The libertarian liberal

I think libertarians and this so called “libertarian-liberal” will just have to disagree on the economic issues. We’re with you on civil liberties and that’ll have to be our common ground. I am just glad that “libertarian-liberals” “are much more cautious about what government can do.”

On “moral duty to empower the impoverished and disadvantage.” That exists for libertarians as well. But moral obligations are individual imperatives and they are not legal obligations. Individuals can be selective in identifying the disadvantaged, the unlucky, or the impoverished that merit their aid and they will help those people to the best of their abilities. The recipients of the aid also have a moral obligation to make the most of that aid. By taking advantage of this simple dynamic of give and take, private charities, private organizations, and neighborhood organizations are more effective than government programs and have done more with less resources.

On “keeping the corporations and government in check.” It is the job of groups of individual to work for both. Grassroots politics, consumer advocacy groups, labor unions, and other non-government organizations are the vehicles of choice. We have tried to use government to keep corporations in check, but the corporations have usurped the reins of power instead.

Finally, I find your analysis of root cause of economic ills very lacking. Libertarians look both short-term and long-term. While regulations are helpful in the short-term, they are harmful in the long term. The New Deal critique of the Great Depression and the current critique of the health care industry is obviously that the free market has failed. It’s not the case in either situation. The Great Depression is born out of inflationary banking policy that enabled the great boom of the 1920’s and the great bust of the 1930’s. The flawed banking policy was enabled by the government created organization, Federal Reserve. While there was short-term catastrophic market failure, the root cause was the long-term government intervention by the central bank. The current rapid inflation of health care costs is also born out of government intervention. The favorable tax status of HMOs, the mandatory minimums coverage levels, the legal obligation (not a moral obligation) to treat all ER patients, the restriction on the supply of doctors, the regulations on alternative medicines, and the rules and regulations on giving people medical care all contribute to the long-term rising costs.

Yet, there is a need for libertarians to be pragmatic as well. Dismantling all of the harmful regulations isn’t going to be easy without enabling many abuses in the short-term.

I called you a hippie socialist not a communist. Still very well thought out.

From a rather superficial skimming of the text, I gathered that it all boils down to this:

“we need a government that is as small as possible, while still allowing it to act as a check against corporate power”

This is something of a contradiction. The problem is, that the bigger the state, the more there is for corporate interests to infiltrate. Also, these checks against corporations are often what allow corporations to maintain their hegemonic status. On top of these, the various regulations and taxes prevent business activity on the lower levels, thus contributing to the gap between individuals and companies by lowering the opportunities for self-employed people and for less profitable businesses. In essence, the effects of economies of scale are emphasized by hindering more mobile, smaller companies from participating in the market place.

In all, I am having trouble accepting the ‘libertarian-liberals’ moniker as accurate. Libertarianism is quite different from what is discussed here. In fact, the similarities are quite superficial. A ‘libertarian-liberal’ still believes in the goodness of the state and that taking from one man by force, to assist another, is not morally questionable. Where as, a Libertarian would function by the following: “I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine.”

“we must, in order to preserve individual liberty, use the state to do this, even though it is morally hazardous, because inaction would not lead to greater individual liberty, but less”

You are talking about positive liberties (the right to social security), which due to the scarcity of resources, is in direct conflict with negative liberties (the right to the fruits of your labor). We cannot have equality and freedom unless we also have infinite resources. So a ‘libertarian-liberal’ would in fact favor sacrificing negative liberties in favor of positive liberties. And this is the problem, as I know of no Libertarian who would accept such an arrangement.

I have to admit that I am thoroughly unconvinced at this point. Everything I have read is quite indicative of a basic mistrust of the free market. You could of course take the left-libertarian route of Chomsky et al. to address this. But that is a shadowy and murky road of vague assumptions and catchphrases, which I would not recommend. So, as a litmus test, I would offer an amendment: voluntarily funded state programs. You could help the poorest of the country without taking by force from others. And it would offer flexibility in cases of financial problems, where normal taxation would impoverish people. And the people could choose which program to fund (welfare vs. Iraq war). If this is compatible to with ‘liberal-libertarianism’, then I would say that there is some merit to the ‘libertarian’ part. At least in the financial sense. The social aspect could be resolved with questions like: what about gun rights?

This is a very very easy so-called conundrum (or irony or contradiction or whatever else people are calling it) to over come in reconciling the ideas of modern liberalism as it’s understood today and libertarianism as it’s practiced today. To reconcile the two into a single system acheiving the ends you describe, the Supreme Court needs only to do one thing.

Here it is:

Overturn Santa Clara County v. Southern Pacific Railroad (1886). This is the landmark decision that defined as persons corporations and thus gave faceless nameless nonhuman enities with no responsibilities or accountibility under the law the same Constitutional rights as US citizens.

Once corporationss are no longer understood as “persons” under the law, their money is no longer able to be used as “free speech” to buy political power or influence and the point of government being a check on corporate power becomes moot. Further, we as a nation could see to it that corporations’ original chartered purpose – benefitting the public good – were carried out, rather than the current purpose of benefitting private profit at the expense of the public good, or we could – as states used to do – simply revoke their charter and disallow them to continue doing business. Votes, not lobbying funds, would once again drive policy, and our laws would once again become “Of The People,” rather than “Of The Highest Bidder.”

Then and only then, when government is returned to its rightful owners – We The People, could we as citizens ever even begin to have an actual debate on the proper role of government. Liberalism and Libertarianism could coexist and even act be good checks on each other and on government power, but only if the third – and most powerful, at this point – dynamic of unaccountable corporate power is removed from the equation.

The theories of John Stuart Mill (“On Liberty” and “Utilitarianism”) should be at the heart of any liberaltarian ideology. He views the right of liberty to only be consummated upon the achievement of adulthood. Prior to this, the government, as a larger collective body than the parents and one therefore more inclined to understanding the “best” outcome on behalf of future citizens, should be able to make decisions on behalf of the child. There are parents out there who refuse to inoculate their children; others don’t buy health insurance for their children. Parents make a moral and legally binding obligation to their child by bringing him or her into the world. They should be held responsible for it. And it is morally abhorrent to allow any child to be neglected, so the government should require it. The idea of perfect liberty is impossible; everyone must be held responsible for their actions so that future decisionmaking will internalize the costs and benefits to society. This is the basis of all economics. However, that which we are not responsible for, (being born into an intensely religious family with a conception of health antithetical to positive science, etc.) humanity, and therefore the government, has a moral obligation to intervene into, just as it would do on behalf of each of its contributors. In this, libertarians may differ from a Millian conception. Economically, the government should take an ordoliberal stances. In some ways this would be considered to the “left” of the articles suggestions, in other ways to the “right”. It would not seem to advocate for universal heath care, for example. It would see eliminating barriers to entry for firms and the propagation of more perfect information as its goals. Ensuring health standards in food and such, legislating corporate disclosure of profits, a sort of antitrust, (different than the system of now,) etc. would therefore be acceptable; so would tearing down the unfathomable regulatory burden that allows a high-margin health care oligopoly to remain instead of collapsing into low-margin and lower cost competitive equilibrium. I think a citizen’s dividend derived from taxation of the use of the air we breathe, land, etc. (the valued added of which is private property but the base of which is property held in common to humanity,) would allow for a basic and utilitarian-necessary standard of living, which tends to the frustration many liberals have with libertarianism in its pure form. Pigovian taxes and inheritance taxes would seem to be justified in viewing each individual as keeping a karma account with his society; income taxes and any government programs beyond the spreading of accurate information, (especially those which constitute the majority and serve as a statist regulatory system that helps perpetuate oligopoly.)

This was just a ramble. In many cases, libertarians would disagree with the propositions listed above as a violation of their belief in more or less absolute liberty, and so they might be justified in demonstrating the difference. My first criticism would be: since the moral basis of libertarianism is this concept of a series of consensual and mutually beneficial trades, what happens when we are born into a poor family and as a result cannot afford college even though we deserve it? If we start at arbitrary and move in a fair way to arbitrary, the outcome is still arbitrary because the initial distribution was arbitrary. In other words, freedom as justice can only justify a society if it was initially just. My second: why should negative liberty be viewed as sacrosanct? If it led to a distribution where 90% of the people were starving and the 10% were loaded with wealth, how would that be okay? Interfering beyond ensuring a basic minimum for those willing to work, (not through an inefficient minimum wage, but rather perhaps a negative income tax or citizen’s dividend,) would distort incentives and make everyone poorer in the long run. But why should that minimum not be there if you can make that many people happier while making the few only less happy? Again, this would not justify widespread intervention but only a single redistributive program to replace much of government. Populist dems don’t understand that in the long run their programs make even those they are trying to help poorer. But rule utilitarianism seems to me the best path to a fiscally moderate, socially liberal working Democratic majority. Thoughts?

@ joe@2parse: My comment would also have made more sense if I had directed to the right paragraph, which is the first of my first comment.

The idea that Nathanael Nerode has alluded to, which seems like common sense to me, is essentially that the economy needs to operate within the bounds of a legal framework that encourages transparency, protects private property rights when doing so does not intrude on the reasonable rights of others, etc. Perhaps my conviction that there is a need for an economic minimum necessary to maintain life is outside of the libertarian liberal doctrine. I agree with Nerode and don’t see how a libertarian right-winger doesn’t see a contradiction; the libertarian conservative just doesn’t seem to see that rights may be mutually exclusive. Here… yes, corporations have a right to organize as they wish, but shareholders have a right to have a say over the corporation that they OWN. We can’t have it both ways. You can either play the gotcha game or you can adopt the notion that there is a reasonable expectation that a person has when buying a share, namely that they now have (# owned / total ) power over that corporation, just as when a hamburger is advertised as a hamburger, it should be legally required to be a hamburger and not reprocessed cow shit. People don’t have the time to be perfectly rational… there are very reasonable steps that the government can take to create a more ideal economic outcome just as there are steps that corporations take on their own behalf that could never be said to benefit society. And while many economists title themselves libertarians, they are not libertarians in the literal sense. What do conservative libertarians think about Pigovian taxes, public goods, etc. where economics says the government should intervene? Or is it really at the very bottom of everything a rights issue? If it is, I don’t see how the right-left libertarian discussion can ever be resolved. I think most sane people realize that there is no such thing as perfect freedom; by allowing it in a legal sense, we end up infringing on each others’ liberty and get less in total than if we set up a reasonable system.

@ Chris Crawford – Regarding your last sentence, I’d recommend an excellent book on classical liberalism by Nobel laureate economist James M. Buchanan, published just last year, in which he discusses “the ethics of liberalism” and draws some nice distinctions. It’s a slender 128 pages.

It’s a bit of a follow-on to Hayek’s work, taking its title from a famous postscript of Hayek’s in The Constitution of Liberty (1960), where Hayek discusses what label liberals should adopt.

Since we’re discussing the names liberal and libertarian, here’s a quote on the subject from a half-century ago. Hayek writes in the aforementioned postscript,

It is necessary to recognize that what I have called “liberalism” has little to do with any political movement that goes under that name today. It is also questionable whether the historical associations which that name carries today are conducive to the success of any movement. Whether in these circumstances one ought to make an effort to rescue the term from what one feels is its misuse is a question on which opinions may well differ. I myself feel more and more that to use it without long explanations causes too much confusion and that as a label it has become more of a ballast than a source of strength.

In the United States, where it has become almost impossible to use “liberal” in the sense in which I have used it, the term “libertarian” has been used instead. It may be the answer; but for my part I find it singularly unattractive. For my taste it carries too much the flavor of a manufactured term and of a substitute. What I should want is a word which describes the party of life, the party that favors free growth and spontaneous evolution. But I have racked my brain unsuccessfully to find a descriptive term which commends itself.

Five years earlier, Dean Russell had written in the Freeman, a publication of FEE, a liberal-remnant organization if ever there were one, the article “Who is a libertarian?” (1955), which is the first place I’m aware of the term coming into use in the States, apart from a science fiction novel. Russell writes,

Many of us call ourselves “liberals.” And it is true that the word “liberal” once described persons who respected the individual and feared the use of mass compulsions. But the leftists have now corrupted that once-proud term to identify themselves and their program of more government ownership of property and more controls over persons. As a result, those of us who believe in freedom must explain that when we call ourselves liberals, we mean liberals in the uncorrupted classical sense. At best, this is awkward and subject to misunderstanding.

Here is a suggestion: Let those of us who love liberty trade-mark and reserve for our own use the good and honorable word “libertarian.”

That science fiction novel by the way was “Revolt in 2100” (1953). Robert Heinlein writes,

As for the second notion, the idea that we could lose our freedom by succumbing to a wave of religious hysteria, I am sorry to say that I consider it possible. I hope that it is not probable. But there is a latent deep strain of religious fanaticism in this, our culture; it is rooted in our history and it has broken out many times in the past. It is with us now; there has been a sharp rise in strongly evangelical sects in this country in recent years, some of which hold beliefs theocratic in the extreme, anti-intellectual, anti-scientific, and anti-libertarian.

It is a truism that almost any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so, and will follow it by suppressing opposition, subverting all education to seize early the minds of the young, and by killing, locking up, or driving underground all heretics. This is equally true whether it be Communism or Holy-Rollerism; indeed it is the bounden duty of the faithful to do so. The custodians of the True Faith cannot logically admit tolerance of heresy to be a virtue.

Shall libertarian liberals allow heresy in thought, word, AND action? And shall they allow heretical families? And heretical medical associations? Remember heresy means choice.

My last comment only makes sense if the comment I submitted just beforehand makes it through.

joe,

Thanks for response. My post was a week ago and I’ve come around to respond only now.

You noted that libertarian liberals believe that the state can do good in the economy. I will not argue against that. I’m not so sure of myself as to argue that the state cannot do any good at all. But you are right in saying that all I’m seeing are the negatives, because I especially emphasize the long term negative effects of government control and government involvement.

In terms of the study of economics, my only formal education were several classes of economics in college. Those few classes led me to the conclusion that most of what passes for the science of economics is a joke. Economists were making huge declarations of truths based on economic analysis based on assumptions that no-one could possibly take for granted as truths. I read individual economists to get the feel for the assumptions they were making in crafting their economic prognostications. This adventure led me to two schools of economic thought that I hold in high regard, the Chicago School and the Austrian School.

The Chicago School is fairly good about avoiding many unfounded assumptions but they still do make them. Their prognoses are fairly accurate in the short term (less than 10 years or so). Short term prognoses are highly dependent on the expectations of the economy. If you are one step ahead of whatever theories are current in the economy, you make the correct predictions. Since neo-classical economics is still being taught everywhere, the Chicago School is in excellent position to take advantage of that because their assumptions hold true in the short term. The key figure in the Chicago School is Milton Friedman.

The Austrian School makes as few assumptions as possible. Their prognoses are accurate in the extreme long term (20 years). When all of the short term expectations are corrected out of existence, you will see the Austrian prognostication. The reason they aren’t very popular or widely heeded is that their predictions are always masked over by the short-term effects of governments constantly meddling, tampering, and nudging the economy. The key figures in the Austrian School are Hayek, Mises, and Rothbard. Studying this school of economy lead some to the conclusion of anarcho-capitalism as the ideal.

In addition to this reading, I analyze the economy, the corporations, the government, the bureaucracy, and the political process as a system. I make the assumption that all actors are jealously acting in their best interest. If there is an incentive to abuse a power and an actor can get away with it, that actor will eventually abuse that power to its full potential. I also make note of interactions between two actors that create positive feedback loops which encourages certain behaviors. I take note of interactions that make up a negative feedback loops which discourages certain behaviors. I try to identify how actions by one part of the system may adversely affect another part of the system. Some systems are too large to analyze completely, but I judge the entire system with as much information as possible. That’s why while I find rampant abusive behavior by corporations despicable, I instead will rail against the positive feedback loops in the system propagating bad behavior.

An example of such a feedback loop is the rise of corporate involvement in politics and the rise of the corporate lobby in the last 30 years. All the regulatory organizations that the government established really cramped the ability of corporations to do business efficiently, and so they went to Washington, funded a lot of lobbyists, and eventually got the regulatory agencies to get off their backs. Paying for lobbyists yielded a huge return on investment for those corporations. But the corporate lobby didn’t stop there. The positive feedback loop pushed them to lobby even more and use the regulatory agencies against the consumers, against competitors, and against all future innovators or to get the regulatory agencies to cover up their many misdeeds from public view. The money they gave to lobbyists is still yielding huge returns on investment.

On the flip side, I have great respect for the Constitution and the free market system because they have strong negative feedback loops for poor behavior. They balance the jealousies of individual actors against one another to smooth out and prevent most abuses. Neither is perfect. Neither prevents abuses from ever happening. But both do try to minimize them. The Constitution balances the three branches of government with checks and balances. The free market pits the consumers against businessman and grievances can be aired out in legal courts or in the court of public opinion.

Like I said before, I am not willing to argue that the government cannot do any good at all. I am also not willing to argue that the free market is perfect. But from my analysis of the situation, I am very pessimistic of the goodness of democracy and government power and more respectful of the power of the free market. Perhaps the thing I am most wary about in government is majority rule. I think a great many evils could have been avoided if we had instead required a large super-majority of three-quarters to support an act before it could be signed into law. I really think that we could have avoided the tariffs on industrial goods the industrial North imposed on the South that triggered the American Civil War.

Gorki Águila Carrasco walks around Cuba with a t-shirt saying, “No!”. Shall libertarian liberals stand up and walk around the United States with a t-shirt that says “No!” holding an umbrella on a clear day like Gorki? Or not. Shall we be different?

The point is that Barack Obama has joined the stampeding herd, attacking a precious right, the human right to say, “No!”

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