Contra Left-Wing Libertarianism Part 1

The libertarian political economic philosophy is unique. It belongs neither to the right or left hand part of the political economic spectrum. This thesis is in sharp contrast to the views of left libertarians Long, Holcombe, and Baden who maintain that libertarianism is really part of the left, or left-feminist movement, and equally so with the perspective of conservative libertarians Hoppe, Feser and Paul, in whose view libertarianism is a constituent element of the right-wing conservative movement.

The present paper defends the position of libertarian centrism, or libertarian purity or plumb-line libertarianism, vis-à-vis its two competitors for the libertarian mantle: left-wing libertarianism and right-wing libertarianism. Appearing on LewRockwell.com, there is no need even to carefully define terms such as "libertarian," as would otherwise be the case. For, amazingly, all parties to this debate are staunch libertarians. There are no differences between any of us as to the primacy of the non-aggression axiom, coupled with private property rights based on homesteading. All principals to this debate agree with these basic premises. Where we differ is in terms of the logical implications of these founding axioms. This week, we take to task Long, a left-wing libertarian, in his views on rape and the wage gap.

Roderick Long

a. rape

Here is an indicative view of Long:

"When radical feminists say that male supremacy rests in large part on the fact of rape — as when Susan Brownmiller characterizes rape as ‘a conscious process of intimidation by which all men keep all women in a state of fear' — libertarians often dismiss this on the grounds that not all men are literal rapists and not all women are literally raped. But when their own Ludwig von Mises says that ‘government interference always means either violent action or the threat of such action,' that it rests ‘in the last resort' on ‘the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen,' and that its ‘essential feature' is ‘the enforcement of its decrees by beating, killing, and imprisoning', libertarians applaud this as a welcome demystification of the state. Libertarians rightly recognize that legally enacted violence is the means by which all rulers keep all citizens in a state of fear, even though not all government functionaries personally beat, kill, or imprison anybody, and even though not all citizens are beaten, killed, or imprisoned; the same interpretive charity towards the radical feminist analysis of rape is not too much to ask."

Although Feser did not write with this specific quote in mind, he might well have:

"… it is of the essence of modern intellectual life that such claims, and many that are even more bizarre — e.g. that marriage is comparable to rape and sexual intercourse an expression of contempt for women (Andrea Dworkin), that Soviet communism would have been worth the murder of 20 million people had it worked out (Eric Hobsbawm), that Greek civilization was stolen from Africa (Martin Bernal) — are regarded as at least worthy of discussion. The rankest claptrap is given the most serious consideration, while common sense and tradition are dismissed without a hearing."

I am of course too scholarly by disposition to characterize the views of Long and Johnson in this regard as "the rankest claptrap." Instead, I content myself by noting that there is a strong disanalogy between males vis-à-vis females on the one hand, and the state with respect to the rest of us, on the other. To wit, every government without exception is a rights violator but not every man is a rapist or woman beater. It is entirely justified for all members of the polity to go in fear of the government. The state is the greatest rights violator known to man. It is entirely a different matter to think it reasonable that all women are kept by all men in a continuous state of fear. Brownmiller and Dworkin, themselves, furnish a counter-example: they went about their ordinary lives, shopping, working, teaching, lecturing, writing; they could hardly done this were they in a perpetual state of fear. Their "fear," rather, was merely theoretical, political, or poetic. Of course ordinary citizens, too, go about their daily concerns, without exhibiting undue fear of government, or, indeed, any fear at all; they are taught from the earliest age that "the (statist) policeman is our friend." The difference is that the minions of the state rule over them whether their victims realize it or not. This simply is not the case regarding all men and all women regarding rape. This is not such a difference in degree that it ultimately amounts to a difference in kind; it is a difference in kind at the outset. For proof, all we need do is reflect upon the fact that there never has been a government that has not violated rights. Surely, most men have never, ever, raped anyone, or even come close.

b. The wage gap

Long and Johnson are exercised about "the reality and pervasiveness of … discrimination against women ..." According to Long:

"Women on the job market make, on average, 75 cents for every dollar men make for the equivalent jobs.

"What explains this wage gap? Various possibilities have been suggested. But some Austrians have argued that there is only one possible explanation: women are less productive than men.

"The argument goes like this: If employers pay an employee more than the value of that worker's marginal revenue product, the company will lose money and so will be penalised (sic) by the market. If employers pay an employee less than the value of his or her marginal revenue product, then other companies can profit by offering more competitive wages and so luring the employee away. Hence wage rates that are set either above or below the employee's marginal revenue product will tend to get whittled away via competition. (See Mises and Rothbard for this argument.) The result is that any persistent disparity between men's and women's wages must be due to a corresponding disparity between their marginal productivities.

"As Walter Block puts it: Consider a man and a woman each with a productivity of $10 per hour, and suppose, because of discrimination or whatever, that the man is paid $10 per hour and the woman is paid $8 per hour. It is as if the woman had a little sign on her forehead saying, ‘Hire me and earn an extra $2 an hour.' This makes her a desirable employee even for a sexist boss.

"The fact that the wage gap does not get whittled away by competition in this fashion shows that the gap must be based, so the argument runs, on a real difference in productivity between the sexes. This does not necessarily point to any inherent difference in capacities, but might instead be due to the disproportionate burden of household work shouldered by women — which would also explain why the wage gap is greater for married women than for single women. (Walter Block makes this argument also.) Hence feminist worries about the wage gap are groundless.

"I'm not sure why this argument, if successful, would show that worrying about the wage gap is a mistake, rather than showing that efforts to redress the gap should pay less attention to influencing employers and more attention to influencing marital norms. (Perhaps the response would be that since wives freely choose to abide by such norms, outsiders have no basis for condemning the norms. But since when can't freely chosen arrangements be criticised (sic) — on moral grounds, prudential grounds, or both?)

"But anyway, I'm not persuaded by the argument, which strikes me as [ominous pause for effect] more neoclassical … than Austrian, in that it ignores imperfect information, the passage of time, etc. I certainly agree with Mises and Rothbard that there is a tendency for workers to be paid in accordance with their marginal revenue product, but the tendency doesn't realise (sic) itself instantaneously or without facing countervailing tendencies, and so, as I see it, does not license the inference that workers' wages are likely to approximate the value of their marginal revenue product — just as the existence of equilibrating tendencies doesn't mean the economy is going to be at or near equilibrium. I would apply to this case the observation Mises makes about the final state of rest — that although ‘the market at every instant is moving toward a final state of rest,' nevertheless this state ‘will never be attained' because ‘new disturbing factors will emerge before it will be realized.'

"First of all, most employers do not know with any great precision their workers' marginal revenue product. Firms are, after all, islands of central planning — on a small enough scale that the gains from central coordination generally outweigh the losses, but still they are epistemically (sic) hampered by the absence of internal markets…. A firm confronts the test of profitability as a unit, not employee by employee, and so there is a fair bit of guesswork involved in paying workers according to their profitability. Precisely this point is made, in another context, by Block himself: ‘estimating the marginal-revenue product of actual and potential employees .... is difficult to do: there are joint products; productivity depends upon how the worker ‘fits in' with others; it is impossible to keep one's eye on a given person all day long; etc.' But Block thinks this doesn't much matter, because ‘those entrepreneurs who can carry out such tasks prosper; those who cannot, do not.' Well, true enough, but an entrepreneur doesn't have to solve those problems perfectly in order to prosper — as anyone who has spent any time in the frequently insane, Dilbert-like world of actual industry can testify…

"Even if women are not generally less productive than men, then, there might still be a widespread presumption on the part of employers that they are, and in light of the difficulty of determining the productivity of specific individuals, this presumption would not be easily falsified, thus making any wage gap based on such a presumption more difficult for market forces to whittle away. (Similar presumptions could explain the wage gap between married and single women likewise.)

"Hence a wage gap might persist even if employers are focused solely on profitability, have no interest in discrimination, and are doing the level best to pay salary on marginal productivity alone. But there is no reason to rule out the possibility of deliberate, profit-disregarding discrimination either. Discrimination can be a consumption good for managers, and this good can be treated as part of the manager's salary-and-benefits package; any costs to the company arising from the manager's discriminatory practices can thus be viewed as sheer payroll costs. Maybe some managers order fancy wood paneling for their offices, and other managers pay women less for reasons of sexism; if the former sort of behaviour can survive the market test, why not the latter?

"I should add that I don't think my skepticism about the productivity theory of wages is any sort of criticism of the market. The tendency to which Austrians point is real, and it means that markets are likely to get us closer to wages-according-to-productivity than could any rival system. (Since neoclassical perfect competition is incoherent and impossible, it does not count as a relevant rival.) If employers have a hard time estimating their workers' productivity (the knowledge problem), or sometimes cannot be trusted to try (the incentive problem), that's no reason to suppose that government would do any better. Employers are certainly in a better (however imperfect) position to evaluate their employees' productivity than is some distant legislator or bureaucrat, and they likewise have more reason to care about their company's profitability (even if it's not all they care about) than would the government. So there's no reason to think that transferring decision-making authority from employers to the State would bring wages into any better alignment with productivity. People in government are crooked timber too, and (given economic democracy's superior efficiency in comparison with political democracy) they're even less constrained by any sort of accountability than private firms are.

"Nothing I've said shows that men and women are equally productive; it's only meant to show that, given prevailing cultural norms and power relations, we might well expect to see a gap between men's and women's earnings even if they were equally productive (which is at least reason for skepticism about claims that they are not equally productive).

"I would also add that even if there are persistent problems — non-governmental but nonetheless harmful power relations and the like — that market processes do not eliminate automatically, it does not follow that there is nothing to be done about these problems short of a resort to governmental force. That's one reason I'm more sympathetic to the labour movement and the feminist movement than many libertarians nowadays tend to be. In the 19th century, libertarians saw political oppression as one component in an interlocking system of political, economic, and cultural factors; they made neither the mistake of thinking that political power was the only problem nor the mistake of thinking that political power could be safely and effectively used to combat the other problems….

"We know — independently of the existence of the wage gap — that there is plenty of sexism in the business world. (Those who don't know this can verify it for themselves by spending time in that world or talking with those who have done so.) Once we see why the productivity theory of wages, though correct as far as it goes, goes less far than its proponents often suppose, it does not seem implausible to suppose that this sexism plays some role in explaining the wage gap, and such sexism needs to be combated. (And even if the wage gap were based on a genuine productivity gap deriving from women's greater responsibility for household work, the cultural expectations that lead women to assume such responsibility would then be the sexism to combat.) But that's no reason to gripe about ‘market failure.' Such failure is merely our failure. Instead, we need to fight the power — peacefully, but not quietly."

There are several problems with the foregoing.

1. Perhaps most important, we must hark back to the biblical story where people are paid different amounts of money for doing precisely the same job; or what is the same thing, the same compensation for doing very different amounts of work. Why is this unjust from a libertarian perspective? It is not. These disparities can be interpreted as a differential gift giving. That is, the employer pays everyone equally for equal productivity, but then makes a freely given donation to some but not to others. As long as all these acts are voluntary, there is nothing to which the libertarian, qua libertarian, can object. Based only on this consideration, Long is going to have to decide whether his primary allegiance lies with feminism or libertarianism. This author does indeed touch on one aspect of this when he discusses the possibility that the wage gap between males and females might be due to in effect employer consumption: paying males more than females just for the sheer joy of doing so. If so, is this not the employer's right? And if so, from whence springs any possible libertarian objection to the wage gap?

2. Let us move from normative to positive economics, and consider Long's objections to the thesis that in the free market, wages tend to be based upon marginal productivities. Here, we note that this author posits that there is a "tendency" for employers to pay workers at the level of their marginal revenue product (MRP), but, fully in the Austrian tradition, notes the fact that this is not instantaneous. However, he seems to think that always and ever females are paid less than their MRP, and that the market is in effect "lazy" in bringing the two amounts into equality. If the market process were instantaneous, which of course it is not and cannot be, then female wages would instantly rise to their proper MRP levels, and there would be no injustice, at least in this one case. But why would there be a bias in the market, such that entrepreneurship necessarily results in lower female wages in disequilibrium? Why not wages higher than MRP when the market is not in its equilibrium or evenly rotating state? Long, let alone not furnishing us with an answer to this absolutely crucial implicit claim of his, does not even seem to recognize that there is a need to do so.

3. Perhaps the fact that lesbians earn more than straight women will convince Long that the market wages tend not to be determined by sexist men who are biased against women, on the basis of this taste. For, if the male chauvinist pigs were indeed in charge of pay decisions, and were indeed biased in this direction, and not stopped by profit considerations from indulging in these tastes, surely they would reserve their extreme ire for lesbians, who, presumably, violate traditional values far more than do heterosexual females.

4. Long is on a slippery slope. If he doubts that marginal productivity theory applies to the male—female wage gap, logic compels him to articulate the same difficulties as far as the usual free market economic analysis of minimum wages is concerned. That is, he must say something along the following lines: yes, the minimum wage leads to unemployment for low-skill workers; but this is true only in equilibrium, and we are never in equilibrium. To bitterly oppose minimum-wage legislation, as do many right-wing libertarians, is to base one's analysis on, horrors, dramatic pause for effect, neoclassical economics. In contrast we sophisticated left-wing Austro-libertarians are more sympathetic to minimum-wage legislation since it takes time, time that the poor simply do not have, for wages of the unskilled to rise to their equilibrium MRP levels. In the interim, the minimum-wage law can play a positive role.

His support for unions in this regard is more than just a little disquieting, in that they are, and for good reason, among the strongest supporters of minimum-wage legislation in society, apart from the fully economically illiterate. It may well be that while Long is a staunch libertarian when it comes to personal liberties, he is less so, far less so, when it comes to economic freedom, due to his misunderstanding of economics. It is also more than passing curious to find an eminent libertarian such as Long supporting an institution that engages in violence against "scabs."

5. What is this business of criticizing the freely made decisions of women to stay home and take care of babies? It matters not one whit that this is done "on moral grounds (or) prudential grounds." The libertarian qua libertarian simply has no business in criticizing "women's (choice of) greater responsibility for household work." It is no business of the libertarian, none whatsoever, to "combat" the "sexism" implicit in "the cultural expectations that lead women to assume such responsibility."

6. Consider Long and Johnson's claim that there is a false but "widespread presumption on the part of employers that" female productivity is lower than that of the male. Presumably, this false presumption is not only widespread, but of long duration. Otherwise, it could hardly account for a continuing wage gap. If so, it resembles nothing if not the "cluster of error" of Austrian Business Cycle theory (ABCT). But, as we know from our study of business cycles, any such conglomeration of error cannot long endure without continued statist interference with markets. It would be dissipated by the market's profits-and-loss weeding out process.

7. State our authors: "… employers … cannot be trusted to try … estimating their workers' productivity … (the incentive problem)." By this they refer to the fact that some employers might forego a non-sexist discriminatory policy out of consumerist motivations. But if they do, they will be doing so strictly as consumers, albeit it on company property. That is, they will not be doing so as employers, as these authors maintain.

8. In my view, it is not at all a "mistake" to "think… that political power (is) the only problem," that is, as far as libertarianism is concerned. Here, I define political power along Oppenheimer lines to include any and all initiations of violence, or threats thereof, against innocent people. This would include, of course, government; but it would also incorporate other uncivilized behavior such as that perpetrated by robber gangs, or, even, individuals who brutalize innocent victims on their own account. Of course, there are other problems that libertarians are involved in combating: bad breath, the heartbreak of psoriasis, losing chess games, cancer, the list goes on and on. But, here, libertarians who do so are not acting qua libertarians. This is a distinction that is crucial for a clear understanding of this philosophy.

9. What are we to make of this claim: "We know — independently of the existence of the wage gap — that there is plenty of sexism in the business world. (Those who don't know this can verify it for themselves by spending time in that world or talking with those who have done so.)"

In one sense, this is unobjectionable. Were it to be filed under the "everyone knows" category, no reasonable person would object to it. However, if we are going the anecdotal route, let me add in my own two cents worth. Yes, we have all heard the sexist jokes in the business world, and, also, the numerous comments about different women's physical attributes. But when it comes to pay, my own informal assessment is that it works mainly in the direction not of increasing the pay gap between men and women. Rather, it is all in the direction of paying attractive women a beauty premium. And this observation should not be the occasion of any great surprise. What else could we reasonably expect from healthy male heterosexuals, if they are in a position to indulge their tastes? Their true tastes, let it be stated loud and clear, is not against women, but, if they are in opposition to anyone, it is to other males who are seen as competition.

In another sense, this is highly objectionable. After all, we are discussing an important issue: is there a male—female wage gap once productivity is taken into account, and if so, is this unjust from a libertarian point of view? Resort to anecdotes of this sort must be ruled out of court in any serious analysis.