TCS Daily

Libertarian Basics

By Arnold Kling - August 25, 2005 12:00 AM

"While American conservatives have retained their passion for Big Ideas, their passion for the biggest idea of all -- the Holy Grail that will refute liberalism -- has waned...

What libertarians do not have, however, is a comprehensive argument for their ideology."
-- Austin Bramwell, The American Conservative magazine


Austin Bramwell wants a political philosophy to be so powerful that any alternative is "refuted." I think that the best one can hope for is a philosophy that gives sensible answers much of the time. What this essay will offer is a less-than-comprehensive argument for libertarianism, but one that will serve to explain its appeal relative to other philosophies.


The Individual and Morality


Are individuals the best judges of their own interests, or should government regulate matters of personal behavior?


Libertarians believe that it is better to allow adults to judge their own best interests. Opponents counter that human beings will not always act in their best interests, because we can be irrational, uninformed, weak, incompetent, etc. Libertarians do not deny that. We just question whether government coercion is a cure for moral infirmities.


The issue of recreational drug use is an illustrative example. Libertarians tend to oppose the drug war. As an empirical matter, we see the costs of the drug war as high, and the benefits as low. Even if the costs were lower and the benefits were higher, libertarians would place a high price tag on the loss of freedom entailed by making recreational drugs illegal.


Unfortunately, recreational drugs are not the only example of government regulation that violates libertarian principles. Paternalistic regulation is widespread. It includes many forms of "consumer protection," such as requirements that one must obtain a "license" to provide certain goods and services.


Concerning paternalistic regulation, we are skeptical as to its benefits in practice. We doubt that the flaws in human beings are best dealt with by regulations enforced by other flawed human beings. Moreover, even if regulation "works," we believe that there is a moral case for allowing people to make their own mistakes rather than restricting their autonomy.


Moral and Social Order


How will people be guided to a path of moral behavior and constructive social relationships?


I believe that the human instinct for reciprocity -- to respond positively to those who treat us well and negatively to those who treat us poorly -- is generally a sufficient basis for a moral and social order. Private business transactions and contracts, reinforced by reciprocity, can induce a virtuous cycle of increased ethical behavior, greater rewards for ethical behavior, and better institutional arrangements.


From a libertarian perspective, anyone who is capable of recognizing the implications of reciprocity is morally competent. People can agree to join clubs, networks, partnerships, corporations, and other institutions that enforce codes of conduct and resolve disputes. Within those institutions, they devise rules and agree to abide by those rules. Morality does not have to be defined by a central power or by a designated class of priests or authorities. Any statement of the form "the moral authority of ___ is absolute" would be repugnant to libertarians, regardless of how one fills in the blank. There is no room in libertarian thinking to designate any particular class of people as too-fortunate villains or sainted victims.


What is the role of government in this overall social order? A libertarian anarchist would argue that government is unnecessary, and that private contracts and transactions are sufficient. I instead take the view that government is needed to ensure that violence does not overtake social order. We need to know that contracts will be enforced and that we will not be conquered by organized violent regimes.


Non-libertarians believe that private contracts and voluntary transactions are not a sufficiently "just" or "ideal" social order. They believe that the institutional arrangements that people arrive at voluntarily need to be improved by the actions of a coercive government.


Libertarians believe that government's role relative to the social order is more threat than guardian. To a libertarian, the most dangerous individuals in society are those who believe that they are insulated from reciprocity, because those who are insulated believe that they can harm others without being harmed in return. We worry about the risk that government officials will attain this sense of insulation. It is possible that government officials, like criminals, will come to believe that they are insulated from reciprocity and from the need to conform to the law. In Lord Acton's words, "Power corrupts, and absolute power corrupts absolutely."


Private Property


Does property belong to individuals to buy and sell as they see fit, or should it be at the disposal of government to distribute?


Libertarians and non-libertarians recognize that the institution of private property is conducive to economic growth. Ownership gives people the incentive to improve land, accumulate human and physical capital, and generate intellectual and creative works. The general standard of living rises as a result of economic growth, which comes from work, thrift, risk-taking, and creativity.


Apart from its economic benefits, libertarians view private property as an inherent good. Private property is a fundamental aspect of personal liberty. If you cannot choose to whom you will sell your goods or services, then you are not free.


Opponents view private property as evil relative to an egalitarian ideal of sharing. When government takes property from one person and gives it to another, progressives see this as redistribution, which they regard as a good thing.


From a libertarian perspective, if I choose to give my money to someone perceived as less fortunate, that is my business. If you choose to give my money to someone perceived as less fortunate, that is theft. Libertarians see redistribution as theft, no different than if a criminal gang seized property for purposes of "redistribution."


In practice, redistribution is advocated under the guise of helping the poor, but many income transfers go to people in upper income groups. Our largest transfer programs, Social Security and Medicare, benefit affluent seniors as well as those who might otherwise be poor. Farm subsidies enacted in the name of poor, small farmers go largely to big farms and wealthy owners.


All in all, if there were no government programs, and the only redistribution that took place was through voluntary acts of charity, the poor might be better off. That is, if people did not have to pay taxes for government redistribution programs, they might do a better job on their own of helping the poor.


The Collective Interest


How can we ensure that institutions serve the collective interest?


To a libertarian, there is no such thing as "the collective interest." We recognize that there are certain types of goods that are inherently shared, such as police protection or air quality. Such "public goods" will be provided most effectively by institutional arrangements that recognize the problem of free-ridership or "tragedy of the commons." Possible institutional arrangements include, but are not limited to, government intervention. People also could obtain "public goods" by joining clubs, networks, or other voluntary associations.


Progressives believe that if they were in power, then government would serve the public interest. In their view, good government is thwarted by individual interests and flawed leaders. As one of their bloggers puts it, "Why are we ruled by these fools?"


Libertarians believe that individual interests and flawed leaders are inevitable. The only way to minimize the harm caused by selfish and misguided political behavior is to implement institutional checks on the power of government.


Some of the worst crimes in human history have been carried out in the name of the "collective interest" by leaders with unchecked power. No private wrongdoing compares to the mass murders directed by Hitler, Mao, and Stalin in the alleged collective interest.


Economic and Political Power


Does political power help to serve as a check on the abuse of economic power?


Libertarians believe that competition and innovation serve as effective checks on the abuse of economic power. All economic advantage is temporary. No one worries today about a monopoly in mainframe computers.


For over a century, progressives have been characterizing economic power as a problem, and they have marketed government regulation as the solution. The actual results of government regulation have been rather mixed. On balance, government has done more to sustain entrenched economic interests than to benefit consumers or small competitors.


The reality is that political power, rather than being the servant of the "public interest," is the locus of what economists call "rent-seeking behavior," whereby individuals try to use the political process to obtain profits ("rents"). Anti-trust laws are notorious among economists for being used by producers against one another, with the consumer interest either not involved or adversely affected.


As I wrote in Government and the Fear Factor, politicians use exaggerated the threats of economic power as a marketing tool. Their goal is to aggrandize political power. The political solution rarely removes the cause of the underlying fear. Instead, it serves the mutual interests of particular constituents and politicians.


Not Perfectionist


Reading Austin Bramwell, I got the impression that he believes that an ideology must be perfectionist. Any ideology that lacks a utopian vision will fail to meet his standards of the "Holy Grail."


While there are some libertarian utopians, I am not one of them. I do not argue that libertarian philosophy can lead to utopia. What I do believe is that attempts to bring about utopia through the exercise of government power tend to backfire.


I do not believe that individuals always act in their best interests. However, I do believe that government controls over personal choice tend to do more harm than good.


I do not believe that government programs necessarily and always fail. However, I do believe that the incentives and mechanisms to eliminate failed government programs are weak relative to the incentives and mechanisms for eliminating failure in the private sector. I believe that government's capacity for evil and for persistent error is of much greater concern than are the flaws in the moral and social order that emerges without government.


I do not believe that markets always work well. However, I believe that there are incentives for private individuals to develop products, services, and institutions to solve the problems caused by market failure. Eventually, those incentives are usually sufficient.


I believe that non-libertarians tend to overstate the benefits of government and to over-rate the risks of smaller government. For example, consider the fact that poverty among the elderly has been reduced since the 1930's. Popular myth attributes this reduction in poverty to Social Security. The fact is, however, that if today we still had the same average standard of living as we had in the 1930's, then even with Social Security many of the elderly would be poor. The main source of the difference between the economic condition of the elderly today and that of the elderly in the 1930's is economic growth.


Consider the following classification system for government regulations and programs.


(a) interventions that work so much better than private alternatives that we feel grateful for them
(b) interventions that are better than private alternatives in some ways and worse in others
(c) interventions that are mostly worse than private alternatives
(d) interventions that are evil


Libertarians look at government and see interventions that are mostly in categories (b), (c), and (d). I would put municipal fire departments in category (a), government water treatment in category (b), public education and Social Security in category (c), and protectionist trade measures such as the Byrd Amendment in category (d). Where the United States is really lucky compared with countries like Zimbabwe is that those other countries' government interventions are predominantly in category (d).


My sense is that non-libertarians view interventions as fitting mostly into categories (a) and (b), and they believe that the programs that they favor are all category (a). I believe that their attachment to government interventions owes more to wishful thinking than to a realistic assessment of results. My reading of history is that progressives tend to exaggerate both the need for government interventions and the likely results of such interventions.


I believe that you will find that when government power is held in check, people solve problems by creating institutions that are less coercive and more effective. That is not a utopian vision. It is not an irrefutable proof. But for me, it is a sound basis for libertarianism.


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