A Challenge For a Libertarian Democrat

Kos is rehashing his "libertarian democrat" nonsense over at Cato's Unbound. The nonsense is not the idea that libertarians and democrats have something, possibly even core beliefs, in common. The nonsense is in stuff like this:

The fundamental reason that "libertarian" has become "libertarian democrat" is that corporations are becoming more powerful than governments. This fundamental fact has created a union between those with libertarian tendencies and those with those who believed all along that government can be a force for good.

...

...[D]efense contractors now have greater say in what weapons systems get built (via their lobbyists, blackmailing elected officials by claiming that jobs will be lost in their states and districts if weapons system X gets axed). The energy industry dominates the executive branch and has reaped record windfall profits. Our public debt is now held increasingly by private hedge funds. Corporations foul our air and water. They plunder our treasury.

(ed. the first paragraph is quoted by Kos, but he agrees and promotes this view; the second is from Kos himself.)

The most intellectually honest people, when defending a position, will respond to the best arguments an opponent has to offer. Kos has not done this - the common, and very persuasive (in my opinion), libertarian response is:

Government is the enabler, empowering corporations to step on individuals and small businesses through both regulations and subsidies. It’s only by restraining government that corporations can be held in check...

or:

Corporations are dangerous only because of myriad federal laws and spending programs that create the trough at which they feed and empower them to cause mischief.

or:

If the government could not make rules defining how the marketplace works, then there would be no power to buy and influence.

or:

[B]ut the traditional (and accurate) libertarian solution is that you vote for people who will actually take power away from government. Without government power, there is less reason for corporations to spend money influencing . . . nothing.

You can look up every single libertarian blog that responded to Kos' post, and you'll find some version of this reply. Call is doctrinaire, call it cliche, but don't call it wrong unless your willing to rebut the argument. This is something that a serious thinker (something Kos most surely is not) would have anticipated and had a preemptive response. It's possible that one of Cato's responding authors will bring this up, and Kos will address it then. But, I don't care, because he will not persuade me. I'd rather someone else with a chance of persuading me take up the cause.

So I issue a challenge. Someone, preferably of the left-leaning variety (but does not have to be), address this libertarian argument, explaining why it is either wrong or unpersuasive. Persuade me that corporate (coercive) power, to the extent that it exists, does not rest on governmental power at its foundation. I've never really seen anyone try, though that certainly could be my own fault for not having seen it. The most promising candidate in the comments (or in email) will be awarded a guest post to expound on this issue, along with a used (old but good condition) copy of The Machinery of Freedom.

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