Money Matters

Economics, Banking, Finance, and Supply Chains

Was libertarianism really created by corporate special interests?

Libertarianism: An image of someone holding up a poster of Ronald Reagan with the quote "Man is not free unless government is limited".

I keep bumping into this idea online.

Here are four articles making this claim

What specific claims do they make?

We know what we know because of a congressional committee

The information was uncovered by a congressional committee named The House Select Committee on Lobbying Activities, also known as The Buchanan Committee, whose mandate was to investigate the extent to which lobbying influenced legislation.

This committee operated from 8/12/1949 to 1/3/1951.

Some of the findings of the committee were summarized in a book titled “The Lobbyists: The Art and Business of Influencing Lawmakers” by Karl Schriftgiesser.

A corporate think tank created libertarianism

Specifically, The Foundation for Economic Education was created in 1946 to promote the interests of big business. They still exist and are known as the FEE.

The FEE was founded by a longtime US Chamber of Commerce executive named Leonard Read and was initially funded by the largest corporations existing at that time: General Motors, Chrysler, Consolidated Edison, Du Point, Gulf Oil, US Steel, Montgomery Ward, Armour, and BF Goodrich.

The stated purpose of the FEE was:

“the preparation of pamphlets, booklets, and articles presenting one side of public issues”.

Something that in other contexts is sometimes called propaganda.

The FEE hired Milton Friedman to promote the real estate industry

They actually hired Milton Friedman and George J. Stigler who jointly published a pamphlet titled “Roofs or Ceilings?”, which you can find on the FEE website even now.

They did so at the request of Herbert Nelson, one of the highest-paid lobbyists in Washington at the time, who was then the Executive Vice President of the National Association of Real Estate Boards and at that time working to find justifications to the ending of rent control.

What makes this hiring of Friedman and Stigler look suspect is that the relationship between the National Association of Real Estate Boards and the FEE, and that Friedman and Stigler were paid by the FEE to publish pamphlets, was discovered during congressional hearings and that prior to those hearings there was no reason to think Friedman and Stigler had any motives for their work other than academic rigour.

The Buchanan Committee revealed to us this is not true.

In libertarian speak, does “freedom” mean corporate freedom?

One of the articles linked to above (This bastardised libertarianism makes ‘freedom’ an instrument of oppression) makes some interesting points.

Sometimes the freedoms of some conflict with the freedoms of others

The author uses the example of “your freedom to swing your fist stops where my nose begins”, but this concept holds true elsewhere.

Even in regards to the US constitution

  • Freedom of speech does not protect threatening to blow up airplanes.
  • Freedom to bear arms does not include the freedom to walk around downtown and randomly fire shots into the air.
  • Freedom from illegal search and seizure does not prevent a seach for “probable cause”.

As always, the devil is in the details.

What about economic freedoms?

In terms of economic freedoms, a seller of goods and services might seek freedom from “undue” competition, whereas the buyers of those goods and services might prefer more choices (i.e.: competition) than currently exits.

In the above example, what is seen as “undue” would determine whose freedoms take precedent.

Corporations, like people, are free to “petition” the government “for a redress of grievances”. This right, protected by the First Amendment of the US Constitution also provides the legal basis for lobbying.

And while lobbying does not necessarily mean legal bribery, in the US, corporate lobbying of federal and state lawmakers has become so.

How? By elevating the freedoms of big business over the freedoms of consumers. This is what these critics claim libertarianism was created for.

It was a bastardization of the concept of “freedom”, specifically designed to tilt our ideas of economic freedom to favour corporations.

Which, given the evidence uncovered by The Buchanan Committee during its very short existence, seems undeniably true.

Leave a Reply

Your email address will not be published.