Saturday, June 03, 2006

Cue Card Libertarianism: Power

There are two kinds of power that are too frequently confused: political power and economic power. Economic power comes from production and trade, "the ability to produce material values and to offer them for trade"; by contrast, and in Mao Tse-Tung’s memorable formulation, political power comes from the barrel of a gun.

The great danger in confusing the two is that too frequently political power is either put in the service of economic power, or it is set against it. In the libertarian view, it is essential that the two powers are separated totally and completely and constitutionally.

The separation of economy and state is as important as was the seperation of church and state, and for the self-same reasons: the abuse of political power without any effective separation of powers. Governments have a legal monopoly on the use of force – citizens have no choice but to submit to it. It makes no essential difference that they may have elected the government. Political power is coercive.

This is true, be it noted, even in a free society, where the initiation of force by citizens is illegal, but governments reserve the legal right to use force against those who initiate it. (That is the proper use of political power; it is much more commonly used improperly. See Government.)

Economic 'power,' by contrast, is wielded by producers of goods and services by virtue of the voluntary patronage of their customers – who are free to withdraw or relocate their patronage the moment they become dissatisfied. Economic power is non-coercive. As Harry Binswanger says so memorably, the symbol of political power is the gun. The symbol of economic power is the dollar.
The only power a business has to induce customers to give it money is the value of its products. If a business started to produce an inferior product, it would eventually lose its customers. By contrast, the only power that the government has to offer is a threat: "We'll dictate what businessmen can and cannot do—and businessmen better toe the line or we'll throw them in jail."
Blurring the distinction between the dollar and the gun is a favourite ploy of statists, who use this equivocation to justify the curbing of economic freedom through the extension of political controls. "There is no difference between being dictated to by a politician and by a businessman," fudges the statist, "so what harm is done by giving more to the politician and less to the businessman?" Answer – immeasurable.

MORE READING: Harry Binswanger, 'The Dollar and the Gun,'

Part of a continuing series explaining the concepts and terms used by libertarians. Originally published in The Free Radical. The 'Introduction' to the series is here. The series so far is here. .

LINKS: Cue Card Libertarianism - Not PC .

TAGS: Cue_Card_Libertarianism, Libertarianism, Politics, Economics

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1 Comments:

Blogger Steve said...

If I were to say that you do not support true separation of the economy and the state, since you support using the state mechanism to enforce contracts, what would you say?

Also, more generally, police, courts, army, all fulfill an economic role as well - without them individuals would buy protection on a free market.

6/04/2006 12:18:00 pm  

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