Posted by Ilya Somin:
Problems with Libertarian Theories of Class Conflict:
http://volokh.com/archives/archive_2007_07_15-2007_07_21.shtml#1184714988
Most people associate the theory of class conflict with Marxism, and
its view that modern society inevitably leads to a zero-sum conflict
between "capitalists" and the "working class." But, ever since the
19th century, some libertarian thinkers have advanced their own
theories of class conflict - ones that emphasize the division between
those who bear the costs of government and those who are net
beneficiaries of the state. Unfortunately, libertarian class theory
has many of the same weaknesses as the Marxist version. [1]This recent
piece by libertarian writer Sheldon Richman provides a good summary of
libertarian class theory:
[T]he [19th century economic] theorists whom Marx credits with
teaching him class analysis placed in the productive class all who
create value through the transformation of resources and voluntary
exchange. The �capitalist� (meaning in this context the owner of
capital goods who is unconnected to the state) belongs in the
industrious class along with workers. Marx didn't learn this part
of the lesson.
Who are the exploiters? All who live off of the industrious class.
Besides common crime, there is only one way to do that: state
privilege financed by taxation. "The conclusions drawn from this .
. . is that there existed an expanded class of 'industrials' (which
included manual labourers and . . . entrepreneurs and savants) who
struggled against others who wished to hinder their activity or
live unproductively off it,� Hart writes. "The theorists of
industrialism concluded from their theory of production that it was
the state and the privileged classes allied to or making up the
state ... which were essentially nonproductive. They also believed
that throughout history there had been conflict between these two
antagonistic classes which could only be brought to end with the
radical separation of peaceful and productive civil society from
the inefficiencies and privileges of the state and its
favourites"... In this view, political-economic history is the
record of conflict between producers, no matter their station, and
the parasitic and predatory political class, both inside and
outside of government. Or to use terms of a later, British
subscriber to this view, John Bright, it was a clash between the
tax-payers and tax-eaters. (emphasis added).
Many libertarians find this theory appealing. So too have some
nonlibertarians, such as [2]John C. Calhoun. Unfortunately, it has
serious flaws remarkably similar to those of Marxist class theory. It
fails to consider the importance of collective action problems, and
also ignores what political scientists call "cross-cutting cleavages."
Collective Action Problems.
Marxists have never succeded in explaining what incentive individual
capitalists or workers have to advance public policies that benefit
their "class" as a whole. A "procapitalist" policy that benefits the
entire group is a public good shared by thousands of people, perhaps
millions. Why shouldn't the individual greedy capitalist simply sit
back and free ride upon the lobbying efforts of other capitalists? If
they act to promote their common interest, procapitalist policies will
be implemented even if an isolated individual doesn't contribute. If
they don't, his individual efforts probably won't be enough to force
the policy through by himself. The same point applies with even
greater force to workers, a much larger group than capitalists. The
average worker has even less incentive to invest time and effort in
promoting proworker policies than capitalists have in promoting
procapitalist ones.
What is true of Marxian classes is is also true of the libertarian
theorists' "taxpayer" and "taxeater" classes. Both taxpayers and
taxeaters are very large groups who have strong incentives to free
ride on the lobbying efforts of their fellows. Indeed, given
[3]widespread rational political ignorance, many people probably don't
even know which group they belong too. If you recognize, as Richman
does, that the cost of government includes the burden of regulation
and other nontax measures, while the "taxeater" class includes those
who benefit from such policies, figuring out whether you are a
taxpayer or taxeater becomes quite difficult, and not worth the
necessary investment of most individual voters' time.
The basic economics of collective action and free-riding seriously
undermines both Marxist and libertarian theories of class conflict. If
anything, the latter is even weaker than the former. In Marxist
theory, most people can easily tell whether they are "workers" or
"capitalists"(though the existence of [4]human capital, unrecognized
by Marx, makes things more complicated). By contrast, it's often
difficult to tell where one falls on the taxeater-taxpayer continuum.
Cross-Cutting Cleavages.
Get your mind out of the gutter! Cross-cutting cleavages have nothing
to do with sex. Rather, cross-cutting cleavage is a concept that
recognizes that most people have multiple interests and identities
that affect their political views. A person who considers himself a
"worker" doesn't necessarily define his political identity exclusively
by this characteristic. He might instead also focus on race,
ethnicity, religion, gender, the particular industry he works in, and
so on. Some or all of these other identities might well play a greater
role in determining his political orientation than his belonging to
the "working class." And, empirically, political systems divided along
Marxist class lines are far less common than those where other
cleavages play as much or more important roles.
The same point applies to the libertarian taxpayer/taxeater divide.
For most people, this is a much less important dividing line than a
variety of other conflicts. Indeed, most people are perfectly happy to
favor increases in government spending and regulation for some
purposes (say, morals regulation), while opposing it for others (say,
welfare).
Both Marxist and libertarian class theorists like to dismiss the
reality of cross-cutting cleavages by claiming that non-class based
political identities are "irrational" or an example of "false
consciousness." Perhaps so, though I doubt that this is necessarily
true. But it is in fact [5]perfectly rational for people to embrace
irrational political ideas, because for the individual voter the cost
of doing so is extremely low, and the psychic gratification of
indulging in irrationality potentially much higher. Even if
class-based ideology (whether Marxist or libertarian) is the most
rational viewpoint for people to embrace, that doesn't prove that they
actually will adopt it.
UPDATE: For some related criticisms of libertarian class theory, see
[6]this post by Bryan Caplan.
References
1. http://www.fee.org/in_brief/default.asp?id=1433
2. http://econlog.econlib.org/archives/2007/04/my_calhounian_c.html
3. http://www.cato.org/pub_display.php?pub_id=2372
4. http://en.wikipedia.org/wiki/Human_capital
5. http://en.wikipedia.org/wiki/Human_capital
6. http://econlog.econlib.org/archives/2007/04/my_calhounian_c.html
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