Le Quebecois Libre columnist Bradley Doucet thinks
conservatives have screwed up the free market brand. They have screwed
it up by paying mere lip service to it, and they have screwed it up by
wedding it to an intolerant, authoritarian sense of morality and a
belligerent, imprudent foreign policy. But out of the ashes of
conservatism will rise a better freedom movement.
Bradley Doucet - November 15, 2008
This
is certainly an interesting time to be a libertarian. The ongoing
global financial crisis rocking the economy threatens to scuttle the
measured support for free trade and free markets that has so benefited
the world in recent decades. As the failures of misguided government
policies are blamed on “unfettered” capitalism, increased government
interventions promise to make the situation worse before it gets
better, ensuring that we continue to cycle through bubbles and busts
well into the future. If one side of the traditional, left-right
political spectrum is more likely to accuse the other of being
socialist, in practice both sides are equally wedded to using the big,
heavy hand of government for their marginally different purposes.
Still, there are reasons for hope. Ron Paul’s campaign for the
Republican presidential nomination has raised the profile of our
political philosophy significantly. Despite some controversy and
infighting regarding certain of Paul’s positions and beliefs, many more
people now have at least some knowledge of what it means to be a
libertarian. That may not sound like a great victory, but we must
remember that these are early days. Also, in addition to being more
widely heard than ever before, the kinds of arguments raised against
the libertarian position are often feeble and fallacious, which
ultimately helps our cause rather than harms it. Finally, the rise of
the libertarian-leaning independent voter presages better times ahead.
It will not happen overnight, but in the vigorous marketplace of ideas
that is flourishing in the Internet age, the truth will eventually out.
The Crisis Proves What?
As evidence that the libertarian position is being heard, witness a
recent article in Slate magazine by Jason Weisberg, chairman and
editor-in-chief of the Slate Group, a version of which also appeared in
Newsweek, entitled “The End of Libertarianism: The financial collapse
proves that its ideology makes no sense.” Lest this title cause any
fear, let me reassure the reader that Weisberg, unable to marshal any
actual arguments against the libertarian position, limits himself to
insults and smug dismissals. What is significant is that he felt the
need to attack us in the first place.
Here are the first two paragraphs of his article:
“A
source of mild entertainment amid the financial carnage has been
watching libertarians scurrying to explain how the global financial
crisis is the result of too much government intervention rather than
too little. One line of argument casts as villain the Community
Reinvestment Act, which prevents banks from ‘redlining’ minority
neighbourhoods as not creditworthy. Another theory blames Fannie Mae
and Freddie Mac for causing the trouble by subsidizing and securitizing
mortgages with an implicit government guarantee. An alternative thesis
is that past bailouts encouraged investors to behave recklessly in
anticipation of a taxpayer rescue.
There are rebuttals to these claims and rejoinders to the
rebuttals. But to summarize, the libertarian apologetics fall wildly
short of providing any convincing explanation for what went wrong. The
argument as a whole is reminiscent of wearying dorm-room debates that
took place circa 1989 about whether the fall of the Soviet bloc
demonstrated the failure of communism. Academic Marxists were never
going to be convinced that anything that happened in the real world
could invalidate their belief system. Utopians of the right,
libertarians are just as convinced that their ideas have yet to be
tried, and that they would work beautifully if we could only just have
a do-over of human history. Like all true ideologues, they find a way
to interpret mounting evidence of error as proof that they were right
all along.”
Like all true pragmatists, Weisberg, noticing that some people hold too
fast to discredited ideologies, raises opposition to ideology into an
ideology of its own. But everyone has an ideology, a world view; what
matters is how successfully it describes and explains the real world.
True pragmatists are merely opposed to trying to reconcile their
conflicting, haphazard views into a coherent whole.
Insults are no substitute for arguments, and Weisberg’s writing will
convince exactly no one who does not already agree with him. Nor does
he offer any arguments anywhere else in his piece. How exactly does our
position “fall wildly short” of convincing? He does not say. Instead,
he calls us “utopians of the right” and “ideologues,” and further
along, “market fundamentalists.” As I have argued before, libertarians
do not believe free markets are perfect, just that they are far
superior to government control and planning. Contrary to Marxism, our
ideas, in proportion to the extent that they are tried, do work
beautifully. And far from suddenly “scurrying” to explain how the
government caused this crisis, many libertarians have been predicting
financial crisis because of government interventions for some time, as
a quick search through Le Québécois Libre’s archives will demonstrate.
Weisberg’s ace in the hole, such as it is, is to rag on Alan Greenspan,
a supposedly avowed libertarian who has recently “admitted” he was
wrong to think financial markets could regulate themselves. As Martin
Masse writes elsewhere in this issue of Le Québécois Libre, Greenspan
long ago abandoned any right to claim to be a libertarian. Furthermore,
it is Greenspan’s inflationary policies that are most fundamentally to
blame for the crisis, a “line of argument” Weisberg curiously neglects
even to mention anywhere in his article.
After damning us with faint praise for at least being “consistent” in
opposing the government bailout—an approach which he snidely remarks
“would deliver a wonderful lesson in personal responsibility, creating
thousands of new jobs in the soup-kitchen and food-pantry
industries”—Weisberg resumes his insults, which, I guess, makes him
consistent, at least:
"The
worst thing you can say about libertarians is that they are
intellectually immature, frozen in the worldview many of them absorbed
from reading Ayn Rand novels in high school. Like other ideologues,
libertarians react to the world’s failing to conform to their model by
asking where the world went wrong. Their heroic view of capitalism
makes it difficult for them to accept that markets can be irrational,
misunderstand risk, and misallocate resources or that financial systems
without vigorous government oversight and the capacity for pragmatic
intervention constitute a recipe for disaster. They are bankrupt, and
this time, there will be no bailout."
Whose views are bankrupt, exactly, when this misleading, unsupported
bluster is the best Weisberg can come up with? To clarify, the
libertarian position is not that market actors can never be irrational;
it is that when actors in a free market behave irrationally and
misunderstand risk, they suffer the consequences of their foolish
behaviour. If they persist in their foolishness, they go bankrupt,
leaving wiser heads to prevail. The main effect of government
interventions is to prevent these necessary corrections from taking
place, and to encourage foolish behaviour where the market discourages
it. If Weisberg can present flaws in this reasoning or evidence that
undercuts it, he should do everyone a favour and do so. Barring such a
demonstration, he only helps our cause by attacking it so feebly—as the
mostly negative reader comments accompanying his article testify.
A Mainstream Libertarian Responds
Weisberg’s attack also helps our cause by providing us with an
opportunity to reiterate the main points of our case in response to his
article, as I have done above and as D. W. MacKenzie has done in more
detail on the Ludwig von Mises Institute’s website. (See “Has
Libertarianism Ended?”) Even more significant for the spread of our
ideas, however, is a response from Richard A. Epstein that appeared on
mainstream Forbes magazine’s website, entitled “Strident and Wrong.”
Epstein is a well-known professor of law at the University of Chicago
and the author of many books, including 1995’s Simple Rules for a
Complex World, and most recently, this year’s Supreme Neglect: How to
Revive the Constitutional Protection for Private Property. By his own
description a classical liberal rather than a more radical libertarian,
Epstein has nonetheless recently begun a weekly column for Forbes.com
entitled “The Libertarian.”
Epstein is polite but devastating in his critique of Weisberg: “No fair
and balanced account of the current meltdown can dwell exclusively on
the failure of government to regulate credit-market derivatives. It
must ask deeper questions about the antecedent events that brought
credit markets to their knees. Weisberg offers no such account.”
Summarizing the “government decision to subsidize home mortgages
generally through low interest rates” and the “special Fannie and
Freddie guarantees,” Epstein emphasizes that “[t]hese foolish decisions
prompted market actors to react just as libertarians fear: to profit
privately from public foolishness.”
Epstein is careful to state that as a limited-government libertarian,
he is not opposed to all government regulation. Minarchists like him,
he writes, “have a presumption against government regulation, which can
be rebutted by showing long-term social improvements. We know not only
about the virtues of competitive markets, but of the challenges posed
by asymmetrical information, public goods, prisoner’s dilemmas and
market cascades.” Importantly, though, minarchists “are equally adamant
that bad regulation can wreck credit markets. And we insist that
governments must mend their lending habits to reduce the odds of credit
trains going off the rails yet again. We also strenuously oppose using
the credit crisis as a lever for introducing all sorts of senseless
gimmicks to disrupt labor and product markets.” He sums up his piece by
stating that Weisberg pathologically “overrates market failures and
underestimates government ones,” a pattern libertarian readers will
recognize as all too common.
The Rise of the Independent Voter
The intemperate response of the American government to the current
crisis—a mind-boggling $700-billion bailout bill, among many other
smaller, but still huge, bailouts—is certainly a sign that the
libertarian future is not right around the corner. But the American
public’s reaction to the bailout plan was far from uniformly
favourable. When framed as a government “investment” to keep “markets
secure,” one poll showed that only 57% supported the bailout (with 30%
opposing it). When another poll actually used words like “bail out” and
“taxpayers’ dollars,” 55% opposed the rescue package.
Along with significant opposition to this massive government
expenditure and power grab, there are other signs that suggest America
is moving in a libertarian direction. John P. Avlon, a senior fellow at
the Manhattan Institute and the author of Independent Nation: How
Centrists Can Change American Politics, recently wrote on the Wall
Street Journal’s website that independent voters “are now the largest
and fastest-growing segment of the American electorate.” Roughly 40% of
American voters now identify themselves as independent.
But what do these independent voters believe? Is there any consistent
ideology that unites them, or are they just a motley crew? According to
Avlon, there are some consistent trends: “Independents tend to be
fiscally conservative, socially progressive and strong on national
security.” Fiscally conservative and socially progressive—this sounds a
lot like the quasi-libertarian “bobos” (bourgeois bohemians) identified
by Brink Lindsey in his Age of Abundance, which I reviewed here last
fall. As for being strong on national security, Lindsey wrote that the
bobos “would part company with all grand ideological pipe dreams in the
realm of foreign affairs (including pacifism as well as neoconservative
adventurism), insisting instead that American power is a positive force
in the world but one that ought to be used cautiously.”
In a recent Weekly Standard article entitled “We Blew It: A look back
in remorse on the conservative opportunity that was squandered,” P.J.
O’Rourke laments the poor job conservatives have done promoting
freedom. He ends his piece with a funny and eloquent defence of the
free market:
"What
will destroy our country and us is not the financial crisis but the
fact that liberals think the free market is some kind of sect or cult,
which conservatives have asked Americans to take on faith. That’s not
what the free market is. The free market is just a measurement, a
device to tell us what people are willing to pay for any given thing at
any given moment. The free market is a bathroom scale. You may hate
what you see when you step on the scale. ‘Jeeze, 230 pounds!’ But you
can’t pass a law making yourself weigh 185. Liberals think you can."
Conservatives have screwed up the free market brand. They have screwed
it up by paying mere lip service to it, and they have screwed it up by
wedding it to an intolerant, authoritarian sense of morality and a
belligerent, imprudent foreign policy. But out of the ashes of
conservatism will rise a better freedom movement. The swelling ranks of
independent, quasi-libertarian voters do not want to tell you who you
can marry or what you can do with your own body; they do not want to
export democracy around the world at the point of a gun; and they do
not think the laws of economics can be legislated out of existence.
As I wrote at the outset, these are early days. Lindsey recognized in
his book that the current bobo synthesis remains “an unspoken and
unloved compromise rather than a well-articulated and widely embraced
consensus.” In other words, there is still much work to be done. We
must keep talking, writing, and arguing, nudging our friends and
acquaintances to reconsider a point here, read an article there. Yes,
free market ideas tend to get a raw deal during economic downturns, but
things are very different today than they were in the past. Today,
there is the Internet, itself both a free market for ideas and another
piece of evidence for how beautifully markets work when they are
allowed to. And at the risk of sounding triumphalist, the Internet
changes everything. With increased exposure, ineffective criticism, and
more and more independent voters who eschew the left-right divide,
freedom is on the rise. No, it won’t happen overnight, but what will
the world look like in five years? In ten or twenty years? Financial
crisis fallout notwithstanding, my bet is that the future is
libertarian.
Does the future really belong to libertarians? Discuss this question on the Shotgun blog here.
Recent Comments