Why Should I Have to Defend Libertarianism?

This symbol of libertarianism represents an entirely consequentialist morality.Blogging is the rock 'n' roll of the information generation, and Ezra Klein is its Bob Dylan.  In a May 21st post, Three types of arguments over policy, Klein soberly reins in and classifies the noise of a drunken and whirling Washington:

Washington is home to two -- actually, three -- different types of policy debates. The first one, the one that we're used to, asks whether a policy will work. That's the one where I say health-care reform is likely to achieve its goals and cut costs and David Brooks says it won't do either thing and we both try to marshal empirical evidence in service of our points. In theory, whoever's evidence is stronger wins.

Then there's the second one, which is the one that (Rand) Paul is giving voice to, which asks whether a policy is philosophically acceptable. Paul isn't arguing that the Civil Rights Act was ineffective at desegregating Woolworth lunch counters. He's arguing that government shouldn't tell private businesses what to do, and when they do, that's not legitimate even if it achieves its stated policy goals. Or, more prosaically, a Republican argues that we shouldn't have more government involvement in health care because government involvement is bad, and that's true whether or not it's proved efficient in other countries. In theory, whoever's philosophy is more appealing wins.

The post also includes this hilarious, Juvenalian passage:

Then there's the third one, which is the debate that we're usually having even though people don't admit it, which asks whether a policy will help someone's chosen party in the next election. That's the one where Chuck Grassley and Orrin Hatch oppose a bill that looks like a bill they sponsored in 1993 and Mitt Romney attacks a bill that's based off legislation he signed in Massachusetts because the bill in question is a Democratic bill, and if its passes and is accepted as major achievement, it will ruin the Republican Party's chances in 2010. 

The point of Klein's post is that Rand Paul's contentions about the 1964 Civil Rights Act are grounded in the second, philosophical debate, where government involvement in anything is bad in a tautological way.  To his credit, Klein remains generally focused on Paul, but the die has been cast by other bloggers, and the poorly-understood ideology of libertarianism is now under attack all over the internets.  Here's Reason's trashing of Bruce Bartlett.  Here Jamelle Bouie calls "checkmate" on a pawn.  Here Matt Zeitlin tortures and crucifies reason itself.   

Judging from the comments to these entries, which tend to exclude those who aren't members of the progressive, liberal choir, the consensus seems to be - and Klein seems guilty himself of propagating this - that libertarianism is a lazy, immature, elitist, deontological ideology; that is, libertarianism's central tenet is that government intervention in the economy is a priori bad, and must be avoided.  

On the contrary, libertarianism is rooted in a consequentialist worldview.  (Hayek called his book the Road to Serfdom, after all.)  Libertarianism bases it's ideology on a fundamental human inability to accurately predict the consequences of policy, the empirical evidence for which progressive liberals continually ignore.  The question liberals never ask themselves when dismissing libertarianism is why government involvement is bad.  A case study from the consequentialist libertarians at Reason:   

(1) Mattel's Fisher-Price puts lead in toys in 2007.  Awesome.

(2) Congress responds to calls to "do something" and loudly establishes a new law banning lead in toys which is almost exactly the same as an already existing 1978 law banning lead in toys.

(3) The new law requires expensive third-party testing.

(4) Small toy-makers - which did not put lead in toys - cannot afford to comply with regulations.

(5) Giant Mattel is fined 2.3 million dollars, or 0.0002 times its 2007 market value of 11,295.8 million dollars. 

(6) The American toy market is consolidated into an oligopoly of companies which are too big to fail.

This pattern holds for pretty much every American industry, and especially for the most important ones, like healthcare, cars, and banks.  Reason here exemplifies the hard work, attention to detail, math ability, passion for boring facts and figures, humdrum clerical work, ability to comprehend the difference between "million" and "billion", and mental database-building that it takes to be a libertarian.  

Indeed, American industry is contaminated and cancerous, and it's not capitalism's fault, because there is no capitalism.  For proof, go to your local beach and try to sell smoothies this summer.  How much will it cost you to get a "permit"?  Will that "permit" cost more than you could hope to gain in profits?  If you're super poor, does selling crack present a more lucrative opportunity?         

True capitalism (I heard they have it in Taiwan.) is awesome, whether you believe - as many conservatives do - that success follows from hard work and dedication or whether you believe - as many liberals do - that success is primarily the result of Rawlsian luck.  If you believe that success in life is the result of hard work and effort, then capitalism is the system that best rewards and thereby encourages said hard work and effort.  If you believe that success in life is the result of luck, then capitalism is the  system that provides cheapest and easiest access to training and markets so you can try try again.  

The typical liberal response to this sort of flawless (yet arrogant) reasoning is to ask a lot of rhetorical questions that it would be like totally insane to not answer in the affirmative.  Ezra Klein:

(1) Can the federal government set the private sector's minimum wage? (2) Can it tell private businesses not to hire illegal immigrants? (3) Can it tell oil companies what safety systems to build into an offshore drilling platform? (4) Can it tell toy companies to test for lead? (5) Can it tell liquor stores not to sell to minors?

Answers: (1) sure, but it means unemployment and all sorts of other problems, (2) There shouldn't be illegal immigrants, because we should encourage legal immigration.  There wouldn't be any security concerns if we weren't perpetually at war (see accompanying picture.) (3) What the government should do is represent its citizens in charging corporations for creating externalities instead of doing the exact opposite (see Mattel above.), (4) You wanna trust the toy companies to self-regulate? (It worked so well for tobacco.) (5) See (3).

Which brings me to my fully consequentialist conclusion: economics is an extension of biology, and humans are social animals.  The market mechanism allows supply and demand to coordinate and submit themselves for mathematical analysis.  The idea that humans are not rational actors is anathema to reality and indicative of a failure to properly empathize with the considerations of one's fellow human beings.  Human beings, acting on subjective knowledge, will make the decisions which they perceive as best for themselves.  Government interference in the market and society is almost always heavy-handed and clumsy and should be minimized.  Not only do poorly executed government solutions to problems destroy the supply side of free-markets in the aforementioned manner, but they also distort the market in its capacity as provider of true information to consumers.  This in turn forces otherwise rational actors to misrepresent themselves and to make poor choices.  This leads to social cancers, or, as Hayek called it, serfdom.  Larry Summers is famous for saying, "Idiots exist.  Look around." but how many of these idiots were born that way, and how many were created?

Comments

[Josh "Sugar Tits" Weinstein]

The conclusion paragraph reads like you pulled the definition of libertarianism from Wikipedia or something. I would say I have some libertarian leanings, but let's be real with ourselves here. Not everyone is a rational actor. Your next major article should be a thought exercise about how a libertarian robot, programmed to the exact principles of libertarianism, would've handled the financial crisis and what its projected outcome would be.

[Christopher Carr]

Here's the thing: from an outside, unentitled perspective, it seems like people are irrational. For example, why would someone eat a twinkie when they could eat an apple? Don't they know how bad it is for them? But the same forces of rationalization that go on in your head when you're choosing a snack also occur in the head of a Twinkie-eater. The information on which I draw to make that decision, the information on which you draw to make that decision, and the information on which the twinkie-eater draws to make that decision are fundamentally different, and due to the chaotic and varying nature of information, we can correlate around vastly different means; my mean and your mean may point towards the apple, but the twinkie-eater's mean may overwhelmingly conclude to eat the twinkie. That's what I mean by rational, that our brains all follow the same biological process in making decisions, but the neuronal path involved in that process will be fundamentally different for all of us.

This is further complicated by the fact that companies seek to create misinformation in order to sell their products. Look up Edward Bernays. That is what I fundamentally meant by my last sentence, when I ask, "...how many of these idiots were born that way, and how many were created?" When our society is saturated with misinformation, whether that misinformation comes from corporations, or via the government through regulatory measures which interfere with the price mechanism, the result is rational beings making irrational choices. In my next post, which will be about food policy, I will explore this more.

Your point about a perfect "libertarian robot"'s solution to the financial crisis automatically assumes a reality that is inconsistent with my worldview. I also don't really find thought experiments valid for anything but recreation. My point is that everyone seems to take for granted that the financial crisis was caused by Laissez Faire capitalism. This is wrong! The Wall Street of today puts far more resources into responding to loopholes in government policy than it does into betting on fundamentals.

The primary problem with our economy is that overreaching, poorly conceived regulation has changed the nature of finance and industry. Why do large corporations themselves often push for regulation? Why did Wall Street overwhelmingly support the recent financial regulation legislation? Because these regulations create barriers to entry so large that today's prevailing companies can effectively stop worrying about long-term risk and shift all their resources towards speculation and branding. This is turn fuels the cycle of misinformation.

In short, on the supply side, markets are undermined by regulatory policies that establish a minimum level of clout in order to participate. This creates an oligopoly where industry players collude and misinform consumers through misinformation and branding. On the demand side, prices are distorted and true costs are not represented in the market. This leads to widespread effectively irrational economic behavior.

I have no problem with the government's involving itself with issues that affect all citizens, such as with environmental legislation or food safety, or even with healthcare (which is much more complicated) in principle. It's when the government dispenses special privileges to the few that I begin to have a problem. Far from being pro-corporate, a perfect libertarian robot, provided it were programed by me, might decide to tax corn, which is an essential ingredient in processed junk food. As it is, subsidizing corn effectively subsidizes junk food, which effectively taxes healthy food. Do we really want to tax healthy food? My robot might even consider our current national champions dominated economy to be a lost cause and break them all up Bull Moose Party style.