Left-libertarians differ from the (current) libertarian mainstream both in terms of what outcomes they regard as desirable, and in terms of what outcomes they think a freed market is likely to produce.

With regard to the latter issue, left-libertarians regard the current domination of the economic landscape by large hierarchical firms as the product not of free competition but of government intervention – including not only direct subsidies, grants of monopoly privilege, and barriers to entry, but also a regulatory framework that enables firms to socialize the scale costs associated with growth and the informational costs associated with hierarchy, while pocketing the benefits – and leaving employees and consumers with a straitened range of options. In the absence of government intervention, we maintain, firms could be expected to be smaller, flatter, and more numerous, with greater worker empowerment.

Thus we tend to wince when libertarians (or many of them, to varying degrees) rush to the defense of elite corporations and prevailing business models and practices as though these were free-market phenomena. First, we think this is factually inaccurate; and second, we think it’s strategically suicidal. Ordinary people generally know firsthand the petty tyranny and bureaucratic incompetence that all too often characterize the world of business; libertarians who try to glamorize that world as an arena of economic rationality and managerial heroism risk coming across as clueless at best, and shills for the ruling class at worse.

This is also why we tend to be less than enthusiastic about the word “capitalism” as the term for free-market society; as Friedrich Hayek notes, the term is “misleading,” since it “suggests a system which mainly benefits the capitalists,” whereas a genuine free market is “a system which imposes upon enterprise a discipline under which the managers chafe and which each endeavors to escape.” (Law, Legislation, and Liberty, vol.1, p. 62.)

But it is not only mainstream libertarians (and of course, to a far greater extent, conservatives) that tend to conflate the results of crony corporatism with those of free markets; such conflationism is all too common on the traditional left as well. The difference is that the evaluations are reversed; where the right-wing version of conflationism treats the virtues of free markets as reason to defend the fruits of corporatism , the left-wing version of conflationism treats the objectionable fruits of corporatism as reason to condemn free markets.

Central to both forms of conflationism is the myth that big business and big government are fundamentally at odds. As is often the case, the myth sustains itself by containing a kernel of truth; while big business and big government are partners, each serving to prop up the other, each side would like to be the dominant partner (as with church and state in the Middle Ages, or Dooku and Palpatine in the Star Wars prequels), so much – though not, I think, most – of the conflict between them is genuine. But we should not allow these squabbles between different wings of the ruling class, essentially over how to divide up the loot, to obscure the far greater extent to which the political elite and the corporate elite work together. Conservative politicians, largely agents of the corporate wing, wrap their policies in anti-big-government rhetoric, while liberal politicians, largely agents of the political wing, wrap their policies in anti-big-business rhetoric; the differences in policy often involve nudging the balance of power slightly in one direction or the other (will healthcare be mainly controlled by government directly, or instead by the private beneficiaries of government-granted privilege like insurance companies and the AMA?), but both wings systematically benefit from most of the policies propounded by each side. FDR’s presidency, for example, with its cartelizing policies, gave a massive boost to corporate power, while the three chief indices of state power – taxes, spending, and debt – all skyrocketed under Reagan’s presidency.

But conflationism isn’t just a mistake about the prevailing system; it’s also a means by which that system perpetuates itself. People who are attracted to the idea of free markets are hoodwinked by conflationism into supporting big business, and thus becoming foot soldiers of the corporate wing of the ruling class; people who are repelled by the reality of corporatism on the ground are hoodwinked into supporting big government, and thus becoming foot soldiers of the political wing of the ruling class. Thus, thanks to the pincer-movement of right-conflationism and left-conflationism, those who seek to oppose the prevailing system end up in the ranks of its supporters – and the possibility of a radical challenge to the system as a whole is rendered effectively invisible. This is how conflationism functions.

My talk of “functioning” is not meant to imply that conflationism is deliberately propagated in order to divert potential enemies of the system into the ranks of its supporters (though of course it sometimes is).

In a broader sense, whenever some feature A of a system B tends reliably to produce a certain result C, and A’s being such as to produce C helps to explain the existence and/or persistence of B, and thereby of A, then we may say that the function of A is to produce C. Thus the fact that thorns tend to protect roses from being eaten explains why roses, with their thorns, exist and persist. It’s in that sense that I say that the function of conflationism within the prevailing state/corporate system is to bewilder its foes into becoming supporters, and to render alternatives invisible. Conflationism is an instance of malign spontaneous order.

Philosopher of science Thomas Kuhn describes an intriguing experiment:

Bruner and Postman asked experimental subjects to identify on short and controlled exposure a series of playing cards. Many of the cards were normal, but some were made anomalous, e.g., a red six of spades and a black four of hearts. … For the normal cards these identifications were usually correct, but the anomalous cards were almost always identified, without apparent hesitation or puzzlement, as normal. The black four of hearts might, for example, be identified as the four of either spades or hearts. Without any awareness of trouble, it was immediately fitted to one of the conceptual categories prepared by prior experience. … With a further increase of exposure to the anomalous cards, subjects did begin to hesitate and to display awareness of anomaly. Exposed, for example to the red six of spades, some would say: That’s the six of spades, but there’s something wrong with it – the black has a red border. … A few subjects … were never able to make the requisite adjustment of their categories. (Structure of Scientific Revolutions, pp. 62-63)

In short, people tend to have not only difficulty with, but even aversion to, recognizing something that doesn’t fit their established categories. This creates a problem for libertarians generally; for many in the political mainstream, the first impulse is to assimilate libertarians to a more familiar “anti-government” category, namely conservatives. When, after longer exposure, mainstreamers realize that libertarians aren’t quite conservatives after all, then they begin to see libertarians as the equivalent of “black spades with red borders” – conventionally conservative on some issues, conventionally liberal on others, rather than representing a radical alternative to existing ideologies. (Libertarians’ use of the Nolan Chart as an outreach tool may contribute to this tendency.)

What holds true for libertarians generally, holds to a still greater extent in the case of left-libertarians. The prevalence of conflationism tends to reinforce the impression that anyone who attacks (what we consider) the fruits of corporatism must be anti-free-market, and that anyone who defends free markets must be undertaking a defense of (what we consider) the fruits of corporatism. Thus nonlibertarian leftists tend to see us as corporate apologists in leftist camouflage, while nonleftist libertarians tend to see us as commies in libertarian guise.

Even when mainstream libertarians acknowledge the existence (and badness) of corporatism,as most do, communication with left-libertarians still tends to come to grief. Left-libertarians are baffled when mainstream libertarians acknowledge cronyism in one breath, only to slide back in the next breath into treating criticisms of big business as criticisms of free markets. More mainstream libertarians, for their part, are baffled as to why left-libertarians keep raising the issue of corporatism when the mainstream libertarians have already acknowledged its existence and badness.

Kuhn is helpful here too:

Since remote antiquity most people have seen one or another heavy body swinging back and forth on a string or chain until it finally comes to rest. To the Aristotelians, who believed that a heavy body is moved by its own nature from a higher position to a state of natural rest at a lower one, the swinging body was simply falling with difficulty. Constrained by the chain, it could achieve rest at its low point only after a tortuous motion and a considerable time. Galileo, on the other hand, looking at the swinging body, saw a pendulum, a body that almost succeeded in repeating the same motion over and over again ad infinitum. … [W]hen Aristotle and Galileo looked at swinging stones, the first saw constrained fall, the second a pendulum …. (Ibid., pp. 118-121)

Aristotle and Galileo were observing the same two facts: the stone keeps swinging back and forth for a while, and then it eventually hangs straight down. But for Galileo the swinging was essential and the eventual cessation accidental, a “friction” phenomenon; whereas for Aristotle, progress toward a state of rest was, and the sideways perturbations accidental.

Likewise, for those operating within a conceptual framework that sees conservative opposition to big government and liberal opposition to big business as essential and deviations from these norms as accidental, evidence that conservative policies promote big government or that liberal policies promote big business will be dismissed as inessential or anomalous or an excusable. (See, for example, this video in which Obama supporters condemn right-wing-sounding policies when they think they’re Romney’s, but either excuse them or go into denial when told that the policies are actually Obama’s.)

Similarly, for many mainstream libertarians, free exchange is what essentially characterizes the existing economy, while the corporatist policies are so much friction; and just as there’s no need for constant references to friction when talking about how a mechanism works, such mainstream libertarians don’t constantly bring up corporatism when discussing the working of the existing economy. For left-libertarians, by contrast, corporatism is a far more central feature of the existing economy, and leaving it out radically distorts our understanding. In such cases left-libertarians and more conventional libertarians are arguing from opposite sides of a Gestalt shift, where what looks essential to one side looks accidental to the other.

I don’t mean to suggest that these disputes are rationally irresoluble, however. In the playing-card experiments, subjects did eventually come to see the suits correctly after sufficiently long exposure. And sufficient exposure to the evidence marshaled by left-libertarians can prompt the relevant Gestalt shift, as indeed it frequently does; most left-libertarians once started out either less leftist or less libertarian or both. But the prevailing conceptual framework, through which so many (both libertarian and not) look at the economy without seeing what we see, is, I think, no accident; it’s part of the means by which the big-government/big-business partnership maintains itself.