Objections

Objections to capitalism, liberty and anarcho-capitalism

This page can start by listing objections and concerns, and link to more detailed sections to analyze and answer the problem.

Capitalism does not produce public goods

See Public goods.

The case of science. Terence Kealey offers three arguments: The first one is a recent OECD comparative analysis of growth between countries with regards to the amount of government funding of science. It shows no positive effect in countries with heavier government funding, whereas it shows positive effects when there is more private R&D investment. The second one is that economic growth trends historically did not improve when government become involved (before/after comparison). The third is the disappearance of "secret publication" of science in favor of the current open model well before governments became involved in science (ie. scientists themselves find it advantageous to share, it is not a disincentive as suggested by the "public goods" argument).

Also, anyone can say that any nonrivalrous, non-excludable good is a public good. That doesn't mean it should be produced at taxpayer expense. If, say, the Republicans want Ronald Reagan's signature to appear in skywriting over Washington, DC on President's Day, they can't prevent members of the public who made no contribution to a private skywriting fund from seeing it. But that is a far cry from demonstrating that society will benefit more from that use of resources than it would from alternative uses.

On the other hand, sometimes what people think are public goods actually are not. An example would be lighthouses. If a harbor is privately owned, and those who use the harbor can be required to pay a fee, then the lighthouse that guides ships safely to the harbor, and is paid for by the harbor owner, can be considered a private good. The free market will tend to cause such situations to come to pass.

Capitalism under-produces what society needs

More details TBD

Capitalism exploits workers

A variation of this objection is that people in difficult situation cannot afford to exercise choice. Employer can take advantage of people when there is unemployment. A counter-argument is that in many cases, workers have a great deal of bargaining power. Consider, for example, the voice actors for The Simpsons, who receive millions of dollars a year for 22 weeks' worth of work. They can shut down the show by refusing to accept what is offered. That is an extreme example, but there are many types of employees who are, to some degree or another, difficult to replace and therefore in a good position to drive a hard bargain on salary. It is not for nothing that the Hacker Test contains these two items:

0241 Is your job secure?
0242 ... Do you have code to prove it?

Those who aren't in a good bargaining position probably need the "exploitative" job that is offered, because the whole reason they are in such a bad bargaining position is that they don't have better options they can point to and say, "Look, this employer is offering me $x. Can I have a raise up to what the market is paying someone with my knowledge, skills and abilities?" Those employees need a job that will keep body and soul together while they seek education, training, experience, or whatever else will make them more productive (in the consumer's opinion, as expressed by his willingness to pay a certain amount for the work product) per unit of labor invested, and therefore more valuable in the job market. If those opportunities for self-improvement are not available to that worker, then he will probably need that job on a more permanent basis, and it would more permanently diminish his standard of living to take it away.

Capitalism leads to monopolies and cartels

It is important to understand what constitutes a monopoly and under what conditions it leads to monopolistic effects (lower quality and higher prices). What are the forces which encourage concentration? What are the forces which encourage fragmentation? How does one define an "industry" or "sector"? What are substitution effects?

Also, it is interesting to look at historical data on monopolies, in light of the above analysis. Which problems occurred? Which forces actually came into play?

For one, identifying a monopoly requires defining the scope of the market. If defined arbitrarily narrowly, it will apparently lack adequate substitutes. Is the iPhones in the market for large-screen touch-based smartphones, consumer smartphones, cellphones, communication devices, or social networking tool?

But more importantly, competitive forces (both actual competition, potential competition, and indirect competition) are sufficient to regulate how much control a company (or a cartel of colluding companies) can get over the market. Despite its dominance of a market, the company will always feel the pressure to perform well or else it will lose customers to rival companies. Anti-competitive conditions can only arise legally from the government (and illegally through other kinds of force, like the mafia). Such government-granted monopolies are indeed harmful to consumers and the market.

Mainstream economists have this theory of so-called "natural monopolies", whereby if a company manages to get far ahead in a capital intensive business with economies of scale, it creates a very difficult situation for competitors and allowing a long-term monopoly (which has bad effects on prices and quality). This theory is often used to justify government stepping in with anti-trust regulations, to "fix the market" and regulate the "unavoidable" monopoly (therefore actually sustains the monopoly). But as Thomas DiLorenzo explains in this presentation, another presentation, and paper, and history shows that such sustained natural monopolies do not exist in practice. All sustained monopolies to date can be traced back to some unfair advantage secured through government (diamonds, cable TV, phone service, railroads, ...). Also, he explains that the supposed problem of "excessive duplication" is also a consequence of a pre-existing public utility. Because of their lack of pricing, economic calculation is impossible so trade-off cannot be made on a rational basis. Even so, this can be mitigated with "competition for the field", whereby utility companies bid for a monopoly contract which is open on auction again every few years.

Government is voluntary, people can migrate

Let me stimulate your thinking on this problem:

• If the state is voluntary because you can move, then the mafia is voluntary too since you can change neighborhood or city.
• If the state is voluntary, then are there limits to the state?
• People don't choose where they are born.
• If the state is voluntary, like a club, then why is it monopolistic on a territory?

Government is needed to define the law

Here are some points to stimulate thought on this problem:

• languages (for the most part) emerge without centralized government definition
• governments are in a state of anarchy with regards to each other (no "super-government" defining international law)
• there are already multiple sets of law (from country to country, state to state, city to city), what is the optimal number and how would we know that number?

Government is needed to control and protect the national borders

Actually, the State provokes foreigners to want to retaliate against it for its acts of aggression (including propping up tyrannical regimes to serve as puppet governments that will do domestic politicians' bidding), and the citizens get caught in the crossfire as they are hit by terrorist attacks, taxed to pay for foreign wars, subjected to intrusive searches at airports, etc. We would do well to heed what Morris and Linda Tannehill wrote in The Market for Liberty:

Government can't defend its citizens, and it is foolish and sacri­ficial for the citizens to defend a coercive monopoly which not only enslaves them but makes a practice of provoking conflicts with other coercive monopolies-i.e., with other governments. In the matter of foreign aggression, government is far more of a liability than an asset, and people would be much better off with a free-market system of defense.