters here.

It is worth noting here that economics is a vital conversation for several reasons. First, as Marx taught us in the opening of Das Kapital, ‘The wealth of those societies in which the capitalist mode of production prevails, presents itself as “an immense accumulation of commodities,” its unit being a single commodity.’ From here we understand that the universal commodity, that x factor that can stand in for any digit, is the money commodity. In other words, money makes the world go round. There is no way in politics to therefore avoid fiscal conversations unless you hope to literally stop the turning of the earth.

But second, by helping Libertarians understand where and how some very un-Libertarian practices, like neoliberal gentrification, red-lining, and underfunding of public utilities prior to privatization, have been visited on populations of color in our society, it helps them better understand the logic of redistribution policies like the graduated income tax or reparations. Further help can be gained from the book Markets Not Capitalism: Individualist Anarchism Against Bosses, Inequality, Corporate Power, and Structural Poverty, edited by Gary Chartier and Charles W. Johnson and published in late 2011, a charming anthology acclaimed by Alexander Cockburn and others.

Furthermore, I would argue that the Libertarians can offer a useful critique, in some instances, of what can be labor union excesses. Over the past year, I have seen the Rhode Island building trade unions embrace with a whole heart and full throat two projects that were and are fundamentally ridiculous. The first was the loopy idea to build a baseball stadium in Providence on the taxpayer dime. The second was a fracked gas power plant in Burrillville that would be hooked into the Keystone XL pipeline in the I-95 corridor. The local Libertarians were part of a broad grassroots movement that had the brains to say no way to this silliness. Their political marginalization after all these years creates a certain skepticism that can be useful to these institutional problems that traditional Lefties might be unable to embrace due to a fetish-like workerist attitude that can be ridiculous.

There will be a juncture, sometime in the future, when a Green and Libertarian alliance might come apart due to fundamental differences. Yet that is a future that is far-off. The late Edward Said’s beloved quote from the poet Aime Cesaire was “There’s room for everyone at the rendezvous of victory” is a motto to hold as a central tenet at this juncture.

Andrew Stewart is a documentary film maker and reporter who lives outside Providence.  His film, AARON BRIGGS AND THE HMS GASPEE, about the historical role of Brown University in the slave trade, is available for purchase on Amazon Instant Video or on DVD.