Yes, regulations are a barrier to entry and protect the large incumbents.

Yes, Liberals are for the individual, not the State or Corporations, i.e. they are against enforced collectivisation.

If the State does something, it is systemically inclined to create a monopoly for itself via legislation, or distorts the market via subsidy, so reducing choice to such an extent that for most it is a de-facto monopoly (Education and Health are examples). This is not good for the individual as eventually any monopoly will degrade and will remain degraded for a long time, far longer than an entity in a pluralistic environment (i.e. the customers would desert it). It degrades because it does not have the self-correcting input from the market, i.e. all those hundred of thousands and often millions of individual brains making personal, highly relevant and immediate decisions and trade-offs. It is IMPOSSIBLE for a group of well-meaning people to match that. Firstly, they are under political control, being appointed by the State, secondly they just CANNOT know what might be good for everyone all the time, let alone be in a position to come up with a decision and balance it against all the others. The best they could do in a State system is try and establish what is good for the Majority and that gets us into the Tyranny path. They will tend to be behind the times, affected by trend and dogma. Yes, individuals are also affected in this way. If I am THAT IS MY FAULT and if I realise it, I can do something about it. What I object to is my life being affected by the outdated dogma of another who is deluded into thinking they are doing it “for my own good”. State monopolies entrench infantilisation.

If you use central taxation but want to avoid the State Monopoly you are in tricky position, as how do you harness a pluralistic environment where each person exercises they choice and that new players can enter and bad players can exit stage left followed by a dog? The State is an appalling purchaser. It cannot buy value for toffees.

The nearest I can see to have central taxation yet a pluralistic environment for delivery is a form of voucher system. I can see this working for education. In Health, I think most know that I prefer some form of regulation to create a minimum policy and for that policy to be bought directly by the individual – the reason for this is I believe there is more of a need for price control and more price-sensitivity in healthcare than in education – education is more about HOW, not about HOW MUCH. If you think it is about HOW MUCH, then logically you need to advocate the regulation + individual buys from the provider, otherwise we end up relying on the “Simple Shopper” that is the State.

I think that some regulation is necessary, but that we have more regulation than we presently need, and that this tends to act in favour of the large corporations who can most easily absorb the costs of this regulation.

So, who wants to take up the debate?

Dunno – depends what you’re on about here. ‘Economic liberals’ in the 19th century were the sort of people that opposed the Mines Act of 1842. I don’t think any economic historian would argue that this measure, which amongst other things banned children from working underground, benefited ‘large corporations’. You clearly think this has changed – but what you need to do is explain why and give some examples. Otherwise your post amounts to little more than you saying you believe in motherhood and apple pie – oh, and world peace.

**‘Economic liberals’ in the 19th century were the sort of people that opposed the Mines Act of 1842. I don’t think any economic historian would argue that this measure, which amongst other things banned children from working underground, benefited ‘large corporations’. You clearly think this has changed – but what you need to do is explain why and give some examples.**

Yes, please preface all future posts with a short essay on “Why I believe things have changed a bit since 1842″ – with references and examples. Is ‘Shuggy’ a teacher by any chance? Jeez!

Far too busy to give this a full dissection today I’m afraid, but if you assert that “I believe that nobody should live in poverty” then you cannot support economic liberalism.

On the assumption that by ‘economic liberalism’ you mean removing constraints and barriers to free trade, then there are (at least) two reasons why. Firstly, economic liberalism creates poverty. At its most basic example, a factory owner says to his workforce “either you take a pay cut or i move the factory to the next town down the river and you will all be out on your arse.” this is how liberalism eventually depresses wages to the minimum. Of course 200 years ago it would have been moving to the next town. In the 21st Century it is moving the factory to China, but the same principles apply.

Secondly , economic liberalism NEEDS poverty in order to work. Unless there is poverty for workers to fear, employers have no purchase over their workforce. Way back in about 1975 Keith Joseph, the original architect of economic liberalism in the UK argued that full employment would be a disaster – Britain needs a minimum of about 1 million unemployed in order to keep the workforce ‘flexible’ (ie sackable.)

Now of course you get into arguments about relative poverty and whether someone who is not starving, homeless and destitute can actually be categorised as ‘poor’ but the same principles apply.

There is of course a good argument that says BOTH economic liberalism and a controlled economy have failings which means neither will eradicate poverty – and I’d broadly agree. But it is nonsense to say that you think there should be no poverty and that you also believe in economic liberalism.

Personally I think the big arguments against liberalism are not social but environmental. Neoliberalism is sending us on the fast track to apocalypse and it is simply inconceivable that we can address that problem using the free market. Globalise capitalism and build a big boat.

“Is ‘Shuggy’ a teacher by any chance? Jeez!”

Yes – and you get 2/10 for your comment because you’re not paying attention, young man! Of course things have changed since 1842 but what I was asking Rob to do was to explain in what ways and why. Health and saftey is regulation that’s still supposed to help workers; Rob thinks it benefits large corporations. I think this requires explanation.

State regulations, however, is not the only thing that: “stands in the way of creative, entrepreneurial individuals.”

Economies of scale and barriers to entry into markets often mean that unregulated markets tend towards monopoly, as well. Rather, the mechanics of doing business always favour the established interests – the ones you talk about wanting to challenge through entrepreneurship.

I would also challenge your assertion that all state regulation hits individuals harder than larger organisations. Larger organisations are slower to change, and have more to do to adapt themselves to a changing regulatory environment, something that can often favour smaller, less-calcified players in a market.

I think the problem that many people have with ‘economic liberalism’ is that its language has been co-opted by neoliberals for the last 30 years. This has masked the transformation of a radical philosophy that stood against vested interests into a poorly-concealed anti-unionism, characterised by the insistence that all property rights that now exist are the ones that must be defended, a wilful ignorance of the historical bases of many property right, and a disregard for externalities.

As Kevin Carson says on his Mutualist Blog (www.mutualist.blogspot.com):

“From Smith to Ricardo and Mill, classical liberalism was a revolutionary doctrine that attacked the privileges of the great landlords and the mercantile interests. Today, we see vulgar libertarians perverting “free market” rhetoric to defend the contemporary institution that most closely resembles, in terms of power and privilege, the landed oligarchies and mercantilists of the Old Regime: the giant corporation. When the “free market” is perverted to defend such odious interests, it’s not hard to see why sane people view it with the same apprehension they normally reserve for the bubonic plague. ”

It is this perversion of the language of economic liberalism, and it’s representation of corporate welfare that is the reason many people are instinctively chary. Public-private partnerships are not ‘free trade’, privatisations are not ‘free trade’ – they are ways to use public money to subsidise private interests.

Young man? Clearly you are a teacher ( But you really shouldn’t jump to conclusions. I’m afraid that I was around when Winston Churchill was Prime Minister.

“…you’re not paying attention, young man! Of course things have changed since 1842 but what I was asking Rob to do was to explain in what ways and why.”

Who’s not paying attention? I wrote:
“Yes, please preface all future posts with a short essay on “Why I believe things have changed a bit since 1842? – with references and examples.”

And the difference is…?

“Health and saftey is regulation that’s still supposed to help workers; Rob thinks it benefits large corporations.”

I pray to God your subject isn’t English!

I would like to see some examples of the kind of regulations Rob would like to see abolished. I can think of a few I would certainly want to keep but if there are some that serve no useful purpose then by all means scrap them…but I want to know which ones he means.

Ally: “Firstly, economic liberalism creates poverty. At its most basic example, a factory owner says to his workforce “either you take a pay cut or i move the factory to the next town down the river and you will all be out on your arse.” this is how liberalism eventually depresses wages to the minimum. Of course 200 years ago it would have been moving to the next town. In the 21st Century it is moving the factory to China, but the same principles apply.”

In your world, however, the factory owner will not be in charge of the entity they created. They will be forced to pay their workers more than they can afford while a factory in China IS built and WILL produce the product anyway for far less, forcing the UK factory to eventually go broke, become nationalised, be taxpayer funded (who is left to fund it if all we get are workers, eh?) and then close resulting in even more poverty. Witness the UK Car industry.

Economic Liberalism does not “create poverty”. Poverty exists already and can be created for all manner of reasons totally unconnected with Economic Liberalism. The employer MUST have the final say in the employment contract – that is essential, otherwise it becomes a form of robbery – “Pay me, or else”.

One way to have widespread poverty both materially and in ambition is to have a command economy. That is guaranteed.

Nathaniel @6,

I am not sure the term Libertarian can be given to people who uphold the rights of the Corporation to dominate the individual against the will of the latter. I would like to know how a giant corporation can dominate the individual for any length of time without the connivance and/or support of the State.

Being an economic liberal can mean a lot of things, regulation is a minor consideration, free trade is what I would consider the major part of any economic liberal ideology. It is also possible to take a liberal attitude with certain caveats.

As such, I am firmly opposed to the brand of liberal economics that calls for the reduction of protective barriers to trade, in particular the reduction of such barriers in developing nations. Protective trade barriers in developing countries, encourage entrepeneurship because they allow local entepreneurs with local knowledge the ability to make use of local business opportunities. Lowering trade barriers means the multinationals either run local businesses into the ground or take them over.

There is a good body of evidence to indicate that policies based around the encouragement of free trade have done far more harm than good. Bad Samaritans by Ha-Joon Chang documents all this very well.

As far as regulation goes, I think everyone can agree on the need for some regulation. Beyond this, there is a milage in the idea that some regulation hurts small business, but any discussion on regulation does need to be specific.

“I pray to God your subject isn’t English!”

Trying to say I don’t right proper England?

What we’re looking for is some justification for the statement that regulation benefits large corporations. People who describe themselves as ‘economic liberals’ all too often are simply pro-business rather than pro-market and are rather inconsistent with their application of liberal principles. This is why they are associated with the right.

Regulation benefits large corporation beause they have a disproportionate input to the regulatory framework. Supposing you are the EU and you want to regulate safety in say the oil industry – who are you going to consult ? Probably some “independent” experts (who may or may not have worked in said industry), some academics (who may or may not be paid to research by said industry), and probably some lobbyists who will be blatant fronts for the oil industry.
The guy running the independent little garage won’t get a look in. At the same time he will lack the infrastructure to absorb new regulation which will consequently impact disproprtianety on his overheads and harm his competitiveness. Look at how the big supermarkets have managed to manipulate planning law at the expense of local shops, or how the tobacco/alcohol industries have bought off sucessive governments, it is surely axiomatic that size equals power.

Roger:
“In your world, however, the factory owner will not be in charge of the entity they created.”

Not necessarily. You’re assuming I’m an old-school command economy socialist, and I’m not – as I said in my comment there are other problems with attempting to control economies which may in some cases be more damaging than the neoliberal alternative.

I wasn’t putting forward a ‘correct’ economic model, I was pointing out the flaws in Rob Knight’s reasoning.

I think whole new models of economics are needed now which are far more based on the true value of non-renewable resources. Once you bring that factor into the equation every other accepted principle of classical economics (both left and right) go right out the window.

Roger @ 10

I was not suggesting that vulgar libertarians were correct in calling themselves ‘libertarians’ or even ‘economic liberals’, merely saying that they do. I was arguing that the fact that the vocabulary of economic liberalism has been twisted by market fundamentalists is what leads to many people’s suspicion of it.

Apologies two twice referring to the same article, but Kevin Carson’s Review of Naomi Klein’s ‘Shock Doctrine’ (http://mutualist.blogspot.com/2007/11/naomi-klein-shock-doctrine.html) gives a good explanation of why some people are so chary about the language of economic liberalism.

What’s the problem with “liberal economics?”

Putting it simply:

1) As a religious belief (c.f. a lot of “high libertarians”) it simply doesn’t pass the evidence test. The weight of economics research over the last 20 years has come down against full on libertarianism. Since you believe in some regulation, you’re not one of these people.

2) As a facade (c.f. the “vulgar libertarians”) it’s just a cod philosophy for promoting the interests of the rich and powerful, including large corporations. I’d hope you’re not one of these people.

3) As a real, working, living political approach? It’s a set of tradeoffs that need to be discussed in detail.

It’s easy to say “we have more regulation than we presently need”, but I suspect if you are feeling reasonable about debate you’d admit that the reality of a changing world is that most of the time, some things are over-regulated and some things are under-regulated. And so the question comes down to discussing the tradeoffs in particular areas. So there’s lots of room for interesting discussions, but not much to say in “the general case.”

But, since we’re generalising, my own experience is that the people who ramble on about “not letting people get trapped in the machinery of the State” are very happy for people to be “trapped in the machinery of oligopolistic corporations.” You say that isn’t the case for you, but without that detailed discussion I mention as point (3) it’s hard to separate you from people like Sir Keith Joseph who in rhetoric made many of the same points as you, but in actual policy terms was very sanguine about letting laissez-faire rule.

Personally I’d very much encourage you to post about some actual regulatory matters and let’s have a debate.

ally,

You are suggesting that the employer is not free to hire and fire, locate their place of business nor set the level of wages, though!

The real value of anything is roughly the price someone is willing to pay for it. The price someone is willing to pay is usually what they can get from using it – overheads – margin. That goes for one’s labour too. You cannot synthesize value and expect everyone to believe you for very long.

Roger: “You are suggesting that the employer is not free to hire and fire, locate their place of business nor set the level of wages, though!”

And so are you, if you accept sex, race, age etc discrimination legislation as being valid.

And so are you, if you accept the principle of the minimum wage.

And so are you, I am sure, in numerous other respects.

It’s all about where we think is the appropriate place to draw the line. One thing that bugs me about the right / economic liberals is that they want employers to be as unrestrained and free as possible, but don’t extend the same rights to employees. So if you are going to be liberal about pay and conditions, you should also recoognise that labour has a value too, that is as high or as low as the seller wants to sell it for. That means liberalisation of trades union activities – people must be able to withdraw their labour as they see fit, organise themselves as they see fit etc. So re-legalise sympathy strikes, nationally co-ordinated strikes, closed shops etc etc. Otherwise you don’t have a free market at all – you have a constrained market that is rigged in favour of the employers.

Oh dear, this is getting a bit sixth-form. How easy it is to confuse liberal economics with economic liberalism…how easy it is to lump free-trade issues together with a laissez-faire outlook…how easy it is to ride the liberal bandwagon to the precipice and assume that money has an anarchic power!

We can easily play the historical associations game and assign positive or negative attributes to past aspects we can identify as favorable or adverse, but the ‘liberal’ answer always seems to slip out of simple definition and skip nimbly into application with newer conditions.

Good practice involves due diligence and checks and balances – taking the conflicting pressures and synthesising them into an acceptable compromise. Why are free trade and fair trade incompatible? Well they aren’t, but don’t expect the reality to match up to your ideals.

At one end of the spectrum, if it is a choice between an unregulated market or a dole queue, then I think there is no chance that both waste and people going hungry will be avoided. At the other end you won’t prevent people from making their own choices and having eating disorders or not making full-use of their money-making and tax-paying potential. What you can do is ensuring that these problems are minimised by having a market open and diverse enough to counter any overdependencies or limitations. No regulation is intrinsically desirable – all must be continuously justified; less is certainly better, but none definitely isn’t more.

As such, additional liberalisation is always possible and desirable in one direction or the other, just don’t jump to the conclusion that this presupposes unconditional accpetance of one version of a ‘liberal’ doctrine over another.

The liberal answer is always underscored by an active dynamism: there are no fixed answers.

Ally.

Alot of the employment regulations are killing small companies. If regulations make business MORE productive, as some people suggest, then there is no need for regulations, just PR, surely? Ask any small business and they will tell you “never hire a woman of reproductive age”. Yes, you need to prevent line manager discriminating on race or age (fat chance of getting age enforced, though) but other regulations, especially on smaller companies or in certain trades and roles, regulations and “entitlements” are often counter-productive and nonsensical – there is no sense in a client facing account manager to work flexi!

As for your idea of freedom of association somehow extending into, what “closed shops”? How is that “freedom of association”? That is the classic “right to form a voluntary collective to enforce an involuntary one”. Utter nonsense. So is sympathy strikes. If you want sympathy strikes, then the employer you strike at is free to fire you for breech of contract. If you want free association, you need to enforce rigorous policing and “anti scab” policies to enable workers to join or leave a strike as they see fit. To not aupport that wholeheartedly, including police action to allow workers to enter, is hypocracy, Ally. I do not think I am unreasonable in suggesting that people who what all these union “freedoms” pay scant regard to the freedom of the individual. Any Liberal should be against enforced collectivisation at such a personal level.

Indiscriminate firing by line managers is something we need to prevent, but quotas and somehow creating groups who are “untouchable” are the consequences of the current regulations.

I must also point out that it is the employer who is buying and the worker who is selling. The customer is king and has the right of refusal on goods and services offered. The seller cannot demand someone buys at a price or unilaterally alter a contract without implications. How difficult is that to understand?

“I must also point out that it is the employer who is buying and the worker who is selling. The customer is king and has the right of refusal on goods and services offered. The seller cannot demand someone buys at a price or unilaterally alter a contract without implications. How difficult is that to understand?”

Workers don’t belong to a category of product that can just gather dust on a shelf in a warehouse without it impacting their value or ability to produce. There must be at least a minimal framework to ensure a basic standard of value for their employment, equating this with the underpinning value of the product of the labour, otherwise it simlpy isn’t economic. Without the correct level of regulation to constrain the power relationship between employer and employee the dominant player will bring the other to their knees (literally or metaphorically), which is ultimately to the detriment of both sides of the argument – as companies may go bankrupt and insolvent, so too may individuals go bankrupt and, in extremis, starve.

All relationships (including industrial and commercial ones) are symbiotic and mutually benefitial where the opposing powers are balanced to enable that they work well by compensating adequately for the exchange in value that is undertaken in the process. Where one side gains dominance over the other it will become destructive and unstable, leading ultimately to failure if remaining unchecked. Both sides must be recognised, but both must also recognise their responsibility to their role within that relationship. Responsible government will reflect the relationship and create healthy conditions for it to prosper, rather than attempt to influence the outcomes by prejudicing the processes.

As the market grows, so the relative values of labour and product evolves and must be continuously renegotiated to maintain both the narrower and wider balances within the company and society as well as in the individual circumstance. At each stage it is liable to be impacted by the destabilising influences of self-interested actors within the continuing process.

There are many undesirable aspects to an imperfect economic system and each changes in significance as the balance in power relationships shifts. None will ever be completely eradicated, only minimised as they become more liberated.

It’s not rocket science, it’s just hard work.

“Without the correct level of regulation to constrain the power relationship between employer and employee the dominant player will bring the other to their knees (literally or metaphorically), which is ultimately to the detriment of both sides of the argument – as companies may go bankrupt and insolvent, so too may individuals go bankrupt and, in extremis, starve.”

But this relationship is fluid since an individual over the course of their lives might be both employee and employer, besides being in different parts of the day, both consumer and producer. Failing employment, people can live very successful self-employed lives too. There is an implicit class structure being pushed here which is not necessarily very helpful for analysing power relationships. It is much more about how much coercion an individual (whatever their alleged place in a theoretical hierarchy) can bring to bare on another. And for the libertarian, the answer is simple: none. You can’t force someone to buy your products, nor can you force someone to employ you.

Incidentally, the minimum wage ends up inflating the cost of all products that use minimum wage labour (which is also many of the products that minumum wage individuals buy) so although the least well off in an advanced capitalist society (i.e. one with access to cheap goods in foreign markets) will benefit in the short-term from the creation of a minimum wage, in the long run, they end up paying for that themselves through inflation (the easiest way to tax the poor while leaving rich people with high interest bank accounts unscathed).

Here comes the sporting metaphor.

The best kind of referee is the one you never see or have to consult, but the nature of the game means that this is inevitable on some occasions. Of course you could formulate a game where there are no rules, no guidelines, or field lines indicating the area of play, but then would you manage to keep the interest of the people you wish to participate without it turning into a brutalist no limits free-for-all fight to the death?

Once survival is no longer a real question then it all becomes about the measure(s) of success – ie goals etc.