On Libertarianism, Part II

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Editor’s note: this is the second post in a three-part series on the basics of libertarianism and why it appeals to me. Part I is here.

WHY LIBERTARIANISM?

Aaron Ross Powell of Libertarianism.org identifies three major types of libertarians: deontological (rule/natural law based), consequentialist/utilitarian (outcome based), and virtue-ethicist (circumstance based). Of the three, I’m a deontological libertarian: I’m a libertarian because I think natural law and liberty are central to a moral existence. Unlike consequentialists, policy outcomes are, frankly, a secondary concern of mine.

That is not to say that libertarianism doesn’t have a bevy of practical, outcome-based reasons to believe in it. It does. As was mentioned in the last post, two of the greatest economists in history (Hayek and Friedman) were libertarians; the man who led an improbable legal charge against the Affordable Care Act (Randy Barnett) is a libertarian. In their professions, appealing to the deontological benefits of libertarian policies doesn’t cut it. Furthermore, a reasonable reading of much of American history could provide empirical support for the theory. Facts, I believe, often support a libertarian approach to policy.

Most of the practical reasons for libertarianism fall into one of two buckets: the knowledge problem, and concentrated benefits/diffuse costs.

THE KNOWLEDGE PROBLEM

We live in an extremely complex, dynamic society. It is complex in that there are, mathematically speaking, too many elements in it for a person or group of persons to keep track of. It is dynamic in that those multitudinous elements are constantly changing.

This makes it impossible for anyone, no matter how brilliant, to fundamentally grasp it. Human intelligence is impressive, but it isn’t even close to being able to fundamentally understand all of the interchanging variables that make up a free society. Indeed, even fully deciphering one individual can be a daunting task; one who, like us, has frequently-shifting motives, numerous and often conflicting desires, and whose decisions are often made on a whim.

There are, of course, things which humans have gained a great understanding of, namely mathematics and natural sciences. These rule-based systems occur in a relatively closed environment; there are few enough variables to account for almost everything. One can run controlled, repeatable experiments to derive and refine rules. This is impossible in society.

In his acceptance speech for the 1974 Nobel Prize in Economics, Hayek chastised his fellow economists for thinking that, through statistical modeling, they could have a similar level of knowledge about human actions as chemists did about molecules:

…I confess that I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false. The credit which the apparent conformity with recognized scientific standards can gain for seemingly simple but false theories may, as the present instance shows, have grave consequences.

Hayek hammered home the point in his 1988 essay “The Fatal Conceit”

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

This is, of course, problematic for proponents of large government programs. Such laws–whether they cover health insurance or early childhood education–prescribe very specific actions to bring about very specific responses. Yet they depend on a predictable societal order that simply does not exist.

CONCENTRATED BENEFITS, DIFFUSE COSTS

Another major practical issue for big government is the skewed system of incentives it creates.

Most government programs, individually, add little to one’s tax bill and restrict freedom in only minor ways. Spread across 300 million citizens and 180 million+ taxpayers, the costs are thus “diffuse”. Beneficiaries of each law, though, have a great deal to lose if their program is cut back in any way…hence concentrated benefits.

To the individual taxpayer, none of these programs (with a few possible exceptions) really cost them that much. Collectively, though, they add up. Predictably, recipients of government largesse are organized; they send letters to their congressmen, organize “get out the vote” efforts, and threaten to primary anyone who gets in their way. It’s extremely difficult for individual voters to mobilize; there are simply too many programs arrayed against them, and the opposition has more to lose than they have to gain. Thus, what often start as small programs grow and grow, often going far beyond their statutory justifications. And taxpayers are left to foot the bill.

Journalists will often decry citizens for not voting or being well-enough informed, but as George Mason’s Ilya Somin points out, citizens are “rationally ignorant”. Only the most polarizing programs can generally get enough opposition support to even have a chance.

How do we have a government that administers so many programs and not create these skewed incentives? Progressives have yet to come up with an answer to this problem; I think it’s impossible to do so at the scale at which they wish to govern.

INTENTIONS VERSUS OUTCOMES

Skeptics of this reasoning should examine a consistency across American legislative history: the vast chasm between most laws’ stated intentions and their actual effects.

The Affordable Care Act’s alleged purpose was to insure the uninsured and bring down the costs of American healthcare. Initial results show that it’s only marginally reducing the amount of uninsured and doing so at a massive cost.

The Republican-issued War On Drugs was started to reduce drug use and violence. It has failed to stem drug use and has increased violence.

Social Security was initially created as a financially self-sustaining old-age insurance program; in a time where the average person lived to be 62, it didn’t start paying out benefits until age 65. It now pays out working-age recipients from a pool of money that isn’t really there.

The second Iraq War (started by a Republican president but rubber-stamped by Democrats like Hillary Clinton) was started to stem violence in the Middle East and make the region friendly to western interests. It did neither; America gained next to nothing at the expense of over four thousand American lives and over a trillion dollars.

All of these laws sought to impose strict controls and response mechanisms on a complex, dynamic system. When other parties (young and healthy uninsured citizens, drug users, etc.) and institutions didn’t go along as predicted, the laws completely backfired, despite the hundreds of thousands of (smart!) man hours and billions of dollars that went into their planning.

FEAR OF THE UNKNOWN

Of course several scholars, all smarter than I, have a different interpretation of American history. They will point to programs that have fulfilled their purposes; they will think the ill-effects I speak of are overblown. And when granting that such negative things happened, they will make  some variant of this argument: “Yes, these laws may have had side effects, but what are we supposed to do…not feed children? Not provide health care? Let people use hard drugs unabated?”

Modern intelligentsia, for the most part, take active government as a given, and such thinking has permeated itself in our culture. We’ve become conditioned to believe in a logical fallacy: “The government currently does this thing. If the government does not do this thing, it will not be done. This is a good thing. Therefore, government should do it.” Senator Elizabeth Warren gives a pertinent example here.

Counterfactuals are, of course, tough to argue, but one should not assume that virtuous things would not be done in the absence of government. Often government programs crowd out private resources. What I would urge the reader to do is respond to criticisms such as Warren’s with reasoned thinking: why does government have to do a given thing? Why can’t private citizens handle these matters? And what cost is acceptable for such governance?

The unknown might be scary, but it is not by definition a bad thing, especially in the wake of so many policy failures of such horrific magnitudes.

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