Right Reason

Nirvana Libertarianism

All too many libertarians aren't actually interested in libertarian policy. That's fine insofar as they don't hurt libertarian policy, but there exist in the world a brand of not-so-serious libertarians that can't accept anything but perfect policy on issues such as the Trans-Pacific Partnership. In doing so, they hold back any hope of the evolution of libertarian policies.

Matters of policy are always going to be about the adjacent possible. They’re going to be about making marginal changes that accumulate over time. In this sense, states do evolve. They do accumulate tiny variations, whether useful or not, and their forms are changed across the generations as a result of that accumulation of variation. The point of good public policy, or statesmanship if you will, is ensuring that the best marginal changes happen.  

For libertarians, policy should largely about choosing the policy that ranks higher in liberty. As a political program, libertarianism can largely be collapsed into a single principle: The liberty principle, exhorting people to support the policy that ranks higher in liberty. Yet for many libertarians, that isn’t enough. Instead, they only option that can be considered is an option that ranks 100% in liberty. For them, politics is about utopia or nothing. 

 

N. Stephen Kinsella is one such libertarian. In “Trans Pacific Partnership is about Control, Not Free Trade,” Mr. Kinsella argues that the “TPP is just the latest instance of the US federal government employing its post-WWII dominance to advance the interests of the music, movie, and pharmaceutical industries in the US, at the expense of US consumers and foreigners.” He argues that the only acceptable libertarian position would be unilateral trade:

A real free trade policy would amount to a couple of sentences, not thousands of pages: one nation announcing that all imports and exports to and from that nation are to be exempt from duties, controls, quotas, tariffs. That is free trade. Instead, we have the managed trade of the last 60-70 years.

However, Mr. Kinsella seems to be utterly blind about the state of free trade as an issue in America. A large chunk of the population don’t even like slightly open trade. Unilateral free trade is simply not attainable in the nation Mr. Kinsella and I live in. Curse out the people for that, try to educate them and do whatever else one may desire to do, unilateral free trade is suddenly not going to become a policy any politician can successfully commit himself to. Barack Obama, normally an enemy of libertarian reform, has had to work quite hard and defy his own party to get the reform that’s on the table right now. Yet, because it doesn’t correspond with Mr. Kinsella’s ideal, he rejects it. 

 

Normally, libertarians are very good at calling out when other people use the nirvana fallacy in support of government encroachment, but they tend to be as utopian as anyone else when talking about what they like. Harold Demsetz coined the term ’Nirvana fallacy’ in his paper, “Information and Efficiency: Another Viewpoint,” writing: “The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing "imperfect" institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements.” 

The libertarianism of Mr. Kinsella falls victim to such a view. Rather than thinking about how policies affect liberty on the margins, he merely considers 100% cases. His libertarianism is a Nirvana libertarianism and it actively hurts any chance of libertarian reform in the world people live in by preventing marginal reforms for liberty. 

 

Overall, as attested to by “Trans Pacific Partnership is about Control, Not Free Trade,” Mr. Kinsella isn’t a very serious libertarian. He may write on libertarian policy, but he fails to grasp the basic fact that all matters of policy are about marginal changes. It’s about evolution and the accumulation of slight variations that drive any evolutionary process. It’s a shame that such not-so-serious people tend to dominate the discussion about liberty. 

When Removing Government Requires Government

 

Whatever you think of them, reform happens at the margins of politics.

 

Free trade has always been a tenet of libertarianism. After all, the unimpeded movement of goods across borders may be a paradigmatic example of the libertarian maxim of ‘Anything peaceful.’ It is then with trepidation that many libertarians have looked on at the debate surrounding free trade today. For them, the Trans-Pacific Partnership doesn’t look anything like free trade. Instead, it looks like just another arrangement between governments bestowing benefits upon their favored cronies at the expense of the rest of society. Yet, for whatever its controversy, if it is passed, the Trans-Pacific Partnership would be America’s largest trade agreement in effect and would thereby represent a marginal liberalization of trade across the region.

 

The Trans-Pacific Partnership, then, is an example for a central irony to libertarianism: Although libertarianism advocates anything peaceful, it is often in need for politicians to advance its agenda. Very frequently the very act of de-governmentalization itself requires government. What a government erects can very often only be demolished by a government. Although, many new technologies have and will emerge that can disrupt regulations and thereby increase the overall liberty of society by creating a space that has yet to be interpreted with, such disruption isn’t always possible. In the case of trade, new technologies may make certain tariffs and quotas irrelevant to the lives of consumers, many more will remain and, in some way, harm consumers.

 

No Uber-like company will emerge that can allow American consumers to find a way around the United States’ protection of domestic sugar producers. Doing that would require government. However iron-clad the arguments for free trade may be, to actually get free trade requires a government eliminating its own obstructions, just as the peaceful enjoyment of alcohol required it to repeal the Eighteenth Amendment. Bargaining, interviews, negotiations and speeches are all necessary parts of the process. Without political acumen, trade reform would go nowhere. Free trade needs crafty politicians who are aware of when the political stars align and who can seize the initiative to advance liberty-enhancing reforms at the margins.

 

Libertarians worry about whether the Trans-Pacific Partnership would advance crony capitalism, not free markets. Cronies have certainly taken an interest in the treaty. That much is indisputable. As The Guardian reports, for ever ‘yea’ vote tallied in the Senate to give the White House fast-track authority, the US Business Coalition for TPP gave an average of $17,676.48 to it. That negotiations of the Trans-Pacific Partnership is being kept secret, contrary to standard operating protocol, only compounds those suspicions.

 

Although President Obama has said that there is nothing to worry about with the secret negotiations, certainly the president is not unaware of how ironic it is for him to assert that while still keeping the supposedly innocuous records out of the public eye. The old quip, quis custodiet ipsos custodes, looms large. Combined with the amount of money that businesses have spent, the secrecy surrounding the Trans-Pacific Partnership is bound to pique the suspicion of many libertarians. Those opponents of the Trans-Pacific Partnership are, then, right enough since there certainly is plenty of crony capitalism in the Trans-Pacific Partnership.

 

Nevertheless, a sober assessment of the treaty and particularly its impact at the political margins of liberty should inform us that these are acceptable costs to a policy that will lead to an improvement of the overall liberty of all involved. It’s true that the Trans-Pacific Partnership wouldn’t lead to a system of perfectly free trade and, in doing so, would plenty of room for each nation’s particular cronies to prosper. But we don’t live in a world where such a system of perfectly free trade is attainable. We live in a world where the treaty is on;y an improvement at the margins and where those improvements are going to have to be made in a way that placates each nation’s many cronies. The Trans-Pacific Partnership promises just that: marginally freer trade, with all the benefits that marginally freer trade would have. The Brookings Institute estimates that the global gains that marginally freer trade would be in the vicinity of at around $295 billion each year.

 

By being self-aware that any liberalization of trade would require government action, libertarians can be very open about the costs of the treaty while at the same time confident that it will have a beneficial overall effect. To remove the barriers to trade that exist across the Pacific requires an act of government. That alone would introduce some cronyism to the reform. Worse, it requires an act of many governments, all with their own particular faults. Nevertheless, that any progress towards liberalization in trade is possible is itself a miracle. A miracle that is only possible because of crafty politicians in government today. It’s not everyday that their actions would have a liberty-enhancing outcome and so the opportunity shouldn’t be squandered by comparing our imperfect world to a libertarian utopia.

 

Overall, the Trans-Pacific Partnership reveals an irony in any hope of libertarian reform today: However much libertarians may properly distrust politicians, free-trade reform will only happen if the politicians in power are able to negotiate the restraints away. On this issue, the cause of liberty, therefore, is in the precarious and inextricable position of relying on government to remove government. Maybe they shouldn’t stop worrying, but libertarians should start to give the Trans-Pacific Partnership the modest love it deserves.

A Hayekian Welfare State?

 

What goes under [the name of the welfare state] is a conglomorate of so many diverse and even contradictory elements that, while some of them may make a free society more attractive, others are incompatible with it or may at least constitute potential threats to its existence.

-Friedrich Hayek, The Constitution of Liberty

 

In its January issue, Econ Journal Watch held a symposium on economists’ opinions on the welfare state, titled “Economists on the Welfare State and the Regulatory State: Why Don’t Any Argue in Favor of One and Against the Other?” In response,  Sam Bowman of the Adam Smith Institute voices his sympathy with Andreas Bergh’s contribution (no, not that Andreas Bergh): “Yes, There Are Hayekian Welfare States (At Least in Theory).” In “Let’s have a Hayekian welfare state,” Mr. Bowman writes: 

[W]e should have a predisposition against regulation, even regulation that appears to solve problems, if it holds people back from experiments. There are also serious examples of regulations leading to bad things that are even worse because everyone has been forced to make the same mistake, which strengthens this predisposition even more. The more complex a system is is, the more we should value pluralism.

All of this has to do with having limited knowledge in a complex world, not incentives, though of course there may be good incentives-based arguments to be made on a case-by-case basis against certain regulations.

But this doesn’t tell us very much about the distribution of wealth in a society. To use Bergh’s terminology, redistribution may be something that can be done with relatively low amounts of knowledge. That doesn’t mean that it can’t fail – clearly it can, very easily, if the level of redistribution is set too high (or too low) – or that the system itself be badly designed.

The particular distribution of wealth in an economy may be an efficient reflection of who is most productive, and interventions that try to correct for that are likely to fail for the same reasons that other interventions designed at improving market efficiency will fail.

But we may have non-economic concerns about the distribution of wealth as well. An economy in which everyone is paid according to their productivity may be very brutal for people who are not very productive and cannot change that. We may wish to redistribute income for their welfare.

 

Myself, I’m sympathetic to Messrs. Bowman and Bergh’s notion of a Hayekian welfare state. I certainly believe that the most humane way of helping the poor politically today is by ending policies that have put up walls to them improving their own stations in life, whether those walls be vocational licensing or the war on drugs. Nevertheless, in a nation as wealthy as the United States, a welfare state can advance the general welfare by helping those who would otherwise down and out. The welfare state describes such an institutional means. 

When advancing a Hayekian welfare state, we have to be careful to keep in mind that the welfare state is not beneficence. Politicians who claim to be beneficent in their support of welfare policies are lying. Beneficence must be freely given. In the welfare state, it is not and politicians would have nothing to give if it weren’t for the tax revenue, at the end of the day, coerced from the general population. 

Nevertheless, keeping in mind that the welfare state is not an instrument of beneficence, I am sympathetic to the Hayekian welfare state, that is to a welfare state existing side-by-side to a minimal regulatory state. Importantly, Messrs. Bowman and Bergh argue, in my mind successfully, that there is a plausible economic reason for opposing the welfare state as there is for the regulatory state. Instead, the issue is one of morality and expediency. On both counts, there is a case for the welfare state.

 

On this issue, I think that contemporary libertarians, otherwise opposed to any welfare programs, should take a Whiggish view on the matter. They need to accept the political changes around them, even if their hearts may not be fully on the side of those changes. The existence of the welfare state is something that liberal political theory needs to adapt to, if it is to be relevant. Concerns about knowledge do matter in providing a, shall I say, efficient welfare state. There is much the Hayekian position can add to welfare policies. Taking a pig-headed opposition to it as the sole acceptable position only serves to cut off the value of that position from political discourse. 

The Freedom of Contract: A Non-Negotiable

 The freedom of contract is not just a product of a free and open society, but a perquisite for it. The reason for this is two-fold, one that correlates mostly with the latter adjective and another that correlates mostly with the former adjective. Not only is the freedom of contract necessary if we are to accept that humans have self-agency and should be able to use their agency in order to strive after whatever ends they desire as long as their conduct is in accordance with law, but it is also necessary if society is going to evolve, the ends that people strive for in their daily actions must be able to change in unforeseen directions despite the wishes of individuals within the society.

 

For one thing, the freedom of contract is necessary if we are going to treat people with dignify. The reason is simple: a dignified person is a person whose self-agency is respected and held in high regard by those around him. For this to be the case, he has to be able to make his own decisions and to have those decisions respected by his compatriots in civil society. Contracts allow this to happen. They allow individuals to give services to others only by their own free will. If someone wants another person to do something for them, they have to obtain their consent via contract. On the flip side of this coin, it allows people who do not want to associate with other people in certain ways to simply say no, to not sign their name on the contract and to go about their way. When a society does not respect the freedom of contract, then it impinges on this fundamental self-agency that is so fundamental to respecting each person with dignity. To force people to associate with those who they do not want to in manners that they do not want to is to treat people as means towards ends that they do not wish to pursue. When the freedom of contract has been violated, people are reduce to tools, mere pieces in a larger game that they have no say in. The citizen of a free society is no chess piece, but he is a dignified person and as a dignified person, his self-agency must be respected.

 

The freedom of contract is not something that can be simply cast aside for concerns of the moment. Indeed, even though there may be easily identifiable benefits to infringing upon people's freedom of contract, which is always some people inflicting their desired contracts upon other people, the costs are great yet so often unseen. Hopefully the moral consequences of infringing upon other human being's self-agency is a seen cost, but that is often swept aside and is unseen for all too many within society. Definitely unseen is the way in which constricting the set of contracts people can choose from in their negotiations with others in society restricts the possible courses social evolution can take.

When people cannot choose not to receive certain goods in their contracts, then social evolution will largely be constrained towards keeping the specific goods that are now necessary attributes of the contract in use. Essentially gone, unless people are willing to accept lower real wages by simply not using part of their wage, is the possibility of social evolution by the abandonment of the consumption of that good, or the emergence of substitutes to it. Of course, those who support the infringement upon freedom of contract will say that it is very unlikely that social evolution will proceed in that manner, but that is a statement that they have no grounding to make. Evolution is in response to unknowable conditions in the future and will categorically never be scientifically predictable in any robust manner. It is not for the politicians restricting of freedom of choice to dictate how social evolution to take place, it is for them to protect the general rules of conduct that make possible any form of social evolution.

And if society cannot evolve in undirected directions, then it is not open. Now “Open” here is being used in a sense different from the sense of translucent, but rather in the sense of an open system since the open society is an open system. The open society is a society in which the actions of individuals may direct the course of society in any direction that is within the rule of law. It is an open system in which no politician can take for himself the authority to dictate how society should evolve in the future.

 

The freedom of contract becomes even more important when we consider how important contracts are for the cooperation of human beings in modern society and thus for social evolution. Without a doubt, the most important form of cooperation for the course of society today is cooperation by prices in the market. Even though most of our cooperation on the market is based on uncontracted, spontaneous interactions with producers as consumers, the contract is of supreme importance to the continuation of cooperation in the interaction between employees and employers that underpins everyone's role as a consumer.

After all, to go to the supermarket for eggs, a person needs money in his pocket, to get money in his pocket he needs to persuade someone else to give him money, to do that he needs to provide that person with a desired service, most of us do this in the form of selling our labor, and the convention in our present day and will probably continue through time is for people to contract out their labor so that not only are the terms and conditions of the agreement clearly known, but that both can form a solid expectation of their future cooperation with the other party in the contract. As a result, contracts underpin the entire division of labor that makes market-cooperation possible and ergo the importance of contracts to social evolution cannot be underestimated. Thus what seems like only a small infringement upon the freedom of contract can have massive long-term adverse effects by restricting what courses social evolution can take.

 

However, the moral issue must once again take center stage. After all, by telling someone how they can use their self-agency and what ends they must seek in their interactions with other people by restricting what contracts can be made within the rule of law, the proponent of such measures is fundamentally treating people as animals who cannot decide for themselves how to better their own interests. If the person is an agent capable of pursuing their own ends, then why is there the need to use coercion to force them to do so? Are they not functional human beings? Are they not citizens within a free and open society? In addition, the freedom of contract also is necessary for a tolerant society for it is by tolerating that other people may desire other ends in their interactions with other people and may make other provisions in their contracts to attain those ends.

Limiting the freedom of contract, people's ability to pursue the contracts that better their desired ends, and to force them to pursue other ends is thus fundamentally intolerant. It is the presumption that other people may snuff out striving towards some ends and force other people to strive towards others simply because the people doing the restricting think they know better. It is the essence of totalitarianism and that there is so much acceptance of regulations that do so is a sign that totalitarianism did not perish in either 1945 or 1991, but still lives with us today.  

The Foreign Policy of Freedom

From William Ewart Gladstone's speech at West Cader on November 7^th 1879 as part of his Midlothian Campaign against Prime Minister Disraeli's government:

And that sixth (principle of foreign policy) is, that in my opinion foreign policy, subject to all the limitations that I have described, the foreign policy of England should always be inspired by the love of freedom. There should be a sympathy with freedom, a desire to give it scope, founded not upon visionary ideas, but upon the long experience of many generations within the shores of this happy isle, that in freedom you lay the firmest foundations both of loyalty and order; the firmest foundations for the development of individual character, and the best provision for the happiness of the nation at large. 

 

It is tempting to think merely in terms of national interests when it comes to foreign policy. After all, each nation has a scarce amount of resources at its disposal and ought not its principle guiding force be to advance the interests of its citizens? However, once we go down the rabbit-hole of national-interest politics then where do we end? At what point must national interests be sacrificed in order not to violate the moral prescriptions of virtue and propriety? The cold truth, though, is that whenever we speak in terms of national interests, we have put moral concerns aside and have come to foreign affairs as merely a technical problem, with the end (i.e. the national interests) given with the question now being what means must be employed to achieve those ends most efficiently.

A moral foreign policy cannot be one dictated by mere national interests. They are certainly important, but no nation is well served by officials willing to sacrifice foreigners at the parochial altar of national interests because there is then the threat that those officials will then be willing to act similarly against their own citizens. Plus, in the uncertain world of foreign affairs, it is often unclear how to advance national interests: the lines between friend a foe blur, the data of each situation are unknown, and even the mission itself is not entirely known. What can be in the national interest a year ago may have turned out to be conditioned on a mistaken appraisals of intelligence. We must have recourse to general rules then and the only general rules that action should be informed by in government are the rules dictated by justice.

 

Along with those rules comes a deep devotion to human liberty. Sadly American foreign policy motivated by the very same love of freedom that Gladstone speaks about has lead to unnecessary interventions, entangling alliances and the squandering of resources. Whether it be in Afghanistan, Iraq, or Libya, the honest love of freedom, among other things, has too often lead the United States into no-win situations it is too proud to simply leave.

However, it need not be that way and to understand why it need not be that way, we must understand that freedom is not just an abstract state of affairs, but rather a fruit of a society of law. Too often those who advocate freedom, whether in Gladstone's era or our own, advocate it as if it is a idea removed from the institutional specifics of society, as if it is something that simply has to be accepted rather than cultivated by law. However, if we take the writings of men from Edmund Burke to Friedrich Hayek to heart, what we must accept is that freedom is something that must emerge in each society by the proper functioning of laws. It is simply not something people can be liberated into for freedom without the rule of law will never sustain itself, but will collapse into chaos and faction.

A foreign policy of freedom, even though it is far more the claim of modern Libertarians than modern Conservatives, must still be a conservative foreign policy. The reason is that a free society does not simply come into being by the fiat of its rulers or by the fiat of foreign invaders, but by stable domestic institutions and by the rule of law. A tragic consideration that we must accept is that not all societies are ready to reap the fruits of liberty, whether this be for reason for a lack of the rule of law or maybe due to unstable institutions; liberty is as much a historical accident as conscious creation of the human mind. Any foreign policy that proclaims to be for freedom while at the same time destroying the institutions and rule of law that are its preconditions in foreign countries is no foreign policy of freedom, it is a foreign policy of tyranny which is bound to result from the conditions it causes in other countries.

 

A foreign policy of freedom must then be a policy of example and sympathy. It must be a policy of setting a virtuous and just example to other nations by showing how the conditions of freedom are a boon for the prosperity of the nation. It must be a policy of sympathy because no advocate for freedom within our modern and inter-connected world can stay silent as liberty in quashed in foreign parts of the world, but must be an active advocate willing to extend its sympathy across the world. However, prolonged engagements and entangling alliances do nothing to make possible the conditions of liberty in other countries, and as such they must be rejected.

 

Libertarianism: A Call for an Aretaic Turn

 The poverty of much of modern Libertarianism is its insistence upon rights without much being concern to why those rights are so important. All too often Libertarians will simply assume that it is just that people be allowed to live the lives that they want to wish without providing a reason why that is so important.

This may seem to be a mere lacuna, something that need not go explain. After all, who is for forcing other people to live their life a certain way? However, this lacuna grows ever more worrisome when Libertarianism is compared to other political philosophies. When this happens, Libertarianism is often left with nothing but the argument that rights must be protected because, well, rights must be protected as a principle of justice. Often, this does work convincingly, but there are times when this approach simply seems like a wooden insistence on principles with no motivating force behind them.

 

Why should people be able to do as they please? We cannot just base an entire edifice of political philosophy without breathing into its foundation a reason for its importance. And yet much of modern Libertarianism carries on as if that is OK. As if it is clear to everyone the reason for this. Even if it were, though, still bad reasoning to construct a foundation out of an unsubstantiated principle.

One of the key gaps has been to explain why this private sphere, where individuals may direct their actions by their own decisions (which the Libertarians defend more enthusiastically than any others whether it be in the case of free speech, civic liberties or the free use of private property), is necessary.

In The Constitution of Liberty, Hayek argues that the private sphere is necessary in order to give each person the ability to act on their own knowledge and to do what others would have never thought possible. In Liberalism, Ludwig von Mises based his defense of liberty and private property on his critique of socialist calculation, asserting that it is the necessity of private property for the maintenance of social cooperation that makes it immoral to violate property rights. In Anarchy State and Utopia, Robert Nozick starts his book simply by asserting that human beings have rights that rights must be respected. He later provides a Lockean approach at the beginning of the second section in which goods are justly acquired and then the only means of conserving, so to speak, the justness of these acquired goods is by voluntary exchange. In The Ethics of Liberty, Murray Rothbard, also arguing along Lockean grounds, derives his non-aggression axiom from man's nature as a being who has to act upon his own reason in order to survive and who acting upon his reason transfers his own self-ownership to the goods he produces.

 

I find all of these arguments to at least have some value, but none do I consider to be able to truly breath life into the concept of liberty. Of all of them, I think that both Hayek and Mises are both correct in arguing for the institution of private property and a private sphere from economic and social necessity. However, they both fail to provide a reason for the justness of private property in terms that can persuade and enthuse. Mises completely side-steps the issue by arguing that the metric of justice is the preservation of social cooperation, which is internally consistent with his other ideas, but it is certainly not consistent with others', including my own, conception of justice. Hayek completely neglects this area.

I find Nozick's entire notion of justice to be lacking. For me, Rothbard gets the closest to arguing why liberty is to be desired by addressing concerns about how people need to use their reason and create consumable goods from nature in order to survive. However, I do not find his Lockean story about Crusoe all alone in a new world having to establish his ownership over nature to be a convincing argument for why Crusoe has property rights over his creation once Friday comes along. It is once again a rationalistic moral geometry that takes as its central position a human being somehow spontaneously generated in isolation and then tries to lift all of ethics from that one point like Archimedes would the world. However, the lever of rationalistic ethics is a weak lever and rather than lifting ethics, it just shows the absurdity of their approach. Hayek and Mises avoid this point with their own arguments that focus on the social ecology of human beings, but they in turn fail by not actually addressing the individual human being.

 

If the Libertarian ideal of the private sphere is to be persuasive, it must be able to address why the private sphere is important for the flourishing of the human being. It must address why a private sphere is integral for each human being to be able to reach their potential and to live their life in the best way possible. What Libertarian ethics needs in an Aretaic turn. Rather than defending liberty in terms of ethereal laws of the world or for its social consequences, Libertarians need to address why liberty is necessary for each human being to actualize their potential.

Why is the private sphere needed? Because it is a necessary condition for the flourishing of each individual human being. Should that not be our primary goal in politics?