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Response to Long on Corporations, Unions, and Wal-Mart
by J. H. Huebert and Walter Block

December 12, 2008

Roderick Long has responded to our article on the subject of corporations, Wal-Mart, and labor unions.  Here is our response to him.

Why Pick on Corporations?

We asked why Long singles out corporations as opposed to other types of businesses for criticism.  He says that corporations are "the primary and disproportionate beneficiaries of government privilege."  Perhaps.  But Long muddies the water by referring to "corporations" instead of "big businesses."  After all, while most big businesses may be corporations, most corporations are not big businesses; rather, they are small businesses. 

And many big businesses become involved with government only to a limited extent, if at all; nor is it, typically, the primary cause of their success.  There is an enormous difference between, say, Blackwater, which owes its very existence to government, and Google, which has become tainted by involvement with government only lately, and only to a limited extent, after its rise to success.  It is reckless to lump such entities together into an evil aggregate called "corporations." 

Making the Most of Government Roads

We are still not sure why Long believes big businesses, and Wal-Mart in particular, disproportionately benefit from the existence of government roads.  No one disapproves of government roads more than we do, but the roads are there for anyone to use -- the would-be competitor has just as much access to them as Wal-Mart does.  Where is the unfair advantage

For Wal-Mart, or any present-day market participant, the government roads are a given.  Once the roads exist, the only question for the market is, who can use these roads to serve consumers most effectively?  Wal-Mart has managed to do so, and does indeed deserve its success for having done so.  Merchants who have failed to take advantage of the roads to serve consumers more effectively do indeed deserve to fail. 

Would the market winners and losers be different if there had never been any government roads?  Who knows?  But there is no reason to think that the qualities that made Sam Walton (and other real-world entreprenuers) successful under the current regime would not also have made them successful in a fully free market. 

Of course, Wal-Mart, and virtually every other member of the public, has suffered as a result of the U.S. socialist road system.  Had it not existed, and the vast amounts of money used for it remained in private hands, and had private enterprise been allowed to operate in this field, we would all have benefited from private roads and highways far superior, and cheaper, than the ones we now have.  Wal-Mart -- given its size and its heavy use of the roads -- may well have suffered disproportionately to others because of government roads. 

Blaming Wal-Mart

Long says he wasn't really "blaming" Wal-Mart for this, but it certainly sounds like blame when, in another entry in his Cato Unbound series, he says that Wal-Mart is to FEMA as Mussolini is to Hitler.  Even many of Long's fellow "left-libertarians" must recognize this as morally outrageous.  FEMA is partially responsible for the deaths of at least 1,500 people in the wake of Hurricane Katrina.  Who has Wal-Mart killed?

Again, we acknowledge that Wal-Mart is not perfect.  But we deny that its success is attributable primarily to its small-scale wrongdoing as opposed to its massive-scale service to consumers and, yes, workers.  If we could hold Wal-Mart liable for its infractions -- eminent domain takings and so forth -- we have little doubt that it would still exist and thrive after paying the damages it owes. 

Actual Unions Are Inherently Coercive -- Actual Businesses Are Not

On to the unions.  If Long supports unions only to the extent that they use no coercion and violate no private property rights, then we have no disagreement with him.  But why, then, the qualified support for unions in their present, highly coercive form?  Also, we are skeptical that voluntary unions could last for very long -- as most students of economics know, a voluntary cartel is likely to fail.  But if a voluntary union can exist and succeed, fine.

In the real world, however, there are at present no labor unions, absolutely none of them, that fully restrict their activities to the purely voluntary. This applies, even, to the most "moderate" unions such as the Christian Labor Association of Canada. CLAC, to be sure, abjures “blue collar” violence against scabs, namely, engaging in assault and battery upon them when they try to compete for pay scales rejected by the union.  However, this organization fully supports -- even though they of course do not see matters this way -- “white collar” violence against scabs; that is, labor legislation that forces employers to bargain with organized labor, when they would rather ignore them, and deal with non-unionized workers instead.

Thus, it makes sense that we praise businesses -- even though many businesses do indeed seek government coercion on their behalf -- but condemn unions.  Coercion is not a necessary aspect of what present-day, real-world businesses do, and even where it exists, it is often incidental, not integral, to the business's activities overall.  On the other hand, coercion is an essential, integral component of what all existing labor unions do.

Long also accuses us of having a double standard with respect to violence between businesses and unions.

In the view of Long:

It is certainly true that over the course of history unions have often employed aggressive violence against employers and fellow workers alike, both directly and through the intermediary of the state; it is likewise true that over the course of history employers and businesses have often employed aggressive violence against unions, again both directly and through the intermediary of the state. If anti-union aggression on the part of business is, as Huebert and Block would presumably contend, merely a sin on the part of the particular businesses who have practiced it and not an indictment of business per se, then why do they insist on regarding pro-union aggression as an indictment of unions per se? It seems like a puzzling double standard.

The so-called “double standard” is easily resolved. Unions are the initiators of the violence; the violence employed by firms is in reaction against this prior use of violence. That is, it is false to say that “over the course of history employers and businesses have often employed aggressive violence against unions.” No, firms’ violence against unions was retaliatory. Typically, the union would come to the boss (another pet peeve of Long’s is his hatred of “bossism;” that is, hierarchies in the labor force) with a demand for higher wages, better working conditions. The owner would then tell the union organizer to “get lost.” Whereupon organized labor would set up a picket line, refusing to allow competing workers (“scabs”), suppliers, customers, or, indeed, anyone else, to cross it. Why is there ever any need for a company to initiate violence against a union, if the latter does not first engage in this activity? When the boss tells them to get lost, the only option a union has, if it wants to accord with libertarian principles, is to quit en masse, and to advertise that the boss is unfair, etc. Yes, sometimes corporations used violence first, in a preemptive manner, to stop union conspiracies. But this is only because unions, unless they limit themselves to mass quits and advertising, etc., are necessarily invasive. If A and his henchmen are getting ready to beat up B, the latter does not have to wait until the punch has actually landed.

Who Are the Power Elite?

We are particularly concerned with Long’s misunderstanding of Rothbard in this context.  We, along with Rothbard, embrace the concept of the “corporate power elite;” we, too, condemn “groups who have maneuvered to gain privileges, subsidies, and benefices (sic; we assume “benefits” here) from the State.” But for Rothbard, and for the present authors, all that matters is whether or not an entity (whether a corporation, a partnership, a single proprietorship, or a labor union) is hand-in-glove with the government, egging it on to give it more subsidies (as with the Detroit 3), to increase tariffs against foreign competitors, or to impose regulations that benefit them vis a vis others. If they do this, they are part of the ruling class, no matter what their size or type of business; if not, then they are not.

Contrary to Long's suggestion, Rothbard would not at all consider Wal-Mart a member of the ruling elite on net balance. As we noted above, if you took away Wal-Mart's illicit activities, the business would almost certainly remain intact and look more or less the same.  Besides, such activities are not part of the usual lefty reasons to condemn Wal-Mart for being too big, driving out small businesses, “exploiting” workers, etc., all of which Long appears to embrace to some degree.

As Long concedes, Wal-Mart (like McDonalds, Wendy’s, Burger King, and many many other now very large corporations), started out as very small mom-and-pop type operations.  Apart from these few admitted deviations from libertarianism, they gained wealth and market share from satisfying customers, suppliers, employees, more fully than those with whom they were in competition. 

Long is on the warpath against corporations because, he says, “the primary and disproportionate beneficiaries of government privilege tend to be corporations, particularly large corporations. If the primary and disproportionate beneficiaries of government privilege were tiny gnomes from Neptune I’d be complaining about pro-Neptunian-gnome favoritism instead.”

But this is just plain silly.

Who are the primary and disproportionate criminals?  Aside from the state, the biggest criminals -- the ones who engage in purse snatching, mugging and other violent crimes -- tend to be young males.  Do we as libertarians thus complain about young males?  Of course not.  Instead, we inveigh against criminals of whatever age, size, gender, etc.

Conclusion

States Long:

Huebert and Block conclude that libertarians "should win with their own ideas, on their own terms, and avoid pandering to statists of any stripe." I entirely agree. But to Huebert and Block it apparently seems that I am violating this advice by embracing ‘the ideas and rhetoric of the left.’

Nonsense! … We pioneered the ideas that today are associated with the left—class conflict, anti-corporatism, and worker empowerment (as well, incidentally, as feminism, antiracism, antimilitarism, and environmentalism).

While we cannot endorse many of the ideas commonly associated with feminism or environmentalism, for now let us consider only one of these ideas for which Long wants to give libertarians credit: class conflict. There is all the world of difference between leftists or Marxists, on the one hand, and libertarians, on the other. For the former, the main class division is between capitalists and laborers. For the latter, it is based on the distinction between those who live from, by, and on the basis of market processes, based on private property, and those who rely on initiatory force or fraud. The history of the matter is relatively unimportant; this philosophical distinction is crucial.

Although much of Long’s intellectual output has been in support of the libertarian perspective all throughout his career, we fear that in the cases of Wal Mart, unions, corporations, he is veering off in the wrong direction.

We know Long is not a statist -- but by pitting workers against bosses and finding fault with the likes of (net) victims such as Wal-Mart for doing the best they can in our hampered market -- Long distracts from our real battle, which is against the state itself.   

 

© 2008 J. H. Huebert and Walter Block