Some Problems with Libertarianism (Part Three)

In two previous blog items back in December of 2010, I began to lay out the case against libertarianism. It seems the time has come to extend this argument and go deeper into the fundamental deficiencies, as I see it, of a philosophy of radical freedom. Here is a third part – in the form of a rebuttal to a proselytizing libertarian philosopher -- with more to come.

In a recent on-line attempt to win over progressives to their libertarian ideology, the self-styled “bleeding heart” libertarian Matt Zwolinski claims the he too is concerned about social justice. But this turns out to be window dressing. His real agenda is to persuade us that we should trust “free markets” more and trust government much less, and he attempts to do this with seven numbered “reasons” that are highly debatable.

Indeed, his case is so full of holes that it’s like trying to hold water in a sieve. You know what is to come when he blithely begins by telling us that “respect for private property rights and free markets generally serves the interest of the poor.” Oh? As Bill Gates (lately the richest man in the world) observed: “Markets only work for people who have money.” So let’s take a look at Zwolinski’s reasons.

1. Government is coercive. Well, of course. That’s true by definition. The question is coercion by whom and for what purpose. Zwolinski (like other libertarians) characterizes government as some sort of alien force out there that is inherently inept if not corrupt, and that mindlessly restricts commerce. He asks if government coercion is any different from being mugged by another person. “All of us accept that it is wrong for us as individuals to use violence against our neighbors to get them to do the things we think they ought to do. Is it really so much less wrong when the violence is committed by the government instead?”

The answer, emphatically, is that it depends on what kind of government you have. Government in an absolute monarchy, or a strong-man tyranny (say Saddam Hussein), or even an oligarchy is likely to use coercion to advance the narrow interests of the ruler, or an elite. But a democracy, in principle, means collective “self-government,” along with a common-law tradition that at least aspires to achieve government “of, by, and for the people.” In the ideal, our representatives should enact laws (and regulations) in our common (majority) interest (including taxes), subject to Constitutional safeguards for our individual rights. We obviously fall far short of this ideal, but that doesn’t negate the principle. (Some European countries do much better than we do.) As Winston Churchill put it, democracy is the worst form of government, except for all the others -- including no government at all, I might add.

2. Regulation “often” serves the interests of the powerful, not the vulnerable. Well, yes of course, when democratic government has been co-opted, or “bought” by the rich and powerful. The Bush administration was positively subversive of government; they systematically corrupted it on behalf of the “interests of the powerful.” A return to government in the public interest is precisely what the current “war” between conservatives and progressives is about, in part. Indeed, many of the new regulations that have been fought most bitterly by the private sector business interests recently are precisely those that protect the general public against environmental pollution, food contamination, threats to public health, financial chicanery, hazards to mine safety, and much more. And almost all of these regulations were the result of egregious, even tragic private sector abuses; they were not the result of gratuitous, bureaucratic power-trips. It’s certainly true that there are cases of regulatory overreach; governments consist of fallible human beings. But on balance the public has benefitted.

3. Government is often unable to help the vulnerable. Often that’s because (conservative) government is unwilling rather than unable to help the vulnerable. Zwolinski cites as an illustration the economics textbook case of price gouging for the sale of ice after a hurricane. If government intervenes with an anti-gouging law, he claims, it might cap the price too low to encourage an increase in the “supply” of ice – in accordance with basic market supply-demand theory.

This is, of course, a highly contrived and theoretical example. In fact, a lot of price gouging in such calamities is for things with a fixed supply – like rental housing and motel rooms, where there won’t be an increase in the housing supply anytime soon, except for tents. But even in the curious case of ice, there are in fact three alternative principles available for allocating the supply – rationing, first come first served, and favoring those who can afford to pay and penalizing the poor. To me, the moral high ground, and fairer options, are one and two.

But as I say, this is all very theoretical. Funny that Zwolinski didn’t mention FEMA. In the recent tornado rampage, for instance, FEMA and local emergency preparedness services were there quickly to provide for the basic needs of those – rich and poor – who suffered injuries and losses through no fault of their own, and they did a very effective job. Such an organized, trained collective response by the government (funded by the taxpayers) is also a far more equitable (fair) approach to dealing with disasters than to rely on an often exploitative and greedy “market” response by those who are all too willing to take advantage of the suffering of others. To be sure, private donations and non-profit agencies also helped, but the magnitude of these disasters vastly exceeded their capabilities.

Overall, the private sector has a dismal record when it comes to helping the poor and vulnerable. Currently, 24 percent of the total personal income goes to the top 1 percent and 49 percent to the top 10 percent of income earners. The other 90 percent share the remaining half. Likewise, the top 20 percent hold 87.2 percent of the total wealth (excluding home equity, cars and personal belongings). Meanwhile, there are an estimated 25 million people who are unemployed or underemployed, some 25 million who are living in dire poverty (as prices continue to escalate) and about 50 million who suffered food deprivation (hunger) at various times last year. Our “free markets” (sic) do not do an adequate job of meeting our basic needs.

Government is needed to fill in the gaps. Our government already does a lot to help the poor and vulnerable where the private sector has fallen short, from unemployment insurance to child nutrition programs, food stamps, and Medicaid – not to mention Social Security and Medicare. It could do a better job if libertarians would get off their free market, ideological white horses and support more adequate safety net spending.

4. Economic growth is all-important and progressives should support it. I don’t know of any progressives who are opposed to economic growth. It’s a matter of how, and who benefits – and who pays. I think of Enron, Massey Energy (and the coal mine disaster), BP in the Gulf of Mexico, Countrywide and the rampant fraud in the mortgage market, the financial chicanery on Wall Street, and many other examples of “growth” run amok. To protect the public from such abuses, we need – you guessed it – effective government regulation in the public interest.

5. Economic liberty is very important. Zwolinski tells us “Libertarians believe that economic freedom is important not merely because it produces good results for society, but for precisely the same reasons that traditional civil liberties matter — they are an important element of personal autonomy and well-being.”

I am frankly tired of this naïve, if not disingenuous argument. The “free market” has never been free. It has always been heavily influenced if not dominated by the powerful, and politically-influential. The notion of autonomous individuals freely exchanging goods and services in the marketplace is a utopian ideal that is being promoted to justify the “freedom” of large, authoritarian, hierarchical corporations that serve their corporate interests often at the expense of their workers – from job outsourcing to denying the freedom of their employees to form unions for collective bargaining to laying off workers in the millions in the recession. Furthermore, the only effective counterweight to this enormous concentration of economic power is the power of government to act in the public interest. No wonder wealthy conservatives trash government at every turn. Why are libertarians playing into their hands? Find me a libertarian who favors harnessing and restricting the power of large corporations (it may be hard to find one), and I’ll honor him/her as a progressive in deep disguise.

6. Libertarians and progressives agree on some non-economic policies. Like immigration reforms, abandoning the misbegotten war on drugs, bringing the troops home, and opposition to agricultural subsidies. Well, that’s fine. But so what? Why don’t libertarians get some of their conservative Republican representatives/senators to come around to their views? If so, we’ll do the same with the Democrats and continue to oppose their economic views.

7. “Spontaneous order [in free markets] is more powerful than you think.” Well, there is nothing “spontaneous” about order even in physics, Ilya Prigogine to the contrary notwithstanding. And in markets, people with purposes (economic goals) are responsible for creating order/organization. There is nothing magical about it. It’s a cliché going back to Adam Smith that markets are an efficient way to organize economic activity. No progressive that I know of is calling for centralized planning like the Soviet Union or even post-war Britain under the Labour government. That’s a dead horse. But progressives oppose the naive idea that markets work better without rules of the game, and regulations, and policing and constraints that protect the public interest.

It also seems that some (many?) libertarians are in denial about the important role that our government has played in promoting and facilitating economic development in this country, going back to the post roads and canals before the Revolution to tariff protections for baby industries, land grants to underwrite the building of railroads, road construction (and a supportive infrastructure, from traffic lights to traffic cops) to pave the way for the automobile industry (sorry for the pun), subsidies for aviation development, providing mail contracts and airports for the airlines, underwriting the development of computers, the design and early development of the internet – and this only scratches the surface. The reality throughout our history has been government-private sector partnerships of various kinds. And that’s one reason, among many, why the rich should pay their fair share of our taxes.

Finally, Zwolinski claims there is no fundamental difference in values between libertarians and progressives. Even if we disagree on some things, it should be more “civil and productive.” Hey, tell that to the Tea Party. And tell that to the many conservatives (some of whom are running for President) who have published diatribes against liberals, painting them as subversives, and un-American, and evil. (I could provide some quotes.) And how about the current deficit “negotiations” (sic), where Republicans are uncompromising on a fundamental issue of fairness – sharing the pain versus protecting the rich at the expense of the “poor and the vulnerable.” Why isn’t the GOP more “reasonable?” And which side of this important social justice issue are you and the bleeding heart libertarians on, Matt?