Bad arguments against libertarianism

I’m a pragmatist, and hence don’t ascribe to the sort of libertarianism advocated by the true believers—those who base their arguments on natural rights.  I’d like a government that intervenes much less than any real world government, but much more than members so the Libertarian Party would want. 

But when I read criticism of libertarianism by outsiders, it almost makes me want to embrace the most dogmatic forms of libertarianism.  Consider a recent critique of libertarianism by Christopher Beam of New York magazine, which struck me as a series of knee jerk reactions to libertarian ideas that seem wacky at first glance, until one actually starts to think seriously about the issues:

There are all sorts of situations the private market isn’t good at managing, such as asymmetrical information (I know my doctor is qualified to treat me because he has a government license)

That’s good to know!  I had almost been brainwashed by some big government advocates into supporting medical malpractice suits.  They kept telling me there are “thousands” of incompetent doctors out there.

I currently have an excellent doctor, but in the past that wasn’t always the case.  How do I know?  Let’s just say that I didn’t evaluate their effectiveness on the basis of whether they are government certified.  Indeed, how many of us have even checked out our doctor’s certification?  (And yes, there are doctors who practice illegally, w/o certification.)

Of course not everyone will agree with me.  But that’s the beauty of libertarianism–if you really are stupid enough to believe that one can judge a doctor’s quality on the basis of certification, you are free to rely solely on doctors who have degrees from respected medical schools.

Beam also ignores the costs of certification—all the residents of poor neighborhoods who are deprived of medical services because the medical cartel has priced health care services at exorbitant levels.  Many ordinary procedures could be performed by people with nurse-level training, for instance.

Here is another critique of libertarianism:

[Penn] Jillette might choose his words differently today. Everyone knows going through airport security sucks, even without “porno- scanners.” But few dispute the need for some line of defense. More-efficient, less-intrusive security would be great. But none at all? Jillette’s tract is a good example of how libertarianism ventures down some fascinating paths but usually ends up deep in the wilderness.

Put aside the empirical question of whether airport security does more good than harm, which Beam doesn’t even consider.  The more serious problem is that Beam confuses libertarianism as a political philosophy with the personal preferences of individual libertarians. 

I don’t know the optimal amount of airport security.  My hunch is that it is much less than we have now, but more that Jillette would prefer.  But all that’s irrelevant; the question is whether the market would provide the optimal amount of air security.  I’d guess the answer is no.  People are irrationally afraid of flying.  The data on the safety of flying are literally beyond human comprehension, like the time it would take to ride a bicycle to Pluto—even with terrorism.  But that means the market failure is probably too much security.  Adding the TSA just makes a small market failure into an even bigger government failure.

I’ll stop there, although the rest of the article is almost as bad.  It consists of the sort of counterarguments you’d get from someone who had heard about libertarianism in a bar, but had never actually bother to evaluate arguments showing the myriad ways in which seemingly well-intentioned regulations can actually do more harm than good.  

More disappointing was the praise Beam received from normally level-headed Matt Yglesias:

I liked Chris Beam’s NY Mag article on libertarians, but I want to quibble with this:

“Yet libertarianism is more internally consistent than the Democratic or Republican platforms. There’s no inherent reason that free-marketers and social conservatives should be allied under the Republican umbrella, except that it makes for a powerful coalition.”

People, especially people who are libertarians, say this all the time. But we should consider the possibility that the market in political ideas works is that there’s a reason you typically find conservative and progressive political coalitions aligned in this particular way. And if you look at American history, you see that in 1964 when we had a libertarian presidential candidate the main constituency for his views turned out to be white supremacists in the deep south.

So Yglesias thinks the main problem was that Beam didn’t also tar libertarians with the brush of racism?  Why pick Barry Goldwater?  Wasn’t Calvin Coolidge even more libertarian?  He presided over a government that spent 4% of GDP.  Yet the deep south states were just about the only states that Coolidge lost in 1924.  And does Yglesias really believe that libertarianism would appeal to the sorts of people who favor Jim Crow laws?  Wouldn’t it make more sense to see where the votes came from for presidential candidates who actually were libertarian, rather than someone who was a hodgepodge of libertarian, conservative, and militarist views?  The best performance by a libertarian candidate occurred in 1980, when Ed Clark received nearly a million votes.  His strongest support came from socially liberal states like Alaska and California; he did relatively poorly in the south.

Of course any movement collects it share of undesirables.  One can find self-professed “socialists” spanning the spectrum of Nordic-style social democrats all the way to hard core totalitarian communists.  So in that sense Yglesias is correct, it is easy to find examples of unsavory libertarian individuals and unsavory libertarian arguments.  But surely he goes too far when he claims:

And this is generally how politics goes in most countries. You have a dominant socio-cultural group allied with the bulk of the business community, and you have a more diffuse “left” coalition of reformers associated with labor unions and minority groups. There’s nothing “inconsistent” about organizing politics this way.

There are two problems here.  First, there are many places, such as Eastern Europe and Russia, where politics split along libertarian/statist lines.  “Liberals” are socially liberal and free-market-oriented.  Conservatives are strongly religious, xenophobic, and anti-market   And even where the right is “pro-business” it often doesn’t favor free markets.  Italy is the classic case of a country that lacks a pro-market right, but to a lesser extent this is also true in Japan, France and Germany (excepting the Free Democrats in Germany.)  In Latin American the right has traditionally been very hostile to the free market, with the notable exception of Chile after 1975.  China also splits along statist/classical liberal lines.  In much of the world Yglesias would be voting for the more free market party.

Yglesias is partly right about the US, but less than he might think.  There have been only a few truly free market reforms in the US since 1975 (price and market entry deregulation, NAFTA, deep cuts in MTRs during the 1980s, welfare reform, immigration reform, banking deregulation, etc.)  All received extensive support from Democrats, often from liberal Democrats such as Ted Kennedy.  So there is actually very little evidence that the statism/free market divide is what separate American liberals and conservatives.   And on both social issues and foreign policy the libertarians are much closer to the Dems.

Yglesias frequently points out (correctly) that American conservatives don’t really act like they believe in small government.  So he’s previously bashed conservatives for not really being libertarian, and now he’s bashing libertarians for being too close to Southern conservatives.  Yes, Obama has pushed the libertarian movement further to the right, but they certainly didn’t feel they had a home in the big-government conservatism of George Bush.

Here’s how one might defend Yglesias’s argument.  A healthy libertarian movement is a sign of good governance in a country with lots of social conservatives.  Where you have bad governance (say lots of really stupid economic policies, and also laws that discriminate against various groups), the honorable opposition is called “liberal.”  When you have already achieved a free market economy and also eliminated most laws that discriminate against minorities, women, and gays, the remaining fight will be in a few areas;  income redistribution, environmental protection, and affirmative government intervention to help minorities.  In that policy environment the dogmatic conservatives will often line up with cultural conservatives who resent the “undeserving poor” getting handouts, and who have somewhat traditional or tribal views on cultural issues.  With enough infiltration from the right, you’ll even get some so-called “libertarians” rejecting libertarian policies like open borders.  

 The dogmatic and pragmatic libertarians should really be treated separately, as any generalizations directed at one group will be wholly inappropriate for the other.   It’s easy to make fun of the views of Ron and Rand Paul.  But I don’t recall Milton Friedman losing many debates over libertarianism.  Indeed I don’t recall him losing any.  If Christopher Beam tried to address the arguments of people like Friedman, Hayek, Brink Lindsey, or Will Wilkinson, he might have produced an article worth reading.

HT:  Tyler Cowen


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68 Responses to “Bad arguments against libertarianism”

  1. Gravatar of Alexander Hudson Alexander Hudson
    29. December 2010 at 12:01

    I think the point that Yglesias was trying to make, or at least the point that I would make, is that over the last 50 years libertarians have to tended to gravitate more towards the Republican Party than the Democratic Party, in large part because Republicans have been more friendly to their small government arguments. This is not to imply that libertarians favor *all* or even *most* of the party’s views, just that a libertarian-Republican alliance is more natural than the alternative, at least in the United States.

    I also don’t think he means to suggest that racists are *always* a natural constituency for a libertarian-minded candidate like Barry Goldwater. But in some contexts this will be the case. In the context of of the 1960′s, with Lyndon Johnson trying to exercise federal power to end segregation in the South, it seems natural that racist southerners determined to maintain this status quo would gravitate to Goldwater, who opposed Civil Rights legislation not because he thought segregation was good, but because he thought federal intervention was bad.

  2. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. December 2010 at 12:06

    Beam is probably like the slim young man here:

    http://www.bing.com/videos/watch/video/milton-friedman-puts-a-young-michael-moore-in-his-place/0686e508592d32a8ee6c0686e508592d32a8ee6c-289996014207?q=milton+friedman+michael+moore&FROM=LKVR5&GT1=LKVR5&FORM=LKVR

    Who doesn’t realize he’s losing the argument.

  3. Gravatar of Alexander Hudson Alexander Hudson
    29. December 2010 at 12:06

    I think part of the problem might be in associating libertarians too closely with the Republican Party. Obviously there is an important distinction, but part of the reason for this association is that Republicans have used libertarian rhetoric and libertarian arguments in the service of some very un-libertarian goals.

  4. Gravatar of libfree libfree
    29. December 2010 at 12:48

    I don’t think we understand the marginal changes to parties between elections. The shift in individuals between parties are subtle and are based on a lot of things that aren’t obvious. I’ve always thought of political parties as being like stocks on the stock market. On any given day, people are buying and selling for a lot of reasons, not just the ones in the headlines. Politician “A” admitting he’s gay will lose some support and pick up other support. It only results in a net loss/gain in popularity. Factor in a whole bunch of people that decided to (support / not support) that person for a whole host of other reasons.

    Plus, agree completely on the statist/free market divide. I know lots of big government Republicans and lots of small government Democrats.

  5. Gravatar of John Hall John Hall
    29. December 2010 at 13:08

    “But all that’s irrelevant; the question is whether the market would provide the optimal amount of air security. I’d guess the answer is no. People are irrationally afraid of flying.”

    I think this whole argument about market failure is mistaken.

    Most people have heard the canard that flying is safer than driving. Even still, the free market for airplane security would give the optimal amount of security given people’s beliefs. If the beliefs turn out to be wrong, that doesn’t mean that there is a market failure. It means the people’s beliefs are wrong. For instance, if people expect growth to be 5% and it turns out to be 0%, that doesn’t mean there is a market failure either. It means the expectations were wrong.

  6. Gravatar of Benjamin Cole Benjamin Cole
    29. December 2010 at 13:23

    This is an interesting and thoughtful post by Scott Sumner.

    Still, as much as I like free markets and individual rights, I wonder if man is not too much a social animal for even a modified form of libertarianism to work.

    In Iraq, we saw how people of different sects/religions treated each other when the state was eliminated. There are no more Jews left, and the Christians have largely left Iraq. Millions of others left their traditional homes from fear, or where killed.

    So, what if in America people put signs on the bars/restaurants that said, “No Blacks (whites, Jews, women, Catholics etc) Allowed.”

    Yes, as a private establishment, they have the right to bar anyone (in a libertarian society). But such signs could help foment ethnic, religious hatreds. As we saw in Iraq, these hatreds can get out of hand quickly (and have in the past in the USA).

    The lib. solution that people will learn to live with each other is fine, if you are not in the group that was extinquished along the way.

    Yes, states do this too, we saw Nazi Germany, Cambodia etc.

    I have come to the unfortunate conclusion that in many areas–pollution, human rights, huge and growing imbalances in income and wealth, or extremely dangerous and cheap weaponery, such as anthrax strains–the state must take a hand to keep things civil. I wish it was different.

    But it ain’t.

  7. Gravatar of Benjamin Cole Benjamin Cole
    29. December 2010 at 13:34

    PS, the idea that Repubclians are libertarians is laughable.

    Have anyone ever pondered the Red State Socialist Empire? Our gigantic global military-foreign policy archipelgo? The USDA, Commerce Department?

    Most of federal income taxes are eaten up by the Department of Defense, USDA, Commerce, VA, Interior and debt. (The entitlement programs are paid for through payroll taxes).

    Each of the above departments are R-Party favorites. How kooky does it get? The R-Party is a big booster behind tobacco industry subsidies…and $8 billion a year in rural telephone service subsidies…an entire rural economy has evolved around federally subsidized highways, power systems, water systems, postal service, rail stops, airports and placement of defense installations. Rural states are Red States.

    I won’t even mention gay-bashing and abortion.

  8. Gravatar of cassander cassander
    29. December 2010 at 13:49

    So, what if in America people put signs on the bars/restaurants that said, “No Blacks (whites, Jews, women, Catholics etc) Allowed.”

    Yes, as a private establishment, they have the right to bar anyone (in a libertarian society). But such signs could help foment ethnic, religious hatreds. As we saw in Iraq, these hatreds can get out of hand quickly (and have in the past in the USA).

    Will these signs cause more or less hatred than the current policy, which is to say that these signs are such serious moral and legal violations as to be beyond the pale of civilized society, unless your a member of a privileged and arbitrarily defined group, in which case they are righteous forces for good? Because I went to college with a black only dorm, which organized speakers from the national organization for the advancement of colored people, and I know the reaction I would have had if I proposed a white only dorm, or a society for the advancement of the Caucasian people.

  9. Gravatar of cassander cassander
    29. December 2010 at 13:51

    Sorry, I wasn’t sure if it was clear or not, but my objection is to the double standard that is the inevitable result of the modern anti-discrimination regime, not the lack of white only dorms or a white NAACP.

  10. Gravatar of Benjamin Cole Benjamin Cole
    29. December 2010 at 14:49

    Cassander-

    I dislike also the double-standard that seems to exist in race and sex relations. I also dislike censorship, meaning no one can tell “race” jokes etc.

    Yet, repeatedly through history, people have shown great desire to hack each other to death over religious and racial identities (often spurred on by state propaganda, I concede).

    Still, I contend it is the role of the state to try to defuse bad relations. In Saddam Hussein’s Iraq, it was illegal to ask if someone was a Sunni or Shiite. It turned out to be a worthy bit of repression.

    Towards the end of his life, viewing the failure that is Russia, even Milt Friedman thought a well-administered civil state was necessary to a free society.

    The siren call of libertaraianism is never quite so appealing to religious or racial minorities, or perhaps even the well-heeled, who need the state to equitably protect their piles of gold by robust enforcement of property rights and contract law.

    While I am blabbing, that is another face of “libertarians”–oh sure, they like those parts of the state that help them–contract law and property rights, rural highways and defense spending–but not other parts.

    That’s why so many call libertarians, “Republicans who want to smoke pot.”

  11. Gravatar of Mark A. Sadowski Mark A. Sadowski
    29. December 2010 at 14:52

    Benjamin Cole,
    To your list of anti-libertarian policies that most Republicans seem to endorse I’d like to add the Patriot Act (which, granted, also had plenty of Democratic support) and the Citizens United ruling by the Supreme Court.

    For example, among the many ringing endorsements given by Republicans, Mitch McConnell said the following of Citizens United: “For too long, some in this country have been deprived of full participation in the political process. With today’s monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups by ruling that the Constitution protects their right to express themselves about political candidates and issues up until Election Day.”

    By “these groups” presumably he means lobbyists.

    I came across the following today on Citizens United that criticized it from a free market perspective:

    “But Citizens United imperils not only our democracy. It also threatens the U.S. economy. Citizens United adds to the existing institutional tools that encourage a “corruption economy,” long known to waste social resources and reward inefficiency. This economy also systematically disadvantages startups and “disruptive innovators”–companies and individuals whose ideas productively displace entrenched alternatives.”

    “Taking this one step further, researchers have attempted to quantify the return-on-investment (ROI) of this corruption. A widely cited study by professors at the Universtiy of Kansas shows a 22,000 percent return on $283 million spent lobbying for tax holidays. Another study demonstrates that large companies got a 600-2000 percent return lobbying for tax breaks. Both of these estimates far eclipse the average ROI for Fortune 500 companies, which is less than 10 percent. As Johnston puts it, corporations can more easily “mine gold from the government treasury than the side of a mountain.”"

    “A corruption economy disincentivizes investment in new technologies, human capital, and socially useful products and services. It instead encourages companies to invest in lobbyists, political action committees, and campaign ads.”

    “A corruption economy rewards those most adept at the D.C. game, not market competition and innovation. The result is higher prices for inferior products and services.”

    “In a corruption economy, established companies are given the upper hand. They have legions of lobbyists, revenue to allocate to campaign expenditures, and deep and long relationships with legislators. Upstarts usually have none of that, so established companies use their greater access to government and legal avenues to kill off young competitors. For instance, when a new data format (from home video to YouTube) hits the market, established content providers often file copyright complaints. Following similar logic, established telecom companies attempt to interfere with Internet traffic. This changes the behavior of new companies for the worse. An upstart’s first idea should be a product or service, not an appropriations rider; its first employees should be engineers, inventors, and management, not lobbyists and lawyers.”

    http://bostonreview.net/BR35.5/ammori.php

    So Citizens United is not only wrong politically, it is bad economically.

  12. Gravatar of Wonks Anonymous Wonks Anonymous
    29. December 2010 at 15:07

    Milton Friedman had the same “unsavory” take on discrimination laws as Rand Paul & Goldwater (who was personally a desegregationist when it came to his family’s business and the Arizona government). He also said that conditional on having a welfare state, we cannot have open borders. I don’t know what Hayek’s views on those areas were, but he’s hardly more acceptable to liberals than Friedman.

  13. Gravatar of Wonks Anonymous Wonks Anonymous
    29. December 2010 at 15:15

    Mark A. Sadowski, can you name any self-described American libertarians who oppose Citizens United? The ACLU was in favor. That sort of “inequality road to serfdom” (as Will Wilkinson named it) argument is generally used by people to argue against libertarians. Would you also say that tax-cuts for the rich are anti-libertarian?

  14. Gravatar of Benjamin Cole Benjamin Cole
    29. December 2010 at 15:31

    Mark Sadowski-

    Interesting post by you.

    Yes, there is an inherent conflict in free markets–the successfull will become rich, and when they are rich they tilt government in their favor.
    If you say then let’s reduce government, the rich then become the government. Feudalism, it was called.

    Again, I do not support welfare states–heck, I even think the Department of Education, HUD, and the USDA ought to be sunsetted.

    But economic concentrations of power inevitably lead to political concentrations of power.

    Just reality.

  15. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. December 2010 at 15:34

    What did the Citizens United case have to do with lobbying?

    But, does this mean you’re in favor of abolishing the corporate income tax?

  16. Gravatar of Full Employment Hawk Full Employment Hawk
    29. December 2010 at 15:48

    We are clearly in complete disagreement here.

    Government evaluation of the effectiveness of physicians is far from perfect, but is doing a better job that the average person with no medical knowledge can do. Since my intelligence and education is far above average, I can do a better job evaluating the doctors that treat me than the average person, and I do not rely exclusively on the government certification for my evaluation, but also make my own. But the fact that the doctor has to meet government certifaction requirements assures me more that my own ability to do such evaluations does. And doctors who practice without a licence can be prosecuted. The asymmetric information problem is very serious for even people like me. What I would like to see is more vigorous government enforcement of medical licencing, for example, so that a doctor who loses his licence in one state cannot get a licence in another.

    More generally, my position is that externalities, market power, asymmetric information, and missing markets are the RULE, and not exceptions to an otherwise perfectly competitive market. Therefore real world economies only have an invisible paw, not an invisible hand. The market system is very powerful and works reasonably well most of the time. If it did not, economies beyond bare subsistence could never have developed. But because of this, real world economies can go badly off the track from time to time, and then the visible hand of the government has to intervene to put it back on the track.

    I see agressive use of monetary policy the most effective form of intervention at the macroeconomic level, which is why I participate in this site.

  17. Gravatar of Mark A. Sadowski Mark A. Sadowski
    29. December 2010 at 15:52

    Wonks Anonymous,
    My sense is that capital “L” Libertarians are divided over the Citizens United decision. For example a group of Libertarian Party of Michigan members led by Will White issued the following news release in January:

    “Calling the recent Supreme Court decision to allow unlimited corporate funding of electioneering “another serious violation of the Constitution,” some Michigan Libertarians have begun a movement to impeach Justice Kennedy, the chief author of the opinion and the only sitting justice who also sided with the majority in the 2005 Kelo vs. New London, CT decision on eminent domain. That decision gave government the power to seize private property and give it to corporations promising higher tax revenues. These decisions show the court, and Kennedy in particular, has forsaken the rights of the individual in deference to big business.”

    http://www.brianrwright.com/Coffee_Coaster/01_Columns/2010/Columns_Doc/100201_Will_White_News_Release.pdf

    The ACLU’s position is also less than clear. Their membership was split over the implications of the ruling and its board sent the issue to its committee on campaign finance for further consideration:

    http://www.nysun.com/national/aclu-may-reverse-course-on-campaign-finance/86899/

    I consider myself pragmatically libertarian, and like many Libertarians I’m oppossed to the decision.

  18. Gravatar of Full Employment Hawk Full Employment Hawk
    29. December 2010 at 16:04

    “Still, I contend it is the role of the state to try to defuse bad relations.”

    For a generation Yugoslavian dictator Marshall Tito kept the hostile ethnic and religious groups in that region from looting, raping, and killing each other. When the power of government collapsed, all hell broke lose.

  19. Gravatar of Full Employment Hawk Full Employment Hawk
    29. December 2010 at 16:10

    Mark Sadowski is right on”

    “A corruption economy rewards those most adept at the D.C. game, not market competition and innovation.”

    Citizens United will greatly increase the investments of corporations in rent seeking behavior, which produces both inefficient and inequitable results.

    Libetarians tend to favor interpreting the Constitution and the Bill of Rights on the basis of original intend. It was clearly not the original intent of the framers of the Bill of Rights to have the provisions apply to corporations.

  20. Gravatar of Full Employment Hawk Full Employment Hawk
    29. December 2010 at 16:18

    Neither you nor Milton Friedman are libetarians in the area of monetary policy. Full libertarians like Ron Paul are opposed to the use of monetary policy and favor a policy of laissez-faire with respect to the money supply, at the most, tying money to gold is the most government intervention they favor.

  21. Gravatar of libfree libfree
    29. December 2010 at 16:21

    Historically, the role of markets in segregation has been vastly overstated and the role of government understated. Private individual interaction with private individuals shouldn’t have state interference. My personal belief (unsupported by any concrete evidence) is that every law requiring some sort of tolerance towards one group or another, invites backlash by the group being targeted.

  22. Gravatar of W. Peden W. Peden
    29. December 2010 at 16:33

    Benjamin Cole,

    If man (sic) was not a social animal, then libertarianism couldn’t possibly work. As far as we are benevolent, co-operative and honest, we don’t need a state at all. The need for a state arises out of our vices, not our virtues.

    Full Employment Hawk,

    I am reminded of George Stigler’s paper, where he proved that all demand curves are inelastic. And all supply curves are inelastic. His next paper in that series was to be a demonstrative proof that the price system didn’t exist.

    Wonks Anonymous,

    Yes, Milton Friedman had the most sensible view on discrimination laws: there is no basis, consistent with equality before the law, on which one can forbid private choices to discriminate, whether it’s a business hiring on a racist basis, a hotel choosing not to host a NAMBLA conference, or a customer choosing a red car rather than a structurally better green car.

    What one can do is ensure that people pay the full costs of any immoral discrimination. That’s the brilliance of a free-market: racial discrimination is expensive.

    When I studied social relations in the old USSR, I was stunned by the degree of racism, particularly in hiring and the party nomenclature. This was because, in the absence of a competitive economic and political market, the costs of racism were eliminated. Hiring an incompetant Russian (or at least Slavic) manager rather than a Baltic, Caucasian, Jewish or a Central Asian manager. As a result, if you look at the black market in the Soviet Union, it was dominated by ethnic minorities, because the state-run legal economy was generally closed to talented minorities. There were no figures in Soviet management that could be compared with, say, Alan Sugar in the UK, because anti-Semitic hiring practices were effectively subsidised by the state.

    As for the general “libertarians vs. liberals” view, I find myself sharing many of the sympathies of US liberals; my disagreement tends to concern means rather than ends. For instance, they seem to be familiar with every possible market failure, but “government failure” still isn’t part of the American lexicon.

    In fact, one of the notable things about the political market, as opposed to the economic market, is that things tend to be named in terms of their ends (“minimum wage laws” “the war against drugs” “homeland security” “rent control” etc.) rather than in terms of the instruments used.

    So, with licensing, the question is not whether or not it would be good that the government would weed out all bad physicians, but “What are the processes and incentives created by licensing laws?” If they are defensible, they should be defend empirically in answer to that question.

  23. Gravatar of Scott Sumner Scott Sumner
    29. December 2010 at 16:33

    Alexander, I don’t agree. I think he was saying that libertarians and conservatives naturally fit together. The GOP has certainly not been the small government party–the government grew at a very fast pace when they finally took power in 2001.

    I agree with your point that sometimes racists will find things they like in the libertarian movement, just as sometimes gays and feminists will find things they like. But I think that view contradicts Yglesias–it suggests that conservatism is not the natural home of the libertarians. That they have no natural home in either party.

    Patrick, Thanks for that video.

    Alexander, I agree with your second point, but would add that the Dems also frequently use libertarian rhetoric–think of how they want the government out of the bedroom, or how they criticized Bush’s war on terror.

    libfree. Thanks.

    John Hall, That raises a deep philosophical question–too deep for me to answer. In any case, I think we agree on policy.

    Benjamin, You said:

    “In Iraq, we saw how people of different sects/religions treated each other when the state was eliminated.”

    I think you are confusing libertarianism with anarchy. Most libertarians support a state that aggressively protects peoples’ rights. I consider Sweden to be far more libertarian than Iraq, indeed I don’t think it’s even close.

    You said;

    “I have come to the unfortunate conclusion that in many areas–pollution, human rights, huge and growing imbalances in income and wealth, or extremely dangerous and cheap weaponery, such as anthrax strains–the state must take a hand to keep things civil. I wish it was different.”

    I completely agree.

    Mark, I don’t believe the cause of corruption is lobbying, I believe lobbying is an effect of corruption. The root causes are complex–partly cultural and partly our system of governance, which is nowhere near democratic enough. I favor the Swiss system, which I believe would greatly reduce corruption. Have people vote on every tax increase. Every school should be its own school district. Like Sweden every county should fund and run it’s own health care system.

    Wonks Anonymous, Those are very good points, which raises an factor I forgot to mention; history. The past was different, and even the greatest intellectuals of the past (on both the left and right) said and believed things that modern intellectuals find repugnant (I’m refering here to Hayek, not Friedman.)

    Perhaps the bigger problem with mentioning Goldwater is that 1964 is a long time ago. What was Goldwater’s view of civil rights in 1990? If Goldwater opposed Jim Crow laws in 1964, then by the cultural standards of 1964 in the Deep South he was (relatively) liberal. But the main things that made him un-libertarian were his views on the military and foreign affairs

    The Henderson article you linked to makes a good point–we’ll never know what a color-blind legal regime would have produced in the US. Because I’m a pragmatist, I don’t have any principled objection to either side of the debate over the 1964 Civil Rights act. To me the question is empirical–what legal structure most effectively removes barriers to African Americans? At a minimum, I can’t see any good pragmatic arguments for not banning discrimination against customers of various races. So in that sense I disagree with Friedman. (At least the Friedman of 1962–I don’t know his later views.)

  24. Gravatar of Scott Sumner Scott Sumner
    29. December 2010 at 16:50

    Full Employment Hawk, If you have empirical evidence to support your argument I’d love to see it. Most of the studies I’ve seen suggest that government regulation, even in health care, does more harm that good.

    Why do you think government certification is more reliable than medical school certification? Isn’t it also illegal to claim you are a grad of the University of Michigan medical school, if you are not?

    You said;

    “More generally, my position is that externalities, market power, asymmetric information, and missing markets are the RULE, and not exceptions to an otherwise perfectly competitive market. Therefore real world economies only have an invisible paw, not an invisible hand. The market system is very powerful and works reasonably well most of the time. If it did not, economies beyond bare subsistence could never have developed. But because of this, real world economies can go badly off the track from time to time, and then the visible hand of the government has to intervene to put it back on the track.”

    I agree, but because government failure is usually worse than market failure, I favor a light touch. But I do support regulation in some areas such as pollution.

    You said;

    “Neither you nor Milton Friedman are libetarians in the area of monetary policy. Full libertarians like Ron Paul are opposed to the use of monetary policy and favor a policy of laissez-faire with respect to the money supply, at the most, tying money to gold is the most government intervention they favor.”

    I strongly disagree, as having the government tie the dollar to gold is just as interventionist as having the dollar tied to NGDP futures contracts.

    A “full libertarian” would presumably oppose the gold standard, and instead would support a free market in money. In my view a free market in money (in the US) would lead banks to issue notes redeemable in euros, or perhaps a basket of currencies. Being a pure libertarian is about as sensible as being a pure socialist, where pure socialism is defined as a system with no private property at all, like Maoist China. Someone can and should be a less than pure socialist, and they can and should be less than a pure libertarian.

    W. Peden, Those are very good observations. However I slightly disagree on the discrimination issue. I don’t se ehow the priciple of equality before the law precludes rules against racial discrimination.

  25. Gravatar of W. Peden W. Peden
    29. December 2010 at 17:25

    Prof. Sumner,

    As I see it, from Hayek’s analysis of equality before the law, a salient principle of equality before the law is that the state should forbid means, not ends.

    For example, the state may forbid that I shout political slogans in the street at night with a megaphone. But I am as forbidden from shouting government-approved political slogans, as I am from shouting political slogans contrary to the government. That’s equality before the law.

    On the other hand, consider a case where I am forbidden to buy the custom of the NAACP when they want to use my hotel, because the government disapproves of the NAACP’s objectives. In such a case, I would be allowed to let them use my hotel if they were, say, the KKK, so it’s not the means that is forbidden, it’s the end. In such a case, there is inequality before the law: the KKK and NAACP are treated differently in the legal system because of their different ends.

    Now, consider the case of two people: one who hires on the basis of whether or not someone is suitable, and the other who tempers this motive with disgusting racism. In both cases, they are discriminating, in the sense of picking specifically on the basis of criteria. The means are the same. However, one end is illegal, while the other is legal. There is no equality before the law in such a case, because the law has mandated ends (the criteria upon which discrimination can take place) rather than means (discriminating, full stop).

    The case of state employment and purchasing is different, because the state exists to serve the sovereign(s) and the sovereign(s) can choose the basis upon which the state hires. The ends of the state should be the ends of its rulers. In a republic, this means the people. I for one don’t want the state to discriminate racially, but that’s because the state is (in part) MINE. A person’s business or home or body, however, is not mine and I don’t feel that its my place to tell them what ends they may use it to accomplish. I have no more right to mandate the goals of a business selecting its employees, than I have a right to tell a person the basis upon which they may pick their dates.

    Of course, that’s not forbidding rules (as opposed to laws) against discrimination. If I found out that an employee was a racist, for instance, I imagine I would fire them. As a moral matter, we should condemn and ostracise racism, but we should seek to do so in a way that is compatible with equality before the law, which is the form political equality that I cherish the most.

  26. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. December 2010 at 17:35

    ‘Citizens United will greatly increase the investments of corporations in rent seeking behavior, which produces both inefficient and inequitable results.’

    Hard to see the connection. Most rent seeking behavior is done quietly, not advertised on television (the actual issue in CU v. FEC).

  27. Gravatar of honeyoak honeyoak
    29. December 2010 at 17:46

    I think summer’s point about the political spectrum in other countries is very good. having lived in a country where there is NO political competition on economic grounds, I truly appreciate such political discussion, at least in rhetoric if not action.

  28. Gravatar of Mark A. Sadowski Mark A. Sadowski
    29. December 2010 at 18:33

    Patrick R. Sullivan,
    The main problem is that Citizens United failed to address the important distinctions between non-profit and for-profit corporations.

    The constitutional promise of equal rights quickly evaporates when immensely wealthy corporations compete against individuals.

    If libertarianism is about anything, it is about the rights of the individual and the role of government to protect those rights. Can you explain to me how this decision protects my individual rights in any way, shape, or form?

    Giving free reign to multinationals whose budgets are bigger than many states is giving them control of the debate in the political arena. To paraphrase an old saying—you cannot argue with someone who runs a printing press and buys ink by the barrel just by printing a few posters. Likewise, you cannot argue in the political debate unless you have millions to buy air time (except now it’s in the billions).

    Campaign finance laws in general are definitely a convoluted mess though, even the Bipartisan Campaign Reform Act of 2002 (cosponsored by Russell Feingold, the only Senator to vote against the Patriot Act I might add).

    In my opinion, political parties and non-profit groups (which are obviously treated differently than for-profit corporations) should be the only legitimate means for individual citizens to form associations to promote candidates and influence elections.

    If you think it was hard for third parties before, this ruling just made it next to impossible.

    Just one libertarian’s opinion (although I’m not alone).

  29. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. December 2010 at 18:49

    ‘The constitutional promise of equal rights quickly evaporates when immensely wealthy corporations compete against individuals.’

    Can you point to anything in the actual Constitution to support that assertion?

    ‘Can you explain to me how this decision protects my individual rights in any way, shape, or form?’

    You can arrange your affairs through a corporation and use that to argue for or against any political candidate you wish. That’s now your First Amendment right (again).

    ‘you cannot argue with someone who runs a printing press and buys ink by the barrel just by printing a few posters. ‘

    Scott seems to be doing just that with a few blog posts.

    ‘political parties and non-profit groups (which are obviously treated differently than for-profit corporations)’

    No kidding, the former don’t pay taxes. Why should non-tax payers get privileges denied to taxpayers?

  30. Gravatar of Paul Zrimsek Paul Zrimsek
    29. December 2010 at 20:24

    If you can’t argue with someone who runs a printing press and buys ink by the barrel, then the “equal rights” to which Mark Sadowski wants to sacrifice our civil rights are nothing more than a chimera, Citizens United or no Citizens United. That is, unless the other part of the plan is to abolish printing presses and sell ink by prescription only in little bottles. (Is it?)

  31. Gravatar of Mark A. Sadowski Mark A. Sadowski
    29. December 2010 at 20:38

    Paul Zrimsek,
    You’re implicitly referring back to the idea that voters will be able to shrink government back to its constitutionally proscribed limits so it isn’t interfering in the economy.

    This is pie-in-the-sky wishful thinking that would put libertarians solidly within the fringe element.

    “If” government wasn’t so interfering and “if” the government wasn’t for sale” are pretty big IFs. That seems like an admission that government is for sale, which it is, and guess who is buying it?

    Not individuals (except as pawns, couriers and lobbyists for the multinationals).

  32. Gravatar of The Rage The Rage
    29. December 2010 at 22:02

    Sadowski is a classic market statist. The word “statism” goes far beyond the traditional ‘nation state’.

    Ron Paul believes in totalitarism……..of the market. The “market” itself has to be created, traditionally by the nation-state. Hence the nature of the market is statist.

    Even a non-traditional “goverence” that isn’t run by the nation-state is created.

    There is nothing “free” about “Libertarians”. They just believe in low caste domination not unlike socialists. The main difference is, they unlike socialists, don’t try equalize the economic units inside the spheres. “Libertarianism” would lead to international slave states and tryanny. Much like socialism……who were ironically called “Libertarians” in the 19th century.

    Decadence of the low castes always leads toward death. Money supply should always be controlled by the public and not be private actors who look to undermine a country. The final stage of Libertarianism is death. Nothing more, nothing less.

    Hence, the true “consititutional limits” aren’t on the government but the private actors themselves. When they cross the line to treason and internationalism…………even when they mutter they are such great patriots(which they weren’t).

  33. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. December 2010 at 22:23

    Actually, Paul seems to be implicitly referring to your claim that the First Amendment doesn’t cover newspapers (the most conspicuous ink by the bottle purchasers).

  34. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    29. December 2010 at 22:30

    Oops, that should have been, ‘newspapers (the most conspicuous ink by the barrel purchasers)’.

  35. Gravatar of W. Peden W. Peden
    29. December 2010 at 23:44

    A (very slightly) more serious observation on information asymmetries-

    Premise 1: Amazon.com and Ebay.com are online retail firms, where trading takes place between almost totally anonymous heterogenous sellers/buyers with little government oversight.

    Premise 2: Such markets are characterised by severe information asymmetries.

    Premise 3: In cases of markets with severe information asymmetries, market failure theory tells us that market agents will strongly avoid them if at all avoidable.

    Premise 4: Online retail is an avoidable market, therefore it should be avoided by all market agents.

    Conclusion: Amazon.com and Ebay.com do not exist.

    What went wrong? Again, Hayek has the answer (I’m sounding suspiciously like Rothbard with von Mises!). In such markets, individuals will create spontaneous orders to facilitate mutually beneficial exchanges. In the case of online retailers, competition on reputation has emerged. If I’m buying something on Amazon.co.uk, I will look at a seller’s past record to determine whether or not I trust them to supply the product in a good condition. Compare with mainstream theory regarding the role of brand identity in securing sales.

    Now, let’s look at a market with far more government intervention: banking. There was once a time when reputation was very important in the banking sector, but in an age when most of our deposits are guranteed by the government and central banks (until recently) always intervene promptly when an institution gets into trouble, it makes little sense to pay much attention to the reputation of banks. Banking in the West, therefore, is characterised by competition on price and product differentiation rather than competition on reputation. I don’t even consider depositing money with the Airdrie Savings Bank, because their ultra-safe banking practices are meaningless in a world where I can put my money into Icesave and still get my deposit back when the Icelandic banking industry implodes.

    Put another way: would you bank in the same way, if your deposits were guaranteed?

    Put another another way: would reputation be as important as it is in the online retail sector, if all purchases were guranteed by the government?

    (See the work of Timberlake, White, Ricketts, Hoskins, Wallison and O’Driscoll for more detailed study into the erosion of the role of reputation and trust in the banking sector by government intervention.)

    An extreme case of all this was the old Eastern Bloc, which was characterised by what one might call “unrobust social capital”. Social capital, like all capital, is heterogenous (contra basic neoclassical theory) which has important implications. In the case of the Eastern Bloc, social institutions were the construction of the Party/State apparatus. There was a party secretary in every factory, Young Communist leagues, Palaces of Culture and all manner of social capital. On the other hand, product quality was horrendous and unreliable, since seller reputation is meaningless in a market of state monopolies.

    After each revolution in the Eastern Bloc, state-sponsored social capital dissolved very quickly, leaving an extremely distressing and damaging vacuum. In many countries, societies have not yet recovered from this social capital shortage. The institutions that survived tended to be voluntary institutions, like churches and mosques, i.e. instances of social capital created in a “market” situation.

    The key fault in most of the recent research in market failure is that, while looking at information is a good step (albeit something that exists in the work of Stigler and Hayek, and in both cases more profoundly and predictively usefully than in the work of economists like Stiglitz) it’s looked at in a very “Homo Economicus” way. In real life, people form bonds and create bridging institutions i.e. what Hayek calls the “spontaneous order”.

    Where one finds this spontaneous order breaking down, it tends to be exactly where the costs of transaction have been distorted by government intervention, as in the financial sector.

    I think one can, in principle, make a pragmatic libertarian or classical liberal argument for licensing, as licenses in theory facilitate contracts. But one should be very wary about disrupting spontaneous orders, as the recent financial crisis proves. Therefore, the case for licensing in a particular profession should be based on sound empirical evidence rather than Stiglitzian Homo Economicus market failure theory that, if sound, would imply that neither Amazon.com nor Ebay.com should exist.

  36. Gravatar of reason reason
    30. December 2010 at 01:26

    W. Peden,
    the problem with your argument is of course that Amazon and E-Bay specific took steps to address the information assymmetry question. If the answer seems ridiculous, check your assumptions.

  37. Gravatar of W. Peden W. Peden
    30. December 2010 at 01:28

    Reason,

    That is exactly my point. There was an information asymmetry, but people took steps to address the information asymmetry in order to facilitate exchange. That’s an example of spontaneous order.

    If all purchases on Amazon or E-Bay were underwritten by the state, would there still be any need for seller profiles, aside from any incovenience from seeking a refund from the relevant state office?

  38. Gravatar of libfree libfree
    30. December 2010 at 04:02

    1. I think that we generally overstate the importance of money/advertising in politics. Hillary outspent Obama by a good margin but still managed to lose to him. I think its more likely that the cause that has the most popular support is the cause that raises the most money not the other way around.

    2. My right to organize and structure with other individuals (as a corporation) shouldn’t limit my right to petition the government. If W. Peden and I form a widget making company and we think the regulations regarding widgets are unfair, we should be able to use our collective funds to petition the government. We could do it individually but then we’d have free rider problems ect.

  39. Gravatar of Lorenzo from Oz Lorenzo from Oz
    30. December 2010 at 04:24

    On Citizens United, how does one distinguish between corporations such as the ACLU and corporations such as GM? Surely the more sensible principle is people are entitled to exercise their rights through organisations, including corporations. Moreover, freedom of speech is the freedom not only to speak, but also to hear.

    I generally find the notion that corporations have some potentially crushing power fairly laughable. First, the “evil” of corporations is standard fare in most of the (very large) education sector and sells lots of books and documentaries, are standard Hollywood villains, etc. Second, people patently prefer to live in places where corporations are thick on the ground, rather than those where they are thin on the ground.

    On lobbying generally, corruption is the market for official discretions. The more official discretions you have then, ceteribus paribus, the more corruption you will tend to have. From about 1770 to about 1850, the main activity of the British Parliament was removing various monopolies, privileges and official discretions. The result was that the UK acquired a reputation for notably honest government (not something people said of British government during most of the C18th or earlier). Interventionist government generates lobbying the way manure attracts flies: there is so much crap to feed off.

  40. Gravatar of Ram Ram
    30. December 2010 at 05:39

    This is why I prefer the term ‘neo-liberal’. For reasons unknown to me, the term ‘libertarianism’ is usually reserved for borderline (or bona fide) anarchism. As such, utilitarians who worry more about government failure than market failure in general, but who nevertheless worry more about particularly costly market failures than the government failures that invariably accompany attempts to correct them, fit in with neither the dominant strand of liberal thinking, nor the dominant strand of libertarian thinking. Neo-liberal picks out this middle ground nicely, for it emphasizes not only the philosophical connection to liberalism (via utilitarianism), but also the policy connection to (relatively) free market capitalism. Though it is not hampered by associations with political extremes of any particular sort, it does have a negative connotation, because of its association with the structural adjustment methodology of the IMF and the World Bank. Still, I think it to be the least inaccurate way of characterizing my own views.

  41. Gravatar of Joshua Macy Joshua Macy
    30. December 2010 at 06:54

    I’ve never met anybody who admits to believing whatever the side that has spent the most money on an issue says, and every election cycle demonstrates the falsity of the claim that the side that spends the most money always wins. The entire argument for campaign finance “reform” rests on the proposition that if we allow certain people to speak, they might be believed, and we can’t be having that. It’s hard for me to imagine a more illiberal belief than that.

  42. Gravatar of Brian Brian
    30. December 2010 at 06:55

    Excellent post

  43. Gravatar of Slocum Slocum
    30. December 2010 at 08:49

    “Government evaluation of the effectiveness of physicians is far from perfect, but is doing a better job that the average person with no medical knowledge can do.”

    But that’s a false choice. Absent government licensing, it wouldn’t be ‘every poor layman for himself’. Instead, people would rely on private ratings/certification organizations. This would be a big improvement because such organizations would NOT have a legal monopoly so they would have to jealously and carefully maintain their standards and reputations–unlike a government agency which knows regardless of how much and how often it screws up, it will never be replaced by a competitor (indeed, for government agencies, major screw-ups can be a good thing since they can be used as a justification for more funding and more bureaucratic empire-building).

    Who do you trust more — Consumer Reports? Or state licensing boards? Do you think state licensing boards are more or less susceptible than Consumer Reports to political influence-buying/corruption/regulatory-capture/garden-variety laziness and incompetence? The answer is pretty obvious, isn’t it?

    Say it a thousand times until it sinks in LIBERTARIAN DOES NOT MEAN EVERY PERSON FOR HIMSELF!

  44. Gravatar of ssumner ssumner
    30. December 2010 at 09:54

    W. Peden, If that’s Hayek’s argument then I think it is a bad argument. It’s not pragmatic. Here’s how I think equality before the law should be interpreted:

    a. All people of whatever race are allowed to criticize the government.

    b. No people of any race are allowed to yell fire in a crowded theatre.

    c. All shops are allowed to discriminate against tall customers.

    d. No shop is allowed to discriminate against customers based on race.

    I don’t see these examples violating equality before the law. Rather they are examples of the government making pragmatic distinctions about where to legislate and where to let the market prevail.

    Patrick, I agree. I think the indirect effect of corporate speech restrictions do more harm than good.

    Thanks Honeyoak.

    The Rage, So what’s your preferred political system?

    W. Peden, Those are good points about the importance of reputation.

    libfree, I agree that people overrate the importance of money in elections. Money goes to plausible candidates, but that’s to be expected. The actual victor depends on the condition of the economy, the quality of the candidates, etc.

    Ram, Those are also my views–I consider myself a neo-liberal. Sometimes I use the term right-wing liberal, although that bothers some people.

    Joshua Macy, I agree.

    Thanks Brian.

    Slocum, I agree.

  45. Gravatar of Wonks Anonymous Wonks Anonymous
    30. December 2010 at 10:37

    I hadn’t heard of those Michigan folks. I guess I was too quick to jump to a conclusion, Sadowski.

  46. Gravatar of PaulG PaulG
    30. December 2010 at 11:53

    “Why pick Barry Goldwater? Wasn’t Calvin Coolidge even more libertarian? He presided over a government that spent 4% of GDP. Yet the deep south states were just about the only states that Coolidge lost in 1924.”

    Hmmm. How could someone from the party of Lincoln get swept in the South just 60 years after the Civil War? Tough one.

    Well, it could be in part because the Democratic candidate, John Davis of W. Va., opposed anti-lynching laws, the 15th Amendment and the suffragette movement.

    Short of wearing a white hood, I’m not sure how you could make yourself more attractive in the South in the 1920s.

  47. Gravatar of Richard W Richard W
    30. December 2010 at 12:00

    No sane person wants state interference where it is not required just for the sake of interference. Bureaucracies tend to be self-replicating and politicians rarely vote themselves less power are well known phenomenon. However, it is important to remember the horrors when government just gets out of the way or never gets in the way in the first place.

    http://www.dailymail.co.uk/news/article-1312764/Britains-child-slaves-New-book-says-misery-helped-forge-Britain.html

    The Daily Mail are certainly no bleeding heart lefties. They are the furthest right newspaper in Britain. I would like to think I was pragmatic libertarian. However, I agree with Prof. Sumner that the most dogmatic do more harm than good and their dogma ultimately achieves nothing. So get the government out of the way as much as is reasonable but let’s not pretend we would be living in libertopia but for the government. The government grew in the first place because the conditions were unacceptable in the eyes of reasonable people.

  48. Gravatar of W. Peden W. Peden
    30. December 2010 at 12:01

    Prof Sumner,

    The violation, in that case, is that tall people (and those who discriminate against them) have a different legal status from specific ethnic groups (and those who discriminate against them). If there was simply a law against all shops discriminating against any customers, then that would be a prohibition of means rather than ends and wouldn’t be singling out any ends as unacceptable.

    For example, one can advocate Islamic terrorism, but the contexts in which this advocacy can take place should be restricted by general laws e.g. laws against inciting violence. It’s the incitement to violence for political ends and the terrorism that is prohibited, rather than anything Islamic. That would be consistent with equality before the law.

    On the other hand, if there were specific laws against means when used towards Islamic ends (whether terrorism or more normal Islamic things like preaching, reaching out the local community and engaging in charity) then that would violate equality before the law, because Muslims would be faced with specific prohibitions because of their Islamic objectives. It’s the difference between a War Against Terror and a War Against Islam.

    However, there is one very good argument in favour of certain laws against discrimination: one can argue that, if a business is to discriminate on unusual grounds, then in the interests of transparency and good faith they should be made to publicise it. If people really have so little fibre that they are willing to discriminate on the basis of race, then they should either have the honesty to admit it to the general public or not do it at all.

    I share your desire for pragmatism, but unless we have a clear idea of the goals which we want to accomplish using the state, we don’t really know what a pragmatic solution would be.

    (By the way, there are no laws against shouting “Fire!” in a crowded theatre, only vaguely defined laws like laws against “disturbing the peace”. This makes sense: what if there really was a fire?)

  49. Gravatar of Bob Murphy Bob Murphy
    30. December 2010 at 12:27

    Scott, you sound a lot smarter when I agree with your conclusions. Not sure why that is.

  50. Gravatar of Justin Justin
    30. December 2010 at 12:54

    Scott,

    Great post. Random question if you have time: if you had to pick between the current government, and a hypothetical government based on the principles of natural rights libertarianism, which would you pick?

  51. Gravatar of Thursday December 30, 2010 « Matt Alldian Thursday December 30, 2010 « Matt Alldian
    30. December 2010 at 17:17

    [...] Sumner has an excellent response to a pretty weak criticism of libertarianism in the New York Magazine.  I find myself drifting [...]

  52. Gravatar of Mark A. Sadowski Mark A. Sadowski
    30. December 2010 at 18:10

    The Rage wrote:
    “Sadowski is a classic market statist.”

    Thanks. I view it as a compliment. And given the (libertarian) company I often keep it’s rare I get the pleasure of being lumped with Ron Paul (who I actually voted for way back in ’88). I’m even tempted to put your statement concerning me on a T-shirt. ;)

    As for the rest of the comments directly or implicitly referring to my statements concerning the Citizens United ruling I read them. Most were good points but ultimately in my heart I still disagree.

  53. Gravatar of Hannes R. Hannes R.
    30. December 2010 at 18:30

    When you harm someone psychologically, you obviously limit their freedom. That’s why we have laws against harassment and bullying, and why we can’t write or say anything we like, even though we value our freedom of speech. That’s why I can’t have my television on too loudly because I have to respect my neighbour’s nerves.

    Irrational and prejudicial discrimination is very harmful psychologically for its victims, and obviously invoke strong feelings of restraint. This could be discrimination against race or sex, but against tall people as well if there’s no sound reason for why they should be discriminated against.

    Liberalism is a lot more about defining boundaries than most liberals want to admit. Defining bounderies and defining property rights.

  54. Gravatar of ssumner ssumner
    30. December 2010 at 22:16

    PaulG, Sounds like you agree that Coolidge was much more libertarian than Davis, unless you think libertarians favor lynching.

    Richard; You said;

    “The government grew in the first place because the conditions were unacceptable in the eyes of reasonable people.”

    I don’t think that’s the main reason why governments grew. And I also don’t think that libertarianism is an anti-government philosophy. Libertarians believe governments should do some things and not do others. My own view is utilitarian, I favor government policies that maximize aggregate happiness. I just happen to think that a government that did this would be much smaller than any real world government (at least in the develped world–maybe bigger than the Somali government.)

    W. Peden, You said;

    “The violation, in that case, is that tall people (and those who discriminate against them) have a different legal status from specific ethnic groups (and those who discriminate against them). If there was simply a law against all shops discriminating against any customers, then that would be a prohibition of means rather than ends and wouldn’t be singling out any ends as unacceptable.”

    I don’t agree. Laws that ban discrimination on the basis of race apply equally to all races (or perhaps I should say should apply equally–no one is favored.) And having no laws on height discrimination treats everyone equally, all people could face discrimination on the basis of height.

    I think you are somehow misunderstanding my argument, assuming I favor laws protecting some ethnic groups but not others.

    Yes, You are right about “Fire!”, I don’t know what I was thinking.

    Bob, I think I know why.

    Justin, I hate to dodge your question, but it depends. If the natural rights government was headed by someone like Ron Paul, I’d prefer Obama. This is because even though Paul would get 95% of things right, the 5% he’d get wrong would destroy the economy. We’d have Great Depression #2.

    If the natural rights government was headed by someone more thoughtful and pragmatic (say someone with the approach of Tyler Cowen) then I’d prefer the natural rights government.

    Hannes, I partly agree. But if we are pragmatic we must recall that government remedies to problems have costs. So even if a form of discrimination is harmful, it doesn’t mean it should necessarily be banned. I don’t see anyone calling for a law banning discrimination against tall people, and I presume that is because the problem is so trivial that any government solution would do more harm than good. Otherwise I agree with your comments. By the way, I am 6’4″ and often bump my head. I don’t want the right to sue people for having excessively low door frames. It would make more sense for me to be more careful.

  55. Gravatar of redonkulus476 redonkulus476
    30. December 2010 at 23:39

    Scott says: “The GOP has certainly not been the small government party–the government grew at a very fast pace when they finally took power in 2001.”

    This is an odd statement for a pragmatic libertarian to make. The libertarian purists tend to say such things. They basically act like they are immune to criticism, because they can always claim (pretty justifiably) that “true” libertarians almost never have political power. Rand Paul did something bad? Well, he isn’t really one of us anyway. Nor was Reagan or anyone else for that matter. They were all too imperfect in their classical liberalism. The “true” libertarians somehow end up being theorists and novelists.

    The fact is that historically the Republican Party has been pretty darn classically liberal by the standards of both the U.S. and the rest of the world (I hesitate to use the word libertarian in this case, because it seems to be so loaded). Yes, there are embarrassing examples of Republicans supporting big government programs, but that’s how politics works. It’s inherently disappointing.

    But to all the libertarians out there (I’m not one. But I’m generally a small government guy.): Do you think there’s a large chance of the U.S. in the next, say, 30 years, electing someone significantly more classically liberal than, say, Reagan or Coolidge as president? In the real world Milton Friedman doesn’t get elected president.

    To Scott: I realize you are not one of the fire-breathing sort of libertarians. But you should realize that sometimes the best you get is someone who is with you 70% of the time and against you 30% of the time. If you look at some of the Republicans in the House, actually some of them are pretty consistent free market types. E.g. I was impressed a few years ago to hear that Dan Lungren (CA) was against the 2008 farm bill. There are some good apples still. Among the Democrats, you might find someone who supported a free market reform or two in the 70s or 80s, but many of those guys are actually for big government about 90% of the time.

  56. Gravatar of redonkulus476 redonkulus476
    30. December 2010 at 23:44

    I should add: Yeah, some aspects of the 2001-2006 period were embarrassing, but does that undo all those decades of being the small government party (at least relative to the alternative)? Some people may then bring up Nixon. But are you comparing him to Humphrey and McGovern or to Milton Friedman?

  57. Gravatar of Mike Sandifer Mike Sandifer
    31. December 2010 at 05:14

    Scott,

    You wrote: ” But I don’t recall Milton Friedman losing many debates over libertarianism. Indeed I don’t recall him losing any.”

    Yet, I’ve noticed some obvious flaws in the specifics of some of his arguments. Take the excerpt of Free to Choose below, for example.

    http://www.youtube.com/watch?v=UFGBHiTlXuw&feature=related

    He more or less treats the inheritance of musical talent with that of monetary wealth. The problem is, the children in the music school have already demonstrated specific talent, while at least some inheriting wealth have not demonstrated talent as capital allocators and/or business managers.

    I think Warren Buffett makes a good point when he says that vast inherited wealth risks supporting the development of plutocracies.

  58. Gravatar of John Papola John Papola
    31. December 2010 at 05:19

    Tremendous post Scott. I have to say that your commentary on neo-liberalism and political economy is probably my favorite stuff. NGDP is interesting… but this stuff is REAL gold.

  59. Gravatar of John Papola John Papola
    31. December 2010 at 05:42

    Underneath the New York Magazine commentary is a really childish view of politics and government action that seems to underpin progressivism in general: intentions and stated goals are reality. Because government licensing is claimed to be a filter for quality, they believe it is. Pay no attention to the actual history regarding who pushed for licensing, the arguments they made at the time or the actual outcomes in the real world. All of those pesky facts would bring some mature thought into play. It’s pretty strange to see someone write such a long piece, have it published, while maintaining such an infantile set of beliefs. Oh well. Hence the need for eternal vigilance…

  60. Gravatar of W. Peden W. Peden
    31. December 2010 at 07:15

    Prof. Sumner,

    You may well be right. It’s an issue on which I’m still very much undecided, especially because it’s a case where I can see myself sacrificing equality before the law, even if one presupposes that laws against racial discrimination violate equality before the law.

    Mike Sandifier,

    I think his point is not that having innate musical talent and being born with wealth are identical in every respect, but that their similarity in terms of both having their ability “by chance” undermines the conventional meritocratic arguments against inheritance. However, I do think he overlooks the way that a society might tax inheritance as a means of fighting tax avoidance, since it’s hard to hide death.

    As for plutocracies, I agree that there should always be concern about the power that come from wealth (though I don’t think that the inheritance or otherwise of wealth makes a difference in this regard) but I think that one of the reasons why the wealthy get involved in politics so much is because politicians are so powerful. If the wealthy weren’t so scared of politicians and so able to gain advantages (bail-outs, subsidies and such) by influencing politicians, perhaps there’d be less of an incentive for the wealthy to be so involved in politics.

    John Papola,

    Thomas Sowell once pointed out that one of the difference between how problems are considered in politics contra economics is that economists tend to focus on processes and outcomes, while politicians tend to trade in intentions.

    I think this has been one of the reasons why economists have been so lousy at selling the negative income tax: “negative income tax” describes the instruments, not the intentions. If it had been labelled the “minimum income” or the “guaranteed living income” or the “simplified benefit”, I think it would have been adopted back in the 1960s. Something similar is being introduced in the UK (the “universal credit”) but that’s decades after the idea was first mooted.

    That’s why I think that NGDP targeting would have to be called something like the “Monetary Stability Programme” or the “Sustainable Growth Plan” before it could really get any of the public on board. Those are horrible names for ideas in economics (a bit like the “Real-World Economists”) but good names for policies.

  61. Gravatar of PaulG PaulG
    31. December 2010 at 07:17

    Ssumner:
    “Sounds like you agree that Coolidge was much more libertarian than Davis, unless you think libertarians favor lynching.”

    To be clear, I’m saying exactly what I wrote. The southern states voted against the party of Lincoln, the Great Emancipator. Coolidge may have had libertarian views on handling the economy (if you think taking loooong vacations a libertarian approach) but most importantly, he was a Republican.

    And Davis was no nanny-state politician either. He opposed child labor laws, anti-lynching legislation and other federal government interference. Less libertarian were his views on corporations, but as you say, libertarianism can be a matter of degrees.

    So Beam makes the point that there should be no strong ideological common ground for free-marketers and social conservatives, except when it made political sense. Like the 1964 election, for example. Free-marketers and social conservatives had a common enemy, the guy who signed the Civil Rights Act and promised a Great Society.

    But Yglesias contends that the political marriage is more natural. He says libertarians would also oppose affirmative action, anti-discrimination laws, etc. The graph after the one you cited:

    “Libertarian principles … prohibit the Civil Rights Act as an infringement on the liberty of racist business proprietors. Similarly, libertarians and social conservatives are united in opposition to an Employment Non-Discrimination Act for gays and lesbians and to measures like the Lilly Ledbetter Fair Pay Act that seek to curb discrimination against women.”

    The consequences of libertarian policies would have seriously adverse effects on folks of color. That isn’t simply a knee-jerk response or tarring all libertarians racist. There’s a logical point to be made here. The market wasn’t going to lift up a former slave class in a very capitalistic society without a little help.

    Also …
    Is it so surprising that the guy who ran in the 1978 California governor’s race had a strong showing in Reagan’s home state as a third-party candidate in the 1980 presidential race? And if name recognition wasn’t enough, he was supported by his well-heeled running mate David Koch.

    One more thing …
    Alaska is a liberal state? Really?

  62. Gravatar of scott sumner scott sumner
    1. January 2011 at 13:09

    Redonkulus476, You said;

    “This is an odd statement for a pragmatic libertarian to make. The libertarian purists tend to say such things. They basically act like they are immune to criticism, because they can always claim (pretty justifiably) that “true” libertarians almost never have political power. Rand Paul did something bad? Well, he isn’t really one of us anyway. Nor was Reagan or anyone else for that matter. They were all too imperfect in their classical liberalism. The “true” libertarians somehow end up being theorists and novelists.”

    You misunderstood my argument. I am not claiming Rand Paul is less of a libertarian than I am. I’m claiming he’s a different type of libertarian. This post was certainly not an attempt to defend libertarianism, which has lots of flaws. The purpose was to show that anti-libertarian arguments are quite weak.

    You said;

    “I should add: Yeah, some aspects of the 2001-2006 period were embarrassing, but does that undo all those decades of being the small government party (at least relative to the alternative)? Some people may then bring up Nixon. But are you comparing him to Humphrey and McGovern or to Milton Friedman?”

    What decades? I’d compare Nixon to Kennedy or Carter or Clinton, and he was clearly more of a big government type. The only decade where you could argue the GOP was small government was the 1980s, but even then it was debatable–Clinton was equally small government.

    The GOP has to face up to the fact that when people do systematic studies of government growth, it’s just as fast under the GOP as the Dems. That’s being pragmatic–looking at the evidence, not what people say. Talk is cheap.

    Mike, You said;

    “He more or less treats the inheritance of musical talent with that of monetary wealth. The problem is, the children in the music school have already demonstrated specific talent, while at least some inheriting wealth have not demonstrated talent as capital allocators and/or business managers.”

    If Milton Friedman were alive he’d reply as follows: “Has the government demonstrated talent as capital allocators or business managers?”

    I just noticed that W. Peden (below) has an even better reply.

    I’m not worried about plutocracies, incompetent people are quickly separated from their money. And people like Gates and Buffett are giving almost all their money to charity–I think they’d do the same w/o the death tax.

    John, That’s exactly right. The vast majority of liberal people I know, even highly intelligent liberals, naively believe that the alphabet soup of government agencies has improved things, without a shred of evidence (FDA, SEC, OSHA, CPSC, etc)

    PaulG. You said;

    “And Davis was no nanny-state politician either. He opposed child labor laws, anti-lynching legislation and other federal government interference. Less libertarian were his views on corporations, but as you say, libertarianism can be a matter of degrees.”

    I think we are simply defining libertarianism differently. I believe anti-lynching laws are libertarian legislation, indeed I can’t think of any legislation that is more libertarian. You seem to think it is anti-libertarian. I’m not quite sure how you define libertarian, but it’s not the same way that I do.

    You said;

    “The consequences of libertarian policies would have seriously adverse effects on folks of color. That isn’t simply a knee-jerk response or tarring all libertarians racist. There’s a logical point to be made here. The market wasn’t going to lift up a former slave class in a very capitalistic society without a little help.”

    Again I completely disagree. Ending Jim Crow laws was a very libertarian move, and it allowed African-Americans to make a great deal of progress in the two decades after WWII. That’s a huge success for libertarian ideas. I certainly don’t think we need to abandon libertarian ideals to promote racial progress, just the reverse. And I’d say the same for women’s rights and gay rights. The key to progress was eliminating anti-women and anti-gay legislation, and also changing cultural attitudes. Those are very libertarian methods.

    And since you mention “people of color” it’s also worth noting that throughout history anti-libertarian legislation has done great harm to Asians and Hispanics.

    You said;

    “Lilly Ledbetter Fair Pay Act that seek to curb discrimination against women”

    That’s what it may “seek” to do, but that’s not what it would do.

  63. Gravatar of Mike Sandifer Mike Sandifer
    2. January 2011 at 07:47

    Scott,

    You replied:

    ‘If Milton Friedman were alive he’d reply as follows: “Has the government demonstrated talent as capital allocators or business managers?”’

    The government doesn’t have to allocate capital well or operate businesses to simply tax estates in the interest of progressive taxation.

  64. Gravatar of redonkulus476 redonkulus476
    2. January 2011 at 12:07

    Scott, thanks for the response. I admit I’m not very familiar with studies of government growth under different parties. But I do think of Eisenhower, Ford, Reagan, and Bush I as fairly medium/small government types. Compare them to, say, FDR, Truman, LBJ, Obama.

    Moreover, I think it’s best not to focus exclusively on the president. Some presidents preside over expansions of government, but it might more sense to blame Congress.

    I think the 80th Congress (Repub. majority) under Truman fairly small-government-oriented, but I could be wrong. About half of Republicans in Congress voted against Medicare in the 1960s: http://www.ssa.gov/history/tally65.html
    And I imagine a bunch of them voted against other gov’t expansions in that decade and in the 1970s (interestingly, they actually were more likely to vote for the 1964 Civil Rights Act than the Democrats were.) And small-gov’t Republicans were fairly powerful in the 1990s.

    I think there are more Republican congressmen with small-gov’t voting records than there are Democratic congressman with such records. Perhaps they are not always dominant within the party, but they have a stronger presence in the R party than in the D party.

  65. Gravatar of scott sumner scott sumner
    2. January 2011 at 15:37

    Mike, You said;

    “The government doesn’t have to allocate capital well or operate businesses to simply tax estates in the interest of progressive taxation.”

    Why do you think estate taxes are progressive? Remember the the burden of a tax does not necessarily fall on the person who writes out the check.

    The money has already been taxed once. It is actually a tax on capital, which is harmful. If you favor a progressive tax regime, the way to do it is a progressive consumption tax. Estate taxes reduce capital formation, which hurts workers. That’s why progressive countries like Sweden have abolished estate taxes.

    redonkulus476, I understand the perception, but I think there is much less there than meets the eye. I think much of the perception is based the the GOP’s use of small government rhetoric. I don’t expect this Congress to cut Social Security, Medicare, defence and the other major programs. They talk a small government game, but in the end favor their own special interests.

    In the last 60 years federal spending has hovered around 20% of GDP, it doesn’t much matter who is in office. It rose sharply at the end of the Bush administration–we’ll see if that increase turns out to be permanent.

  66. Gravatar of Mike Sandifer Mike Sandifer
    2. January 2011 at 18:04

    Scott, yes I’ve long favored progressive consumption taxes, but we can’t even seem to get a simplified income tax code right now.

    However, I don’t understand how taxing estates is particularly bad, as opposed to merely raising taxes on ordinary income, or maybe treating all income as ordinary. This is perhaps likely due to economic ignorance on my part.

  67. Gravatar of Neil S Neil S
    3. January 2011 at 08:50

    Prof Sumner,

    Your professed belief that equality before the law should be interpreted:

    “c. All shops are allowed to discriminate against tall customers.

    d. No shop is allowed to discriminate against customers based on race.”

    seems to me to be somewhat intellectually inconsistent. If one is allowed to discriminate against tall customers, what other personal characterstics should one be allowed to use as a basis for discrimination…hair texture, skin tone, visual acuity? Are shops also allowed to discriminate against those of us under 5′ 10″ (aka short people)?

    Regards,
    Neil S

  68. Gravatar of ssumner ssumner
    4. January 2011 at 09:56

    Mike, Taxing estates is taxing capital, which means double taxing the same income and thus discouraging capital formation. We should be taxing consumption.

    Neil, There is no inconsistency at all, they are completely different cases with different cost/benefit ratios. That’s why one is legal and the other isn’t. Laws should be pragmatic, not attempt to follow some sort of logical consistency based on qualitative similarity. The benefit of banning discrimination against tall people is trivial, not worth the cost. That’s not true for race.

    You said;

    “Are shops also allowed to discriminate against those of us under 5′ 10″”

    I think so, I’ve never heard of any law saying they can’t. But I’m not certain.

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