Robert Kuttner, professor at Brandeis University’s Heller School and senior fellow of the think tank Demos, believes that libertarians suffer from a delusion. He claims that the market is incompetent to price certain problems, and must be tightly controlled by government to prevent excess and abuse.
In a piece written for The American Prospect, where he serves as co-founder and co-editor, Kuttner submits examples which he believes demonstrate market failure. We rebutted his analysis in parts one and two of this series. Unsurprisingly, Kuttner’s assertions arise from a Marxist worldview wherein natural disparities in both wealth and knowledge require government activism to equalize “power.” We explored a couple of the fatal flaws of that perspective in part three.
Now we turn from Kuttner’s critique of the market to his reverence for government. Where the market fails, Kuttner argues, government boasts great accomplishments:
Government can invent things that markets never would have imagined. Apple has created wonders, but it has piggybacked on government investment in advanced semiconductors and the Internet. America’s biotech industry’s success was reliant on massive government investment in the Human Genome Project and other basic research. Later in the special report in the magazine’s Winter issue, Fred Block’s piece describes the indispensable government role in innovation. Commercial broadcasters were disinvesting in radio as a serious medium of news, public affairs, culture, and humor, when along came public radio, partly underwritten by government and partly by listener-subscribers. NPR demonstrated that ingenious and high-quality noncommercial programming could attract an audience that for-profit companies did not know was there.
This echoes the sentiment of a government-adoring MSNBC promo featuring Rachel Maddow at the Hover Dam, claiming the private sector could never build it. Perhaps, but that hardly stands as justification for the means by which it was built.
The pyramids may never have been built without slaves. That doesn’t justify slavery. Nor do modern monuments to “the public good” or “national greatness” justify the theft utilized to construct them. That’s the best argument against Kuttner’s point, the moral argument. A thief doesn’t get to cite “the good” he did with stolen money as a justification for stealing.
Beyond that, we ought to question the value of these so-called public goods. If indeed, as Maddow asserts, the private sector never would have built the Hoover Dam, then perhaps the Hoover Dam should never have been built.
When we say that the private sector “can’t” do something, we’re really saying that it won’t.
We recognize, in other words, that the public good in question has insufficient value to warrant private investment. More to the point, it does not adequately serve those who pay for it.
Therefore, when we claim government must produce some good which the market “can’t,” we’re really saying that people should be forced to pay for something which does not serve them. There’s no getting around this point. Statists like Kuttner don’t even try. Instead, they argue that those stolen from to produce public goods deserve to be victimized on account of their “privilege.” The whole point of public goods is to benefit those who don’t pay for them at the expense of those who do.
The NPR example demonstrates this redistributive motive. Kuttner claims that the public radio audience eluded private sector investors. That’s an odd way of looking at the interaction. Is it really any surprise that an audience exists for free stuff? If investors were willing to throw their money away on a private venture that looked like public broadcasting, there would undoubtedly be an audience for it. But that audience wouldn’t be sufficient to make the venture commercially successful. In that light, what Kuttner is actually saying is that the NPR audience benefits from the theft integral to NPR’s production. Again, this fails as a moral justification.
It’s the height of arrogance to assume that technological developments like the internet or scientific research would not occur without government.
We have no way of measuring what hasn’t happened as a result of government interference in the market, no way to know the precise opportunity cost of resources seized, productivity displaced, or innovation prohibited. Even so, we can stand on the certainty of human nature and economic law, which suggests that people do not die of atrophy without government prodding them to action. Populations only starve when enslaved.
Despite its many immoral excesses, government retains a legitimate function. Kuttner comes close to articulating that role:
…The market itself is a creature of government. As Karl Polanyi famously wrote in a seeming oxymoron, “laissez-faire was planned.” Markets could not exist without states defining the terms of property ownership and commerce, creating money, enforcing contracts, protecting patents and trademarks, and providing basic public institutions. A Robinson Crusoe world never existed. So the real issue is not whether government “intrudes” on the market—the capitalist system is impossible without government. The practical question is whose interests the state serves.
The proper answer to that practical question is: the individual.
Government exists to protect individual rights. It does so by wielding a monopoly on force in retaliation against those who initiate force, applying due process according to objective law.
Kuttner postures as if government’s role in the market is some sort of revelation to libertarians. But this is a strawman. No one but the most ardent anarchists believe government has no role to play in the market. Indeed, a market cannot truly exist without government to ensure that individual rights are preserved and transactions occur by consent rather than coercion or fraud. Of course, by definition, that also precludes government from violating rights. You can’t rationally claim, as Kuttner attempts to, that government must violate rights to “protect” the market.
Next time, we’ll get into Kuttner’s naked contempt for freedom as such. The only thing more stunning than his wholesale rejection of self-ownership is the extent to which our culture embraces his anti-libertarian worldview.
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