Some recent conversation on Kevin Carson’s “Free Market Anti-Capitalism” blog has focused on the notion of bargaining power, and the visceral reaction that talk about bargaining power seems to evoke among some libertarians. One commentator suggests that “[t]he inability to recognise bargaining power comes from a profound methodological individualism or atomism among many American style libertarians.”
Some libertarians of various stripes may be atomists. And, if they are, rescuing them from that dubious metaphysical position may be a worthwhile endeavor.
But I wonder whether “inability to recognize bargaining power” may also reflect another difficulty or family of difficulties.
I suspect that the primary underlying objection on the part of the libertarians who are uncomfortable with talk about bargaining power may not be that bargainers’ different positions don’t give them unequal influence over the outcome of their bargain. I’m not sure they’re—necessarily—denying this point. Rather, I suspect, their claim is often, instead, that, even when this is the case, the use of unequal bargaining power does not involve the use of physical force, and therefore doesn’t justify the legal system’s becoming involved in altering the outcome of the bargain. Because appeals to unequal bargaining power have lain at the roots of much modern labor legislation, such appeals raise the hackles of some libertarians, since they seem designed to pave the way for interference with contracts these libertarians regard as free because not grounded in the aggressive use of physical force.
There are multiple objections, I think, to this line of reasoning. I will attend only to two:
1. Someone could express concern about unequal bargaining power without being committed to any particular view regarding what would count as an appropriate response to a contract concluded on the basis of an unequal bargain. Someone could, that is, regard making a bargain the terms of which one is able to shape unfairly to one’s own advantage as wrong without taking any position one way or the other on what sort of response the wrongness of the bargain ought to trigger on the part of the legal system (whether in our world or in a stateless society).
The point is that claims about unequal bargaining power are claims about (potential) moral wrongs, not about remedies.
The difficulty in acknowledging the potential unfairness of a contract concluded on the basis of unequal bargaining power reflects the Remedial Fallacy to which too many libertarians seem to me to be prone. The proponent of the fallacy says something like: If the legal system can’t use force to remedy the supposed harm caused by this conduct, then there’s really nothing wrong with the conduct. The unavailability of a particular kind of remedy is taken, fallaciously, to imply the absence of a wrong in the first place.
In fact, of course, other legal options aside, there are multiple force-free options (which, BTW, could, though need not, be facilitated non-coercively by the legal system in a stateless society—the range of remedies needn’t be exhausted by forceful legal remedies and non-forceful non-legal remedies) that might be pursued in response to the abuse of bargaining power in a stateless society. These might include boycotts of various kinds, public shaming, non-appearance on endorsement lists published by anarchical Better Business Bureaus, etc. (It is also not clear to me why a non-state court system in an anarchic society—not, after all, backed up by the threat of state violence—couldn’t simply announce that it was not going to enforce contracts emerging from what it judged—in light of publicly specified criteria—to be unfair bargaining situations. No libertarian would presumably want to use force to compel such a court system to decide in certain ways.)
But the wrongfulness of an action is not determined by the kind of remedy available for it. To take an obvious example: does anyone imagine that people have stopped objecting to infidelity by their partners in those jurisdictions in which criminal and civil penalties for adultery aren’t available? If exploiting unequal bargaining power to one’s unfair advantage is wrong, it’s wrong quite apart from the question whether it can justly be remedied using forceful legal remedies. The concern about force here is a red herring.
2. It is also a mistake to suppose that unequal bargaining power, where it exists, is unrelated to the prior use of force in multiple ways. As Kevin Carson has emphasized—for instance, here and here—the background conditions for many, perhaps the vast majority of, economic transactions are shaped by centuries-old histories of dispossession and oppression. Even if an individual trader does not act unjustly in making choices within the constraints set by those histories, the existence of bargaining disparities can be seen as a pointer to background injustice. And, of course, the relationships may sometimes be much more intimate, as when wealthy landowners who are themselves responsible for (or in partnership with those responsible for) dispossessing peasants of whose circumstances they then take contractual advantage, or when employers opposing strikes choose, or threaten, to do so violently. Even people for whom force is seemingly the only visible factor ought to be able to acknowledge its significance here.