Sunday, February 08, 2009

What is Political Capitalism?

A week ago, I wrote a response to a Marginal Revolution post about "political capitalism". I wrote:

"Political capitalism" is yet another far-right think tank spawned pile of crap. Every few years, the right needs new, less boring clubs with which to beat their opponents. We've seen a number of them in the past: trickle down, Laffer curve, etc. Austrianism is required to believe in this one, according to the author.

You need only look at the biography of the author to see just how pathetic this is. His PhD was under Murray Rothbard at the now-defunct International College in Los Angeles, and pretty much all of his work has been based on Austrianism.

The author, Rob Bradley, responded.

Sorry to see that one participant has turned the discussion into argument against the person.

Two comments: One, a review of my dissertation, published as Oil, Gas, and Government: The U.S. Experience, was published in the Southern Economic Journal by Tyler Cowen.

Two, a major endorsement of my "political capitalism" theme comes from Gabriel Kolko, a New Left historian out of the Marxist tradition, who stated on the back cover of my new book, Capitalism at Work: "Fascinating, comprehensive ... far surpassing my own history of political capitalism done in the 1960s."

I tried to respond again, but my post was supposedly filtered for too many links (no other responses appeared.)

So rather than waste my efforts, I'll post here so that I have them for reference....

Bradley criticizes me for "argument against the person", and defends himself with appeal to authority.

Take a look at Tyler's review of his published thesis which is as fine an example of damning with faint praise as I've ever seen.

Yet another review says "it is ironic that the main criticism one can direct against him relates to his ideological a priori attachment to the belief that any form of government intervention in the market economy must always and everywhere be pernicious and counterproductive."

If you check the Gabriel Kolko wikipedia page, it points out that "political capitalism" is a term Kolko used for corporatism, but hardly anybody else adopted it in the subsequent 40+ years. There isn't even a wikipedia page for "political capitalism", nor does it redirect to corporatism.

Yet he totally ignores my first paragraph where I point out that two other giant negatives for his credibility: that he is a tool of the right wing think tanks, and that he relies on Austrian economics.

A little reading of his introduction tells the full story. Shorter Rob Bradley: "Enron and Ken Lay failed because they were victims of a mixed economy even though every other corporation that fails or succeeds is in a mixed economy. Fairytale pure capitalism, as fantasized by Ayn Rand, would be free of these problems."

Comic quotations:

"Adam Smith, Samuel Smiles, and Ayn Rand elucidated the character traits, mental models, and interpersonal conditions behind success and failure, while differentiating sharply between free-market entrepreneurship and political rent-seeking."
Right. Female industrialists swooning before the economic might of mighty male industrialists, as in Atlas Shrugged.

"In the twentieth century (chapter 3), the philosophy of Objectivism, formulated by Ayn Rand, explains how Enron’s financial bankruptcy was at root a philosophic one."
Shorter Rob Bradley: It's only because Ken Lay was not an Objectivist cultist, unlike every successful CEO.

"Smith, Smiles, and Rand did much to frame what can be called heroic capitalism"
Most of us outgrow moralistic stories of heroes by the end of our teens. And Smith was much more sensible than Smiles or Rand: he showed good and bad in capitalism. Not simple heroism.

"But why did inferior thinking in the social sciences and humanities prevail? [...] The answer is the by now familiar one: arrogance."
Ah, the classic crank explanation for why everybody else is wrong, and he's right. How humble of him to proclaim that they're arrogant, every one!

There are so many stupid things in this introduction that it beggars description. Essentially, he wordily describes the Enron/Lay problems as hubris, but attributes the hubris to the mixed economy. Sorry, jack, but hubris doesn't need mixed economy to occur.

He also declares that he worked at Enron (and for Lay) for years. That's honest, but it sure points out that he has an incentive to find somebody else to blame. Was he the one point of light at Enron who wasn't suffering from the moral flaws that brought Enron and Lay down? Somehow, I doubt it.

I guess I'll finish by quoting my Libertarianism in One Lesson and Libertarianism in One Lesson; The Second Lesson, because Rob Bradley embodies these caricatures:

Government is the Great Satan. All Evil comes from Government, and all Good from the Market, according to the Ayatollah Rand.

Require perfection as the only applicable standard to judge government: libertarianism, being imaginary, cannot be fairly judged to have flaws.

Government causes pollution, crime, discrimination, slavery, poverty, and all the other evils of the world. Businesses and individuals only produce wealth: they are not involved and not responsible for any of those problems.

There are no market failures, only government failures. Which is why we should abolish corporations, patents, copyright and other intellectual property; they are established by government interference with free markets.


Jeremy said...

A few comments from a libertarian (but non-Austrian) point of view:

1. libertarians will, by definition, value perfect freedom over other goods, all other things being equal. That's largely what it means to be a consistent libertarian. There's nothing wrong with that as long as one is clear about that (and does not pretend it should be more convincing than it is - any honest libertarians will acknowledge that mere freedom is not the highest priority for most people).

2. libertarians are as susceptible to being assholes as anybody else. Spent much time on Daily Kos lately?

3. There are libertarians (the left libertarians) who (A) appreciate Kolko and his particular definition of political capitalism (see Kevin Carson), (B) are not market fundamentalists who think that every ill in the world can be reduced to some unit of economic inefficiency (Cowden's "Markets in Everything" series is a great example of this deification of the market).

Government is not always bad, and the market is not always good. OK. fair enough. Still, isn't it strange how so many libertarians are familiar with a new left historian like Kolko, while so many liberals / progressives / leftists are not? Isn't it remarkable that a leftist like Kolko would find such words for Bradley's work?

In critiquing arrogance and the incompleteness inherent in *any* human ideology, let us not overstate the case against libertarianism - at least, not to the extent that we ignore there are competiting *values* here, not just competing perspectives.

Jeremy said...

Also, don't you think you should at least *offer* an answer to the question stated in this post's title?

This is the problem with taking an exclusively critical stance towards any ideology: what you're left with, in the end, is the tearing down of one wall while still standing behind another.

Mike Huben said...


1. There can't be any such thing as perfect freedom. "Liberty and equality, spontaneity and security, happiness and knowledge, mercy and justice - all these are ultimate human values" according to Isaiah Berlin. One basic problem of libertarianism is the pretense that only liberty should be satisfied, and not traded off for any of the other values.

2. People who work for thinktanks (in my experience) have a particular sort of assholery shared by press secretaries and various other paid shills. It's the pretense of a conversation, when in actuality you might as well be discussing the issues with a sign on the wall.

3. I'm aware of the variety of libertarians (I link to Carson, among others.) I generally criticize libertarian arguments and positions, but I think it is important to identify those who do not engage in reasonable argument (paid shills and grotesque ideologues, for example.)

Other values ought to compete with liberty: it is an impoverished ideology that attempts to claim overriding importance for only one.

I did answer what political capitalism is, in two senses. First, in the academic sense, it is what the vast majority of others call corporatism. Second, in the public relations sense, it (Bradley's efforts) is yet another far-right think tank spawned pile of crap for the purpose of bludgeoning critics of capitalism.

D.R.M. said...

This isn't related at all to the post, but have you seen that Ugyur and Wayne Allyn Root interview?

To me, the rather centrist Ugyur comes off as much more sensible and focused than Root. Just because Root seems to reuse talking points whenever presented with an argument, rather than actual address the point head on.

Jeremy said...

There can't be any such thing as perfect freedom.

Well, of course not - that's why it's a ideal, to be understood in the language and logic of values.

One basic problem of libertarianism is the pretense that only liberty should be satisfied, and not traded off for any of the other values.

Well, but any ideology is incomplete on its own terms. It is not a mechanistic rule system to be followed blindly, but then again, neither is democratic socialism.

We're agreed on number 2.

Other values ought to compete with liberty: it is an impoverished ideology that attempts to claim overriding importance for only one.

Of course - but that's why I think honest libertarians don't primarily frame things in terms of vague, romantic abstractions like "liberty". What does that even mean in any given context?

That's why being anti-government is so informative to my position. I'm not just "for liberty" - I'm against *specific* encroachments on my autonomy as an individual (such as political centralization, mass democracy, etc.). There are encroachments that come at a more local, community, or family level, but those aren't as big of a threat as those of large scale centralization driven by the myth of this thing called the "state".

Too many people practice ideological conformity like robots. We need fresh thinking, in libertarianism and other sectors, so that human beings can articulate their interests on terms that are not axiomatic and exclusive, but holistic and dialectic.

My bad on the definition question. I think Kolko nails the definition of "political capitalism" - with the political being pretty redundant if you ask me. There *IS* no capitalism without the state, so it is by definition inherently political.

vrally5 said...

one of the problems with Libertarianism is that for too long it has been anti-government,and thus produced a bias that excludes other factors as well. These factors can include anything from monopolies,to poor working conditions.

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