Are Company Towns the Libertarian Ideal of Free Market?

Was just listening to a podcast on the uprising of coal miners who basically fought a civil war to be allowed to unionize around the turn of the 20th century. This got me to thinking: You work for the company, live in their housing (with no rights to proper evictions or anything), go to their schools, shop in their stores (with their own non-US-tender money), and spend your money wherever else the company decides to build for you in your isolated town.

To me, this is the capitalist free market run amok. To some, this is the ideal? Or am I misunderstanding Libertarianism?

An economics textbook definition of a free market:

  1. Large number of buyers.
  2. Large number of sellers.
  3. Few or no barriers to new buyers or sellers wanting to enter the market.

A company town holds monopolies on jobs, housing, and most commerce. It is about as un-free a market as you can get. Definitely not Libertarian.

I don’t know if you’re misunderstanding Libertarianism. But you appear to be misunderstanding what a free market is.

In a “Libertarian Paradise” company towns would either be forced to give excessively high wages/living standards to compete with other more conventional companies or would just straight go out of business due to noncompetitiveness. There’s a reason why company towns had to basically do everything they could to force workers to stay there.

In a “Libertarian Paradise” what stops a company from buying or forcing out the competition?

Nothing. That’s the flaw appeal of Libertarianism.

(I think this would get more traction in Great Debates rather than this forum, FWIW.)

Technically, it holds a monopsony on jobs: One buyer for however many sellers. That is, the company which owns the town hires everyone or effectively everyone, and you can’t get a job anywhere else in town. This interacted with old-fashioned vagrancy laws: If the company fired you, you were all of a sudden in town with no visible means of support, and thus a vagrant, and thus breaking the law. Libertarians would be opposed to vagrancy laws, but they’d be in favor of the whole town being private property and the owner having broad rights to force you out for trespassing. No real difference.

Anyway, “a monopoly on jobs” is the definition of what a successful union has: To hire anyone in this field, you have to deal with the union, because all workers in this field are organized in a union. It’s a powerful counterbalance to a monopsony on jobs, and Libertarians aren’t opposed to unions, but they’re opposed to the more violent mechanisms unions use to “discourage” people outside the union trying to earn a living, and they’re opposed to government-mandated unions.

Companies that won’t sell and can’t be forced out. Libertarians are against the initiation of force or fraud, which is laughably simplistic as a guiding philosophy but, in this case, does enable them to be against the old skull-cracker force as a means to clear out the market in a philosophically consistent fashion. This doesn’t enable them to be against monopolies, or monopsonies, but they insist as a matter of dogma that such things cannot arise without government intervention, and in a Libertarian state, the government would not so intervene.

The last time I worked with people, dogma was a thing of convenience, twisted beyond recognition when greed reared its ugly head. This “Libertarian Paradise” is going to consist of people, right?

And this is why I don’t believe in any of the Big Idea political theories.

Company towns are an obvious consequence of Libertarian ideas put into practice - at least the most common set of libertarian ideas, exactly what a ‘libertarian’ is changes from discussion to discussion. Unfettered free market action, unhindered property rights, and in many cases ‘self ownership’ (which in practice means 'no protection against open-ended exploitive contracts) are core to libertarians beliefs, and are exactly the sort of thing that led to people being trapped in ‘company towns’ in the past. The fact that libertarians will often talk glowingly about how free people were in the 1800s vs today is pretty telling.

It actually doesn’t, because it’s pretty easy to come up with initiations of force and fraud that libertarians are OK with. For example, while you can’t just ‘send in skull crackers’, you can buy or contract with local road owners (libertarians love privately owned infrastructure), transportation companies, and suppliers to cut off their access to any kind of food, goods, or raw materials. Once they try to trespass to smuggle some in, you can break out the ol’ skull crackers since they’re now ‘initiating force’ in libertarian terms.

Company Towns are a consequence of Libertarianism because Libertarianism is filled with consequences, unintended or otherwise, that manifest themselves because people are greedy and racist and have proven time and time again that if the society we have approximates survival of the fittest that means by definition that those less fit have to die.


Libertarianism can be reduced to the following simple soundbite: In a Libertarian world you get exactly as much freedom as you have the power to demand coerce from everyone else around you.

Somalian warlordism is the end state. Doctrinally speaking, it IS a Llibertarian Paradise.