Why Not Libertarianism?

What is Libertarianism?

2021-08-28 Leave a Comment

In laws and in morals, it is wrong for me to hit you, steal your stuff or enslave you. This is nearly a universal truth, held by almost all societies, at almost all periods in human history.

Similarly, if I and a bunch of my friends decide to beat you up, steal your stuff or enslave you, this is still wrong. Again, this is nearly universally held to be true.

If my friends and I form a corporation and beat you up, steal your stuff and enslave you, this would still be wrong, etc.

Now comes the magic.

If my friends and I form an association, and call it a state, then we can take your property, via taxation, civil forfeiture and eminent domain, put you in prison for smoking the wrong plant or loving a person of the wrong sex, or for employing someone for the wrong wage, and put a rifle in your hand and force you off to fight and die in some jungle on the other side of the planet.

Why is this not universally held to be wrong? It is a curious thing.

Libertarians are those who are suspicious of the mechanism that takes a bundle of clearly immoral acts — violence, theft and slavery — and turns them into patriotic virtues. They scrutinize and delineate the conditions (if any) under which collective coercion is legitimate. At the same time they celebrate and seek to push the boundaries of what can be accomplished by free men acting in voluntary, non-coerced associations.

Public Health

2021-06-28 Leave a Comment

We say the word “public health” but what we really mean is more government control over our bodies. This is a dangerous concentration of power, one that has repeatedly shown itself susceptible to abuse in the past. What starts with quarantines and vaccinations then progresses to treating every politically unpopular issue (guns, cyber-bullying, skinny fashion models, large sugary beverages) as a “public health concern.” This has led to some of the saddest chapters in our history.

This concern is not merely hypothetical. We’ve seen it happen. Oliver Wendell Holmes, writing for the majority of the U.S. Supreme Court, in the 1927 Buck v. Bell, argued that forced sterilization of the “unfit” was merely an extension of the public health power of compulsory vaccination:

We have seen more than once that the public welfare may call upon the best citizens for their lives. It would be strange if it could not call upon those who already sap the strength of the State for these lesser sacrifices, often not felt to be such by those concerned, in order to prevent our being swamped with incompetence. It is better for all the world if, instead of waiting to execute degenerate offspring for crime or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind. The principle that sustains compulsory vaccination is broad enough to cover cutting the Fallopian tubes. Three generations of imbeciles are enough.

To a libertarian, the term “public health,” like “national security,” is one to treat with great skepticism. It should not be taken as a justification beyond criticism or debate. There might be public health goals that are compatible with libertarian means. But there are certainly other public heath goals that are not. A blanket authority that can be wielded for any goal a politician or technocrat happens to label “public health” is, historically, unwise.

“Capitalism versus Socialism” now Available

2021-01-22 Leave a Comment

I’m pleased to announce that my latest book, Capitalism versus Socialism: The Great Seligman-Nearing Debate of 1921 has been published and is now available for purchase as a paperback from Amazon and Barnes & Noble (as well as other places). There is also an ebook version for the Amazon Kindle.

The book dissects a 3-hour long debate that took place 100 years ago, on January 23rd, 1921 in NYC, between two economists: the stodgy old Columbia professor, E.R.A. Seligman and the much younger outspoken activist Scott Nearing. I look at the debate and the debate participants against the background of their times. It is a mix of history, biography, politics and economics.

If you ever wondered how this capitalism/socialism question has been argued over the years, whether the arguments change or improve or not, this book dives into that question. (Hint: One side of the argument has improved and refined its argument, while the other side is nearly unchanged after 100 years.)

You can also get a flavor of the book by reading my recent article on Mises Wire: “Debating Socialism: The Seligman-Nearing Debate at 100” (or the audio version narrated by Michael Slack.)

So you want the failed Articles of Confederation, do you?

2020-12-19 Leave a Comment

We libertarians have all heard the retort, “So you want to be like Somalia?” whenever we suggest that we’d prefer something a wee bit smaller than a nuclear superpower surveillance state. Evidently, to some deep thinkers, those are the only two alternatives: What we have today, or Somalia.

A related rhetorical flash of brilliance meets those who might suggest shrinking the federal government and allowing more state and local control over our affairs. “So you want the failed Articles of Confederation, do you?”

In either case we need to reject the false dichotomy, that these are the only two alternatives. Here’s how I like to argue the federalism question.

I say, let’s first have a quick quiz. Who are the leaders of the following countries?

The United States
France
Germany
The U.K.
Russia
North Korea
Turkey
Canada
China
Switzerland

I suspect that most readers will score 8 or 9 out of 10, with these names readily available at the tip of their tongues. But I doubt that 1 in 100 readers could name the President of Switzerland.

OK. Maybe that is a trick question. Switzerland has not been in the news recently. How about name any Swiss president, from any time in history? Too hard? How about any Swiss political leader, at any time in history? Anyone?

Honestly, the best I could come up with was Albert Gallatin, Swiss-born, who served as Secretary of the Treasury under presidents Jefferson and Madison.

The point here, of course, is that Switzerland is also a confederation of states, without a strong centralized government. They have a Federal Council as an executive branch, and the Swiss President is picked from among them, but has little power himself. That is why the Swiss president is not in the news a lot. He does not have a lot of power. The power is in the individual cantons. This seems to be a stable political system that has longevity and which supports prosperity and individual freedom. Note also that Switzerland scores higher than any of the above countries, including the U.S., in the Index of Economic Freedom: Country Rankings.

So, as libertarians, we have more than one model of a loose confederation we can look at. We’re not limited to 18th century examples. Avoid the false dichotomy.

The Government, Not COVID-19, Broke Schools

2020-10-15 Leave a Comment

In recent months, policymakers have had to make a nearly impossible decision: Should they open public schools or continue with remote education? If they open the schools then some children will possibly catch COVID-19 and infect an older relative. But if a parent must stay home to monitor their child’s remote learning, how can the parent return to work? And what about families without highspeed broadband? And what about older teachers who will be at risk of catching COVID-19 if they return to the classroom?

We see here a conflicting set of priorities, a real thorny problem. So, how should policymakers pick the best solution? Or is this even the right question to be asking?

Let’s look at a parallel problem, conflicting priorities about automobiles, and remind ourselves about what we already know about how the world works. One person wants a car that runs on renewable energy. Another wants an SUV that comfortably fits eight passengers. Another needs a small truck for his business, one with towing power. Another seeks a car that looks sporty. Another really wants good off-road handling.

What would it look like if the government made all the cars and they were all the same model? How would policymakers reconcile all the different priorities? Would they do a good job? Or would it end up like the Trebant? I think we know the answer here.

This real problem here is not COVID-19. The real problem has been with us for much longer. The real problem is a government monopoly in K-12 education that forces us into monolithic solutions, without considering the individual preferences of parents, students, and teachers. It is this one-size-fits-all approach of public schools that makes it impossible to make everyone happy. What the pandemic has done is stress the system and shown more clearly how unresponsive the state-run education system is and always has been.

As an alternative, imagine a world where the current cost per student of public schools was turned into a portable “Education Voucher” that parents could spend on their child’s behalf. If continuing to send their child to the local public school is the best fit for the family, then they could use the voucher for that. Nothing for them would change. But if a public school nearer to the parent’s workplace makes more sense, so they can avoid taking a bus, then the voucher could be used for that. If a charter school or a private school was preferred, then the parent could use the voucher towards that tuition. If a parent would rather take a cut to their own work hours, so they could stay home and monitor their child’s remote education, or even home school them, then the voucher could be applied to those lost wages. The voucher could be used to purchase homeschooling books and supplies, or to pay for broadband or a computer.

There is a lot that a parent could do today if given the opportunity of an Education Voucher. But that is just considering half of the picture. What incentives would nation-wide access to Education Vouchers create among producers of educational goods and services, if they knew that tens of millions of families were free to consider alternative educational experiences for their children? What innovations might come?

A hypothetical scenario: a business might hire some of the most experienced and talented teachers, including older ones who might not have felt safe being in a classroom full of young “asymptomatic carriers.” The teachers could work on developing a curriculum and delivering instruction, all grades, all subjects. The instruction could be recorded and streamed online or fed into a cable or satellite network. Everyone household could be reached, even if they did not have broadband. The cable or satellite company might handle the billing, and even bundle a computer with the subscription. (They already know how to handle renting cable boxes and such.)

The above approach might be a great solution for some but might not be an adequate solution for others. That’s fine. We’re not looking for one-size-fits-all compromises. We’re not looking to design a “sporty and roomy electric off-road SUV with a hitch” for everyone to buy. The point is to encourage free market solutions in an area where consumers naturally have diverse preferences, an area which is particularly poorly served today by a government-run monopoly.

Free markets are not about translating, one-for-one, government solutions into private sector alternatives. Free markets not about just offering a choice among several well-known alternatives. Free markets are about alert entrepreneurs, attentive to changing consumer needs and the incentives these needs create. Free markets are about innovation.

In a sense this related to Frederic Bastiat’s famous essay, “That Which is Seen and that Which is Unseen.” We all see the public school, the teachers, and the classrooms. We can imagine that, if Education Vouchers were made available, that this would translate into some teachers and some students being in different classrooms, perhaps down the street, in schools that would be privately run, but would otherwise be quite similar to the public schools. That much is familiar to us. We can see that in our mind’s eye. But what is unseen and hard to even imagine are the innovative educational approaches that would be created, here in the 21^st century, if not for the government monopoly in K-12 education. These solutions, unseen today for lack of incentives to create them, might be so different from what we know that we might not even call them “schools.” We would need to seek a new word for them, like we had to invent the word “automobile” to replace “horse-drawn carriage” and “lightbulb” to replace “candle.”

Unconscionability: An Artifact of Bottlenecking

2020-08-05 Leave a Comment

An “unconscionable” contract is one that the courts may nullify under the theory that no one in their right mind would have agreed to the contract if they actually understood what was in it.

The classic case here is Williams v. Walker-Thomas Furniture Co. This was a 1965 D.C. Circuit case that concerned a furniture store’s credit policies. The store would allow buyers to take home furniture, and pay for it over time, but on the condition that each individual purchase was collateralized by all the purchases. So, if you bought a couch two years ago, and paid it off, and bought a dining room set this year, and then became delinquent in paying off the dining room set, the furniture company could repossess the dining room set as well as the couch. The idea, presumably, is that the dining room set diminished in value as soon as it left the showroom, and the furniture store wanted to attach the credit to additional collateral in order to recoup the full value of the loan.

Judge J. Skelly Wright held that the contract was unconscionable because of a disparity in bargaining power:

The manner in which the contract was entered is also relevant to this consideration. Did each party to the contract, considering his obvious education or lack of it, have a reasonable opportunity to understand the terms of the contract, or were the important terms hidden in a maze of fine print and minimized by deceptive sales practices? Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.

I agree that the circumstances of the case illustrate a disturbing inequality, but I find it to be of a different nature, one perhaps too close to the judge’s nose for him to see it clearly. There is, indeed, an inequality in expertise, specifically expertise in reading and understanding contracts. But why is this much-desired expertise not readily and cheaply available to all? Why are we trying to fix the problem after-the-fact rather than trying to prevent the problem in the first place?

The answer is clear. We have longstanding collusion between the coercive regulations of the state and the guild-like bar associations, which act to create barriers to entry and reduce the number of people permitted to offer legal services for hire. This is aimed at propping up fees for lawyers. We’re all familiar with this racket.

If I could snap my fingers and reshape things in an instant, I’d allow anyone to offer legal services, without any limitation by the state or by third parties. Let these service providers compete based on reputation and price. This would open things up, especially on the low end. In particular, a person offering expertise to review contracts would not be required to also have course work in unrelated areas such as constitutional law, probate law, criminal procedure, etc. Such expertise in basic consumer contracts might be as available and affordable as notaries are today. You might expect most banks to have one, that the library might have one, that they were widely available online, that the AARP offered the service free to its members, etc. There might even be an “app” for that.

Break the bottlenecking in legal expertise, and the inequality in power vanishes.

The Police

2020-04-21 Leave a Comment

I am ambivalent about the police. At the core, police enforce the government’s laws. For example, they enforce laws against assault and murder. This is a good thing. But they also enforce laws against selling “loose” cigarettes and unlicensed burritos.

Police catch rapists and burglars. But they also shut down lemonade stands and seize the cash deposits of immigrant business owners.

Police run toward crazed gunmen when others are running away. Police have also used their batons against labor organizers, suffragettes and civil rights protesters.

Police, as instruments of state power, have all the contradictions of state power. At their best they are heroes. At their worst they are jackbooted thugs. In between they daily enforce the dull yet pervasive oppression of the bureaucratic state.

The libertarian view is not so much opposed to police per se, as it is opposed to the paternalistic Big Brother state that has lost track of the core mission of government — protecting natural rights — and insinuated itself into all parts of our lives. Restore the state to its proper role and police would at the same time be restored to their proper role.

The Origin of Wealth in 400 Words

2020-03-02 Leave a Comment

Simple example: There are just two of us, stuck on an island. We survive by harvesting coconuts and catching rabbits.

Scenario #1 — Autarky. We each work independently, doing both tasks. Since we’re dividing our effort, neither of us gets very proficient at these tasks and it takes us each 16 hours of daily effort to scrape by, after which we collapse from exhaustion for the day.

Scenario #2 — Specialization. You are a better climber than I am, but I am a better with snares. So, we specialize, you on gathering coconuts, me on catching rabbits. By focusing on that one task we each gain greater skills in that area. We each complete our work for the day in only 12 hours after which we trade a portion of our goods with each other.

As a bonus, we now each have four hours left over before we go to sleep. This is time that could be used for leisure and relaxation. It could be used to satisfy other needs. Maybe one of us wants to try fishing, or building a boat? The time could also be used to build tools to make our main production even more efficient. For example, I may design new and better snares for catching rabbits. This might mean I can, down the road, reduce my labor to only 10 hours a day.

Whether you are talking about an island of two persons, a community, a nation or the entire world, it is the same basic mechanisms at play. There is comparative advantage (you are naturally a better climber than I am). There is specialization and division of labor (I focus on catching rabbits and become really good at that one thing.) There is capital investment (I take my free time to build tools that make my production more efficient.) And there are gains for trade (It is cheaper for me to get some of your coconut in trade than for me to take time away from rabbit hunting to get them on my own.)

Note that there are also some unstated pre-requisites that enabled the productivity gains described above. We had to agree not to kill each other or steal each other’s property. We also had to honor whatever agreements we made with each other. This “rule of law” provides the foundations on which all thriving societies are built.

Democratic Anarcho-Capitalism: A Thought Experiment

2020-02-18 Leave a Comment

A challenge of achieving anarcho-capitalism is that we live in a society with so many people reliant on public infrastructure and institutions, from roads and utilities to schools and courts. There is also the crowding-out effect, how state provision of a service discourages competition from the private sector. Although we can easily argue and describe the superiority of private alternatives, in moral terms as well as in predicted results, getting from here to there, within a framework of a democracy, is a particularly hard nut to crack.

I’d like to suggest a thought experiment that illustrates one way in which a majoritarian democratic state could transition to a stateless anarcho-capitalist society, without major disruption.

The goal is to recognize reliance interests and give time for transitions, but also provide the certainty of a change, so entrepreneurs can make plans.

Let’s start with reformulating majoritarian democracy with three meta-rules (a.k.a. a constitution):

A sufficient majority of eligible voters may make such laws as it sees fit.
All laws will require reaffirmation, by a sufficient majority, every 10 years, or will be automatically voided.
A sufficient majority is defined as at least 50% in year 1, but will increase by 1% every year until it reaches 100%.

So, under this system, in year 1, it will be pretty much as we have it today. If the majority wants a new law, it will be created. If the majority wants to repeat a law, it will be repealed.

In following years, it will be become increasingly difficult to pass new laws, or maintain old laws, if they have but narrow support. Only laws that have broader support will still exist.

The would-be laws that are not approved will force those minority interests to seek alternatives in the private sector. Say, for example, that a law is proposed to require licencing of hair braiders, but in year ten the needed 60% approval is not achieved. The 40% who supported this law would be encouraged, as an alternative, to set up a private certifying agency, to develop standards, test applicants, and licence use of its certification mark. It would follow the long-established model of other private-sector certification programs, like those used to certify Kosher food or Microsoft-Certified Developers.

Of course, those programs that only made sense based on rent-seeking behaviors, those that don’t serve any other purpose but to reduce competition, would likely fail in the private sector as well. This is a good thing. The first laws to die would naturally be those that benefit the few at the expense of the many.

At some point even more cherished programs will be be challenged. But this need not lead to an abrupt change. Let’s imagine that, absent any other proposal, in year 30, when 80% approval is required, funding of public schools fails its reaffirmation vote. Although hitting that “tipping point” has an abrupt effect, many would have anticipated its eventual arrival and would have had ample opportunity to plan for a transition. For example, in year 20, with the writing on the wall, a sufficient majority of 70% might support a 10-year transition from public schools to vouchers , starting by instituting school choice, auctioning off public school buildings, etc.

The inexorable gradual pressure of increasing levels of consent would focus government on its fundamental tasks, while relieving the private sector of crowding-out effects and allowing greater ability to plan and invest in private sector alternatives.

In year forty, with a 90% majority required to maintain laws, I suspect we have only a minimal, nightwatchman state, consisting of a defensive military, courts of justice and a few other things. It would be smaller government, but government would necessarily have very high approval ratings, around 90%, due to the high degree of consensus required to sustain it.

Why Private Property Works

2020-02-11 Leave a Comment

What is it about private property that is so important? Why does it hold such a fundamental position in libertarian thought?

One could certainly argue from the philosophical perspective (John Locke and his ilk) that property derives from “self-ownership.” We own ourselves. We own our own labor. We own the things we create by our labor. And the things we own we can freely exchange with other men. In this sense, private property has an ethical charm, that it is created and exchanged peacefully.

Of course, saying something is peaceful, or even that it is ethical, is not the same as saying it increases prosperity. I like to couple the ethical argument for private property with an economic one, looking at the incentives at play.

Private property aligns the control over the use of a resource, with the benefits that accrue from the use of a resource.

If I own a cow, then I have control over how she is cared for, while also having rights to the milk she produces. This alignment of control and benefits give an incentive to use the cow well.

Without property rights, control and benefit are separated. The person who maintains the cow but has no rights to the milk would tend to underfeed her, while the one who had rights to the milk but did not have to maintain her would tend to overmilk her.

Private property aligns incentives by joining exclusive control and beneficial interest into the same person. This, I think, is the genius of private property, and the reason why alternatives fail.