Improving Our Standard of Living (Wattpad Edition)

Chapter 44: Crypto-Libertarianism

Despite my criticisms of libertarianism, there's one variant that might theoretically be possible. I have my doubts, so take this chapter with a grain of salt.

As a reminder, libertarianism is the minimization of business regulations and income redistribution. It's basically, "Let me do whatever I want as long as I'm not hurting anybody. Also, permit me to come to any contractual agreement with anyone else, even arrangements that might be considered exploitative. Finally, don't take any of my income and give it to others."

Most libertarians still support barebones regulations and public services. For example, the police force, public roads, the military, and a judicial system. These things require a minimal tax rate at the very least. But for the most part, the focus of libertarianism is on having the fewest regulations and smallest amount of income redistribution practical.

I agree with the idea of keeping restrictions to a minimum and maximizing personal freedoms. But there needs to be some way to prevent inequality of income and power from getting out of hand. I have proposed that direct democracy combined with a basic income system are effective mechanisms for that.

Without checks in place, I have argued that traditional libertarianism isn't possible because it's like a game of Monopoly. Businesses compete, and some get richer than others. This trend continues until a handful of corporations possess a tremendous share of national income. They then use that wealth to influence the government in their favor. If the state is already barebones, then the oligarchs will simply strengthen it or buy a new one. Nobody will be able to stop them because the oligarchs have secured so much economic and political power. They are the "Monopoly players" that have "won the game." They are in a better position than anyone else to get what they want because they have more advantages than everyone else.

This is a natural consequence of competition absent mechanisms of redistribution. Play any competitive game and you will find that disparity widens. Someone or some group eventually dominates.

But that doesn't happen as long as there are mechanisms in place that prevent disparity from widening beyond a certain threshold.

Presumably, the free market itself is the system that would prevent ever-widening inequality in a libertarian economy. Supposedly, a few companies can't dominate the market because other competitors would find ways to stop them.

Maybe, though I'm skeptical. It's like saying that Monopoly—or any other simulation of pure competition—doesn't result in growing disparity because the other players will find ways of preventing it. But that never happens. Not unless you modify the rules and put in place a system that prevents inequality from growing beyond a specified threshold.

But maybe real life doesn't work that way. I'm willing to concede that, which is why I propose the following: Go ahead and remove most business regulations and permit free trade. See what happens. If the Gini coefficient (inequality) starts to go above 0.25 or 0.30, then we'll have our answer. Likely, inequity will worsen, and it will become apparent that redistribution is necessary for optimizing our standard of living. Even in the freest of markets.

What better way to rein in disparity than implementing an inequality-based tax system that funds a basic income? It's the least bureaucratic form of redistribution, and most of the population and its businesses aren't taxed. It provides opportunities to everyone, even the poorest demographic. It doesn't require much taxation because it's so efficient at achieving its objective. It goes well with capitalism.

But there might be an alternative. I've argued that libertarianism isn't sustainable because the "winners" use their wealth to control the government. Their puppet politicians grant them artificial advantages—things like subsidies, tax breaks, exclusive contracts, and tariffs on foreign competitors. The legislators ensure their funders remain dominant.