How Inequality Shapes Our Lives

Those of us who regard socioeconomic inequality as a serious problem are often accused of “envy,” as though such concerns were simply a matter of begrudging someone else’s having more cookies than we do.

I think this reaction misses the point in a number of ways; let me say just a bit about just one of those ways:

stupid "class envy" ad

Suppose you forget to pay your power bill (or your phone bill, or your cable tv bill, or your internet access bill, or your credit card bill, or whatever). What happens? Your provider disconnects you, and you’ll probably have to pay an extra fee to get service reestablished. You also get a frowny face on your credit report.

On the other hand, suppose that, for whatever reason (internet glitches, downed power lines after a storm, or who knows), you suffer a temporary interruption of service from your provider. Do they offer to reimburse you? Hell no. And there’s no easy way for you to put a frowny face on their credit report.

Now, if you rent your home, take a look at your lease. Did you write it? Of course not. Did you and your landlord write it together? Again, of course not. It was written by your landlord (or by your landlord’s lawyer), and is filled with far more stipulations of your obligations to her than of her obligations to you. It may even contain such ominously sweeping language as “lessee agrees to abide by all such additional instructions and regulations as the lessor may from time to time provide” (which, if taken literally, would be not far shy of a slavery contract). If you’re late in paying your rent, can the landlord assess a punitive fee? You betcha. By contrast, if she’s late in fixing the toilet, can you withhold a portion of the rent? Just try it.

Now think about your relationship with your employer. In theory, you and she are free and equal individuals entering into a contract for mutual benefit. In practice, she most likely orders the hours and minutes of your day in exacting detail. As with the landlord case, the contract is provided by her and is designed to benefit her. She also undertakes to interpret it; and you will find yourself subjected to loads of regulations and directives that you never consented to. And if you try inventing new obligations for her as she does for you, I predict you will be, shall we say, disappointed.

These aren’t merely cases of some people having more stuff than you do. They’re cases in which some people are systematically empowered to dictate the terms on which other people live, work, and trade. And we generally take it for granted. But it’s not obvious that things have to be that way.

When it comes to diagnosis and prescription, those of us who worry about socioeconomic inequality go in two different directions. Some identify the free market as the cause of such inequality, and government regulation as the cure; for others, it’s precisely the other way around. I’m obviously with the latter group; all the phenomena I mentioned are made possible by systematic restrictions on competition. Libertarians need to spend more time focusing on liberty as the solution to these pervasive asymmetries of power, rather than giving the impression that they find them unproblematic.

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121 Responses to How Inequality Shapes Our Lives

  1. Stephan Kinsella January 3, 2011 at 4:23 pm #

    Firefox 4.0b7 MacIntosh

    MBH: “If the logic of an OSE replaces the currency platform, then we don’t still have capitalism. We may have markets, but with consumer preferences shaped by the OSE, the invisible hands of market exchange will be determined by non-rival cognition. That’s not capitalism or socialism or communism bub.”

    And herein lies a main difference between standard anarcho-libertarianism, and whatever you are. As a good anarcho-capitalist, I’d relish a free(d) market so we could see you guys eat our dust from your communes up in Lancaster.

    • MBH January 3, 2011 at 4:56 pm #

      Chromium 9.0.597.19 Linux

      And as whatever I am, I’d relish a freed market because the “currency” would be stable, interaction wouldn’t entail hierarchies, knowledge would flow freely, and poverty would likely be eliminated.

      Therein does lie the main difference. You seek the end for more division. I seek an end to unjust division. You think that capital can continue to measure value. I think that innovation has outpaced capital, and you ass clowns are parasitic on us.

      Once we do design systems to decouple Open Source Ventures from the metacurrencies that more accurately represent their value than your archaic capital, then we will see whether or not the old school venture capital leaves us in the dust — undoubtedly funneling toward your legal services.

      Fuck you in the ass how much did Goldman Sachs value Facebook at yesterday? Boy, if only they had gold backing their start-up; they’d really be rich. Save your horse shit for Lew. :)

  2. Stephan Kinsella January 3, 2011 at 5:04 pm #

    Firefox 4.0b7 MacIntosh

    mbh: nothing wrong w/ “hierarchy”.

    • MBH January 3, 2011 at 5:24 pm #

      Chromium 9.0.597.19 Linux

      Right, it’s fantastic in sand castles.

      Nothing wrong with a wealth hierarchy a priori?

      How exactly will a medium of exchange that cannot accurately track value not entail a wealth hierarchy a priori?

  3. Stephan Kinsella January 3, 2011 at 5:27 pm #

    Firefox 4.0b7 MacIntosh

    MBH: “Nothing wrong with a wealth hierarchy a priori?”

    right. Nothing unlibertarian, either.

    “How exactly will a medium of exchange that cannot accurately track value not entail a wealth hierarchy a priori?”

    Media of exchang do not “track value”. As Mises showed, even for goods that do have a market price, the price does not serve as a measure of the good’s value. As Mises states:
    “Although it is usual to speak of money as a measure
    of value and prices, the notion is entirely fallacious. So long
    as the subjective theory of value is accepted, this question of
    measurement cannot arise.” Ludwig von Mises, The
    Theory of Money and Credit
    , H.E. Batson, trans. (Indianapolis:
    Liberty Fund, [1912] 1980), p. 51 (in chapter 2,”On the Measurement
    of Value”). Also: “Money is neither a yardstick of value nor of
    prices. Money does not measure value. Nor are prices measured in
    money: they are amounts of money.” Ludwig von Mises, Socialism:
    An Economic and Sociological Analysis
    , 3d rev. ed., J. Kahane,
    trans. (Indianapolis: Liberty Press, 1981), p. 99); see also Mises,
    Human Action

    • MBH January 3, 2011 at 6:31 pm #

      Chromium 9.0.597.19 Linux

      Nothing unlibertarian [about wealth hierarchies a priori].

      So libertarianism cannot prefer one situation over another?

      So long as the subjective theory of value is accepted, this question of measurement cannot arise.

      Yet agreement on which commodity will serve as medium of exchange presupposes the inter-subjective theory of value, which is different.

  4. Stephan Kinsella January 3, 2011 at 6:35 pm #

    Firefox 4.0b7 MacIntosh

    mbh: “So libertarianism cannot prefer one situation over another?”

    Libertarians can, insofar as they are not just libertarians. But libertarainism itself? If it prefers at all, it would prefer hierarchies to none.

  5. MBH January 3, 2011 at 6:40 pm #

    Chromium 9.0.597.19 Linux

    Libertarians can [prefer one situation over another], insofar as they are not just libertarians.

    And you prefer wealth hierarchies without any consideration for the nature of the unit of account, its stability, or whether it permits just mobility?

  6. Stephan Kinsella January 3, 2011 at 7:02 pm #

    Firefox 4.0b7 MacIntosh

    MBH: “you prefer wealth hierarchies without any consideration for the nature of the unit of account, its stability, or whether it permits just mobility?”

    I don’t prefer just any hierarchies; I simply oppose the abolition of all of them. Since it is clear that in any free society there will be inequality (ever heard of Nozick’s Wilt Chamberlain hypo?); and since private authority figures and structures are necessary and would exist.

    I’m a libertarian which means I oppose aggression and focus on aggression as the primary political evil. It is what we oppose, qua libertarian: it is why we say that the only way to violate someone’s rights is by initiation of force. Of course I would oppose any authority that results from state intervention but if the state is gone then that is not a concern.

    I fully expect a free society would be very capitalist indeed, with lots of wealth disparities, inequality, private authorities, employment, firms, division of labor, distant ownership, rent, landlords, and the like–and that this is good insofar as it results from the free market process. Of course the poor would be far better off and there would probably be a wide diversity and variety and significant amount of localism, self-employment, leisure, and what have you; but the rich would also be much better off.

    • MBH January 3, 2011 at 8:10 pm #

      Chromium 9.0.597.19 Linux

      I don’t prefer just any hierarchies; I simply oppose the abolition of all of them.

      I would walk it back too, Stephen. Unfortunately for you, I’m not going to let you skate here — too many LvM’ers hold this belief without any idea how repulsive it is.

      I said,

      Nothing wrong with a wealth hierarchy a priori?

      You said,

      [R]ight. Nothing unlibertarian, either.

      You didn’t qualify it at all. You didn’t say, “If the hierarchy implies ability, then it’s OK.” You didn’t say, “If the hierarchy is unjust but can be overcome by openness, then it may not be OK, but we could work with it.” You didn’t say, “If the particular hierarchy is a revolt against nature, then I want another hierarchy.” You just said, “Right, [nothing's wrong it.]“Reflect on this impulse, for Christ’s sake. Nothing. Wrong. Wealth hierarchy a priori. Nothing. Wrong.

      It’s the equivalent of conservatives that knee-jerk: government = bad. Or progressives: free market = bad. Misesians: wealth hierarchy a priori = natural, amoral, irrelevant. That belief is a pre-conscious sickness.

      Since it is clear that in any free society there will be inequality (ever heard of Nozick’s Wilt Chamberlain hypo?); and since private authority figures and structures are necessary and would exist.

      Irrelevant. My question was not how to structure a free society. My question was whether certain background conditions to that formation are more or less favorable to other background conditions.

      Of course I would oppose any authority that results from state intervention but if the state is gone then that is not a concern.

      The issue is a priori. Why won’t you play the Austrian economics game with me?

      [...] the rich would also be much better off.

      I have no problem with that per se. I have a problem with your implicit assumption that, even if wealth is bottlenecked in the top .01% of a society a priori, nothing’s wrong. I think that belief is a sickness.

  7. Stephan Kinsella January 3, 2011 at 8:32 pm #

    Firefox 4.0b7 MacIntosh

    MBH:

    “You didn’t qualify it at all. You didn’t say, “If the hierarchy implies ability, then it’s OK.””

    ? Hunh? So? I don’t oppose wealth hierarchies per se. There is no way to “oppose” wealth hierarchies *per se* in a libertarian way, unless you mean just griping about it. But I don’t oppose wealth hierarchies per se at all.

    ” You didn’t say, “If the hierarchy is unjust but can be overcome by openness, then it may not be OK, but we could work with it.””

    That is implied by my rejection of the opposition to all wealth hierarchies per se. It implies that they are not necessarily bad or unlibertarian. Which is my view.]

    “Reflect on this impulse, for Christ’s sake. Nothing. Wrong. Wealth hierarchy a priori. Nothing. Wrong.”

    Correct. There is nothing wrong apriori with (all) wealth hiearchies.

    “It’s the equivalent of conservatives that knee-jerk: government = bad.”

    Conservatives actually do not believe this; the are statists too. But of course all states are “bad”.

    “Misesians: wealth hierarchy a priori = natural, amoral, irrelevant. That belief is a pre-conscious sickness.”

    Wha?

    “My question was whether certain background conditions to that formation are more or less favorable to other background conditions.”

    Then you should have talked about that rather than implicitly claiming that all wealth hiearchies are bad, since these are different claims.

    “The issue is a priori. Why won’t you play the Austrian economics game with me?”

    I am not clear what you are talking about.

    “I have no problem with that per se. I have a problem with your implicit assumption that, even if wealth is bottlenecked in the top .01% of a society a priori, nothing’s wrong.”

    “bottlenecked”? What kind of economic or libertarian concept is that?

    In any case, I did not say that. I only said I do not oppose wealth hierarchies in and of themselves. This only means that not all such hiearchies are objectionable. It does not rule out that some–such as the one you describe–may be illegitimate for one reason or another.

    • MBH January 3, 2011 at 9:18 pm #

      Chromium 9.0.597.19 Linux

      Then you should have talked about [wealth hierarchies qua background conditions] [...]

      What do you think “a wealth hierarchy a priori” means? Have you considered that “a wealth hierarchy prior to…” has a solid family resemblance to “a wealth hierarchy as background to…”?

      Then you should have talked about that rather than implicitly claiming that all wealth hiearchies are bad, since these are different claims.

      Stephan. Where do I imply that? I say,

      [...] I’d relish a freed market because [...] interaction wouldn’t entail hierarchies [...]

      ‘Hierarchies wouldn’t necessarily frame interaction’ does not mean all hierarchies are bad. It doesn’t even imply it. By what rule of inference could it imply that all hierarchies are bad?

      There is nothing wrong apriori with (all) wealth hiearchies.

      I never said all. In fact, I said,

      Nothing wrong with a wealth hierarchy a priori?

      My diagnosis may be incorrect. I thought pre-conscious sickness. It’s looking more and more conscious.

  8. Stephan Kinsella January 3, 2011 at 9:26 pm #

    Firefox 4.0b7 MacIntosh

    “What do you think “a wealth hierarchy a priori” means?”

    Have no idea. seems like crankish terminology to me. I thought you were asking me if I would apriori oppose wealth hierarchies per se.

    ” Have you considered that “a wealth hierarchy prior to…” has a solid family resemblance to “a wealth hierarchy as background to…”?”

    Sorry, but I am not sure what you are talking about.

    “Hierarchies wouldn’t necessarily frame interaction’ does not mean all hierarchies are bad. It doesn’t even imply it.”

    I don’t know what this interesting phrasing is supposed to mean.

  9. MBH January 3, 2011 at 9:37 pm #

    Chromium 9.0.597.19 Linux

    I don’t know what this interesting phrasing is supposed to mean.

    So why did you take it to mean I was “implicitly claiming that all wealth hiearchies are bad?”

    • Stephan Kinsella January 3, 2011 at 9:57 pm #

      Firefox 4.0b7 MacIntosh

      “So why did you take it to mean I was “implicitly claiming that all wealth hiearchies are bad?””

      B/c at first I thought you were asking me if we can know “apriori” that wealth hierarchies [per se] are bad. I say no. Now you say no, that you are talkign about “wealth hierarchies apriori” and I don’t know what this is supposed to mean.

      • MBH January 3, 2011 at 11:53 pm #

        Chromium 9.0.597.19 Linux

        I don’t know what this is supposed to mean.

        Do you know what the word ‘situation’ or the word ‘circumstance’ means? These words refer to states of affairs that are prior to action. Actions occur within a given situation or circumstance. “Man acts” within a larger context — an environment. Man does not act in a vacuum.

        Similarly, Catallactics implies, (among other things) states of affairs prior to visible market activity. The state of affairs under consideration is the ownership of wealth — specifically, the state of affairs in which a large percentage of the wealth’s sum rests within a small portion of a population.

        I contend that this prior state of affairs can be neutral or it can be bad (not one or the other). You contend that per se they are neutral.

        I’m framing the state of affairs through Catallactics. Mises says, in The Scope and Method of Catallactics:

        The subject matter of catallactics is all market phenomena with all their roots, ramifications, and consequences.

        I want to know if a hypothetical market phenomena — highly concentrated wealth — is enough to judge its hypothetical ramifications, or if we need to look for hypothetical roots (distinguishing hypothetically legitimate wealth from hypothetically illegitimate wealth).

        So when I say,

        Nothing wrong with a wealth hierarchy a priori?

        And you say,

        Right.

        I wonder why you suck at Catallactics.:) Mises would obviously say that, when considering a wealth hierarchy (even per se), you have to consider (or qualify) the roots and ramifications. A hypothetical wealth hierarchy might be neutral and it might be bad. Why do you say,

        [N]othing wrong w/ “hierarchy”

        Mises clearly wants to say that something may be wrong with “hierarchy”. The core lesson of Catallactics is exactly that: hierarchy per se is a blur. You can’t say nothing’s wrong with it per se; you can’t say something is wrong with it per se either. Hierarchy per se is necessarily wrong or neutral.

      • Brandon January 4, 2011 at 12:10 am #

        Chromium 10.0.627.0 Ubuntu 10.10

        “I don’t know what this is supposed to mean.”

        That is a very familiar refrain when debates involve MBH. No one understands what he means. My theory, and I haven’t had a chance to test it as yet, is that he is a KGB spy attempting to infiltrate and undermine the traditional values and institutions of the West through ways and means not fully understood.

        • MBH January 4, 2011 at 12:21 am #

          Chromium 9.0.597.19 Linux

          Shhhhhhh…

        • MBH January 5, 2011 at 11:29 pm #

          Chromium 9.0.597.19 Linux

          OK OK. You got me to crack. I’m sending this back to The Motherland.

      • MBH January 4, 2011 at 10:54 pm #

        Chromium 9.0.597.19 Linux

        Stephan, in case you haven’t taken enough medicine, here’s one more dose.

        Rothbard says,

        [...] Bigness is a priori highly suspect [...]

        If bigness is a priori highly suspect, why exactly shouldn’t hierarchy be? — Well, I guess you could always argue that bigness isn’t per se suspect.

        You say on 08.02.09,

        They are suspect [...]

        D’OH!

        For future reference Stephan, just say “oops” and get out! Or, pretend like you’re doing Catallactics right and continue to be called out your ignorance…

  10. Anon73 January 3, 2011 at 9:48 pm #

    Firefox 3.6.13 Windows XP

    Sorry to miss all the mbh/kinsella action, but I wanted to clarify my remark to illustrate how the artificial legal barriers along with corporations might fall but “wage slavery” could still exist. It’s a “collective action problem”, like if a few people try to start driving on the left side of the road they will just be mowed down by the traffic driving on the right side. Graphically, in the space of possible societies capitalism (meaning private property, wage labor, etc) is a valley, so a few hippie cooperatives forming might not make much difference because they would be outcompeted by all the normal firms. The argument then is, that even if the state goes away capitalism might still continue in present form because of existing monopolies, industry is so capital intensive, capitalists can sell at a loss in one region to crush competition in another, etc.

    I should clarify I’m not certain about this and do truly hope that a state-free society would look substantially freer and better than the one we have now. Yet, sometimes I imagine the worst case isn’t anarchy = chaos, but anarchy = the way things are now just with no state, taxes, or social programs and McDonalds running things like in that book “Jane Government”.

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