October 12, 2011

The Eminently Real Free Market (XLI): Sketchy Stories (29): Railroading the Free Market

Mr. Ferrara’s brief eighth historical “sketch”
8. The government-subsidized transportation network (27)
is surreal in its virtual repetition of Murray Rothbard’s case against government subsidies to corporations without "connecting to the dots" for the reader who wants to know how this undermines the Austro-libertarian defense of the free market. One would think it tends to exonerate Austro-libertarians of the Carsonian charge of vulgarity.
When given the opportunity, no Austro-libertarian fails to condemn such subsidies on the explicitly Rothbardian grounds Mr. Ferrara adduces. He then delivers this revelation:
Without government-subsidized transportation systems, the modern “free” market could never have developed as it did nor continue to function as it does. (27)
And Rothbardians, those “vulgar libertarians” who have created almost a cottage-industry of historical revisionism regarding the career of Lincoln the Corporate Railroad Lawyer, join Mr. Ferrara in condemning anything that interferes with free markets.
What we wait in vain for Mr. Ferrara to acknowledge, however, is the significance of the reality of persons who generally seek mutually agreeable terms of trade even if they also irrationally pursue opportunities to cheat and plunder each other. We acknowledge both sets of facts, while affirming the eminent reality of free markets, a reality that asserts itself through the major and minor distortions, betrayals, and perversions committed by every kind of market player, rich and not-so-rich.* The freedom is exercised in spite of the subsidies.
Mr. Ferrara doesn’t need more than these three paragraphs, however, to display once again his already well-documented penchant for misdirection:
Even Rothbard notes that the railroad companies “received vast subsidies of land from the government: not only rights-of-way for their roads, but fifteen-mile tracts on either side of the line.” Through federal, state and local government land grants and outright land seizures by eminent domain as authorized by the “takings clause” of the Fifth Amendment, tort law exemptions that insulated railroads from damages liability, the issuance of government railway bonds, the use of tax dollars to construct and  maintain interstate highways, and numerous other government favors, it is the State—not the “free” market—that has “built an artificial ecosystem to which large-scale, mass-production industry was best ‘adapted’” while small local firms were fatally disadvantaged by new, government-subsidized economies of scale.
This was only part of the process by which “the growth of big government continued to parallel that of big business, introducing newer and larger-scale forms of political intervention . . . to insulate the giant corporation from the market forces that would otherwise have destroyed it.”
To his credit, Mr. Ferrara quotes approvingly and accurately from Murray Rothbard’s Power and Market—perhaps the most hardcore anarchocapitalist economics textbook ever written—but then unfortunately creates the impression that his next two quotes are from the same source. In fact they are from The Homebrew Industrial Revolution by Carson the Accuser, a fact discovered only in the reference notes.** Rothbard's position on large-scale or small-scale industry is not quoted. We cannot recall where he has ever written on it. That aside, why would Mr. Ferrara not make it clear that the "Pope" of the Vulgar Libertarian Church and Carson are on the same page when it comes to the free market and anti-market government subsidies? Would such forthrightness undermine his propagandistic purpose?

*  We acknowledge both sets, but do not equate them ontologically: distortions, perversions, and betrayals are dependent, even parasitic, upon what they distort, pervert, and betray. Wealth, to be looted, must first be produced. 

** Mr. Ferrara’s ellipsis obscures Mr. Carson’s phrase, “to address the corporate economy's increasing tendencies toward destabilization,” which omission suggests that perhaps even Mr. Ferrara is uncertain about whether there is such a thing as a “corporate economy.” There is certainly such a thing as an economy progressively destabilized by governmental interference.