A Left-Rothbardian Approach To "Privatization"

What exactly does it mean to "privatize" a service or industry? As I have argued before, there is a lot of confusion over the precise meaning of the terms "public" and "private" to begin with. The fact that state-controled property is called "public" is misleading because it obviously is not actually controled by the public in any real sense. The public bears the costs for its maintance, but they do not actually have any control over it in a way that a real owner would. The public is of course nothing but a term representing the accumulation of private individuals. Fundamentally, the purpose of "privatization" is to transfer ownership or control over a given piece of property or service from the state to private individuals.

The question inevitably arises over how exactly to go about doing this. The typical proposal for privatization is more or less to sell it to the highest bidder, which predictably is going to be a large corporation, probably one that already is in bed with the state to begin with. From a libertarian perspective, this is problematic for a number of reasons. First and foremost, the state is not a legitimate owner of the property to begin with, so how can it sell "its" property? The state, at least by Rothbardian standards of property ownership, is a criminal organization because state controlled property is stolen property. Proposing that the state sell off the property it controls would be no different than proposing that a thief sell off the property that they stole. But this would be to propose that the thief deserves compensation rather than their victims. To ignore this analogy would be to treat the state as if it were a legitimate private property owner, which it isn’t according to any sensible libertarian understanding of the institution.

Furthermore, the ability to buy property off of the state in this scenario would be quite an exclusive privilege only available to a select set of private interests that already are in patronage with the state. The masses at large do not have the ability to be in patronage with the state in this way, nor could they afford it even if they had such access to the institution. This could be seen as constituting a barrier to entry for most people, as only a handful of private elites are allowed to have access to such patronage. In selling an entire industry or swath of property to one particular private group or corporation, power has merely been transfered from one singular central institution to another. While this might not necessarily qualify as a monopoly under the Austrian definition of a monopoly, it most certainly is centralized and the institution or private group in question most certainly is privileged.

That wild eyed communist Murray Rothbard once suggested a very radical alternative to this method. While Rothbard grew more conservative as he aged, in my view he was in his prime in the late 60’s and early 70’s. It is well known that he was more closely allied with the libertarian "left" during this period. It is also well known that he later abandoned this alliance due to the increasingly irrationalist tendencies in organizations such as Students For A Democratic Society. Nonetheless, the position he advocated at the time amounts to the idea that state controlled property and state run services are homesteadable as if they currently have no legitimate owner. In particular, Rothbard outlined this position in a 1969 issue of "The Libertarian Forum" titled "Confiscation and the Homestead Principle". In the article, Rothbard states the following:

"Let us now apply our libertarian theory of property to the case of property in the hands of, or derived from, the State apparatus. The libertarian sees the State as a giant gang of organized criminals, who live off the theft called "taxation" and use the proceeds to kill, enslave, and generally push people around. Therefore, any property in the hands of the State is in the hands of thieves, and should be liberated as quickly as possible. Any person or group who liberates such property, who confiscates or appropriates it from the State, is performing a virtuous act and a signal service to the cause of liberty. In the case of the State, furthermore, the victim is not readily identifiable as B, the horse-owner. All taxpayers, all draftees, all victims of the State have been mulcted. How to go about returning all this property to the taxpayers? What proportions should be used in this terrific tangle of robbery and injustice that we have all suffered at the hands of the State? Often, the most practical method of de-statizing is simply to grant the moral right of ownership on the person or group who seizes the property from the State. Of this group, the most morally deserving are the ones who are already using the property but who have no moral complicity in the State’s act of aggression. These people then become the homesteaders of the stolen property and hence the rightful owners."

It is no wonder why he was red baited by conservatives. Rothbard goes on to illustrate an example in the case of state run universities:

"Take, for example, the State universities. This is property built on funds stolen from the taxpayers. Since the State has not found or put into effect a way of returning ownership of this property to the taxpaying public, the proper owners of this university are the "homesteaders", those who have already been using and therefore "mixing their labor" with the facilities. The prime consideration is to deprive the thief, in this case the State, as quickly as possible of the ownership and control of its ill-gotten gains, to return the property to the innocent, private sector. This means student and/or faculty ownership of the universities. As between the two groups, the students have a prior claim, for the students have been paying at least some amount to support the university whereas the faculty suffer from the moral taint of living off State funds and thereby becoming to some extent a part of the State apparatus."

In his comment that the state has not found or put into effect a way of returning ownersip of this property to the taxpayers, Rothbard briefly touches on an interesting practical problem. While we have clearly identified some problems with treating the state as if it were the legitimate private property of those who make it up, one could also put foreward the notion that the state is the common property of the tax-payers. But while the taxpayers have clearly been stolen from, there is no sensible way to proportionally redistribute this property back to them, especially considering that it has been redistributed in an endless web so many times over and over such a long period of time that original ownership would be virtually impossible to precisely identify. If anything, the attempt to redistribute in this way would probably end up being a great big welfare scheme, and in practise certain special interests would win out over others.

So we return to the glaring fact that there currently is no discernable just owner of the property. The state obviously must be ruled out as being a just owner because it constitutes nothing more than a band of criminals who stole it to begin with. And while the hapless tax-payers were the original just owners, it is practically impossible to reallocate it back to them in proportion to what was originally stolen from them. So if the state can neither be treated as if it were the private property of its members or as if it were the common property of the tax-payer, it would seem that the only logical option left is to treat it as currently having no legitimate owner and being open to appropriation by either those non-criminals who exercise their labor over it or the first people to appropriate it for themselves.

This has rather profound implications relating to the question of how to transition to a stateless society. At least for the market anarchist, the point is to "privatize" literally everything that the state controls, from the mundane to the fundamentals of the provision of defense and arbitration. But instead of the idea of the state "selling" itself to the highest bidder or a singular private entity, which would seem to be a potential recipe for disaster if not the formation of another state, the idea should be to effectively "homestead the state". This would obviously include government claimed land, and of course the state is defined by its territorial dominion. The portions that are currently entirely unused or vacant would either remain that way or start to be homesteaded by original appropriators, and the portions that are directly controled by the state would be appropriated by those non-criminals who labor upon it and the first users. The state would essentially be absorbed by the economic organism.

Published Fri, Apr 4 2008 1:29 PM by Brainpolice


# A Left-Rothbardian Approach To "Privatization" - PoliticalGroove Forums said on 05 April, 2008 05:52 AM

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# Jason Stumpner said on 06 April, 2008 10:18 AM

The ownership of the econonomy by the state is refered to as "state capitalism", because the workers themselves do not control it directly. State capitalism is no better than corporate capitalism. I agree with left-Rothbardianism, in this regard.

# Brainpolice said on 06 April, 2008 10:47 AM

Rothbard did make a lot of use of that term. Whatever label one wishes to use for it, it's fundamentally opposed to laissez-faire.

# ALLOLUSLADS said on 02 July, 2008 10:06 PM

superb(special) locality. So to  out!

# heuristic said on 12 December, 2008 02:03 PM

Sigh, will you commies EVER stop hijacking respectable labels and perverting them to mean their opposite? So, you stole "liberal" and more recently are trying to steal "libertarian." Now you want to steal "Rothbardian," so that twenty years from now it will mean just another jack-booting thug.

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