Why I Am Not a Left-Libertarian
As a radical libertarian, pacifist, champion of open borders, and mortal enemy of Columbus, I seem like an easy convert to left-libertarianism. Proponents like Sheldon Richman and Rod Long are smart and earnest people. Their motives are pure. Still, their innovations are largely mistaken. All too often, they make a mountain out of a molehill, then implausibly blame government for mountain-making. I’ve criticized them repeatedly in the past (here, here, here, here, and here), but the latest example from Rod Long exemplifies my complaints:
Suppose you forget to pay your power bill (or your phone bill, or
your cable tv bill, or your internet access bill, or your credit card
bill, or whatever). What happens? Your provider disconnects you, and
you’ll probably have to pay an extra fee to get service reestablished.
You also get a frowny face on your credit report.
On the other hand, suppose that, for whatever reason (internet
glitches, downed power lines after a storm, or who knows), you suffer a
temporary interruption of service from your provider. Do they offer to
reimburse you? Hell no. And there’s no easy way for you to put a frowny
face on their credit report.
Rod’s take on the facts is awfully slanted. In the real world, firms give plenty of extra chances to delinquent clients; regulation often extends grace periods; and delinquent customers, unlike service providers, are hard to successfully sue. But suppose Rod’s view of the facts were exactly correct. Then basic microeconomics shines a spotlight on a neglected side effect of the double standard: Prices fall. When consumers have no recourse, firms are more willing to sell (supply increases), and consumers are less willing to buy (demand decreases). Furthermore, if consumers are willing to pay a premium for equal treatment, firms have every reason to offer it. The natural lesson to draw is that consumers prefer the existing double standard to the extra costs of equality.
Rod continues with an analogous example:
Now, if you rent your home, take a look at your lease. Did you write
it? Of course not. Did you and your landlord write it together? Again,
of course not. It was written by your landlord (or by your landlord’s
lawyer), and is filled with far more stipulations of your obligations
to her than of her obligations to you. It may even contain such
ominously sweeping language as “lessee agrees to abide by all such
additional instructions and regulations as the lessor may from time to
time provide” (which, if taken literally, would be not far shy of a
slavery contract). If you’re late in paying your rent, can the landlord
assess a punitive fee? You betcha. By contrast, if she’s late in fixing
the toilet, can you withhold a portion of the rent? Just try it.
Again, this is an awfully slanted view of the facts. Landlords are subject to many regulations that preclude punitive fees, and make it hard to evict tenants who don’t pay. And regulation aside, delinquent tenants are very hard to successfully sue. But even if Rod’s absolutely right on the facts, he totally neglects standard economic analysis. Double standards in favor of landlords reduce rents – and the fact that landlords rarely offer single standards in exchange for higher rents shows that consumers prefer the status quo to formal equality.
Rod’s last case:
Now think about your relationship with your employer. In theory, you
and she are free and equal individuals entering into a contract for
mutual benefit. In practice, she most likely orders the hours and
minutes of your day in exacting detail. As with the landlord case, the
contract is provided by her and is designed to benefit her. She also
undertakes to interpret it; and you will find yourself subjected to
loads of regulations and directives that you never consented to. And if
you try inventing new obligations for her as she does for you, I
predict you will be, shall we say, disappointed.
Once again, Rod’s take on the facts is awfully slanted. Employers may try to order workers’ lives in detail, but in practice plenty of workers habitually shirk. Even without regulation, a worker can effectively say, “Yes, I’m a bad worker, but it would be a real pain to find a replacement, and they might be as lazy as me.” With regulation, a bad worker can hide behind legal protections and threaten costly lawsuits. But in any case, Rod misses the key economic forces at work. Namely: If there is a double standard that favors employers, it raises wages. And if workers really wanted equality, employers would be happy to provide it in exchange for lower wages. The fact that they rarely do so shows that workers prefer the status quo.
Final point: In each of Rod’s examples, existing government policy tilts market outcomes in the direction that he misguidedly favors. Under laissez-faire, service providers, landlords, and employers would be free to adopt double standards more lopsided than current law allows. And plenty of consumers, tenants, and workers would be delighted to accept lopsided rules in exchange for lower prices, lower rents, and higher wages.