Тег: inequality

Can a libertarian society withstand the pressure of hereditary inequality?

Imagine this: one person works hard their entire life, building a business from scratch—while another is born with a “silver spoon” in their mouth and receives millions without lifting a finger. A couple of generations pass—the grandchildren of magnates bask in luxury, while the descendants of laborers barely make ends meet. Unfair? Absolutely. And with each new generation, the gap only grows.

Of course, a person has the right and freedom to dispose of their labor and property. But it’s important to understand those who feel a boiling sense of injustice within. Imagine: you strive, you slog away, and next to you, some privileged kids live off the interest of their grandmother’s capital and look down on everyone else. It hurts, right? And although life never promised to be fair, you still want everyone to have a chance, not just those lucky enough to be born into a wealthy family. It is a serious question: how to ensure the stability of society amidst accumulating inequality—while remaining true to the principles of freedom?

To start, a bit of optimism. It is often said: “the first generation earns, the second squanders, the third begs.” Often, that is exactly what happens: the grandfather built a fortune, the son spent it all—and the grandson has nothing left to inherit. Wealth without effort slips through the fingers, so part of the accumulated inequality dissolves on its own over time.

But relying solely on this is cold comfort. Yes, many “golden children” sooner or later end up with nothing. But there are also families like the Rockefellers, who manage to stay at the top for many generations. They say their secret is simple: they force every new heir to work no less than the previous one. No free rides—if you want to use the family capital, multiply it. Such an approach helps preserve wealth for a long time.

So what should we, as a society, do? We want to preserve freedom and create more opportunities for everyone. How can this be achieved?

First, fair competition and equal rules for all. If a wealthy heir conducts business poorly, they should go bankrupt like anyone else—no special privileges or state monopolies. Without friendly officials, even a huge inheritance is not insured against bankruptcy. Conversely, a talented and hardworking person, even without connections, will be able to break through if obstacles are not placed in their way. Competition is the best equalizer when it is truly free.

Second, equality of opportunity. A talented child from a poor family should have the opportunity to study and realize their potential, rather than remaining poor forever simply because of the circumstances of their birth. Society, through private foundations, scholarships, and mentoring, can facilitate this. In the end, everyone wins: more talented and productive people will emerge. By the way, many wealthy people understand this and invest in education and startups—investing in the future.

Third, a culture of responsibility. Freedom goes hand in hand with responsibility. If you were born into wealth, it is not your achievement, but it is also no reason to rest on your laurels. Consider it an advance that must be justified. Many heirs do exactly that: instead of a life of leisure, they start their own business or engage in science—trying to leave their own mark.

Finally, social elevators—the opportunities to rise from the “bottom.” Fortunately, the free market regularly provides chances for the talented and energetic. An example is WhatsApp founder Jan Koum: he arrived in the States as a poor immigrant, and a couple of decades later sold his creation for billions. No titles or special connections were required—only an idea and perseverance. There are many such stories, and they are inspiring: even without any “silver spoon,” it is possible to make it in life.

It turns out that the recipe for stability under freedom is this: ensure that the “playing field” remains fair and open to all. Yes, some have a head start from the beginning of the game—wealthy parents did their part. But the game is not lost as long as others have the opportunity to make their move. The most dangerous thing is if the rules of the game begin to be written for the chosen few. This must not be allowed to happen!

Voluntarist, Bitarch

Critique of the Libertarian Movement from the Right

Instead of a regular question, I received a rather detailed discourse, apparently with a suggestion to comment on it in some way.

If you are truly a libertarian or an anarcho-capitalist, then you must abandon the progressive “Overton window,” after which anarcho-capitalism becomes feudalism, and you become a reactionary. If we truly had anarcho-capitalism, we would have the death penalty for most crimes typical of the lower class, as well as serfdom or slavery for vagrants and the able-bodied poor, the death penalty for everything, the abolition of voting, at least for the poor and the stupid, serfdom or some similar way to disable people who are not inclined to work.

Most “libertarians,” since libertarianism is close to being illegal, have abandoned libertarianism. Now it is a completely dead doctrine. The great flaw of progressive “libertarianism” is egalitarianism. People are not equal, groups are not equal, reproductive roles are not equal.

Higher people should rule lower people; otherwise, lower people will create problems for each other and for their betters. The best people need to be freer. Lower people cannot handle freedom; they need supervision, discipline, and control. Lower people should be significantly less free. In order for people to have a reason for savings and investments, those who save and invest must possess greater political power compared to those who do not. Children need fathers. For children to have fathers, fathers must have power over their families. For the economy to function, property must be secure. For property to be secure, those who have it must have political power over those who do not.

The Enemy

I would say that some of the theses in this pamphlet coincide with the theses of Moscow republicanism according to Belkovich: people are not equal, the best people should have political power, and so on. But here the position is presented even more exaggeratedly.

I cannot say that the described society is unviable. What is described here is a very ordinary urban aristocratic republic, which existed in various forms from antiquity to the modern era. Such a society is sufficiently stable and historically died, if not from external conquest, then from the degeneration of the aristocracy. What can be done; political power is a poisoned fruit—you may pluck it to preserve your property, but you quickly discover that power is perfectly suited for preventing your competitors from getting rich, and even better, for plundering those under your control. The aristocratic little world closes in on itself, and in the best case, after a few generations, it finds itself tedious to everyone and needed by no one.

Is it possible in the modern world to maintain a society culturally similar to the one described, but without political power? This seems doubtful to me. At the very least, families relying on the dominance of the father of the house are struggling to survive in a world where there are many well-paid labor vacancies for women. On the other hand, if no one has political power (that is, the right to seize someone else’s property under the pretext of implementing socially important projects), then property ends up being relatively secure, and that is exactly what you need.

And what about the numerous rabble—lazy, unable to handle responsibility, living for the day? Let them hang out. At the current level of labor productivity, they will be quite able to afford working to a minimum, without straining themselves much, and it will be enough for them to live. Why worry about these downshifters? They won’t be able to cheat anyone or overthrow anyone. Well, they’ll quietly die from an overdose at fifty—why should you care? For a person without savings, it won’t be such a bad way out.

In short, in order to recreate the society you dream of for yourselves, you no longer need to harshly pressure the mindless mass, and they won’t pressure you either. You can breathe a sigh of relief.

So why on earth do you need these guys as serfs?

A positive feedback loop breeding inequality. Terrifying.

I watched the conversation between Grigory Bazhenov and representatives of the European University on the topic of inequality.

I didn’t do this immediately after the video was released because the topic seemed boring and leftist to me; it is obvious that if inequality is caused by redistribution through plunder (for example, taxes) and coercion (for example, regulations), then one can oppose the consequence, but it would be more useful to eliminate the causes. And if inequality is caused by the fact that people voluntarily give more money to Alice than to Bob, then one can only be happy for Alice and reflect on whether something can be adopted from her practices so that we can get more too. But then I had a bit of free time, took a look, and didn’t regret it.

The part where it was listed that there is income inequality, wealth inequality, and inequality in the number of limbs was not very interesting. I was struck by one specific strong take that I would like to discuss—regarding inequality caused by the difference in time preference.

Its content is approximately as follows. If one economic agent has a lower time preference, and economic agents can lend to each other at interest, then, all other starting conditions being equal, in the long run, he will plunge all economic agents with a higher time preference into debt bondage, with the further prospect of starving to death. This is, obviously, a mathematical model; however, I immediately recalled historical precedents.

Ancient Athens was formed by a union of Ionian tribes settled in Attica, with an initially fairly high level of equality. Over time, however, the stratification between citizens increased, and some gradually fell into debt bondage to others. This led to civil unrest, and as a result of Solon’s reforms, all old debts were forcibly forgiven, land was redistributed, and debt slavery was prohibited. In other words, the market—due to the difference in time preference—led to extremely unpleasant consequences, which were then corrected by purely etatist methods.

The emancipation of the peasants under Alexander II in the Russian Empire provided roughly equal starting conditions for all members of any given peasant community. However, again, the difference in entrepreneurial abilities and time preference over half a century led to stratification from kulaks to hired laborers, with the latter losing their means of production and often finding themselves in credit bondage. Then there was a civil war, followed by a complete redistribution of property and the writing off of old debts.

The question is: what can free-market anarchism oppose this mechanism with under modern technological conditions? Because if we answer “nothing,” it will mean the unviability of the anarchic model—it will inevitably be replaced by something much more leftist, after which, at minimum, property will be redistributed and debts written off, and at maximum, successful entrepreneurs and their heirs will be hanged from lamp posts.

Let’s look at what mechanisms the free market provided to counteract the mentioned effect in the two previous examples.

Becoming landless, selling one’s household members and oneself into debt slavery was not the only possible development for a landowner with a higher time preference or someone less competitive for some other reason in the ancient polis. Furthermore, as such people accumulated, the polis established colonies. There, land-poor colonists received much larger plots than in their homeland, and with them, a new chance for prosperity. This extensive path to solving the problem of inequality led to the colonization of the entire Mediterranean by the Hellenes. Subsequently, a division of labor arose between the colonies and lively trade began. Now, instead of farming a small patch of land, our Athenian could engage in, for example, molding amphorae or sewing sails—this also gave him a new chance for prosperity.

Similarly, becoming a hired laborer was not the only option for an unlucky peasant in the Russian Empire either. He could become a colonist and move to Siberia, or move to the city and become a worker. Under the conditions of a freer market in the USA, urbanization absorbed a huge number of former farmers without any revolutions, and those who remained began to cultivate much larger areas using much more serious equipment, supplied to them thanks to the much higher-paid labor—compared to that of a hired hand—of their former poor neighbors.

So I believe that an anarchic society under a free market will be able to avoid the scenario embedded in the mathematical model with different time preferences but unchanging market conditions. If the emergence of new markets is not legally restricted, then those with a higher time preference will actually strive to take advantage of new opportunities and obtain windfall profits—while those with a lower preference will stay in a reliable but relatively low-margin business, and everyone will be relatively well off. The second factor weakening intertemporal inequality is personal freedom. You are not a member of a community. You are not the property of the head of the family, who can sell you into slavery to pay off a debt. You are self-owned; you have your own time preference, your own inclinations and talents. You won’t perish. In any case, you are not doomed to perish, and let the scary mathematical model not frighten you.