Wednesday, June 29, 2011

Are Libertarians the Descendants of Socialists?

Klint Finley posts (29 June) at Technocult HERE

When Libertarians Were Socialists

Kliny quotes from Benjami Tucker (HERE):

State Socialism and Anarchism by Benjamin Tucker, a proponent of individualist anarchism, a predecessor to modern libertarianism. The essay was written in 1886.

'The economic principles of Modern Socialism are a logical deduction from the principle laid down by Adam Smith in the early chapters of his Wealth of Nations,—namely, that labor is the true measure of price. But Adam Smith, after stating this principle most clearly and concisely, immediately abandoned all further consideration of it to devote himself to showing what actually does measure price, and how, therefore, wealth is at present distributed. Since his day nearly all the political economists have followed his example by confining their function to the description of society as it is, in its industrial and commercial phases. Socialism, on the contrary, extends its function to the description of society as it should be, and the discovery of the means of making it what it should be. Half a century or more after Smith enunciated the principle above stated, Socialism picked it up where he had dropped it, and in following it to its logical conclusions, made it the basis of a new economic philosophy

And he comments:

‘Tucker said socialism was the claim that “labor should be put in possession of its own,” holding that what “state socialism” and “anarchistic socialism” had in common was the labor theory of value. However, “Instead of asserting, as did socialist anarchists, that common ownership was the key to eroding differences of economic power,” and appealing to social solidarity, Tucker’s individualist anarchism advocated distribution of property in an undistorted natural market as a mediator of egoistic impulses and a source of social stability. Tucker said, “the fact that one class of men are dependent for their living upon the sale of their labour, while another class of men are relieved of the necessity of labour by being legally privileged to sell something that is not labour. . . . And to such a state of things I am as much opposed as any one. But the minute you remove privilege. . . every man will be a labourer exchanging with fellow-labourers . . . What Anarchistic-Socialism aims to abolish is usury . . . it wants to deprive capital of its reward.

And he concludes:

‘The abandonment of the labor theory of value is one difference between the anarchism of then and the libertarianism of today.’

It is not clear in my opinion if Adam Smith had a labour theory of value or if he believed that exchange takes place between items of equal value. In fact, Smith on the labour theory of value writes what can only be described as a muddle. I have suggested in the past, and will examine the case in due course, that Smith’s text in WN suggests that he heavily edited it for publication and in doing so he deleted some, perhaps a lot, of its wording, leaving the joins on show.

I also heard this case at a meeting of the History of Economic Thought conference in Manchester a couple of years ago made by a continental scholar, but others at the conference (Terry Peach, a specialist on Ricardo) fiercely disagreed, and because I had not thought through my arguments I was unable to join in the debate.

My thoughts remain, however, how to account for Smith switching back and forward in WN between a pure theory of labour value (the deer and the beaver example) and the acknowledgement that when land became property, there were other necessary claims of the labourer’s product (landlords, labourers, and merchants). In other words, the labourer’s product was unambiguously his own in the first age of man – hunting – but in question in the other ages. Marx took the labour theory of value to a philosophical extreme, creating a poetic language and much mystification in doing so, making it almost irreligious not to believe it and couldn't make it stick, except, as his followers showed in either their continuing anger against capital, or worse, when they achieved to power to harm those who disagreed with them. Libertarians are not in the least dangerous on a similar scale.

Worth a debate, and perhaps my next project for research?



Blogger Person 1 said...

I have a question for you:

Given Smith's comments about the division of labour and education, and also taking into account the gap between modern prosperity and his own day, would Smith have regarded the Coalitions university policy acceptable?

Whilst I accept the need for students to contribute to the costs of their own educations (and benefits thereto), it has always seemed to be bad policy to explicitly render it impossible for people (18 years old leaving school), with parents unwilling or unable to raise the necessary capital from higher education. There does seem to be a role for lending of some kind, and of a riskier kind than banks may otherwise take on, but although there may be negative effects from overprovision (though this can be controlled), the benefit does seem to be, at least if such an education is limited to the most intelligent fifth of the population, a stifling of the discontent of lack of opportunities and the rendering of a more civilised society. As well as the long term investment effects, which is why, as far as I can tell, even the most classically liberal economies such as Singapore have government subsisdised loans systems for students.

3:46 pm  

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