Ron Paul’s 19th Century Fantasy

I was just listening to a speech Ron Paul gave at a Tea Party convention. Some commenters noted it was the first full Ron Paul speech they’d seen from a major news source. Guess what the source is? RT America which is a Russian network that is partly financed by the Russian government.

It’s rather ironic because Americans like to think of themselves as being independent-minded, but you have to turn to a Russian network to get a diversity of alternative American voices. RT America has as guests such people as Thom Hartmann (originally from Air America radio), Cenk Uygur (started the most successful internet news show), and Alex Jones (of conspiracy theorist fame).

I like Ron Paul if only for his sincerity which is a rare attribute for a professional politician. Also, he is far from being stupid… but… His overall repetitive message of big government being the problem comes off as simplistically naive. No one could make such an argument if they knew history and were able to see outside of their own ideological reality tunnel.

I don’t blame Ron Paul per se. He is a businessman and so sees everything through the model of business. His idol is the free market. He honestly believes in it.

People like Ron Paul seem to argue that a free market would solve any problem. The simplest criticism is that a free market has never existed. There are always various people and groups controlling markets. The fundamental concept behind the free market argument is that businessmen have practical knowledge and so are economically smarter than politicians and regulators, smarter than academic professors and researchers. It is claimed that anyone other than businessmen will just mess up everything.

The context of this argument is the idiosyncratic history of America. The US early on was fairly isolated from other powerful countries and many of the communities on the continent were isolated by vast land, but it’s obvious the country wouldn’t remain that way. They didn’t need much of a military or navy. The powerful countries were busy fighting each other. The only reason America won its independence was because Britain was busy elsewhere. The reason the US didn’t need a strong navy was because the French navy defended the waters used by American trade ships. The American sense of exceptionalism arose from this isolation because there was no powerful countries nearby who either were able or willing to threaten us. All the wars we fought early on were minor and easily won.

So, unlike other countries, US markets developed with little regulation. The Boston Tea Party was partly motivated by fighting the collusion between big government and big business. The Founding Fathers intentionally wanted a disconnection between businesses and state just as they wanted between church and state. As far as I know, this was the first large-scale experiment ever to try to develop a free market. This was possible because America as a country grew as industrialization was beginning. The hope was that free markets would regulate themselves through competition and the innovativeness of early industrialization made people optimistic, but this experiment was largely a failure during the Gilded Age… or at least a failure in terms of a democratic society, especially as understood today.

Before the Progressive Era regulation, big business was powerful which led it to be oppressive and sometimes outright violent. They didn’t call them Robber Barons for nothing. Companies back then didn’t have to deal with government interference. There was no regulation and no safety inspections. Some companies even owned entire towns which they ran like anarcho-capitalist fiefdoms. They owned the stores, the hospitals, the schools, the housing. They owned everything. And, of course, workers had very little control. These company towns was nearly indentured servitude because workers could never make enough money to ever save and cost of everything was high.

Ok, but what about vertical oligopolies and monopolies, as MettaliarYanto says in his response? Also, what prevents a “monopoly of force in a given area” your definition of the state?

“[I]f one starts a private town, on land whose acquisition did not and does not violate the Lockean proviso [of non-aggression], persons who chose to move there or later remain there would have no right to a say in how the town was run, unless it was granted to them by the decision procedures for the town which the owner had established.” [Robert Nozick, Anarchy, State and Utopia, p. 270] Is that not such a monopoly, i.e. state, if private?
Is that not such a monopoly, i.e. state, if private? Contracts that employees signed could have provisions forbidding strikes, organizing, etc., agreeing to pay for police, courts, doctors, stores and militaries hired by the employer.
Company towns had every feature which anarcho-capitalists propose, private police, courts, military, etc. Company rules were law. Buying at the company store was required by their contracts. If they sturck or formed a union, they were fired and evicted instantly. The contracts were entered voluntarily, in your sense. Since rights can be waived, exactly what stops this? The British East India Co. was its own state, ruling for centuries. Same with King Leopold’s Congo, run by his corporation.
“Each mining camp was a feudal dominion, with the company acting as lord and master. Every camp had a marshal, a law enforcement officer paid by the company. The ‘laws’ were the company’s rules. Curfews were imposed, ‘suspicious’ strangers were not allowed to visit the homes, the company store had a monopoly on goods sold in the camp.
The doctor was a company doctor, the schoolteachers hired by the company . . . Political power in Colorado rested in the hands of those who held economic power. This meant that the authority of Colorado Fuel & Iron and other mine operators was virtually supreme . . . Company officials were appointed as election judges. Company-dominated coroners and judges prevented injured employees from collecting damages.” [The Colorado Coal Strike, 1913-14, pp. 9-11]

Working conditions were unhealthy and dangerous. It was common for workers to be become sick, to be maimed or killed. If their health became bad enough or they were maimed badly enough, the person lost their job and probably wouldn’t be able to find another. There was no unemployment or disability pay. If the person died, their family lost it’s main source of income and kids would grow up without a parent. Also, many kids went to work early on and so didn’t get education. Because kids were small, they were used in mines. Because kids were cheap labor, they were used in factories. Many kids also were maimed and killed.

Work was hard and brutal. People were forced to work long hours without breaks, without overtime pay, and without any days off. People were forced to take any work no matter how dangerous because there was no welfare. If you lost your job, you became homeless and possibly starved to death. There were more people looking for work than there were jobs. Life was cheap. Basically, businesses had the upperhand. If you were fired for no reason or were cheated out of pay, you had no recourse. There was practically no regulation and no worker protection. There wasn’t yet any established and powerful unions to represent workers. When workers organized, they were fired and blacklisted. When workers attempted to form unions, union leaders were threatened and killed. When workers protested, private police or goons were used to terrorize and brutalize workers.

Despite all of this, so many people were poor and desperate that they confronted this private power even when it meant mass slaughter. Most of these working class people didn’t have guns or any kind of weapons. These people were so poor they owned very little. All they had was their own life to put on the line.

There was no legal guarantee of workers rights. The government mostly left companies to sort out their own problems. When the government did become involved, it was mostly local government and not the Federal government. In these cases, the government usually sided with the companies. But, in some cases, the Federal government intervened and enforced peace. Workers had more to fear from local governments because local politicians were more closely connected with local business owners.

For example:

This is similar to the civil rights movement. It was local (i.e., small) government that was acting oppressively and unconsitutionally. And it was the federal government that stepped in to help the average citizen. If businesses and local governments acted morally, the federal government would never have had to take drastic measures. The Federal government was responding to a real problem. People like Ron Paul idolize both free markets and small government, but it was the failure of both that caused people big government to defend their rights and lives.

The other thing these capitalist worshippers fail to understand is that, during the Wild West free market of early industrialization, many businessmen weren’t opposed to government just as long as it served their purposes. Bribery and corruption was common. The so-called free market was rife with cronyism. In the early 20th century, many businessmen supported and did business with fascist states around the world. There was even a planned fascist coup of the US which was linked to some businessmen.

If you want to look for the earliest defenders of consitutional rights and civil rights, you wouldn’t look to big businesses. There were, however, some collectivist communities like the Shakers that operated their own businesses and did so successfully. And there were the Wobblies which was one of the early workers movements. Neither of these was anti-capitalist by any means, but they were against the so-called free market that served corrupt power and oppressed the citizenry. Both accepted women and men, blacks and whites as equals in their organizations. The Shakers and Wobblies were some of the only places at the time where women and blacks could have their voices heard and could hold positions of power.

This was a time when blacks and women didn’t have the right to vote and couldn’t hold political office. Even poor white men had very little power. Industrialization was built on an ownership class with the entire working class treated like secondhand citizens. This was also the era of the genocide and ethnic cleansing targeted at the Native Americans. This is the era of the free market that so many worship as being as being an era of freedom, but the supposed freedom in reality only applied to rich white men. Yes, the rich white men were free from government imposition and free to force their will on everyone else.

The Pinkerton National Detective Agency, usually shortened to the Pinkertons, was a private U.S. security guard and detective agency established by Allan Pinkerton in 1850. Pinkerton became famous when he claimed to have foiled aplot to assassinate president-elect Abraham Lincoln, who later hired Pinkerton agents for his personal security during the Civil War.[citation needed] Pinkerton’s agents performed services ranging from security guarding to private military contracting work. At its height, the Pinkerton National Detective Agency employed more agents than there were members of the standing army of the United States of America, causing the state of Ohio to outlaw the agency due to fears it could be hired as a private army or militia.[citation needed] Pinkerton was the largest private law enforcement organization in the world at the height of its power.[1]

During the labor unrest of the late 19th century, businessmen hired Pinkerton agents to infiltrate unions, and as guards to keep strikers and suspected unionists out of factories. The best known such confrontation was the Homestead Strikeof 1892, in which Pinkerton agents were called in to enforce the strikebreaking measures of Henry Clay Frick, acting on behalf of Andrew Carnegie, who was abroad; the ensuing conflicts between Pinkerton agents and striking workers led to several deaths on both sides. The Pinkertons were also used as guards in coal, iron, and lumber disputes in IllinoisMichiganNew York, and Pennsylvania, as well as the Great Railroad Strike of 1877.

The Pinkertons were essentially a privatized force that combined detective agency, mercenaries, and the types of activities now associated with the FBI. Big business at it’s height was potentially more powerful than the Federal government.

During the Civil War, many blacks and poor whites knew a kind of power they never had before. Their was this whole new class of people who were well-trained and often well-armed. The Pinkertons couldn’t just pick on the poor and weak anymore. There is a reason that it was the outlaws and not the Pinkerton agents who were the cultural heroes back then. There was so much corruption and oppression that people were inspired by outlaws who stood up to power and fought back.

I’ve written about this topic a number of times:

In the most recent post, I expressed my frustration:

I feel frustrated when someone offers up something like the free market. The striving for freedom won’t save us. The problem is that we aren’t free. We are embedded and enmeshed in, intertwined with and integral to the entire world. We aren’t free of anything. The very idea of freedom is one of those many abstractions that keeps us trapped in the Iron Cage of rationality, the bureaucratization of humanity… costs and benefits, ideologies and systems, improvement and progress. It’s not that any given idea is wrong. Free markets, for example, sound wonderful. What frustrates me is the mindset that constantly creates more ideas to be forced on humanity, on reality, on all the world around us. We think that if we just find the right idea or principle, the right method or framework then the the problems will be solved… but the fundamental problems of civilization are never solved… or at least not so far.

Why I feel frustrated is because of people like Ron Paul. He isn’t a radical conspiracy theorist ranting about the government nor is an uneducated ideologue. Someone like him should know about the history of the US. So, why does he act like he is ignorant of this history or considers it so irrelevant that it’s not worth mentioning? I’m not arguing that there is no problems with the unions and regulations created during the Progressive Era, but it would be morally irresponsible to pretend that vast problems didn’t exist prior to the 20th century big government. Americans gave free markets a chance and free markets failed. Why would any rational person (besides rich white males) want to return to the social and economic conditions of the 19th century?

– – –

* As a note, I should point out that there never actually was a free market during the Gilded Age. For example, the railroads were built with government subsidies and land grants. Collusion between politicians and businessmen has always existed since the beginning of civilization. It happens on the local level as much as it happens on the national level.

Also, I’m not arguing that all 19th century businessmen were corrupt. But I am arguing that most if not all of the wealthiest tycoons became successful at least partly through less than moral tactics. There were other businessmen who fought against these Robber Barons, but they aren’t the names remembered because they aren’t the businessmen who formed the groundwork for today’s big business. Some would argue that the Robber Barons only became corrupt because they colluded with big government, but this certainly wasn’t progressive big government. The point is that corrupt businessmen will try to corrupt government, big or small.

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