Thomas Knapp re Hoppe and Carson

by Thomas Knapp

I’ve never been very enamored of Hoppe, but that piece not only offers a pretty good summation of “class struggle” but also a pretty good explanation of why I disagree with Kevin on the fate of wage labor in a free market.

Vis a vis libertarianism, “class struggle” is and always has been an element that libertarians consider important, regardless of school. Comte and Dunoyer described the “productive class” versus the “political class,” and that continues to be the distinction that libertarians make (Marx forked the class distinction, erroneously in my view, into “proletariat” versus “bourgeois,” and his analysis was so faulty it had to be continuously re-forked, e.g. “lumpenproletariat” vs. “industrial proletariat” and so forth).

The difference between “right libertarians” and “left libertarians” is their analysis of what kinds of actors belong to which class, “productive” or “political.” At both ends of the libertarian right/left spectrum, the analysis tends to admit of mixed claims. Even right libertarians will generally admit to the existence of “crony capitalism,” while holding that most of the employing class is part of the productive class. And left libertarians support markets (productive class activity) even though we hold that existing markets are highly distorted by political class affiliations of the employing class and the attendant state subsidies/privileges.

With respect to wage labor and “exploitation”:

Hoppe explains that latter in terms of time preferences — the “capitalist” works on a longer time horizon for greater rewards, the “worker” accepts discounted rewards in order to get them on a shorter time horizon. The only thing I’d add to that is that wage labor shifts RISK as well. The “capitalist” may make bank or go bankrupt over the long term; the wage laborer makes small bank in the short term, so even if the company goes tits up, he’s already reaped real rewards.

The only real disagreement I have with Hoppe is on whether or not wage labor is “exploitative.” Of course it is — in BOTH directions. The employer exploits the worker for profit, and vice versa. And there’s nothing at all wrong with that.

Carson’s view is that in actually existing capitalism’s wage labor milieu, a political employing class uses state power to extract a greater discount from a productive working class than it could extract in a free market, in various ways, including using the state to bar competition and steal property so that some workers are de facto forced into wage labor versus self-employment. I agree. But I think he over-estimates how many people would give up lower risk and short term discounted rewards in favor of higher risk and long term greater rewards.

I think one precursor cause of Kevin’s position versus mine is that he subscribes to a Labor Theory of Value, and I don’t.

6 responses to “Thomas Knapp re Hoppe and Carson

  1. “The only real disagreement I have with Hoppe is on whether or not wage labor is “exploitative.” Of course it is — in BOTH directions. The employer exploits the worker for profit, and vice versa. And there’s nothing at all wrong with that.”

    I’ve been in business all my life, and one maxim has always guided me; that the essence of any business transaction is that it must benefit both parties. That of course includes the buying or selling of labour. I don’t get this ‘exploitation’ stuff. As soon as the contract ceases to be beneficial to one party, they can terminate it. If I felt I was being exploited I would quit – simple as that.

  2. Hugo-

    It all depends on what one means by “exploitation”. It’s one of those slippery words that has different meanings in different context that overlap, one of which has a moral implication and the other doesn’t. The word “use” (a synonym) is similar, and perhaps clearer.

    To “use” something or someone is not necessarily bad, but “to be used” does have a bad implication. Let’s say I own a building firm and you’re a carpenter, and you say, “do you need any carpenters right now?” and I say, “yes sure, I can use you”, that’s not got a negative moral implication. But if you imply later that there was an unfair contract or something, and say you were “used”, it’s now got a negative flavour to it.

    Likewise, “exploitation”. For Marxists and other leftists, it is always used with the same negative moral implication, whereas a libertarian might just use it as the neutral form.

  3. Hugo Miller

    Well, yes, but that’s clearly not what the writer meant by it.

  4. Libertarian “class conflict” is between tax payers and tax eaters. Not between “rich” and “poor”, “employers” and “employees”, “capital” and “labour”.

    Indeed it is the central insight of Classical Libertarianism and libertarianism that long run economic interests between “rich” and “poor”, “employers” and “employees” are THE SAME.

    Someone can not reject this central insight – and still (honestly) call themselves a libertarian.

    As for saying “it is exploitation – but there is nothing wrong with exploitation” well that does violence to the normal meaning of the word “exploitation” – but FAIR ENOUGH the meaning of words changes in different contexts.

    To say (in normal language) that voluntary wage employment is “exploitative” is false – it goes back to Rousseau (and others) long before Karl Marx with the idea that voluntarily working for another person was “slavery” but being under the control of collective was “freedom” (because one is part of the collective), it is just about the opposite of the truth.

    But, I repeat, if someone wants to use the word “exploitation” in a different way they can – words have different meanings in different contexts (especially with the English language).

  5. Hugo, it’s not that simple any more. Many generations ago one had the choice to fend for oneself and live off the land (or work for yourself – more on that below) if you didn’t like the wages being offered by prospective (or current) employers. Now one has to live off the state. And the state forces one to work or those living benefits are taken away.

    I happen to be fortunate enough to have skills and qualifications that allow me access to a wide range of jobs but I am in the tiny minority. The state has also made the idea of self employment for low skilled people almost impossible now through various schemes, ostensibly for the protection of consumers, but in reality for the benefit of big business. For example, if one wants to cook at home and sell to others one needs all kinds of hygiene certificates, if you want to look after kids then you need to go through all kinds of checks, and if you want to be a taxi driver, well, good luck with that.

  6. “the state makes people work for benefits” – not true in the United States where the Obama Administration has been handing them out to just about anybody who wants them (Welfare Reform has effectively been reversed).

    However, the effect of licensing (and other regulations) is real – and harmful.

    It is not normally pushed for by “capitalists” (although it can be) – it is normally pushed by groups who claim to represent “the workers”.

    Although these workers can be very wealthy – such as doctors and lawyers.

    I have no objection to a voluntary guild – “do not use a taxi driven by someone who is not one of a members – they will get you lost and……..”

    What I object to is the use of force – which is what a license (or other such regulation) represents.

    Libertarians do not tend to think highly of Mr Lincoln (and understandably as he was a Henry Clay Whig – although Jefferson Davis was even worse), but it is still better that he was able to go from rail hand to lawyer.

    In our society (where someone has to go to “Law School” and spend years “qualifying”) such a move would be impossible.

    In Lincoln’s day one could say “well I have not been to university, but I have read some law books and I am lot cheaper than that learned person down the road…..”.

    Then as one practiced one would improve (learn more about the law – and how to operate in a court room).

    There is also the modern obsession with “health and safety” – G. Kolko was wrong, big companies did not invent it and get the government involved (although they sometimes took advantage of the development – as a business person will try and take advantage of any event).

    Well meaning “reformers” pushed it – and pushed it very hard indeed.

    Good intentions – but bad results.

    As Milton Freidman made clear in the chapter “Who Protects the Consumer” in “Free To Choose” (1980).