Saturday, November 05, 2005

What's Wrong With Libertarianism

According to 'Radical Russ':
The more important point, however, is that the capitalist is the über-villain for communists, and a glorious hero for libertarians; that property is "theft" for the communists, and a "natural right" for libertarians. These dovetail a little too closely for coincidence. It's natural enough, when a basic element of society is attacked as an evil, for its defenders to counter-attack by elevating it into a principle....

...The methodology isn't much different either: oppose the obvious evils of the world with a fairy tale. The communist of 1910 couldn't point to a single real-world instance of his utopia; neither can the present-day libertarian. Yet they're unshakeable in their conviction that it can and must happen....

...If someone has an answer for everything, advocates changes which have never been tried, and presents dishonest evidence, he's a crackpot. If a man has no doubts, it's because his hypothesis is unfalsifiable.

As an addendum, Russ has posted a continuation of this essay: What's Wrong With Libertarianism, Part 2.


Blogger Management said...

What's wrong with libertarianism
"The perfect liberty they seek is the liberty of making slaves of other people." -- Abraham Lincoln

Apparently someone's curse worked: we live in interesting times, and among other consequences, for no good reason we have a surplus of libertarians. With this article I hope to help keep the demand low, or at least to explain to libertarian correspondents why they don't impress me with comments like "You sure love letting people steal your money!"
Good libertarians and the other kind

This article has been rewritten, for two reasons. First, the original article had sidebars to address common objections. From several people's reactions, it seems that they never read these. They're now incorporated into the text.

Second, and more importantly, many people who call themselves libertarians didn't recognize themselves in the description. There are libertarians and libertarians, and sometimes different camps despise each other-- or don't seem to be aware of each other.

If you--

* have never heard of (or don't think much of) Rothbard, Rockwell, Rand, and von Mises
* accept that the FDIC is a pretty good idea
* want a leaner, more efficient government, but don't dream of getting rid of it

...then this page isn't really addressed to you. You're probably more of what I'd call a small-government conservative; and if you voted against Bush, we can probably get along just fine.

On the other hand, you might want to stick around to see what your more fundamentalist colleagues are saying.
The Un-Communism

Libertarianism strikes me as if someone (let's call her "Ayn Rand") sat down to create the Un-Communism. Thus:

Communism Libertarianism
Property is theft Property is sacred
Totalitarianism Any government is bad
Capitalists are baby-eating villains Capitalists are noble Nietzchean heroes
Workers should rule Worker activism is evil
The poor are oppressed The poor are pampered good-for-nothings

Does this sound exaggerated? Let's listen to Murray Rothbard:

We contend here, however, that the model of government is akin, not to the business firm, but to the criminal organization, and indeed that the State is the organization of robbery systematized and writ large.

Or here's Lew Rockwell on Rothbard (emphasis mine):

He was also the architect of the body of thought known around the world as libertarianism. This radically anti-state political philosophy unites free-market economics, a no-exceptions attachment to private property rights, a profound concern for human liberty, and a love of peace, with the conclusion that society should be completely free to develop absent any interference from the state, which can and should be eliminated.

Thomas DiLorenzo on worker activism: "[L]abor unions [pursue] policies which impede the very institutions of capitalism that are the cause of their own prosperity." Or Ludwig von Mises: "What is today euphemistically called the right to strike is in fact the right of striking workers, by recourse to violence, to prevent people who want to work from working." (Employer violence is apparently acceptable.) The Libertarian Party platform explains that workers have no right to protest drug tests, and supports the return of child labor.

On Nietzsche, as one of my correspondents puts it, some libertarians love Nietzsche; others have read him. (Though I would respond that some people idolize executives; others have worked for them.) Nonetheless, I think the Nietzschean atmosphere of burning rejection of conventional morality, exaltation of the will to power, and scorn for womanish Christian compassion for the masses, is part of the roots of libertarianism. It's unmistakable in Ayn Rand.

The more important point, however, is that the capitalist is the über-villain for communists, and a glorious hero for libertarians; that property is "theft" for the communists, and a "natural right" for libertarians. These dovetail a little too closely for coincidence. It's natural enough, when a basic element of society is attacked as an evil, for its defenders to counter-attack by elevating it into a principle.

As we should have learned from the history of communism and fascism, however, contradiction is no guarantee of truth; it can lead one into an opposite error instead. And many who rejected communism nonetheless remained zealots. People who leave one ideological extreme usually end up at the other, either quickly (David Horowitz) or slowly (Mario Vargas Llosa). If you're the sort of person who likes absolutes, you want them even if all your other convictions change.

Who needs facts?

The methodology isn't much different either: oppose the obvious evils of the world with a fairy tale. The communist of 1910 couldn't point to a single real-world instance of his utopia; neither can the present-day libertarian. Yet they're unshakeable in their conviction that it can and must happen.

Academic libertarians love abstract, fact-free arguments-- often, justifications for why property is an absolute right. As a random example, from one James Craig Green:

This concept of property originated in some of those primitive tribes when individuals claimed possessions for themselves as against the collective ownership of their groups. Based on individual initiative, labor, and innovation, some were successful at establishing a separate, private ownership role for themselves. [...]

Examples of natural property in land and water resources have already been given, but deserve more detail. An illustration of how this would be accomplished is a farm with irrigation ditches to grow crops in dry western states. To appropriate unowned natural resources, a settler used his labor to clear the land and dug ditches to carry water from a river for irrigation. Crops were planted, buildings were constructed, and the property thus created was protected by the owner from aggression or the later claims of others. This process was a legitimate creation of property.

The first paragraph is pure fantasy, and is simply untrue as a portrait of "primitive tribes", which are generally extremely collectivist by American standards. The second sounds good precisely because it leaves out all the actual facts of American history: the settlers' land was not "unowned" but stolen from the Indians by state conquest (and much of it stolen from the Mexicans as well); the lands were granted to the settlers by government; the communities were linked to the national economy by railroads founded by government grant; the crops were adapted to local conditions by land grant colleges.

Thanks to my essay on taxes, I routinely get mail featuring impassioned harangues which never once mention a real-world fact-- or which simply make up the statistics they want.

This sort of balls-out aggressivity probably wins points at parties, where no one is going to take down an almanac and check their figures; but to me it's a cardinal sin. If someone has an answer for everything, advocates changes which have never been tried, and presents dishonest evidence, he's a crackpot. If a man has no doubts, it's because his hypothesis is unfalsifiable.

Distaste for facts isn't merely a habit of a few Internet cranks; it's actually libertarian doctrine, the foundation of the 'Austrian school'. Here's Ludwig von Mises in Epistemological Problems of Economics:

As there is no discernible regularity in the emergence and concatenation of ideas and judgments of value, and therefore also not in the succession and concatenation of human acts, the role that experience plays in the study of human action is radically different from that which it plays in the natural sciences. Experience of human action is history. Historical experience does not provide facts that could render in the construction of a theoretical science services that could be compared to those which laboratory experiments and observation render to physics. Historical events are always the joint effect of the cooperation of various factors and chains of causation. In matters of human action no experiments can be performed. History needs to be interpreted by theoretical insight gained previously from other sources.

The 'other sources' turn out to be armchair ruminations on how things must be. It's true enough that economics is not physics; but that's not warrant to turn our backs on the methods of science and return to scholastic speculation. Economics should always move in the direction of science, experiment, and falsifiability. If it were really true that it cannot, then no one, including the libertarians, would be entitled to strong belief in any economic program.
How to try new things

Some people aren't much bothered by libertarianism's lack of real-world success. After all, they argue, if no one tried anything new, nothing would ever change.

In fact, I'm all for experimentation; that's how we learn. Create a libertarian state. But run it as a proper experiment. Start small-scale. Establish exactly how your claims will be tested: per capita income? median income? life expectancy? property value? surveys on happiness? Set up a control: e.g. begin with two communities as close as we can get them in size, initial wealth, resources, and culture, one following liberalism, one following libertarianism. Abide by the results-- no changing the goalposts if the liberals happen to "win".

I'm even willing to look at partial tests. If an ideology is really better than others at producing general prosperity, then following it partially should produce partially better results. Jonathan Kwitny suggested comparing a partly socialist system (e.g. Tanzania) to a partly capitalist one (e.g. Kenya). (Kenya looked a lot better.) If the tests are partial, of course, we'll want more of them; but human experience is pretty broad.

It's the libertarians, not me, who stand in the way of such accountability. If I point out examples of nations partially following libertarian views-- we'll get to this below-- I'm told that they don't count: only Pure Real Libertarianism Of My Own Camp can be tested.

Again, all-or-nothing thinking generally goes with intellectual fraud. If a system is untestable, it's because its proponents fear testing. By contrast, I'm confident enough in liberal and scientific values that I'm happy to see even partial adoption. Even a little freedom is better than dictatorship. Even a little science is better than ideology.

An untested political system unfortunately has great rhetorical appeal. Since we can't see it in action, we can't point out its obvious faults, while the ideologue can be caustic about everything that has actually been tried, and which has inevitably fallen short of perfection. Perhaps that's why Dave Barry and Trey Parker are libertarians. But I'd rather vote for a politician who's shown that his programs work in the real world than for a humorist, however amusing.
My friend Franklin

At this point some libertarian readers are pumping their hands in the air like a piston, anxious to explain that their ideal isn't Rothbard or von Mises or Hayek, but the Founding Fathers.

Nice try. Everybody wants the Founders on their side; but it was a different country back then-- 95% agricultural, low density, highly homogenous, primitive in technology-- and modern libertarianism simply doesn't apply. (The OED's citations of the word for the time are all theological.)

All American political movements have their roots in the 1700s-- indeed, in the winning side, since Loyalist opinion essentially disappeared. We are all-- liberals, conservatives, libertarians-- against the Georgian monarchy and for the right to life, liberty, and the pursuit of happiness. You can certainly find places where one Founder or another rants against government; you can find other places where one Founder or another rants against rebellion, anarchy, and the opponents of federalism. Sometimes the same Founder can be quoted on both sides. They were a mixed bunch, and lived long enough lives to encounter different situations.

It cannot have escaped those who have attended with candor to the arguments employed against the extensive powers of the government, that the authors of them have very little considered how far these powers were necessary means of attaining a necessary end. --James Madison

Stable ownership is the gift of social law, and is given late in the progress of society. --Thomas Jefferson

All the Property that is necessary to a man is his natural Right, which none may justly deprive him of, but all Property superfluous to such Purposes is the property of the Public who, by their Laws have created it and who may, by other Laws dispose of it. --Benjamin Franklin

The Constitution is above all a definition of a strengthened government, and the Federalist Papers are an extended argument for it. The Founders negotiated a balance between a government that was arbitrary and coercive (their experience as British colonial subjects) and one that was powerless and divided (the failed Articles of Confederation).

The Founders didn't anticipate the New Deal-- there was no need for them to-- but they were as quick to resort to the resources of the state as any modern liberal. Ben Franklin, for instance, played the Pennsylvania legislature like a violin-- using it to fund a hospital he wanted to establish, for instance. Obviously he had no qualms about using state power to do good social works.

It's also worth pointing out that the Founders' words were nobler than their deeds. Most were quite comfortable with slave-owning, for instance. No one worried about women's consent to be governed. Washington's own administration made it a crime to criticize the government. And as Robert Allen Rutland reminds us,

For almost 150 years, in fact, the Bill of Rights was paid lip service in patriotic orations and ignored in the marketplace. It wasn't until after World War I that the Supreme Court began the process of giving real meaning to the Bill of Rights.

The process of giving life to our constitutional rights has largely been the work of liberals. On the greatest fight of all, to treat blacks as human beings, libertarians supported the other side.
Why are they trouble?

Crackpots are usually harmless; how about the Libertarian Party?

In itself, I'm afraid, it's nothing but a footnote. It gets no more than 1% of the vote-- a showing that's been surpassed historically by the Anti-Masonic Party, the Greenbacks, the Prohibition Party, the Socialists, the Greens, and whatever John Anderson was. If that was all it was, I wouldn't bother to devote pages and rants to it. I'm all for the expression of pure eccentricity in politics; I like the Brits' Monster Raving Looney Party even better.

Why are libertarian ideas important? Because of their influence on the Republican Party. They form the ideological basis for the Reagan/Gingrich/Bush revolution. The Republicans have taken the libertarian "Government is Bad" horse and ridden far with it:

* Reagan's "Government is the problem"
* Phil Gramm's contention that the country's "economic crisis" and "moral crisis" were due to "the explosion of government"
* Talk radio hosts' advocacy of armed resistance to "jack-booted government thugs"
* Dole's 1996 campaign, advancing the notion that taxes were "Your Money" being taken from you
* Gingrich's Contract with America (welfare cuts, tax cuts, limitations on corporations' responsibility and on the government's ability to regulate them)
* Dick Armey's comment that Medicare (medical aid for the elderly) is "a program I would have no part of in a free world"
* Bush's tax cuts, intended not only to reward the rich but to "starve the beast", in Grover Norquist's words: to create a permanent deficit as a dangerous ploy to reduce social spending
* Jeb Bush's hope that the Florida state government buildings would one day be empty
* Intellectual support for attacks on the quality of working life in this county and for undoing the New Deal

Maybe this use of their ideas is appalling to 'Real Libertarians'... well, it's an appalling world sometimes. Is it fair to communism that everyone thinks its Leninist manifestation is the only possible one? Do you think I'm happy to have national representatives like Dukakis, Gore, and Kerry?

At least some libertarians have understood the connection. Rothbard again, writing in 1994:

The truth is that since we have been stuck with a two-party system, any electoral revolution against big government had to be expressed through a Republican victory. So it is certainly true that Newt Gingrich and his faction, as well as Robert Dole, have ridden to power on the libertarian wave.

Can you smell the compromise here? Hold your nose and vote for the Repubs, boys. But then don't pretend to be uninvolved when the Republicans start making a mockery of limited government.

There's a deeper lesson here, and it's part of why I don't buy libertarian portraits of the future utopia. Movements out of power are always anti-authoritarian; it's no guarantee that they'll stay that way. Communists before 1917 promised the withering away of the state. Fascists out of power sounded something like socialists. The Republicans were big on term limits when they could be used to unseat Democrats; they say nothing about them today. If you don't think it can happen to you, you're not being honest about human nature and human history.
What about the social side?

The Libertarian Party has a cute little test that purports to divide American politics into four quadrants. There's the economic dimension (where libertarians ally with conservatives) and the social dimension (where libertarians ally with liberals).

I think the diagram is seriously misleading, because visually it gives equal importance to both dimensions. And when the rubber hits the road, libertarians almost always go with the economic dimension.

The libertarian philosopher always starts with property rights. Libertarianism arose in opposition to the New Deal, not to Prohibition. The libertarian voter is chiefly exercised over taxes, regulation, and social programs; the libertarian wing of the Republican party has, for forty years, gone along with the war on drugs, corporate welfare, establishment of dictatorships abroad, and an alliance with theocrats. Christian libertarians like Ron Paul want God in the public schools and are happy to have the government forbid abortion and gay marriage. I never saw the libertarians objecting to Bush Sr. mocking the protection of civil rights, or to Ken Starr's government inquiry into politicians' sex lives. On the Cato Institute's list of recent books, I count 1 of 19 dealing with an issue on which libertarians and liberals tend to agree, and that was on foreign policy (specifically, the Iraq war).

If this is changing, as Bush's never-ending "War on Terror" expands the powers of government, demonizes dissent, and enmeshes the country in military crusades and nation-building, as the Republicans push to remove the checks and balances that remain in our government system-- if libertarians come to realize that Republicans and not Democrats are the greater threat to liberty-- I'd be delighted.

But for that, you know, you have to vote against Bush. A belief in social liberties means little if you vote for a party that clearly intends to restrict them.

For the purposes of my critique, however, the social side of libertarianism is irrelevant. A libertarian and I might actually agree to legalize drugs, let people marry whoever they like, and repeal the Patriot Act. But this has nothing to do with whether robber baron capitalism is a good thing.
We tried it, and it failed

The libertarianism that has any effect in the world, then, has nothing to do with social liberty, and everything to do with removing all restrictions on business. So what's wrong with that?

Let's look at some cases that came within spitting distance of the libertarian ideal. Some libertarians won't like these, because they are not Spotless Instances of the Free Utopia; but as I've said, nothing is proved by science fiction. If complete economic freedom and absence of government is a cure-all, partial economic freedom and limited government should be a cure-some.
Pre-New Deal America

At the turn of the 20th century, business could do what it wanted-- and it did. The result was robber barons, monopolistic gouging, management thugs attacking union organizers, filth in our food, a punishing business cycle, slavery and racial oppression, starvation among the elderly, gunboat diplomacy in support of business interests.

The New Deal itself was a response to crisis (though by no means an unprecedented one; it wasn't much worse than the Gilded Age depressions). A quarter of the population was out of work. Five thousand banks failed, destroying the savings of 9 million families. Steel plants were operating at 12% capacity. Banks foreclosed on a quarter of Mississippi's land. Wall Street was discredited by insider trading and collusion with banks at the expense of investors. Farmers were breaking out into open revolt; miners and jobless city workers were rioting.

Don't think, by the way, that if governments don't provide gunboats, no one else will. Corporations will build their own military if necessary: the East Indies Company did; Leopold did in the Congo; management did when fighting with labor.
Post-communist Russia

Or take Russia in the decade after the fall of Communism, as advised by free-market absolutists like Jeffrey Sachs. Russian GDP declined 50% in five years. The elite grabbed the assets they could and shuffled them out of Russia so fast that IMF loans couldn't compensate. In 1994 alone, 600 businessmen, journalists, and politicians were murdered by gangsters. Russia lacked a working road system, a banking system, anti-monopoly regulation, effective law enforcement, or any sort of safety net for the elderly and the jobless. Inflation reached 2250% in 1992. Central government authority effectively disappeared in many regions.

By the way, Russia is the answer to those testosterone-poisoned folks who think that guns will prevent oppression. The mafia will always outgun you.

Today's Russia is moving back toward authoritarianism under Putin. Again, this should dismay libertarians: apparently, given a little freedom, many people will demand less. You'd better be careful about setting up that utopia; ten years further on it may be taken over by authoritarians.
Pinochet's Chile

Or consider the darling of many an '80s conservative: Pinochet's Chile, installed by Nixon, praised by Jeanne Kirkpatrick, George Bush, and Paul Johnson. In twenty years, foreign debt quadrupled, natural resources were wasted, universal health care was abandoned (leading to epidemics of typhoid fever and hepatitis), unions were outlawed, military spending rose (for what? who the hell is going to attack Chile?), social security was "privatized" (with predictable results: ever-increasing government bailouts) and the poverty rate doubled, from 20% to 41%. Chile's growth rate from 1974 to 1982 was 1.5%; the Latin American average was 4.3%.

Pinochet was a dicator, of course, which makes some libertarians feel that they have nothing to learn here. Somehow Chile's experience (say) privatizing social security can tell us nothing about privatizing social security here, because Pinochet was a dictator. Presumably if you set up a business in Chile, the laws of supply and demand and perhaps those of gravity wouldn't apply, because Pinochet was a dictator.

When it's convenient, libertarians even trumpet their association with Chile's "free market" policies; (originators of that cute quiz) includes a page celebrating Milton Friedman, self-proclaimed libertarian, who helped form and advise the group of University of Chicago professors and graduates who implemented Pinochet's policies. The Cato Institute even named a prize for "Advancing Liberty" after this benefactor of the Chilean dictatorship.
Destination: Banana Republic

The newest testing ground for laissez-faire is present-day America, from Ronald Reagan on.

Remove the New Deal, and the pre-New Deal evils clamor to return. Reagan removed the right to strike; companies now fire strikers, outsource high-wage jobs and replace them with dead-end near-minimum-wage service jobs. Middle-class wages are stagnating-- or plummeting, if you consider that working hours are rising. Companies are rushing to reestablish child labor in the Third World.
Where the gains go

Under liberalism, productivity increases benefited all classes-- poverty rates declined from over 30% to under 10% in the thirty years after World War II, while the economy more than quadrupled in size.

In the current libertarian climate, productivity gains only go to the already well-off. Here's the percentage of US national income received by certain percentiles of the population, as reported by the IRS:

1986 1999
Top 1% 11.30 19.51
Top 5% 24.11 34.04
Top 10% 35.12 44.89
Top 25% 59.04 66.46
Top 50% 83.34 86.75
Bottom 99% 88.70 80.49
Bottom 95% 75.89 65.96
Bottom 90% 64.88 55.11
Bottom 75% 40.96 33.54
Bottom 50% 16.66 13.25

This should put some perspective on libertarian whining about high taxes and how we're destroying incentives for the oppressed businessman. The wealthiest 1% of the population doubled their share of the pie in just 15 years. In 1973, CEOs earned 45 times the pay of an average employee (about twice the multipler in Japan); today it's 500 times.

Thirty years ago, managers accepted that they operated as much for their workers, consumers, and neighbors as for themselves. Some economists (notably Michael Jensen and William Meckling) decided that the only stakeholders that mattered were the stock owners-- and that management would be more accountable if they were given massive amounts of stock. Not surprisingly, CEOs managed to get the stock without the accountability-- they're obscenely well paid whether the company does well or it tanks-- and the obsession with stock price led to mass layoffs, short-term thinking, and the financial dishonesty at WorldCom, Enron, Adelphia, HealthSouth, and elsewhere.
Welcoming your new overlords

The nature of our economic system has changed in the last quarter-century, and people haven't understood it yet. People over 30 or so grew up in an environment where the rich got more, but everyone prospered. When productivity went up, the rich got richer-- we're not goddamn communists, after all-- but everybody's income increased.

If you were part of the World War II generation, the reality was that you had access to subsidized education and housing, you lived better every year, and you were almost unimaginably better off than your parents.

We were a middle-class nation, perhaps the first nation in history where the majority of the people were comfortable. This infuriated the communists (this wasn't supposed to happen). The primeval libertarians who cranky about it as well, but the rich had little reason to complain-- they were better off than ever before, too.

Conservatives-- nurtured by libertarian ideas-- have managed to change all that. When productivity rises, the rich now keep the gains; the middle class barely stays where it is; the poor get poorer. We have a ways to go before we become a Third World country, but the model is clear. The goal is an impoverished majority, and a super-rich minority with no effective limitations on its power or earnings. We'll exchange the prosperity of 1950s America for that of 1980s Brazil.
Single-villain ideologies

Despite the intelligence of many of its supporters, libertarianism is an instance of the simplest (and therefore silliest) type of politics: the single-villain ideology. Everything is blamed on the government. (One libertarian, for instance, reading my list of the evils of laissez-faire above, ignored everything but "gunboats". It's like Gary Larson's cartoon of "What dogs understand", with the dog's name replaced with "government".)

The advantage of single-villain ideologies is obvious: in any given situation you never have to think hard to find out the culprit. The disadvantages, however, are worse: you can't see your primary target clearly-- hatred is a pair of dark glasses-- and you can't see the problems with anything else.

It's a habit of mind that renders libertarianism unfalsifiable, and thus irrelevant to the world. Everything gets blamed on one institution; and because we have no real-world example where that agency is absent, the claims can't be tested.

Not being a libertarian doesn't mean loving the state; it means accepting complexity. The real world is a monstrously complicated place; there's not just one thing wrong with it, nor just one thing that can be changed to fix it. Things like prosperity and freedom don't have one cause; they're a balancing act.

Here's an alternative theory for you: original sin. People will mess things up, whether by stupidity or by active malice. There is no magical class of people (e.g. "government") who can be removed to produce utopia. Any institution is liable to failure, or active criminality. Put anyone in power-- whether it's communists or engineers or businessmen-- and they will abuse it.

Does this mean things are hopeless? Of course not; it just means that we have to let all institutions balance each other. Government, opposition parties, business, the media, unions, churches, universities, non-government organizations, all watch over each other. Power is distributed as widely as possible to prevent any one institution from monopolizing and abusing it. It's not always a pretty solution, and it can be frustratingly slow and inefficient, but it works better than any alternative I know of.
The problem with markets

Markets are very good at some things, like deciding what to produce and distributing it. But unrestricted markets don't produce general prosperity, and lawless business can and will abuse its power. Examples can be multiplied ad nauseam: read some history-- or the newspaper.

* Since natural resources are accounted as free gains and pollution isn't counted against the bottom line, business on its own will grab resources and pollute till an environment is destroyed.
* The food business, on its own, will put filth in our food and lie about what it's made of. The few industries which are exceptions to food and drug laws (e.g. providers of alcohol and supplements) fight hard to stay that way. The food industry resists even providing information to consumers.
* Business will lock minorities out of jobs and refuse to serve them, or serve them only in degrading ways.
* Business will create unsafe goods, endanger workers, profiteer in times of crisis, use violence to prevent unionization-- and spend millions on politicians who will remove the people's right to limit these abuses.
* Thanks to the libertarian business climate, companies are happily moving jobs abroad, lowering wages, worsening working conditions.
* The same libertarian climate encourages narcissists to pay themselves handsomely while ruling incompetently, and leads to false accounting, insider trading, and corruption.
* Businesses create monopolies and cartels when they can manage it; and the first thing monopolies do is raise prices.
* Businesses can create bureaucracies as impenetrable and money-wasting as any government. (The worst I've ever had to deal with are health insurers. And no, it's not "government regulation" that makes them that way; insurers have an interest in making the claims process as difficult as possible.)
* State-controlled media are vile; but business-controlled media are hardly better, especially given the consolidation of major media. Democracy needs a diversity of voices, and we're moving instead toward domination of the airwaves by a few conglomerates.
* The poor are ill-served even for basic services: they pay more for food; they pay through the nose for rotten apartments; they can't get loans even if they can get bank accounts; if they can get a job it's ill paid, with no health benefits. Poor areas are also highly polluted (in ways that cause massive health problems), while lacking such services as movie theaters.

Libertarian responses to such lists are beyond amazing.

* "Businesses would be stupid to do those things." Then they're stupid, because they do them. Private racial discrimination, for instance, lasted a hundred years; and it wasn't ended by businessmen changing their minds, but by blacks and liberals organizing. The Libertarian Party platform actually hopes to legally re-enable private discrimination.
* "The market will correct those problems." In a few cases it will-- if you wait long enough. But very often it's simply impossible: e.g., the monopolist has made sure no alternatives exist. (One of the railroad tycoons, for instance, was careful to buy up steamship lines.) And though it was sometimes possible to break a monopoly by starting a well-bankrolled competing business, that was no consolation to (say) an oil producer who saw Rockefeller consolidating all the refineries. He could hardly start up his own refinery, and he'd be bankrupt before anyone succeeded in doing so.)

Slavery is another example: though some hoped that the market would eventually make it unprofitable, it sure was taking its time, and neither the slave nor the abolitionist had any non-governmental leverage over the slaveowners.

(Libertarians usually claim to oppose slavery... but that's awfully easy to say on this side of Civil War and the civil rights movement. The slaveowners thought they were defending their sacred rights to property and self-government.)
* "We believe in laws too." And they do, rather touchingly; they just don't believe in enforcing them. Enforcement of the laws passed by democratic legislatures is called "men with guns" or "initiating force" in libertarian ideology. And without enforcement, laws are just pretty words. You can see this today in Latin America, which often has very progressive laws. The business and landowning elite just ignores them.
* "So what do you want, state-run movie theaters?" The single-villain ideology is so strong that the only response some people can make to a market failure is to invent a statist response and criticize that. Sometimes the best solution to these problems is to use the market-- once it gets a good liberal kick in the pants to go find one.

And those are the better responses. Often enough the only response is explain how nothing bad can happen in the libertarian utopia. But libertarian dogma can't be buttressed by libertarian doctrine-- that's begging the question.

Or it's simply denied that these things are problems. One correspondent suggested that the poor shouldn't "complain" about not getting loans-- "I wouldn't make a loan if I didn't think I'd get paid back." This is not only hard-hearted but ignorant. Who says the poor are bad credit risks? It often takes prodding from community organizations, but banks can serve low-income areas well-- both making money and fostering home ownership. Institutions like the Grameen Bank have found that micro-loans work very well, and are profitable, in the poorest countries on Earth, such as Bangladesh.
A balanced society

A proven solution to most of these ills is liberalism. For fifty years liberals governed this country, generating unprecedented prosperity, and making this the first solidly middle-class nation.

If you want prosperity for the many-- and why should the many support any other goal?-- you need a balance between government and business. For this you need several things:

* The rule of law. That means regulations, effective police, and fair courts. As Stephen Holmes said, "There is no rule of law until the Mafia needs lawyers." Neal Stephenson makes the same point in Zodiac: in a liberal society, you can shame companies into obeying the law, because companies don't like bad P.R. You don't have that leverage with mafias.
* Consumer trust. That means that abuse and fraud are persecuted, and you don't have to get things done by paying bribes (a big reason most poor countries stay poor).
* Responsive government and business. That means democracy, stockholder and union rights, and a free press. Personally, I think we'll eventually realize that monarchy doesn't work for business, either.
* Competition. Monopolies charge higher rates, stifle innovation, abuse dependent companies, and provide lousy service. (The robber barons of the 1800s were explicitly after monopolies, and they wanted them in order to raise profits.)
* A wide-based business pyramid-- not just a few multinationals on top. Smaller companies are usually the engine of innovation and city development, and the biggest producers of new jobs.

* No barriers to social rising or business innovation (e.g. racism, monopolies, "licensing" whose only purpose is to protect existing business, unavailable loans or courts, an out-of-reach education system, bribes, mafias).

Government costs money

Perhaps the most communicable libertarian meme-- and one of the most mischievous-- is the attempt to paint taxation as theft.

First, it's dishonest. Most libertarians theoretically accept government for defense and law enforcement. (There are some absolutists who don't even believe in national defense; I guess they want to have a libertarian utopia for awhile, then hand it over to foreign invaders.)

Now, national defense and law enforcement cost money: about 22% of the 2002 budget-- 33% of the non-social-security budget. You can't swallow that and maintain that all taxes are bad. At least the cost of those functions is not "your money"; it's a legitimate charge for necessary services.

Americans enjoy the fruits of public scientific research, a well-educated job force, highways and airports, clean food, honest labelling, Social Security, unemployment insurance, trustworthy banks, national parks. Libertarianism has encouraged the peculiarly American delusion that these things come for free. It makes a philosophy out of biting the hand that feeds you.

Second, it leads directly to George Bush's financial irresponsibility. Would a libertarian urge his family or his software company or his gun club to spend twice what it takes in? When libertarians maintain that irresponsibility among the poor is such a bad thing, why is it OK in the government?

It's no excuse to claim that libertarians didn't want the government to increase spending, as Bush has done. As you judge others, so shall you be judged. Libertarians want to judge liberalism not by its goals (e.g. helping poor children) but by its alleged effects (e.g. teen pregnancy). The easiest things in the world for a politician to do are to lower taxes and raise spending. By attacking the very concept of taxation, libertarians help politicians-- and the public-- to indulge their worst impulses.

Finally, it hides dependence on the government. The economic powerhouse of the US is still the Midwest, the Northeast, and California-- largely liberal Democratic areas. As Dean Lacy has pointed out, over the last decade, the blue states of 2004 paid $1.4 trillion more in federal taxes than they received, while red states received $800 billion more than they paid.

Red state morality isn't just to be irresponsible with the money they pay as taxes; it's to be irresponsible with other people's money. It's protesting the concept of getting an allowance by stealing the other kids' money.
Unacceptable morality

Ultimately, my objection to libertarianism is moral. Arguing across moral gulfs is usually ineffective; but we should at least be clear about what our moral differences are.

First, the worship of the already successful and the disdain for the powerless is essentially the morality of a thug. Money and property should not be privileged above everything else-- love, humanity, justice.

(And let's not forget that lurid fascination with firepower-- seen in ESR, Ron Paul, Heinlein and Van Vogt, Advocates for Self-Government's president Sharon Harris, the Cato Institute, Lew Rockwell's site, and the Mises Institute.)

I wish I could convince libertarians that the extremely wealthy don't need them as their unpaid advocates. Power and wealth don't need a cheering section; they are-- by definition-- not an oppressed class which needs our help. Power and wealth can take care of themselves. It's the poor and the defenseless who need aid and advocates.

The libertarians reminds me of G.K. Chesterton's description of people who are so eager to attack a hated ideology that they will destroy their own furniture to make sticks to beat it with. James Craig Green again:

Typical excuses are "the common good", "public morality", "traditional family values", "human rights", "environmental protection", "national security", and "equality". Each appeals to the confused hysteria of a segment of the population. Each allows property to be denied its rightful owner. Each denies the concept of self-ownership.

Here's a very different moral point of view: Jimmy Carter describing why he builds houses with Habitat for Humanity:

From my rural boyhood, when I often spent the night with black neighbors who lived in unheated and dilapidated shacks, to my years in the White House when I saw the plight of the homeless and those trapped in poverty housing worldwide, I have known that shelter matters. And I know, as a Christian, that I have a responsibility to serve where I can, that as I treat "the least of these", I treat my Creator.

Is this "confused hysteria"? No, it's common human decency. It's sad when people have to twist themselves into knots to malign the human desire (and the Biblical command) to help one's neighbor.

Second, it's the philosophy of a snotty teen, someone who's read too much Heinlein, absorbed the sordid notion that an intellectual elite should rule the subhuman masses, and convinced himself that reading a few bad novels qualifies him as a member of the elite.

Third, and perhaps most common, it's the worldview of a provincial narcissist. As I've observed in my overview of the 20th century, liberalism won its battles so thoroughly that people have forgotten why those battles were fought.

It's hard to read libertarians without concluding that they've never been out of the country-- perhaps never out of the suburbs. They don't know what Latin American rule by the elite looks like; they don't know any way of running an industrial economy but that of the US; they don't know what an actually oppressive government looks like; they've never experienced a depression; they've never lived in a slum or experienced racial discrimination. At the same time, they have a very American sense of entitlement: a gut feeling that they've earned the prosperity they were born into, that they owe the community nothing, that they deserve to have whatever they want, that no one should stand in their way.

In short, they're spoiled, and they've evolved a philosophy that they should be spoiled.

I don't want to leave out the possibility of honest confusion. Some people may be attracted by parts of the libertarian program without buying into its underlying morality.
The bottom line

"The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little." --Franklin D. Roosevelt

I have my own articles of faith. I think a political philosophy should

* benefit the entire population, not an elite of whatever flavor
* offer a positive vision, not just hatred for another philosophy
* rest on the best science and history can teach us, rather than science fiction
* be modified in the light of what works and what doesn't
* produce greater freedom and prosperity the closer a nation comes to it.

On all these counts, libertarianism simply doesn't stack up. Once people are able to be rational about politics, I expect them to toss it out as a practical failure and a moral mess.

5:25 PM  
Blogger jayinbmore said...

My absolute favorite libertarian trope - because it perfectly demonstrates both their aversion to the historical record and their clueless self-aggrandizement - is the United States' tech boom of the 1990's. The entire foundation of the tech-boom was created with federal funding from the military into universities or corporate labs, which then in turn released the stuff to the public. Yet somehow libertarians insisted on construing this gift from the public sector as a triumph of the market, and those libertarians who were in the tech industry construed it as confirmation of their own superiority; "At last through the wonders of technology we are true existential heroes!1!11!!!" It was like watching a kid doing his algebra homework celebrate "solving" a particularly tough problem after his tutor did all the work.

10:49 AM  
Blogger Management said...

My piece on What's Wrong With Libertarianism seems to have provoked a lot of discussion. I originally let the words of another website speak for me. Now I've got some time, so let me explain in my own words What's Wrong with Libertarianism.

All I ask for is for rich and poor alike to pay their fair share of taxes. In the 1940's, corporate taxation made up 35% of the federal tax revenue. Now it's about 7%. In the 1950's, CEO income was about 40x that of the average worker. Today it's about 500x.

Now, certainly, producers and risk-takers deserve compensation. Their talents and hard work prove them to be useful to society, and deserve reward. But really, is the CEO of Pepsi twenty-thousand times more useful to society than a schoolteacher, fireman, policeman, or soldier?

Back to the fairness of taxation -- do you really think corporations only benefit from 7% of the federal tax dollars spent?

Let's look at it this way: if anyone has a right to complain about the unfairness of taxation, it is not the rich corporatist, but the poor or middle-class worker. We pay far more in taxes than we ever get back in services. I actually dream of the perfect libertarian society where everything is privately owned and people must pay for their own individual uses. It would be beautiful to watch rich people and corporations actually have to pay for the government they use.

For example, lots of my tax money goes toward running the Securities and Exchange Commission. I don't own and trade stocks; what do I need that for? But the corporation's entire existence depends on the SEC. There's also a huge local, state, and federal court system. Yeah, I need that a little bit to make sure criminals get punished and I don't get beaten or robbed. But the vast majority of lawsuits and court cases involve corporate interests that mean little or nothing to me. Do I really care whether Widget Corp. wins their copyright-infringement case against Gadget Inc.?

How much money goes into national defense? Sure, I need an Army to keep marauding hordes of invading Canucks out of my back yard, eh, but that's a small percentage compared to the money spent on overseas military action. How much risk do we put on the fortunes of oil company CEOs if they don't have an Army to guard those Middle East pipelines or a Navy to protect those oil tankers?

I understand there's this entire interstate highway system that runs across the entire United States. Now, I only use a small stretch of I-84 about twice a year to visit Boise, and a stretch of I-5 to travel between Portland and Salem. But I understand the CEO of Walmart needs just about every mile of that highway system, every day to run thousands of trucks to get his products to the market.

Public education? Well, I don't have any kids, so I can't figure out why I'm paying for that. I did go to public school, but my cost for that has to have been paid up long ago by my parents' taxes, I figure. However, doesn't just about every corporation require an educated workforce in order to function? Is Phil Knight going to step up and start creating elementary, secondary, and college educational institutions that their future workers can attend for free?

FDIC? FSLIC? Yeah, right, like I have any significant money in the bank that needs insuring. But I'll bet Bill Gates does.

Space exploration? Why do I need rocket technology, re-usable shuttles, and well-trained astronauts; it's not like I've got a summer home on Titan or anything. But I'm pretty sure Rupert Murdoch needs all of that to keep his satellites in operational order.

Tax deductions for entertainment expenses? Yeah, maybe once a year I get to write off a $20 meal for work. But I'm guessing Mark Cuban gets to write off a whole lot more than that.

And in general, the more you have to lose, the more you have to pay to protect it. You pay more for car insurance when you drive a Lamborghini then when you drive a Pinto. What would I have to lose if the country were taken over in a Socialist revolution by violent disgruntled Americans sick of unemployment, poor health care, high crime, and inflation, who then nationalize healthcare, nationalize the oil industry, and mandate union membership? Nothing; in fact, it might make my life better. But the lifestyle of the CEOs of Pfizer, ChevronTexaco, and General Motors would be drastically altered. So it seems to me the taxation is the "society insurance" that provides the social services that keep the hoi polloi just barely gruntled enough put up with Donald Trump's gold plated bathroom fixtures while homeless guys sleep on the steam grate outside the Trump Tower.

See, in that perfect, science-fiction libertarian society you speak of, the rich would actually have to start paying for those government services they use. And if a big corporation, oh, let's pick on airlines and savings & loans, goes belly-up, they wouldn't be getting back any bail-outs from us. (Why should I pay that? I don't fly or use an S&L.) Furthermore, we can forget about all the subsidies, protectionary tariffs, and grants the government gives to various industries, like big corporate farms, for one example.

Of course, don't think for a second that Richie Rich will actually cough up the money for all of those things. He'll just tack that operating expense to the price of his goods and services. Welcome to the world of $10 gas, $30 steaks, $1/20 mile roadways, $5000 airline flights, and a permanent caste system.

Now, I love science fiction as much as the next guy (and believe me, I comprehend Heinlein; I'm just able to separate fiction from reality), but it is not a good basis for a religion or economic system. If we could just see one historical example of working libertarianism -- ONE! -- maybe you could prove your point.

But we do have historical examples of capitalism unfettered by regulation and taxation -- the American Gilded Age, modern Haiti, Pinochet's Chile, post-Communist Russia -- and those didn't work out so well for society in general.

Now, to your moral imperative: How can I give a woman, black, or homosexual liberty for their actions and being, but deny Richie Rich the liberty of keeping all of his money because he has to pay his fair share of taxes? (The imperative feels very different when it's framed like that, no?)

Because I don't believe Richie Rich is really much of an aggrieved party. A woman forced to bear a child against her will; a black denied opportunity or advancement; a homosexual denied civil rights; these things seem much more serious to me than a guy who made $10,000,000 forced to bear the hardship of getting by on a paltry $5,000,000 and the indignity of only getting to pass on $2,500,000 to his never-have-to-work-a-day-in-their-lives kids when he dies.

Entrepreneurship and capitalism are wonderful, and they do deserve reward. That's why successful businessmen get to live lives where they need not worry about where their next meal is coming from, how they're going to afford college for their kids, where will they get the rest of the rent money, choosing between prescriptions or new clothes, or whether their only car will break down. That's why they get to enjoy all-expenses-paid vacations in Jamaica, 20,000 square foot houses on both coasts, yachts & country clubs, trophy wives & girlfriends, caviar & lobster, and front-row seats at the Lakers' games.

Your closing line sums it all up: "I want to be a human being who associates with those who wish to associate with me." Well, you don't get that luxury -- nobody does. You're a part of a society. That society includes lots of people you don't want to associate with, but must -- the illiterate single mom, the HIV-positive junkie, the man working two McJobs to feed his family, the homeless guy you ignore on your way to the office, the pregnant teenage girl, the illegal aliens you employ to keep labor costs down -- you are not an island, Mr. Libertarian, and you need us and government far more than we need you.

You'll deny that with some line about the importance of producers and creators of wealth and how the peons should all be grateful that the altruistic capitalist did them all a favor by creating corporations to provide them jobs and goods and services. I can't argue with that -- I like computers and cars and movies and my paycheck.

But your own philosophy tells me that if one capitalist can't make the venture fly, another one will step up to take his place. Our far-from-libertarian society seems to be producing plenty of millionaires and billionaires, so what's the complaint, that they aren't millionaires and billionaires enough? And it seems to me the capitalist needs the workers -- making and buying his goods and services -- much more than the other way around. No man can become rich without leveraging the labor of others, but every man can survive through the brunt of his own labor, even if that's just subsistence survival.

Another libertarian talking point is the "initiation of force" -- that taxation is stealing from people at the barrel of a gun. Well, as shown above, the libertarian needs the government more than I do, and even the most die-hard libertarian will agree that we need some government, for police, courts, and military protection. That's over 20% of the federal budget right there, so some taxes will have to be taken, even in mythical Libertaria, which means it's okay by libertarians to point that gun and steal that money for at least basic government services. To paraphrase W.C. Fields, we've now determined what you are (in favor of initiation of force to steal citizen's money for government), now we're just haggling about the price.

The libertarian will also argue that in their science-fiction universe, anyone is free to compete and trade and leverage their skills, work, and talent to become rich. Absolutely -- anyone can, but not everyone can. Some people will be born unskilled, untalented, handicapped, or just not very bright, or will become sick, injured, discriminated against, or suffer hardships and bad luck beyond their control. No matter how hard they work, they cannot win. Not everyone can be a winner in the capitalism game. So the question is: how good should the winners have it and how badly should the losers have it? As others have explained, in such a system, eventually the winners game the system to the point where only other winners can compete and losers have no shot. Eventually the best winners collude to prevent competition among themselves. Eventually the losers owe their soul to the company store.

Progressive taxation and limited capitalistic socialism is the only workable solution for a successful and vibrant democratic economy. It's what we have had in place since the New Deal, and it took the United States from the failed, second-rate, Depression-era economy caused by laissez-faire capitalism of the robber barons to being the dominant world superpower with the greatest standard of living ever achieved in human history. Why would libertarians want to mess with success, just to implement a science-fiction philosophy that's been shown to cause greater overall human misery, all because they feel that they are not quite rich enough? How many 17-foot home theaters do they need before they figure that even a lazy, shiftless, parasite on society (otherwise known as a "human") deserves better than sleeping in the street, eating from the garbage, and suffering from easily treatable medical ailments?

OK, discuss. That's all I have to say about that. Since the Libertarian Party has no chance in hell of winning any election that will effect me directly, and since the hard right-wing of the Bushites is going down faster than Paris Hilton in a night-vision home video, I really don't worry about them very much.

10:26 PM  

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