The Mentality of the 'New Libertarian'

Economics Political Theory
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Aristophanes,

If a certain line of production violates the laws of the state where it is occurring, but the state permits it to proceed anyway, ignoring its own law, that is “illegal” or “black market” production in a completely trivial sense - while it is de facto legal production. The distinction I’m making between legal and illegal production is not about legal forms, it is about whether or not the state really enforces a prohibition on the production in question. That is what matters for the economic analysis, right? It is not legal forms which make black market production uncompetitive with white market production, it is the very real fact that former has to be hidden from the state, or face being shut down by force. So, the ultimate point I’m trying to make here is that there cannot be any black market production in the sort of industries I’ve mentioned, and so therefore production in those industries will be undertaken by white market producers who will be subject to the taxes and controls of the state.

So this is the limit of agorism. There’s nothing it can do to get this very large segment of the economy (mining, farming, all manner of heavy industry, etc) out of the hands of the state if the state is strong enough to enforce its own laws. And if it’s not, as I said, then the state is already effectively absent, and there’s no need for agorism or any other strategy for reducing the power of the state. In short, agorism is either impotent or superfluous. It is not a viable strategy for reducing the power of a strong state, such as the U.S. federal government, for example.

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not “we,” just the counter-economicists (who outnumber libertarians btw).

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**

a distinction without a difference. the fact is, no government can possibly enforce all of its prohibitions at most times, it can only endeavor to punish infractions. the fact that the state cannot stop the market, knows it cannot stop the market, and does not try despite the stated desire to do otherwise, is a result of the ultimate impotence of coercive government as compared to market forces.

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@Malachi

A state doesn’t have to enforce all of its laws at all times in order for it to make black market production in certain industries unprofitable - and therefore non-existent. Black market production of gasoline in the US - there is none. Why? Because the state is able to enforce it’s law regarding gasoline production (taxes, regulations, etc) sufficiently to make it impossible for someone to set up an illegal refinery on a large enough scale to be competitive with white market refineries. The same with so many other industries. Obviously this will vary with the power of the state. Could one set up a viable commercial refinery in West Africa and avoid paying the taxes and following regulations of the local state? Perhaps. But if the state is so weak as to be unable to shut it down or force it to comply with the law, then what agorism is supposed to accomplish (the reduction in state power) is already done.

By the way, getting away with selling drugs is in no way comparable to successfully evading taxes when operating some large industrial plant. The drug dealer gets away with it because the state doesn’t notice him, whereas the state can’t possibly miss the big industrial plant. Even the strongest state will miss some drug dealing or similar stealthy activity, only the weakest state will be unable to extort taxes from a highly visible industrial plant. In fact, one could argue that if it is too weak to extort taxes, and its subjects can openly defy it in this manner, it’s not even a state anymore.

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No…

And besides, like I said, I’m not an agorist. I am a realist.

And yes, if you add criterion after criterion to the defintion oif black market (to exclude sales, to make judgements on the capacity of enforcement, ignore discrepency in laws between nations states) then you’ll be able to justify anything (except agorism? - not that I care, however). Even, the “legally” produced goods that are sold in illegal markets add money to the legal market and prove demand beyond what should be there in the legal market’s capacity (and purchasing power). You are ignoring like four or five crucial things to make your case all of which “matters for the economic analysis.”

I’d say rather than seraching for the limit of agorism, you search for the limit of statism.

Strawman. My African example is a counterexample to this claim…

Strawman and setting the stage. If the state’s power is non-existent, then agorism has no goal, therefore it doesn’t need to be pushed forward. You assume here that once there is nothing for agorism to do then it reaches its limit, but when it reaches its limit there is no more need for it…so you cannot fault it for that.

Do you know how cocaine or heroine are produced? Or methlabs for that matter? Look at the gun markets in Pakistan. they melt old soviet tanks and make any gun you can think of from the metal.

This is also a fallacy of generalization based on inductive logic. (see: David hume on the unfeasibility of inductive reasoning)

So, China isn’t even a state anymore? You realize that many many people in China have second children that they do not report to the State. it cannot collect taxes on probably 200 or 300 million people (the entire US population to them). Are they a failed state due to this? China also cannot maintain proper influence over the Xinjhang province that is heavily Moslem. Does this make them a failing state?

Another example is Moscow during and after Yeltsin. the Russian government could not even keep control of the city under the mafia there. The KGB referred to it as a city-state during this period of time because they had such little influence in it. There was all kinds of industrial production happening.

You need to hit the books.

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Stupid forum wrecked my longer post ><

Anyway, I think you seem to be missing the “cause” versus the “effect”. There are three situations where the black market is strong: when the economy, or sector (drugs in the US for example) is literally strangled by tight control, when the state is already too weak to enforce it’s own laws, and when the state defacto accepts the black market’s existence for it’s own benefit.

The prime example of the first would be the Soviet Union. The black market was huge because consumer goods were practically non-existant as a result of the Communist system. This doesn’t say much about the effectiveness of agorism, however, this says more about the inefficiency of communism. If anything, the thriving black market allowed the Soviet regime to last longer, because the people were able to do well enough by doing as they were supposed to and going to the black market for anything extra, rather than trying to, say, overthrow the government.

The second, obviously, would mostly apply to countries in Africa, Pakistan, etc. However, in these places, the government is already weak and a large counter economy is an effect of this, not a cause. So saying “look at how much stuff is made outside government control in Angola/The DROC/Pakistan!” is a largely pointless observation.

The third is the case in Communist China, and is fairly well supported by the government. In China, there are many laws and controls, but most of them are just there to provide excuses to arrest dissidents and so on when politically convenient. Black marketeers operate basically with an understanding with government officials that they won’t be bothered while doing so, and in turn the black marketeers won’t bother the government. In this way, the Chinese economy is a bit more durable than it otherwise would be and dissent is distinctly lower, a win-win for both parties. Of course, there are certain industries that the Chinese government very jealously protects from competition (banking comes to mind especially), and as a consequence they don’t face black market competition.

Come to think of it, I can’t think of a single place where Agorism is a successful tactic as opposed to a side effect of something else. Can you?

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yes, entry into certain industries is unprofitable regardless of what criminal elements are doing what to whom.

no, its because we arent aware of any counter-economic entrepreneurs entering that field.

thats an article of faith. youre assuming that because youre not aware of it happening, it doesnt happen, and since it doesnt happen, it cant happen. instead of thinking in terms of “the power of the state” you should be rigorously methodologically individualistic and realize that if any industry is beset by enough criminal aggressors, and benefits from few enough customers, it wont succeed. this has nothing to do with “the power of the state” but is simply an economic reality based on the cost of doing business versus profitability. agorism isnt supposed to accomplish “reduction in the power of the state” so much as agorism is unfettered trade, which is what we like and want to do.

I guess it depends on the context, they are easily comparable. there are some pretty big drug labs out there and they make a lot of money. you have to explain why a counter-economic investor would forgo those profits in order to enter some other industry like petroleum or automobiles (which already have significant black market components youre obviously unaware of.

could you tell me how you are defining “state”?

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it seems like youre employing a state-centric view when its wildly inappropriate. first you tell me that if the state’s regulations are too onerous, they cant stop people from ignoring them. then you tell me that even when the regulations arent too onerous, they still arent strong enough to enforce them. thirdly, when the government gives up and ceases to pretend to enforce its own prohibitions, somehow this is just the benign behavior of a government letting people do whatever they want.

lol agorism is market anarchy, I dont think I should need to establish the effectiveness. people got the products they wanted, bam! what more do you want?

if by that you mean that people, even agents of the state, were able to survive because they turned to to the freemarket, and that somehow demonstrates the omnipotent power of the state, you lost me.

so getting the goods and services you want without third party intervention is pointless, whats really important is getting even with criminal aggressors. got it.

again you ignore the fact that people are buying and selling what they want without interference from criminal aggressors. why? I dont understand why someone is supposed to be at war with the government or whatever, because otherwise it doesnt matter what you do, the govt let you do it, etc. its ridiculous.

one, false dichotomy. two, anytime two people transact catallactically, its a success. so youre missing the forest for the trees.

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Yes, and that’s sidestepping my point, which is that black market production in certain industries is unprofitable precisely because the state is sufficiently capable of enforcing its laws.

Let’s suppose in the US an oil refinery is required by law to comply with a certain environmental regulation, which adds cost to production. Thus an oil refinery which does not comply with this regulation would be more profitable than an oil refinery which does, all else being equal.

Is it possible for an oil refiner to consistently avoid compliance with this regulation? Sure. I can stealthily refine oil in my basement without complying with the regulation. Thus I, the black market producer, save on production costs relative my white market competitors. But I still cannot offer distillates at a competitive price, because the added cost which the regulation imposes on my competitors is more than offset by the reduction in cost they enjoy due to their economies of scale, so that on balance I still have higher production costs.

Thus either no one attempts to engage in black market oil refining in the US in the first place or, if they do, they find that they can’t compete and are driven out of business.

If someone could avoid compliance with the regulation while refining oil on a commercial scale, then and only then could this black market producer be competitive. But it is physically impossible to hide a commercial scale oil refinery, and the state in the US is sufficiently strong to impose its regulations on economic activity which it can plainly see: in contrast to economic activity which is capable of being hidden.

Thus there will be no black market oil refining in the US until/unless the state here becomes too weak to enforce its laws on economic activity which it can plainly see. The same is true of all other types of economic activity which by nature cannot be hidden. What this means is that black market production in these fields can only ever be an effect of a decline in the state’s power, not a cause of a decline in state power.

Drugs are totally prohibited, hence the black market producers have no white market competition and can be profitable. Likewise, if oil refining were totally prohibited, I might be able to profitably refine oil in my basement, because I would have no competition from more efficient white market refineries.

Firstly, why is it that only existing “counter economic investors” could invest in black market oil refining? If there is an opportunity to sell a product at a price above the cost of production, someone sooner or later is going to start producing it. If this opportunity lies in the black market, and no one already involved in the black market wants to exploit it, then someone will be drawn into the black market for the first time to exploit it. This is always happening, as no one is born into the black market. People previously uninvolved in it choose to enter it because of profit opportunities that they identify.

Secondly, if everyone piles into the most profitable black market industry, production in that industry is going to increase, and profit margins are going to fall, making other industries look more attractive for investment.

Indeed, we’re not, so why would be assume there are any? Are we to assume that they exist precisely because we see no evidence of their existence? Moreover, I expect that if you actually ran the numbers, and looked at the economies of scale involved in oil refining, it would be pretty obvious why a basement oil refiner cannot compete with commercial refinery. I think it’s plain prima facie.

I’m not using any precise definition of the state for the purpose of this discussion. My only point was that if you consider the imposition of taxes and regulations to be characteristic of the state, then obviously a “state” which passes such laws, but is entirely impotent to enforce them, is a state in name only.

You can only have unfettered trade in the areas of economic activity where state power is not effective in preventing unfettered trade, and, as I have pointed out, there are many areas where state power is effective in preventing unfettered trade. How do we get to a point where we can have unfettered trade in those areas as well?

To reiterate, these are the areas of economic activity where, to be competitive with white market producers, you have to have an operation of a sort which cannot be hidden from the state, by its very nature: oil refining, oil production, mining, agriculture, all manner of heavy manufacturing, electricity generation, shipping, rail transport, etc. How do we get free markets in those areas in the US, for example, or in other strong states?

There are two ways to have free markets in a given field. It can be in a black market, or in a white market - i.e. there can be free markets operating against the laws of the state, or free markets which the state makes no effort to fetter in the first place. If, as I have argued, black market production in certain fields is impossible in territoies controlled by strong states, then in such states the only way to have free markets in these fields is on a white market, i.e. for the state to choose to repeal its taxes and regulations and allow a free market. The state as it presently exists in the US, or in any other strong state in the world, is not going to do this of its own accord. It has to be made to do this, either through violent revolution, or through the political process. I opt for the latter.

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My claim is that, where the state is strong enough to impose its taxes and regulations on visible businesses, the operation of black market entrepreneurs will not be visible and that, in certain industries (as oil refining), the price of stealth is giving up economies of scale, which makes the stealth black market business uncompetitive with white market business. Your point about Africa is not a counter-example, as it doesn’t meet the underlined condition.

Per what “My Buddy” said, are you claiming that black market activity caused state power to decline, or that it was an effect of the decline of state power?

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because youre a statist, you reflexively believe this to be true. but its actually irrelevant because agorism is a market phenomenon. there are greater gains to be made in other investments, its kind of like maneuver warfare, but peaceful. you dont attack the beast where it is strongest. besides that, there are any number of reasons why it might not be profitable to invest in a given market. you cant just assume that its because of “the power of the state” as if “the power of the state” is a fixed thing. “the power of the state” is an idea and is only as powerful as it has an effect on the actions of the people, meaning it can be educated away.

wrong.

that is not the case, neither did I imply such. please explain why any current or potential black market investor would choose 1% profits when he could have 15% with less risk? furthermore, it obviously hasnt been the case that the margins in those other fields have been driven down, so you should be able to solve number two yourself. refer to the two economicists.

since the black market is hidden/secretive, we have no license to assume either way. youre begging the question.

which represents a victory condition for my side, and defeat for yours. so stop trying to gloat over the impotent carcass of beaucrats passing meaningless resolutions. thats a “w”

q trying to intimidate people by abstracting everything into meaningless generalizations. you can only have two party transtions when a third party is invited into the transaction by one original party, or when that third party physically interferes with the transaction. enforcement is egregiously expensive. “state power” is a scare term.

tell me, are you an entrepreneur? stop telling me what can and cannot be done as if underground laboratories dont and couldnt exist. how do illegal workers pick strawberries in the u.s. if agriculture “cannot be hidden”? so much for almighty state power. your last paragraph is also abstract and generic. you cant “force the state” to do anything because the state doesnt do anything. only individuals act. and you certainly can use market forces to gradually supplant the state achieving a peaceful voluntaryist revolution.

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Guns are real, property seizure is real, prisons are real - not mere ideas. This is what the “power of the state” means. And as long as it exists, it will have an effect on the behavior of people in general, and on economic activity in particular - obviously, otherwise there would be no need for a libertarian critique of the state.

Right, and it in fact does have an effect on how people act, because most people take into consideration things like the risk of going to prison when deciding how to act. For example, due to the power of the state, an entrepreneur might choose to conduct illegal business in secret, rather than out in the open - since otherwise he would risk undesirable consequences for himself (e.g. property seizure or prison). Business conducted in secret may be materially different than business conducted in the open, depending on what sort of sort of business it is. As I have been saying, one cannot generally achieve the same economies of scale in a secret business operation as in a visible business operation, for the simple reason that economies of scale often require physically large operations, and the larger an operation is the harder it is to hide.

Why do you think black market production of alcohol in the US basically collapsed as soon as prohibition was lifted? Black market producers had to keep their operations hidden, which limited their size, which prevented them from achieving the same economies of scale which white market producers could achieve, which made their cost of production higher than that their white market competitors, thus making their products uncompetitive in the market.

Apparently it’s possible to hide the legal status of your workers, but it obviously not possible to hide the fact that you are farming. The state can see that they’re farming, and can tax and regulate them - and the states does in fact tax and regulate farms in the US. Go set up a tomato farm and try not paying property tax, for example, and watch what happens. Will you be able to compete with white market farms? No, you’ll get shut down, or you’ll be forced to comply and become a white market farm. And what if you set up your farm in your basement, hydroponics with artificial light ala pot production? You will most likely get away with it, but you won’t be able to compete on the market because your production costs are too high, because you don’t have economies of scale.

Indeed. And state power is the reason it is hidden.

Explain to me, for example, how “market forces” could create a situation where I can start up a commercial scale tomato farm and avoid paying property taxes? How is this possible? Only if the state is already too weak to collect the tax, in which case market forces are not “supplanting the state,” rather the power of the state is declining for some other reason, which in turn allows broader scope for market forces to operate unfettered.. As My Buddy pointed out, you agorists have got your causality inverted.

You are suggesting that the reason no one is investing in black market oil refining is that there are higher profits to be had in other black market activities, such as drugs. Let’s analyze this claim more closely.

If the black market in drugs is a free market, with open entry, new investments and new firms would enter the black market for drugs and drive down profit margins until they fell below those of other black market industries, prompting capital to flow to them instead. So, if the black market for drugs is a free market, and if black market oil refining is profitable at all, one would expect some investment in black market oil refining.

But if the black market in drugs is not a free market, and entry is restricted, all the capital that wants to get into drugs cannot get into drugs. The investors who can’t get into drugs aren’t choosing between high returns in drugs and low returns in oil refining, they’re choosing between low returns in oil refining or nothing. So, if the black market for drugs is not a free market, and black market oil refining is profitable at all, on would expect some investment in black market oil refining.

Thus, if there is no investment in black market oil refining, the reason can only be that it is not profitable, since if it were, there would be some investment in it, regardless of whether other black market industries with which it is competing for investor dollars are free markets or not, and regardless of how high their returns are.

On another issue, obviously the black market for drugs is not a free market; it is heavily cartelized. This raises an interesting question. Is it an implicit assumption of agorism that black markets are necessarily free markets?

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  1. the state is a social fiction, and state power is also fictional in nature. guns and prisons are tangible. theft is an act, requiring an actor. those three things you mentioned are not “state power.” the state only exists insofar as it affects people’s behavior, so youre the one inverting causality here.

  2. the state affects how people act to the the extent that people (both agents of the state and non-agents) subscribe to that notion. the state doesnt have a separate existence outside of people’s minds. when you speak in the abstract as though it does, you get sloppy ideas like “the state forces people to pay taxes” when what really happens is a bunch of people choose to follow tax laws, making it easy for other people to choose to penalize a third group of people who choose not to follow tax laws. that third group of tax protestors doesnt “get forced by the power of the state” they actually contribute to a decline in revenue, because enforcement is expensive. the first group of taxpayers choose to pay taxes, meaning they assent to the the idea of the state, or they choose to behave so as to lower their risk of being aggressed upon.
    3)““Explain to me, for example, how “market forces” could create a situation where I can start up a commercial scale tomato farm and avoid paying property taxes? How is this possible? “”
    suppose that tomato farming is regulated and taxed, and therefore production drops, and the price goes up. now its substantially more profitable to grow black market tomatoes. so, somebody starts a tomato farm on land that isnt registered to them, and sells tomatos by the side of the road. there is a “total purchase surcharge” equivalent to the local sales tax, so the receipts look kosher.
    4)”“Only if the state is already too weak to collect the tax””
    you mean like right now?
    5)““market forces are not “supplanting the state,” rather the power of the state is declining for some other reason, which in turn allows broader scope for market forces to operate unfettered””
    thats an article of faith. you have no reason to assume that “some other reason” is the cause, and regardless, we dont care why “state power” declines, the decline of “state power” is inevitable, the point is to participate in free markets as much as possible, so that market forces can replace those few services people do get from governments.
    6)““If the black market in drugs is a free market, with open entry, new investments and new firms would enter the black market for drugs and drive down profit margins until they fell below those of other black market industries””
    when would this happen? it seems like youre assuming that it should have already happened. why?
    7)““So, if the black market for drugs is a free market, and if black market oil refining is profitable at all, one would expect some investment in black market oil refining.””
    yes, eventually. in fact, thats the point. its going to happen.
    8)““The investors who can’t get into drugs aren’t choosing between high returns in drugs and low returns in oil refining, they’re choosing between low returns in oil refining or nothing.””
    what is your reference for this proposition?
    9)““Thus, if there is no investment in black market oil refining, the reason can only be that it is not profitable, since if it were, there would be some investment in it””
    this is not the evenly rotating economy.
    10)““On another issue, obviously the black market for drugs is not a free market; it is heavily cartelized.””
    ok lol, if you say so, I dont think you participate in black markets enough to speak with authority on their characteristics.

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thanks for the answers and the list.

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Out of curiosity did you ever go back?

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Milton Friedman and even Ayn Rand are frontrunning writers and inspirations for the libertarian movement, much more than Murray Rothbard or HHH. Of course that’s not the opinion held by the libertarian faction here in this site. Some kid was just describing to me in another thread why Hayek and Friedman were full blown lenin style communists. LoL

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Flavors, tones, and moods mon ami: notice and appreciate their power and truths.

Some libertarians get off on being creedal sectarian cranks looking for the next witch hunt, purge, and inquisition , doing nasty inside hit pieces and character assassinations - and seemingly make an infelxibale economic science used it as nothing but a basement for politcal thought and activism (kind of like Marxists).

Others will be even more hilarious and pathetic “uncle tom’s” bending over backwards, oscillating between being overly apologetic, diplomatic, reciting the usual more “progressive creeds” - to making fun of “the wrong kind” of libertarian just to avoid the labels “right wing”, “crank”, or whatever other progressive word of alienating condemnation that can get thrown in their direction. This reminds me of a Nietzsche passage that went something lik:e when you follow the crowd, you can not keep up with it, you always (as a rule) will be two steps back: how true.

One side purges itself of itself - the other side tries to flee itself from itself: kind of like a snake eating it’s own tail.

On a more interesting note:

It is odd seeing some people who are self proclaimed libs which could be legitimently seen as"more statist" in ways than people who make no claims or pretentions to libertarianism ranging anywhere on the spectrum from Glen Beck to Lenin - so there may be a serious issue here - it may just show the vacuousness of overly unfocused heterodox political and/or philisophical positions. If that’s the case it’s time to seriously rethink about how to label oneself, and on what line one should draw such labels.