Libertarxism II

February 18, 2009

Ayn Rand’s characters deliver monologues that no person would ever really speak. I write interviews that no one would ever really give. Here’s an example:

Q: Thomas has said that what you’ve written so far on class lacks rigor and “sounds like you want to negate sociology in its entirety just for spite.”

A: Well that’s absurd. If I were spiteful towards sociologists, I would say that sociology is just economics without useful analytical tools. But my beef isn’t really with sociology, anyway. It was Thomas, not I, who brought up sociology.

Q: Alright, so where’s the beef?

A: Like I wrote, it’s with the idea that class exists and matters. I believe that any theory of societal interaction that gives “class” a prominent role is fundamentally misguided. I don’t even know if sociology, in general, does this. If it does, it’s wrong.

Q: How can you say something so obviously false as “class doesn’t exist”? I guarantee you, most Americans do consider themselves part of a class (I seem to remember a survey showing that 90% of Americans believe themselves to be middle class). Clearly, to them it’s not meaningless.

A: Of course you’re right that if a large majority of people believe they know what a class is and are part of a class then it can’t be a meaningless concept. But “class” represents a way of thinking that is seriously outmoded and thus increasingly useless for understanding the world. Class conflict might have been a good way of understanding the world prior to the Industrial Revolution, but the idea has since become obsolete. In this way, it’s kind of ironic that the thinker most associated with the idea of class, Marx, devised his theories just as they would cease to apply. Of course, that’s not the first time that has happened in history.

Q: You have another example?

A: Of course, and it dates from the same era. As Tim Harford points out in The Logic of Life (a book which I did finally get around to reading), Malthus was another person who came up with a theory that was really good at describing history, but ceased to be true almost at the same moment that he formulated it. Throughout history up to Malthus, production grew arithmetically or not at all, while population growth naturally follows a geometric sequence. Common sense dictated that as the world population continued to grow, its size would quickly outstrip people’s ability to produce food to support themselves. But starting at around 1800, world economic output started down a path that it had never followed before in human history. Output grew even faster than population, and as a result, our standard of living is at a level today that would have been difficult for anyone to imagine two hundred years ago.

Q: So you’re saying the same thing happened to Marx?

A: Precisely. Before the Industrial Revolution, the economic world really was characterized by class struggle. In the old days, you got rich by convincing the people nearby to let you lead them into battle as you conquered territory in order to plunder it and enslave the inhabitants. That was how you gained wealth back then. But look at the most successful people in the modern world; the difference is enormous. Billionaires like the inventors of Google or Facebook, or even overpaid athletes, got to be rich by delivering a product that people want. Most residents of England in 1066 would probably have preferred for William the Conqueror to leave them alone. By contrast, I like google.

We do still see plundering behavior in some parts of the world, which I think provides a clue to the nature of the changes that have taken place since 1800. I am referring to what we now call the “resource curse.” In modern resource-cursed countries, successful people are those who are best at politics, especially its uglier features (e.g. violence, rewarding cronies, suppressing or killing opposition). These are the kinds of behaviors that described the entire world before the Industrial Revolution.

Q: What’s the problem with Marxism, then?

A: Exactly that it’s suited to the pre-industrial world, or the world of resource-cursed countries, but doesn’t apply to what is properly thought of as the modern economy. These days, you don’t get rich and stay rich by extracting wealth from other people. The reason is that easily extractable wealth forms an ever-smaller part of the overall wealth in the world. Most goods these days are produced by absolutely massive networks, which requires a level of cooperation that is impossible for any one person to fully grasp.

Q: You mean like, Blu-Ray players are too difficult to get people to produce under duress?

A: Sure, but I was thinking even more basic. You know, nobody knows how to make a pencil.

Q: Ugh. You’re still on about that Leonard Read article?

A: Yes! It’s really important! I’ll grant that Libertarians and Hayekians do tend to trot out the same arguments over and over again, but that’s because we think they’re really good. “I, Pencil” represents a big part of the important change that I’m talking about here. Even simple products require a network so complex that there is no single person capable of understanding and managing the whole process.

Q: I don’t get how this negates the idea of class.

A: Because it’s an artificial distinction, and thus has no consequence in the modern world. One complaint that is often raised against industrialization is that it dehumanizes you and separates the worker from the product of his labor. But there is a positive aspect to this that is overlooked: if industrialization does provide me with a way to treat you as a cog in some giant machine, I am going to be concerned, for the sake of my own self-interest, with making sure that you play your part in that machine as productively and efficiently as possible. In an ultra-complicated economy like the one we have today, the way to maximize my own welfare might just be to let you do your own thing and hope to enjoy the positive spillover, rather than trying to micromanage your life.

That’s where the idea of class breaks down. I’ll only take the time and trouble to rally my class together and exploit yours if I have something specific in mind for you to do, and if I think the net benefit of all this work is going to be positive. My chances of doing this successfully are slim, so I resort to treating everybody the same. I don’t really care whether you are upper class, middle class, or lower class. As long as you have some money, my maxim is “Money talks.”

Q: Any other observations you want to throw out here?

A: Heck yes. I think the Iraq War is a great example of the new economic reality. We successfully conquered a country and ended up $1 trillion in the hole because of it. If that’s not evidence that conquering countries for economic benefit is a terrible idea these days, I don’t know what is. Incidentally, when I’m wearing my anarchist hat, this is my favorite argument against the idea the “National Defense” is an essential public good.

Q: Then again, whether you profit from conquering a country might be a function of the type of government you have at home. Perhaps if we had just gone in, stolen their oil, and left, we would have benefited.

A: Fair point. But it could be a function of the people within the country being invaded, too. Even without a national army, I don’t think Americans would give up their resources too easily. I think that people who assume we would be helpless without a national army greatly underestimate the costs, and overestimate the benefits of invading America.

Q: Alright, I think we’re done here. Thanks, it’s been fun.

A: Yeah, I was all over the map in this one. I guess I won’t be able to yell at Thomas for being off-topic, no matter what he decides to say in response to this.

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