Two related historical claims about welfare and class warfare…

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    I’d appreciate any responses to the following claims from a colleague of mine:

    1) “More interesting than the fact that there are no Libertarian governments is why this is so: The theory itself is self-contradictory and leads to large states. Libertarian theory denies a common good and recognizes only individual goods, which people are always ‘maximizing’. The best way to maximize an individual good, however, is not through hard work but through subsidy, accumulation, externalized costs, and economic rents. Hence, in the name of self-interest, those with power will maximize the power of the state which they control, while minimizing any aspects of the state that threatens their control. The Koch brothers are both major recipients of governmental largesse and the major funders of the Cato Institute and similar organizations. From the standpoint of Libertarianism, there really is no contradiction. There have been efforts to establish a pure libertarian state, most notably when the Liberal Party came to power in England in 1832. Among their first acts was abolishing the rather generous welfare system in place at the time (replacing it with the ‘work house’ system), and the de facto establishment of the Bank of England as a central bank (along with outlawing the major monetary rival, the tally sticks.) Not surprisingly, the government (and taxes) grew, not shrank. Something similar happened in the U.S. at the time.”

    >> The words “a pure libertarian state” followed a little later by the words “central bank…outlawing” were the most glaring error to me. Thoughts?

    2) “In the generation before Marx, the Liberal Party (or as we would say today, the Conservative Party) took control of England. Its leading light in economics was Nassau Senior. Under Senior’s guidance, the most extensive welfare system in the world (the so-called “Speenhamland system”) was replaced by the workhouse. Senior believed that the poor were lazy and would only work at all if poverty was criminalized. In the Poor house, families were virtually prisoners, and men, women, and children were separated and became slaves of the state. By law, their food could be no better than that afforded by the lowest wage that was being paid. Senior expressed his own views thus: ‘There seem to be only three means of governing a densely peopled country in which [the poor] form the large majority. One is to exclude them from political life. This is our English policy.… Another is the existence among them of a blind devotion to the laws and customs of the country…. A third plan is to rely on military power—to arm and discipline the higher and middle classes, and to support them by a regular army trained to implicit obedience.’ If that’s not a description of class warfare, I don’t know what is. Yet, it only becomes class warfare when the poor respond, as they did. Throughout the 19th century, and practically up until World War II, England was in a constant state of low-level civil war. Indeed, it was only the threat of WWII that made English leadership give some concessions to the workers, since it was realized that there would likely be another war, and it would be difficult to get the working class back into the trenches if they did not have some stake in the system.”

    >> I think there’s a lot of “seen and unseen” problems in this analysis (e.g. just yesterday I was reading Ashton’s essay in Capitalism and the Historians how government restrictions and impositions actually left the workers themselves little means to build anything better than the slums that anti-capitalist reformers blamed the “jerry-builders” for (another case of blaming “robber barons”. Sigh.)).

    >> The author of these words is extremely ideological, but also quite knowledgeable, so I want to see how informed libertarians would respond. He made these claims over the course of a couple weeks, and they basically make the same complaint, so I think it’s one of his strongest “go-to” arguments against free markets. In both cases, though, he cites the harm state-sanctioned crony-capitalism can do, yet thinks this counts as proof against libertarianism! D’oh!

    >> Thanks, everyone!

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