Journal on Libertarianism

This paper is a little different from the academic papers I have been posting, but it kind of goes along with the paper on libertarianism I posted before. It is not so heavy on the citations and more what I thought, and outlines some of the problems with libertarianism as I see it, along with some of the strengths. Jess should also read this, since she isn't sure what to think of Atlas Shrugged and Ayn Rand. I also got a couple comments/questions after my previous paper, and hopefully this will answer some of the questions about what I think about libertarianism - no, I do not fully endorse it, but I do think they have some awfully good ideas! =)

This was written in conjunction with the seminar I participated in at Yale summer 2010, after a lot of reading about libertarian philosophy and economics, and was for an independent study I did here at Houghton that summer/fall.

Caution: it's ridiculously long :p

The main things that I have been reading seem to indicate that the libertarian question focuses around one basic point: what is the proper role of government in society? This includes the areas of economics, military, welfare, and is a question of if modern government really is of the people and for the people, as so many modern democratic constitutions claim, or if it is in fact more of a socialistic government comprised of people who care more about their own political gains of power and wealth than of the people they profess to represent.

My first reading was the Declaration of Independence. I thought that would be a good way to start a seminar on liberty, since it was the document that officially made the break for American liberty. After learning somewhat about the British view of the American Revolution last semester, reading the declaration made me wonder – were the people of America objecting, actually, to British rule? Or was it more the policies that they disagreed with? This was my question as I read more of the readings in this course: do liberals believe that the government should be small on principle, or is it that they don’t believe government is trustworthy and so try to limit its size to protect themselves? I found part of the answer in Thomas Paine’s “Common Sense”, when he asks “How came the king by a power which the people are afraid to trust, and always obliged to check?” This seemed to indicate that the power held by governments was not one that they necessarily agreed with or wanted to have over them, but was instead one that they would prefer to be without. In fact, the basis of Paine’s argument that a monarchial power was evil pointed to not just that the government was too big, but that it was wrong altogether.

From this I gather that there are two basic thoughts of liberals in these readings – firstly, that government must be ‘self-government’; as JS Mill said, “the rule [not] of a person by himself, but of each by all the rest”. This also agrees with Paine’s argument that a monarchy or king who holds absolute power is wrong. The second is that even self-government must be checked. This is the argument for a small government. In the seminar, one of the repeated themes was that when government interferes with private life, especially in the economic realm, the people suffer. It becomes a case of ‘the people’ vs. ‘the government’, which defeats the purpose of the government functioning to protect the people.

An example given was the Tongass National Forest, the largest temperate rainforest in the world. A West Virginia-sized piece of land in Alaska, there are many natural resources available in it. One of these is timber, and the US government has a logging operation running in the forest. The problem occurs with the question “Who owns the Tongass?” The answer is “everybody, nobody, and the government.” Since the government is the only party out of those three that can practically do anything with the Tongass, (it is not feasible for every American to head out there and log, etc,) the logging operation is run only at the efficiency the government can produce. The interested parties are the logging companies, who like having the government roads made for them, congress, which likes the PAC money donated by the logging companies, and the US Forestry Service, who gets jobs from Congress, and makes the roads for the loggers. This all works together in a cycle of getting jobs and money, while no one’s concern is that the procedures used are environmentally healthy, conducive to regeneration in the Tongass, or anything else – including the money, which the taxpayers pour into congress to keep the cycle going, without receiving any noticeable benefit from the logging business.

This example shows the immense waste inherent in government business. If the Tongass were privately owned, if the logging companies had to be competitive in order to get the job, if the owners were concerned about the land and farsighted enough to look ahead and see the importance of environmentally-sound logging practices, if the wood were being sold on a free market to buyers who would use it in free trade, then the land would be given good stewardship to ensure more production in the future, the taxpayers would not be burdened, the government would not be spread into things it was never constitutionally designed to do, and the entire system would be better off. This is the kind of economics they taught at the seminar.

The 10-part video series by Milton Friedman, “Free to Choose,” also focused largely on privatized economics. His argument focuses on the waste inherent in government, and bases his opinions off of the Declaration of Independence and Adam Smith’s Wealth of Nations.  He believes that centralization of government is extremely dangerous, and that the people must work very hard to be free, since the natural gravitation of any government is towards expansion of power and centralization. The opposite of this centralization is what Adam Smith noticed creates wealth – division of labor. Smith’s observations were key in Friedman’s argument, as he argues that the government is not a capable manager of the money of the people; that the people should manage their own money. This is his belief on the separation of powers: that decentralization would actually create wealth, since the people would be ‘free to choose’ where they spent their money, and what investments they wanted to make.

One of the real-life examples that I found to be most thought provoking in the seminar was actually so real life it was unintentional. One of the other students was saying that she made money cleaning houses for people, but it was all under the table. Since there was no requirement for minimum wage people could afford to hire her, and she had a job she would not have otherwise had. We had been talking about the detrimental effect minimum wage and labor unions/job security has on the economy, and the point was all but proved when one of the professors jokingly said “well, I’d hire you if you’d do a good job and I wouldn’t have to pay you minimum wage!” It was intended as a side comment, but I saw it was proving the point: if he could hire her at less than minimum wage, it would be good for him. If she had no job security, then it would be incentive for her to do a good job. If she did a good job, then he would keep her in his employ. It was neat to see an instance where the theory we had been talking about actually had an example. The example they officially gave was the Supreme Court case of Muller vs. Oregon, in which a law intended to protect woman by limiting their hours actually took away jobs from these women who worked in laundromats. The owners of the laundromats hired men instead, who did not have limits on the number of hours worked and thus were more profitable. The point of the illustration was that government interference often has long-term, unintended side effects, which was in fact one of the main themes of the seminar.

As an example of how business can flourish when given the freedom, one of the professors used the Underwriters Laboratory. Founded by insurance companies to test products that are to be insured, it is a symbol of an electrical appliance that can be trusted. The professor teaching this actually bit down on the power cord of a projector in the room while it was on, to demonstrate his faith in the Laboratory. Since they are not government owned and therefore are competitive, they have every motive to only give their symbol to products they know to be safe.  Therefore, the people know they can trust the company so buy those products, and both parties flourish: the purchasers, because they get a good product, and the company, because they have customers.

One of the big questions I had about the libertarian argument concerns free market: if it is such a good thing, then why doesn’t it always prevail? Why do governments naturally come to be more controlling of the market, even in cases where the government is a democracy and claims to have the best interest of the people in mind? With the free market comes another question: doesn’t this allow for great stratification of resources? Isn’t it possible – or even likely – that equality would not prevail? The questions that concerned equality were some of the ones that dissatisfied me the most with the libertarian argument, and throughout the seminar I did not feel that they were adequately answered.

The question of the free market is one that I am still wrestling with. From the perspective they offered at the seminar, the idea of curtailing the free market was absolutely senseless. The argument was given from a strictly economic standpoint, where yield minus cost equals economic profit or loss. Where the revenue is greater than the cost, new value has been created. They used the example of a man starting a restaurant: If he spends $80,000.00 in labor, electricity, space, food, etc. and brings in $100.000.00, then he has taken the value of the finished product to the consumer minus the value of the raw goods and made the economy $20,000.00 better off. This is the value of the capitalist; he stimulates the economy. There is no such thing as too much profit, as long as the profit is made in a non-coercive, fair manner of free and voluntary exchange.

By its very nature, the more profit is made the more wealth is created in a nation. Resources are multiplied by creativity, and everyone is economically better off. In addition, if the economy is driven by profit and loss, resources will be channeled into the most profitable areas. This would eliminate the issue of wasted resources – if everyone looked out only for their own best interests, the overall profit margin would be greater. The general rule was that every endeavor should be subject to profit and loss – no one should be taxed at a higher rate because they make high profits, and people who are losing money should not have money poured into their failing system.

They also pointed out that a strictly free-market economy would encourage competition. New products would be offered, since everyone would be trying to get an edge over every other person, and the market – what sold and what didn’t – would determine who won the battle for consumer dollars. The uncertainty in the market is precisely what keeps it alive – the people doing the marketing cannot know exactly what it is that the consumers want, and as such try producing a wide variety of new products. This was the model given for a healthy market: many creative minds working to out-perform one another, the consumer benefiting from a wide selection of products, and the capitalist free to make a profit from his hard work.

For the most part, I agreed with this argument. It made sense that people are by nature selfish, and would try to make money. Having made money it is spent, and the economy is improved. However, I remain unconvinced that in a society so driven by the market, the social order would not suffer. It seems as though it would instead encourage a rather Hobbsian state-of-nature atmosphere, where each was in a war against all. That, of course, would not encourage free trade; warfare would quickly ensue. It remains, then, to be seen if it is possible to have a civil society paired with a free market.

The case for a libertarian civil society was the core of what I saw to be the libertarian argument – at the same time its strongest and weakest point. At the seminar, they vacillated between allowing for limited restrictions on society to arguing that there is a sort of spontaneous order that occurs in nature that would take care of the problem.  The latter I could not believe; if for no other reason the killing fields of the twentieth century would prove to me that men do not naturally live in harmony with one another. At the same time, there is the argument that any peace that comes about in this world can be attributed to a kind of spontaneous order. The argument was not that God does not exist or does not play a role in human life, but instead that people do not naturally make peace for each other. However, I find that argument to be slightly less than convincing, because the point can be taken that any peace that comes about in the world is a result of human endeavor. The peace summits of international leaders are not forced upon the leaders of free countries; it is a voluntary attempt to bring peace to the world. The argument is not that God does not play any part in what goes on in the world; it is instead that even if He does, it is an issue of the people who still are trying to make peace. This still counts as spontaneous order, since the order is not coercive.

This is the part that bothers me the most. The laws of nature are not contradictory, and yet it seems that even while there is the issue that Hobbes brings up of the natural state being one of war, there is at the same time the state we now find the world in – one of welfare, social care, and attempts to bring peace to all people. Are these international leaders truly concerned only with their own economic welfare? In terms of overall politics, are the efforts truly only an economic attempt to further one’s own self? That does not even address the issue of country – do the leaders want the best for their countries out of a sense of patriotism, or is it instead simply a personal, economic concern for their own salaries and safe homes?

If the argument of each wanting only their personal wellbeing holds sound, then why is there social welfare? I can see what the motivation would be for some parts of a government – for example, it is expedient for a government to have a strong military to protect its citizens so the citizens will continue to pay taxes instead of being captured by a foreign power and paying taxes elsewhere. A military is an economically sound practice of protecting a valuable investment. What about the case, then, of a government program like Medicaid? It seems like a rather long stretch to say that there is an investment in loyalty and patriotism that the government can justify. After all, even if the people who are benefitted directly by government welfare programs are dedicated to the system that is giving them handouts and would vote for the people who establish such principles, there is still the consideration of all the people who are paying the taxes and putting into the economy the money that is being sucked out by these people who are not adding to the economic system. Since these are the capitalists, the ones whom this free market is supposed to be benefiting, it seems rather counter-productive to penalize them for their hard work. And yet, this is the natural trend of government; it naturally moves toward being more and more socialistic and providing programs for people who are in need.

The problem in society is the apparent contradiction of innately selfish people, who really want to help each other, faced with the practical realization that instead of helping one another, we often kill each other. Is this an issue of wanting to hurt each other but having some inward compulsion to make peace instead? History does not seem to indicate anything of the sort. Do we inherently want to kill each other, and face the world alone? If that was truly the case, then there would be no governments, since no one is forcing the world to have structured governments – yet the overwhelming majority of people in the world are ruled by some form of government. In order, then, to accurately determine the structure of government, it is necessary to understand human nature and the motives that drive us.

The state of nature as Hobbes portrayed it is one in which the people, despite any given geographical or familial relations, do not in fact care for each other but are in opposition with each other. The modern form of the state of nature is the capitalist ideal: a world dependent wholly upon the work and independent intelligence of individuals. In the same way, just as there is a tendency among humans to develop a government to encourage working together and bringing a measure of security, modern governments tend to take this a step further into the realm of using social, governmental welfare to ensure that security. For some reason, although humans seem to be by nature selfish, there is an ever-present trend of trying to bail people out of their difficulties.

If the libertarian argument is true, then there should be no need for a government to worry about taking too much care of a people. Instead, the people should be concerned that the government does not, in fact, actually care about them. The issue is one of contradictions, because it is the people, working against themselves, that make a government. In a democracy, oppressive government is made up of people who are themselves oppressed by the government. It makes no sense that they would impose heavy restrictions upon the country, because they would also necessarily be binding themselves. That brings me back to the question: why, if human nature is to kill all others, do they care enough to bail people out? Is there something about human nature that was missed when Hobbes wrote Leviathan? Laws do not contradict themselves; human nature is what it is.

The answer I have come to is that the issue is not one of human concern for others, but is in fact an ultimate power struggle. Through wanting to make themselves appear a certain way, governmental leaders do things that look compassionate or merciful in order to maintain international appearances. It is a worldwide trend of trying to impress others in an effort to appear more powerful. For instance, the major money given in supposed charity to people in need is actually more of an effort to appear charitable, protection given to the defenseless is instead to maintain a reputation of care in order to gain the goodwill and support of other nations. Such support is critical for ease of international trading, economic growth, and so on; therefore we have arrived back at the conclusion that the motivating concern of kindnesses is actually economic and self-centered.

This is that part of the libertarian argument that I do not have a problem with. Instead of attempting to prove that there are in fact good intentions in the world, libertarians instead simply admit that everyone is perfectly self-motivated and that far from having kind intentions, humans are instead working for their own economic interest. In fact, this is one of my favorite things about the libertarian argument, and that part which I thought was best presented in the seminar. There is no pretense of good will, or supposed care, but instead there is honesty of intentions, which I find rare and refreshing to find. I would almost rather know that that someone really is not looking out for me and know their motive, then be deceived into thinking that they really have my best interest at heart.

The part of the libertarian argument that I really do not like ad have trouble accepting is that humans can actually live this way. As strong as the argument is that there are in fact no un-selfish motives; that humans are by nature completely selfish and economics are the only motives in life, I find it impossible to believe. The reading that convinced me of this was, interestingly enough, Atlas Shrugged – the very book that set out to prove that the ideal form of government was the strictly economical, capitalist one that I have been describing. I found that book to be an interesting mixture of contradictions and impossibilities, while parts of it were also very compelling. However, the book at its very core contradicts itself: the tenement upon which the book rests is that the brilliant leaders who are withdrawing themselves from the scene of the world are causing it to collapse because of their complete rationality – a rather egotistical, if not entirely inaccurate view of what would happen if people no longer poured their lives into their work.

However, despite Ayn Rand’s almost desperate attempt to show a world in which the ultimate ideal is objective, unemotional selfishness; a system of government in which people do not care for each other as anything more than a means to economic profit, I am unconvinced that she actually achieved this goal. The central character, Dagny Taggart, is portrayed as a woman who has streamlined her life into her work and nothing else, who cares for nothing but the advancement of her railroad. In many ways, this is well shown – Dagny’s creativity in circumventing the obstacles put in her way by the increasingly socialistic government, her fantastic work ethic, and never-ending perseverance make her a good example of a driven capitalist.

However, her character is inconsistent in her relationships with men. During the course of the book, she has affairs with three different men, none of which are for the purpose of economic benefit or furthering her railroad. Thus, while she is in so many ways an ideal libertarian, the book does not convince me that the wholly free-market economy system really does work. It didn’t even work for the characters in the book! Since it is more likely that a person would write about something that could not happen rather than allowing things to happen in the book that weaken the argument, I am unconvinced that Rand does an adequate job of proving the libertarian argument. She outlines a good case, but the proof is lacking.

That being said, I think the book is rather realistic, since I don’t think that libertarians are entirely correct in their argument. The very human emotions that are inescapable in the book are similarly integral in real life. The protests of the characters that they do nothing for the sake of another are drowned out by the sacrifices they make for those they care about. If the argument was that a society need not care for those they do not know, then that would be okay. However, since they claim to not sacrifice for anyone and then do that very thing, I am unimpressed.

Atlas Shrugged contradictions aside, I think that the libertarian argument was summed up in its strengths and weaknesses rather well in that book. They believe in capitalism and free market. That was what the book was advocating. The problem with the libertarian position seems to be primarily this issue with people ending up actually caring for each other, when in a perfect libertarian society no one would care for anyone else. This weakness in the libertarian argument was also in the book. If Ayn Rand had been purposed to write a book on libertarianism, then she would have done rather well. That, I think, is why the sponsors of the seminar recommended the book so highly. As Randian philosophy, it falls a bit short. For summing up the libertarian argument, it is probably the best that could be done.

The question of individual versus collective liberty is one of the major arguments in libertarianism. Are people in fact so interconnected that anything one person does, another person is similarly affected? According to Bastiat, in What is Seen and What is Not Seen, it would appear to be so. His argument – also highlighted in Henry Hazlitt’s book Economics in One Lesson – is that when one action is performed, it has either negative or positive consequences on the rest of society. The example used was of a broken window: if a window is broken, people see the money that is being spent by the man who owned the window at the window maker’s shop. This is considered to be economic stimulation – it is money that is being spent, and as such, the economy prospers. However, the point drawn out by both Bastiat and Hazlitt is that while it is true that the man spends his money at the glaziers, he does not spend it elsewhere. The natural function of money is to be spent, and unless the man would have never spent his money, having a broken window does not boost the economy. It simply redirects where the money is spent.

The reading of Randy Barnett’s “The Moral Foundations of Modern Libertarianism” gave a fairly concise summary of libertarian belief. Libertarians recognize existence and value of individual persons, and as such they place value on the ability of all persons to live and pursue happiness. However, the belief in the pursuit of happiness, it must be remembered, is different that a guarantee of the results. If it would make a person happy to kill someone else, that does not justify the action: the person killed is not free to live and pursue happiness themselves, so the would-be killer must restrain themselves since their wish is a ‘less-basic’ right than that of the victim. That is an extreme example, though, and the point being made at the seminar was that it is possible for nearly all to pursue happiness without depriving others of the same. For the few that are not covered under that ‘nearly all’ I do not have an answer – it is a question of equality, and as I mentioned before, the libertarian argument on equality was not brought to a satisfactory conclusion at the seminar, and I still do not know what they would say in such a case.

With liberty to do as one wishes, restriction of government, and economic equality discussed, I now want to explore just one more issue of the libertarian argument. This question is simply if libertarianism is actually practical to accept as a worldview or philosophy of government. The apparent benefits are that there is economic prosperity, if the theory holds true, since free market is encouraged and flourishes. Freedom given to citizens to do as they please translates into people who work harder, since they are doing what they actually want to be doing instead of being coerced into doing something they have no interest in. This is good for a government, since the nation is wealthier, which grants power and prestige. High international standing transfers into more investments from other countries, and the economy prospers further. This is the purpose libertarians have for believing in the free market. The drawbacks are that there is necessarily complete ruthlessness. The thought struck me when I was at the seminar, then it became somewhat buried with all the other things I was learning, only to resurface when I read Atlas Shrugged. The lack of concern over the welfare of others bothered me, but as I thought more about the issue, and continue to think, I am becoming more and more convinced that this lack of concern is necessary in a free government. In fact, it seems to me that this is the very issue that is at the root of government over-interference: too many kind intentions. After debating what the causes of motivation are for kindnesses, I have come to the conclusion this is in fact the part of human nature in government that the libertarian argument does not take into account.

In order for the libertarian government to work, the people must be completely heartless, caring for nothing but their own economic gain. If this is the case, then as far as I can tell, the libertarian government would have a chance at success. However, as sound as the policies might be, there is no room in this argument for natural human affection for one another. A true libertarian would not care for their parents or children, much less someone who was not related to them. Clearly this is not the case; a cursory examination of any civilization will disprove any theory that people do not form relationships with each other.

The fact that libertarian politics do not allow for gentleness in character does not necessarily mean they are wrong; indeed I have no reason to believe that charity is meant to be the responsibility of government. In history, whenever government takes upon itself to provide for the needs of the poor they end up taking over and the citizens, far from ending up with more freedom and care, instead have no freedom and only so much care as the government decides to provide at the time – a most precarious position indeed, and not at all the libertarian definition of limited government and freedom!

If, then, it is not wrong for libertarians to have a ‘no charity’ policy, does that mean there are no objections to implementing it as my governmental policy of choice? I remain unconvinced. My thought is that even if it is not wrong, there is little to no chance that it would actually work. The reasoning behind this is straightforward – even the best politics would be hard pressed to overcome human nature. Therefore, even if the libertarian argument is solid, the humans implementing the policies are not, and that is where the difficulty arises. It doesn’t matter how good the logic is behind the argument, if it doesn’t work in real life there is no use in promoting it.

I heard a lot of arguments from people who believed very strongly in libertarianism, and the readings were also (with the notable exception of Plato and his rather communistic city) mostly slanted in the direction of less government meaning a better society. I learned a lot about what the libertarian argument was, thus fulfilling my objective for taking the seminar and going through the readings, thinking about what libertarianism was. Still, even after hearing and reading a disproportionally large number of pros without having the opposing arguments, I cannot totally believe the libertarian argument. I think a part of that is my conclusion that it would not work in practicality – that human nature, despite everything that Hobbes said about our wanting to kill each other, and despite the terrible genocides that do occur in the world, also bends toward something less than absolute austerity in the way common people actually deal with each other. Certainly there are broken homes, hurting people, and terrible things that happen in people’s lives. However, most people do not have the strong, idealistic principles required to be a pure libertarian – they will form attachments with other humans, take compassion on someone, or be less than cutthroat in business. If all people were cold and emotionless and fanatically devoted to their principles, libertarianism might work. As the world stands, my conclusion is that it is not a practical philosophy because such characteristics are not, in fact, human nature, and as such a different philosophy of politics is required.