Special Privileges from the Interventionist
State & Conspiracies of Would-Be Monopolists
(Murray Rothbard in Defense of Rational
Conspiracy Theory)
To reiterate and summarize the previous few
paragraphs for emphasis,
when someone dares to point out that coercive
monopolism goes hand in
hand with socialism, fascism, and other
interventionist (statist) systems of
the Left, he is often attacked as an "extremist"
or a right-wing (pro-freedom)
radical.
Such observations and criticisms of
Establishment power
and coercive monopolies are often met with such
snide epithets as
"paranoid" or "The Conspiracy Theory of History"
(said sneeringly) by
Establishment partisans. In rebuttal to such ad
hominem charges, Dr.
Rothbard makes the following observations:
"Suppose we find that
Congress has passed a law raising the steel
tariff or imposing import
quotas on steel? Surely only a moron will fail
to realize that the tariff or
quota was passed at the behest of lobbyists from
the domestic steel
industry, anxious to keep out efficient foreign
competitors. No one would
level a charge of 'conspiracy theory' against
such a conclusion. But what
the conspiracy theorist is doing is simply to
extend his analysis to more
complex measures of government: say, to public
works projects, the
establishment of the ICC, the creation of the
Federal Reserve System,
or the entry of the United States into a war. In
each of these cases, the
conspiracy theorist asks himself the question
cui bono? Who benefits
from this measure? If he finds that Measure A
benefits X and Y, his next
step is to investigate the hypothesis: did X and
Y in fact lobby or exert
pressure for the passage of Measure A? In short,
did X and Y realize that
they would benefit and act accordingly?
"Far from being a paranoid or a determinist, the
conspiracy analyst is a praxeologist: that is,
he believes
that people act purposively -- that they make
conscious
choices to employ means in order to arrive at
goals. Hence,
if a steel tariff is passed, he assumes that the
steel
industry lobbied for it; if a public works
project is
created, he hypothesizes that it was promoted by
an alliance
14
of construction firms and unions who enjoyed
public works
contracts, and bureaucrats who expanded their
jobs and
incomes. It is the opponents of 'conspiracy'
analysts who
profess to believe that all events -- at least
in government
-- are random and unplanned, and that therefore
people do not
engage in pruposive choice and planning."18
CONCLUSION
As we have seen, classical economist Adam Smith,
New
Left historian Gabriel Kolko, activist "liberal"
consumerist
Ralph Nader, conservative Chicago School
economist Milton
Friedman, liberal power-structure analyst
William Domhoff,
right-wing constitutionalist Dan Smoot, Austrian
economist
Ludwig von Mises, power-elites researcher Antony
Sutton, and
libertarian economic historian Murray Rothbard
-- whatever
their differences on policy recommendations and
other issues
-- they all concur on one point: privileged
power elites and
oligopolies tend to be strengthened rather than
weakened by
bureaucratic regulations from government.
Political
interventionism tends to artificially stabilize
the market in
favor of "the big boys" (as Ralph Nader calls
them) and
against greater diversity, market alternatives,
and
competition.
There seems to be a consensus among an
increasing number
of scholars with widely diverse ideological
perspectives that
when the political state uses its power to
intervene in the
economy, regardless of the initial motives or
outward
intentions, it seldom, if ever, does so as a
neutral agent
for the "common good"; rather, political
interventionism
always tends to favor certain special, vested
interests --
almost always those big firms already on top in
their
particular fields -- at the expense of their
competitors and
the consumers. This phenomenon seems to be due
to the nature
of the beast and therefore is endemic and
inescapable in any
interventionist political system.
As long as political regulations over private
industries
are sanctioned as legitimate, there will be
vested-interest
groups and lobbies clustering around Congress
and the
"independent" regulatory agencies -- competing
for favors
from the public trough at the expense of
everybody else.
This has been shown to be true of the Interstate
Commerce
Commission, the Federal Reserve System, the Food
and Drug
Administration, the Federal Trade Commission,
the
Export-Import Bank, the Commodity Credit
Corporation of the
U.S. Department of Agriculture, the foreign aid
programs,
occupational licensure, and even the antitrust
laws. In case
after case, the regulation or agency served the
special
interests by promoting oligopoly and monopoly
and retarded
competition and market alternatives to the
detriment of
consumers.
It would seem, then, that the way to avoid such
abuses
is not by giving even more power to the
political regulators
15
who, after all, are already comfortably in bed
with the
vested business interests. The way to prevent
such
regulatory-industrial complexes and oligarchal
establishments
is through a disestablishmentarian divorce, to
be achieved by
a Separation of Market and State -- that is, a
strict
adherence to a policy of laissez faire: "hands
off" all
peaceful market affairs by asny level of
government.
If the government were constitutionally and
legally
forbidden to intervene on behalf of anyone, then
Rockefeller,
Haammer, or any other would-be monopolist would
have no more
influence over government than anyone else, and
would have to
compete in the marketplace like everybody else.
Moreover, if government had not already been in
the
business of intervening through regulations,
controls,
bureaucratic agencies, special taxes, and so on,
there would
have been no one in government to act as "pull
peddlers" --
since there would have been no political favors
to dispense,
no privileges to peddle in exchange for campaign
contributions; so, the oligarchy based on
political pull
would not have emerged.
It is only the government's ability to
positively
intervene -- and the widespread sanction of
interventionism
as legitimate -- which makes pressure groups,
lobbies, and
political factions so powerful and important in
politics.
Otherwise, they wouldn't cluster around
Washington like flies
around a garbage can. (Isn't this what a very
disillusioned
David Stockman meant by 'the triumph of
politics'?) Making it
illegal for government to regulate or otherwise
intervene in
production and trade would be much more
effective in
combatting political abuses and corruption than
any
restrictions on campaign financing or other
superficial
reforms.
With government constitutionally prohibited from
meddling in the private affairs and economic
dealings of
peaceful people, and restricted to protecting
everyone's
person and property from criminal violation,
then no
conspiracy of would-be monopolists or
special-interest
hustlers could use political power as a legal
tool to obtain
special privileges, exploitative monopolies, or
plunder from
the taxpayers. Without government intervention,
they would
lose their power base, and the chain of
privilege could be
broken. A policy of non-interventionism -- never
really
tried on a national scale -- could be the
ultimate solution
to the problem of coercive monopolies and
coercive power
elites.
As former Congressman Ron Paul of Texas has
cogently
observed, "The free market is not only the most
productive
system, it is also the only system consistent
with individual
liberty. It is also the only one that stops
special
interests from oppressing taxpayers and
consumers.
16
"In an economy characterized by government
intervention,
the powerful use the government to their own
ends. The only
cure is not more government, but getting
politicians and
bureaucrats out of the economy."19
In sum, then, if coercive power elites and
exploitative
monopolies are bred from the interaction and
collusion
between special business interests and
interventionist
politics, then a policy of laissez faire -- a
separation of
market and state -- would seem to be the
ultimate cure or
best solution.
Notes, References, & Bibliography
1. Wayne Leeman, "The Limitations of Price
Cutting As A Barrier to Local
Entry," Journal of Political Economy. December,
1956; Robert Masters,
"An Alternative Concept of Competition," The
IREC Review Vol. II No. 5.;
John S. McGee, "Predatory Price-Cutting: The
Standard Oil (N.J.)
Case," The Journal of Law and Economics.
(October, 1958, pp. 137-169);
Yale Brozen, "Is Government the Source of
Monopoly?" The Intercollegiate
Review. (vol. V no. 2, pp. 67-78). We have even
seen this in a
relative way on an international scale with the
breakdown in
effectiveness of the OPEC cartel in recent
years. Seeking to gain even
more revenues, various members refused to limit
production and sold oil
at prices below that set by the cartel. Indeed,
it has been suggested
that OPEC never would have had much power to
keep oil prices high in the
first place if there had not been domestic price
controls and a myriad
of regulations and controls imposed on energy
industries. Cf. George
Reisman, The Government Against the Economy,
(Appleton, 1979).
2. The terms "monopoly" and "competition" are
somewhat vague and elusive
in that they are hard to define outside of
rather narrow, artificial,
and more-or-less arbitrary assumptions.
Acknowledging the problems of
ambiguity in these concepts, the term "monopoly"
is used in this article
loosely to mean a situation in which one seller
fully dominates his
particular market because competition is barred
from that field.
3. Gabriel Kolko, The Triumph of Conservatism,
(Quadrangle Books, 1967,
pp. 4-5.)
4. Ibid, p. 3.
5. Antony Sutton, Wall Street and FDR,
(Arlington House, 1975).
6. Ralph Nader, The Monopoly Makers: Ralph
Nader's Study Group Report
on Regulations and Competition. (Grossman
Publishers, 1973).
7. Milton Friedman, on Donahue, a TV program
originating in Chicago.
8. Gary Allen, The Rockefeller File, (Concord
Press, 1974).
9. Ludwig von Mises, Human Action, (Chicago, 3ed
Rev. Edition, 1966),
pp. 808-809.
10. Murray Rothbard, "Bankers Conspire,"
MoneyWorld (Winter, 1987);
Antony Sutton, Wall Street and FDR (Arlington
House, 1975); Sutton, Wall
Street and the Bolshevik Revolution (Arlington
House, 1974(; Sutton,
Wall Street and the Rise of Hitler (76 Press,
1976).
11. Carroll Quigley, Tragedy and Hope
(Macmillan, 1966), pp. 950-951.
12. Ibid.
13. Ibid.
14. Ibid.
18
15. Dan Smoot, The Invisible Government.
(Belmont, Mass., Western
Islands, 1967).
16. Smoot, Op. cit.; Cf., Frederick Lewis Allen,
Morgan the Great.
(Life magazine, April 25, 1949); Quigley, op
cit. Cleon Skousen, The
Naked Capitalist (1970); Gary Allen, None Dare
Call It Conspiracy,
(Concord Press, 1971); Gary Allen, The
Rockefeller File, (Concord Press,
1974). G. William Domhoff, The Powers That Be:
Processes of Ruling
Class Domination in America. (New York, Vintage
Books, 1978); G. William
Domhoff, Who Rules America? (Englewood Cliffs,
N.J., Prentice-Hall,
1967).
17. Murray Rothbard, "The Conspiracy Theory of
History Revisited,"
Reason (April 1977).
18. Ibid.
19. Ron Paul, from a May 1981 press release
issued by the office of
Congressman Ron Paul.
19
BIBLIOGRAPHY
Allen, Frederick Lewis. Morgan the Great. Life
magazine,
April 25, 1949.
Allen, Gary. None Dare Call It Conspiracy. Seal
Beach,
Calif.: Concord Press, 1971.
Allen, Gary. The Rockefeller File. Seal Beach,
Calif.:
Concord Press, 1974.
Birmingham, Stephen. Our Crowd. New York: Dell
Books,
1967.
Brozen, Yale. "Is Government the Source of
Monopoly?" The
Intercollegiate Review. vol. V no. 2, pp. 67-78.
Domhoff, G. William. The Powers That Be:
Processes of
Ruling Class Domination in America. New York,
Vintage
Books, 1978.
Domhoff, G. William. Who Rules America?
Englewood Cliffs,
N.J.: Prentice-Hall, 1967.
Hansl, Proctor. Years of Plunder New York: Smith
& Haas,
1935.
Kolko, Gabriel. Railroads and Regulations
1877-1916.
Princeton University Presss, 1965.
Kolko, Gabriel. The Triumph of Conservatism.
Chicago:
Quadrangle Books, 1967.
Leeman, Wayne. "The Limitations of Price Cutting
As A
Barrier to Local Entry," Journal of Political
Economy.
December, 1956.
Lundberg, Ferdinand. America's 60 Families. New
York:
Vanguard, 1938.
Lundberg, Ferdinand. The Rich and the Super
Rich. New York:
Lyle Stuart, 1968.
20
Masters, Robert. "An Alternative Concept of
Competition,"
The IREC Review Vol. II No. 5.
McGee, John S. "Predatory Price-Cutting: The
Standard Oil
(N.J.) Case," The Journal of Law and Economics.
October,
1958, pp. 137-169.
Mills, C. Wright. The Power Elite. New York:
Oxford
University Press, 1956.
Myers, Gustavus. History of the Great American
Fortunes.
New York: Random House, 1936.
Nader, Ralph. The Big Boys: Power and Position
in American
Business. New York: Pantheon Books, 1986.
Nader, Ralph. The Monopoly Makers: Ralph Nader's
Study
Group Report on Regulations and Competition.
Grossman
Publishers, 1973.
Navarro, Peter. The Policy Game. New York: John
Wiley &
Sons, Inc., 1984.
Quigley, Carroll. Tragedy and Hope: A History of
the World
in Our Time. New York: Macmillan, 1966.
Quirk, William J. "A Cross of Paper," The New
Republic,
January 19, 1980.
Skousen, W. Cleon. The Naked Capitalist.
(c) Copyright 1987 & 1999 Sam Wells
--------------------------------------------------------------------------------
"Robber Barons" &
Exploitative Monopolies which system fosters
them & which discourages them?
|