I was reading the comment section of Will Wilkinson’s blog, and came across this assertion:

The libertarian effort to convert liberals will be about as successful as the libertarian effort to convert conservatives. Liberals would at base have to share some common ideology with libertarians for that to work, but since they don’t, it won’t.

I couldn’t disagree more strongly.  Liberaltarianism is basically libertarians attempting to knock some sense into liberals on economic issues.  As you may know, I think both left and right wing liberals have basically the same (quasi-utilitarian) values, but different worldviews.  And as you know, I think the right wing worldview is more accurate on most economic issues (although now I guess I have to exclude monetary policy.)

Let’s review what liberals used to believe, before libertarians knocked some sense into them:

1.  In the US, they believed the prices of goods and services should be set by the government.  Ditto for wages.  This took the form of the NIRA in the 1930s.  It took the form of multiple industry regulatory agencies like the ICC and CAB.  By the late 1960s and early 1970s they favored “incomes policies” which were essentially across the board wage and price controls.  Today they generally favor letting the market set wages and prices.  Very liberal Massachusetts recently abolished all rent controls.

2.  In the US, they believed the government should control entry to new industries.  They have abandoned that belief in many industries, and based on recent posts by people like Matt Yglesias, are becoming increasingly disillusioned with remaining occupational restrictions.

3.  They favored 90% tax rates on the rich.  Today they favor rates closer to 50% on the rich.

4.  In most countries liberals thought government should own large corporations.  Today most liberals around the world think large enterprises should be privatized.  Over the next few decades there will be trillions of dollars in new privatizations, and very few nationalizations.

Sure the recent crisis has created setbacks, such as the government takeover of GM.  But the long run trend around the world has been strongly liberaltarian, and will almost certainly remain so for the foreseeable future.  Just the other day Denmark decided to cut unemployment benefit eligibility from 4 years to 2 years.  Think about what that means.  Two French researchers (Algan and Cahuc) found that Danes had the most liberal/civic-minded attitudes on Earth.  They argued that Denmark was the country most suited to have social insurance programs, because the non-deserving would be less likely to abuse the programs in Denmark than in any other country.  Yet even in ultra-honest Denmark it was found that a large number of workers mysteriously found jobs immediately after their unemployment benefits ran out.  So they are cutting back.  Denmark already has the freest markets in the world, and now they are shrinking their welfare state.  No wonder the Danes are so happy, despite dreary weather.

I see people like Brink Lindsey as trying to make pragmatic libertarians better understand their role in the ongoing policy debate.  We are not engaged in some sort of Manichean struggle between good and evil.  We are trying to convince well-meaning policy wonks like Matt Yglesias of the virtues of free markets.  Whether success on that front would actually change public policy depends on how civic-minded (or “liberal” in the original sense of idealistic) the society is.  In very civic-minded societies liberaltarian ideas are accepted much more easily that in less civic-minded societies, where rent-seeking may be endemic.  In the long run, the only hope for those societies is a change in attitudes.  I believe that occurs through the narrative arts.  Progress seems slow, because the problems seem so overwhelming.  But taking the long view, the progress we have already achieved has been mind-boggling.

Good luck to Brink and Will in their new jobs.

Most libertarians, including me, have generally leaned somewhat toward the Republicans on economic issues.  Therefore it is especially dismaying to read the following comments from the Republican House Leader, John Boehner:

Besides raising the retirement age for full Social Security benefits to 70 for people now 50 or younger, Mr. Boehner suggested curbing benefit growth by tying cost-of-living increases to the consumer price index rather than growth in wages, and providing benefits only to those who need them.

I suppose there are good arguments on both sides of the first point, although it seems a bit unfair to make coal miners work until 70.  I seem to recall that the Brits tried indexing initial benefits to the CPI, and it failed for the obvious reason that people judge how they are doing relative to their neighbors, not relative to those who lived 100 years ago in log cabins.   But it is the third point that really bugs me.  This is penny wise and pound foolish policy-making.  We are already getting all sorts of subtle and not-so-subtle increases in marginal tax rates (MTRs), why would the Republicans want to raise the implicit MTR on people who save for retirement?  We should be moving closer to the Singapore high-saving model, not ever further away.

I suppose some would argue that the benefits of lower government spending outweigh the costs of higher MTRs.  In fact, there is no way that AARP would allow them to means test benefits for any but the top few percent of earners—so it won’t save much money.  And in any case, saving money doesn’t seem to be the most important factor motivating Boehner:

Mr. Boehner advocated continued free spending on defense and said that should Republicans take control of the House in the fall elections, one of his first acts as speaker would be to repeal the $534 billion in Medicare cuts used to finance the Democrats’ expansion of health care this year.

Many of those cuts are the same ones seen in a Republican budget plan, the only one to date that carries out the GOP pledge to get the deficit under control without tax increases, authored by Rep. Paul D. Ryan of Wisconsin.

Liberaltarianism looks more appealing every day.

Now there are two.  First a quick reply to Mike Kimel. 
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I should probably stick to monetary economics, but I can’t resist commenting on a couple Yglesias posts.  Not because I disagree with Yglesias (I mostly agree), but rather because I think I have something to add that puts things in a bit more perspective.
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European intellectuals often view the “Anglo-Saxon” neoliberal model as an extreme form of market fundamentalism.  But just how neoliberal are the British?  Unlike on the continent, where universal health care is often provided through a decentralized set of insurance companies, the British government actually owns and manages the health care system.  Doctors are government employees. 
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