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Ask HN: Libertarian thoughts on poverty/monopoly power?

I am sympathetic to many libertarians ideas; however, I have a hard time getting past a few thoughts. For instance, if we adopted a libertarian alternative for the reduction of our government and the freeing our our markets we might be - in aggregate - a wealthier country, many people would end up in abject poverty because they cannot acquire an sustaining income (for whatever reason). For instance, the argument I hear against the minimum wage is that it suppresses the number of jobs available (i.e. If a worker can only provide $5/hr worth of production for their employer, but there is an $10/hr minimum wage, then the employer will not hire that person at 10/hr and so that person doesn’t get a job. Alternatively, they could have a job if the minimum wage was removed and the employer was able to hire them at 5/hr. Ok, sure - 5/hr is better than 0/hr. Now, if a person can only pull in a 5/hr - or 2/hr - wage that subsequently leaves them unable to access healthcare, education, nutritious foods, etc. in a free marketplace, then what is the libertarian answer to their poverty (or the inevitable social costs of their poverty)? Leave them to die on the streets? Likewise, how does libertarian thought confront monopoly power? Ostensibly, our government is designed to distribute certain rights and powers to all citizens. If we eliminate those rights and powers, what protects me - as a relatively poor and uninfluential human being - from being exploited by my more powerful businessman, landowner, etc.? It seems to put too much faith in everyday people to act morally - or if not morally, at least altruistically. In a libertarian environment, what is preventing a monopoly from wielding private power (rather than taking advantage of public power e.g. regulatory capture) to secure or maintain their position? I’m genuinely trying to understand this political/ethical worldview.

smt88 8y ago
Hayek famously supported universal income, which some of his modern followers ignore or argue against. You may find an answer by looking into his ideas: https://www.libertarianism.org/columns/why-did-hayek-support-basic-income https://www.libertarianism.org/columns/why-did-hayek-support...
nieksand 8y ago
If you're genuinely trying to understand, read Friedman's "Capitalism and Freedom" as a starting point. https://en.wikipedia.org/wiki/Capitalism_and_Freedom#Chapter_summaries https://en.wikipedia.org/wiki/Capitalism_and_Freedom#Chapter...
- eesmith 8y ago
  The Wikipedia link you give summarized chapter vii "Capitalism and Discrimination" starting with: > In a capitalist society, Friedman argues, it costs money to discriminate, and it is very difficult, given the impersonal nature of market transactions. I've become rather jaded concerning models of human behaviors as made by economists without input from anthropology or experimental psychology. The colonial empires of Europe followed a standard model of setting up different classes of people, with the Europeans at top, then a small social group to run the local systems, followed by the rest of the population. This is how a small number of British people were able to control India, for example. Discrimination was built into the system, to the immense profit of Britain. Similarly, in the US South, the rich white slaveholders convinced the poor white slaveholders that it was better to be white, and poor, than to be black. This continued after the treasonous South was defeated during the Civil War - the desire for white supremacy among the (white) dominant population was "worth" the costs of discrimination. Since I didn't want to base my opinion solely on a summary on Wikipedia, I read through the relevant chapter at http://circuloliberal.org/livros/capitalismo-e-liberdade.pdf http://circuloliberal.org/livros/capitalismo-e-liberdade.pdf . On p93 I see something outright wrong: "As noted in chapter i, the purchaser of bread does not know whether it was made from wheat grown by a white man or a Negro, by a Christian or a Jew." If there's a market for that, then that information will be made available. Why do I know that? Because similar things already exist. Consider https://en.wikipedia.org/wiki/Pas_Yisroel https://en.wikipedia.org/wiki/Pas_Yisroel "Pas Yisroel or Pat Yisrael (Hebrew: פת ישראל‎ lit:"Bread of an Israelite") products are grain-products that were cooked or baked with the participation of an observant Jew" and https://en.wikipedia.org/wiki/Chalav_Yisrael https://en.wikipedia.org/wiki/Chalav_Yisrael "Cholov Yisroel, is a Halachic term which refers to all dairy products, including cheese and non-fat dry milk powder, which derive from milk that has been milked under the supervision of a religiously observant Jew." What I don't understand is, didn't Friedman, son of moderately observant Jews, know this? "A businessman or an entrepreneur who expresses preferences in his business activities that are not related to productive efficiency is at a disadvantage compared to other individuals who do not." Here's what happens. I decided to allow both black and whites to eat at my restaurant. This angers the local white population, who call me names, threaten me, and should I not back down, torch my business. If I integrate I have a 5% change of making 10% more money, and a 95% chance of losing everything. (Numbers pulled from my butt.) And the police who might otherwise help protect my property are part of the white power structure. What do you think I'll do? Hint: I'm no Medgar Evers. Economically speaking, the switching costs can be too high to reach a more profitable state. The idea that we should not have laws to prevent racial discrimination because that sort of discrimination cannot be distinguished from a personal taste preference of one singer over another is crazy talk - now. We have 54 years of experience with the the Civil Rights Act of 1964, and followup laws, to show how such a framework can work. "He may simply be transmitting the tastes of the community." So what? I think it is fine to use the coercive power of the state to oppose a community which discriminates on the basis of skin color. If libertarianism necessarily implies that such laws should not exist, then I can see why it's mostly white men who support libertarian beliefs.
eesmith 8y ago
As you do that, try also to understand the political/ethical worldview of libertarian ideas with respect to unions. Because I don't understand it. With a strong union, there is no need for a minimum wage, as in the Nordic countries - https://en.wikipedia.org/wiki/Minimum_wage#Collective_bargaining https://en.wikipedia.org/wiki/Minimum_wage#Collective_bargai... . Many of the accounts I've seen about libertarian views of unions in the US are because the laws can give a union the monopoly right to negotiate on behalf of everyone covered by the union, even if not a union member. However, that analysis always seems incomplete - the unions are also prohibited from many practices (including those legal in other countries) which, under a free market, they should have. Why shouldn't a union be able to negotiate a closed shop arrangement with an employer? It seems little different than, say, McDonald's making a deal with Coke to only provide Coke products, and requiring that all its franchisee go in on the deal.

smt88 8y ago

Hayek famously supported universal income, which some of his modern followers ignore or argue against. You may find an answer by looking into his ideas: https://www.libertarianism.org/columns/why-did-hayek-support-basic-income https://www.libertarianism.org/columns/why-did-hayek-support...

nieksand 8y ago

If you're genuinely trying to understand, read Friedman's "Capitalism and Freedom" as a starting point. https://en.wikipedia.org/wiki/Capitalism_and_Freedom#Chapter_summaries https://en.wikipedia.org/wiki/Capitalism_and_Freedom#Chapter...

eesmith 8y ago
The Wikipedia link you give summarized chapter vii "Capitalism and Discrimination" starting with: > In a capitalist society, Friedman argues, it costs money to discriminate, and it is very difficult, given the impersonal nature of market transactions. I've become rather jaded concerning models of human behaviors as made by economists without input from anthropology or experimental psychology. The colonial empires of Europe followed a standard model of setting up different classes of people, with the Europeans at top, then a small social group to run the local systems, followed by the rest of the population. This is how a small number of British people were able to control India, for example. Discrimination was built into the system, to the immense profit of Britain. Similarly, in the US South, the rich white slaveholders convinced the poor white slaveholders that it was better to be white, and poor, than to be black. This continued after the treasonous South was defeated during the Civil War - the desire for white supremacy among the (white) dominant population was "worth" the costs of discrimination. Since I didn't want to base my opinion solely on a summary on Wikipedia, I read through the relevant chapter at http://circuloliberal.org/livros/capitalismo-e-liberdade.pdf http://circuloliberal.org/livros/capitalismo-e-liberdade.pdf . On p93 I see something outright wrong: "As noted in chapter i, the purchaser of bread does not know whether it was made from wheat grown by a white man or a Negro, by a Christian or a Jew." If there's a market for that, then that information will be made available. Why do I know that? Because similar things already exist. Consider https://en.wikipedia.org/wiki/Pas_Yisroel https://en.wikipedia.org/wiki/Pas_Yisroel "Pas Yisroel or Pat Yisrael (Hebrew: פת ישראל‎ lit:"Bread of an Israelite") products are grain-products that were cooked or baked with the participation of an observant Jew" and https://en.wikipedia.org/wiki/Chalav_Yisrael https://en.wikipedia.org/wiki/Chalav_Yisrael "Cholov Yisroel, is a Halachic term which refers to all dairy products, including cheese and non-fat dry milk powder, which derive from milk that has been milked under the supervision of a religiously observant Jew." What I don't understand is, didn't Friedman, son of moderately observant Jews, know this? "A businessman or an entrepreneur who expresses preferences in his business activities that are not related to productive efficiency is at a disadvantage compared to other individuals who do not." Here's what happens. I decided to allow both black and whites to eat at my restaurant. This angers the local white population, who call me names, threaten me, and should I not back down, torch my business. If I integrate I have a 5% change of making 10% more money, and a 95% chance of losing everything. (Numbers pulled from my butt.) And the police who might otherwise help protect my property are part of the white power structure. What do you think I'll do? Hint: I'm no Medgar Evers. Economically speaking, the switching costs can be too high to reach a more profitable state. The idea that we should not have laws to prevent racial discrimination because that sort of discrimination cannot be distinguished from a personal taste preference of one singer over another is crazy talk - now. We have 54 years of experience with the the Civil Rights Act of 1964, and followup laws, to show how such a framework can work. "He may simply be transmitting the tastes of the community." So what? I think it is fine to use the coercive power of the state to oppose a community which discriminates on the basis of skin color. If libertarianism necessarily implies that such laws should not exist, then I can see why it's mostly white men who support libertarian beliefs.

eesmith 8y ago

As you do that, try also to understand the political/ethical worldview of libertarian ideas with respect to unions. Because I don't understand it. With a strong union, there is no need for a minimum wage, as in the Nordic countries - https://en.wikipedia.org/wiki/Minimum_wage#Collective_bargaining https://en.wikipedia.org/wiki/Minimum_wage#Collective_bargai... . Many of the accounts I've seen about libertarian views of unions in the US are because the laws can give a union the monopoly right to negotiate on behalf of everyone covered by the union, even if not a union member. However, that analysis always seems incomplete - the unions are also prohibited from many practices (including those legal in other countries) which, under a free market, they should have. Why shouldn't a union be able to negotiate a closed shop arrangement with an employer? It seems little different than, say, McDonald's making a deal with Coke to only provide Coke products, and requiring that all its franchisee go in on the deal.