Yves here. It is all too easy to goad libertarians, since their ideas are internally conflicted and they get prickly when you point out the flaws in their dogma. They’d like to get rid of the state as much as possible, and pretend that people and businesses can deal with each other fairly based on contracts. But they ignore how numerous factors (such as network effects, economies of scale, and barriers to entry) mean that in many field,s businesses will have far more resources than their customers, employees and suppliers, which enables them abuse their power (there are boatloads of examples on this blog alone). Information asymmetries produce similar power imbalances.
And the reality is that the “shrink the state” ideology has provided perfect cover for new and improved looting. As Jayati Ghosh stated:
For much of the 20th century, it was easier to talk about an overarching socialist framework, a “grand vision” within which more specific debates were conducted. While there were many strands of socialism, with fierce and sometimes violent conflicts between them, they shared a common fundamental vision. At the risk of oversimplification, they all saw the working class as the fundamental agent of positive change, capable (once organized) of transforming not only existing economic relations but also the wider society and culture.
More recently, the very idea of a grand vision has been in retreat, battered first by the failings of “actually existing socialism” in various incarnations, and more lately by the ferocious triumphalism of an unfettered “free market” capitalism. Indeed, the only grand vision that dominated the late 20th century was that of the market as a self-regulating and supremely efficient mechanism for organizing economic life.
Despite the “anti-government” rhetoric associated with it, “free market” or “neoliberal” capitalism was never really about reducing the role of the state in economic life. Rather, it was about changing the nature of state intervention—away from its ameliorative and regulatory functions (as exemplified, in the global North, by the U.S. “New Deal” and western European social democracy), and towards an open defense of the interests of large capital. The “close partnership of capital and the capitalist state,” to quote the great Marxist theorist of the state, Ralph Miliband, was never really all that disguised. With the government responses to the global crises of the last half decade, however, it has become too overwhelming to conceal. The supposed ideology of free markets has been laid bare for all to see as a cover for the ever-greater concentration of capital, and the use of the state to accelerate that process.
By RJ Eskow, who has worked as a consultant in public policy, technology, and finance, specializing in healthcare issues. Cross posted from Alternet
Libertarians have a problem. Their political philosophy all but died out in the mid- to late-20th century, but was revived by billionaires and corporations that found them politically useful. And yet libertarianism retains the qualities that led to its disappearance from the public stage, before its reanimation by people like the Koch brothers: It doesn’t make any sense.
They call themselves “realists” but rely on fanciful theories that have never predicted real-world behavior. They claim that selfishness makes things better for everybody, when history shows exactly the opposite is true. They claim that a mythical “free market” is better at everything than the government is, yet when they really need government protection, they’re the first to clamor for it.
That’s no reason not to work with them on areas where they’re in agreement with people like me. In fact, the unconventionality of their thought has led libertarians to be among this nation’s most forthright and outspoken advocates for civil liberties and against military interventions.
Merriam-Webster defines “hypocrisy” as “feigning to be what one is not or to believe what one does not.” We aren’t suggesting every libertarian is a hypocrite. But there’s an easy way to find out.
The Other Libertarianism
First, some background. There is a kind of libertarianism that’s nothing more or less than a strain in the American psyche, an emotional tendency toward individualism and personal liberty. That’s fine and even admirable.
We’re talking about the other libertarianism, the political philosophy whose avatar is the late writer Ayn Rand. It was once thought that this extreme brand of libertarianism, one that celebrates greed and even brutality, had died in the early 1980s with Rand herself. Many Rand acolytes had already gone underground, repressing or disavowing the more extreme statements of their youth and attempting to blend in with more mainstream schools of thought in respectable occupations.
There was a good reason for that. Randian libertarianism is an illogical, impractical, inhumane, unpopular set of Utopian ravings which lacks internal coherence and has never predicted real-world behavior anywhere. That’s why, reasonably enough, the libertarian movement evaporated in the late 20th century, its followers scattered like the wind.
Pay to Play
But the libertarian movement has seen a strong resurgence in recent years, and there’s a simple reason for that: money, and the personal interests of some people who have a lot of it. Once relegated to drug-fueled college-dorm bull sessions, political libertarianism suddenly had pretensions of legitimacy. This revival is Koch-fueled, not coke-fueled, and exists only because in political debate, as in so many other walks of life, cash is king.
The Koch brothers are principal funders of the Reason Foundation and Reason magazine. Exxon Mobil and other corporate and billionaire interests are behind the Cato Institute, the other public face of libertarianism. Financiers have also seeded a number of economics schools, think tanks, and other institutions with proponents of their brand of libertarianism. It’s easy to explain why some of these corporate interests do it. It serves the self-interest of the environmental polluters, for example, to promote a political philosophy which argues that regulation is bad and the market will correct itself. And every wealthy individual benefits from tax cuts for the rich. What better way to justify that than with a philosophy that says they’re rich because they’re better—and that those tax cuts help everybody?
The rise of the Silicon Valley economy has also contributed to the libertarian resurgence. A lot of Internet billionaires are nerds who suddenly find themselves rich and powerful, and they’re emotionally and intellectually inclined toward libertarianism’s geeky and unrealistic vision of a free market. In their minds its ideas are “heuristic,” “autologous” and “cybernetic”—all of which has inherent attraction in their culture.
The only problem is: It’s only a dream. At no time or place in human history has there been a working libertarian society which provided its people with the kinds of outcomes libertarians claim it will provide. But libertarianism’s self-created mythos claims that it’s more realistic than other ideologies, which is the opposite of the truth. The slope from that contradiction to the deep well of hypocrisy is slippery, steep—and easy to identify.
The Libertarian Hypocrisy Test
That’s where the Libertarian Hypocrisy Test comes in. Let’s say we have a libertarian friend, and we want to know whether or not he’s hypocritical about his beliefs. How would we go about conducting such a test? The best way is to use the tenets of his philosophy to draw up a series of questions to explore his belief system.
The Cato Institute’s overview of key libertarian concepts mixes universally acceptable bromides like the “rule of law” and “individual rights” with principles that are more characteristically libertarian—and therefore more fantastical. Since virtually all people support the rule of law and individual rights, it is the other concepts which are uniquely libertarian and form the basis of our first few questions.
The Institute cites “spontaneous order,” for example, as “the great insight of libertarian social analysis.” Cato defines that principle thusly:
… (O)rder in society arises spontaneously, out of the actions of thousands or millions of individuals who coordinate their actions with those of others in order to achieve their purposes.
To which the discerning reader might be tempted to ask: Like where, exactly? Libertarians define “spontaneous order” in a very narrow way—one that excludes demonstrations like the Arab Spring, elections which install progressive governments, or union movements, to name three examples. And yet each of these things are undertaken by individuals who “coordinated their actions with those of others” to achieve our purposes.
So our first hypocrisy test question is, Are unions, political parties, elections, and social movements like Occupy examples of “spontaneous order”—and if not, why not?
Cato also trumpets what it calls “The Virtue of Production” without ever defining what production is. Economics defines the term, but libertarianism is looser with its terminology. That was easier to get away with in the Industrial Age, when “production” meant a car, or a shovel, or a widget.
Today nearly 50 percent of corporate profits come from the financial sector—that is, from the manipulation of money. It’s more difficult to define “production,” and even harder to find its “virtue,” when the creation of wealth no longer necessarily leads to the creation of jobs, or economic growth, or anything except the enrichment of a few.
Which seems to be the point. Cato says, “Modern libertarians defend the right of productive people to keep what they earn, against a new class of politicians and bureaucrats who would seize their earnings to transfer them to nonproducers.”
Which gets us to our next test question: Is a libertarian willing to admit that production is the result of many forces, each of which should be recognized and rewarded?
Retail stores like Walmart and fast-food corporations like McDonalds cannot produce wealth without employees. Don’t those employees have the right to “coordinate their actions with those of others in order to achieve their purposes”—for example, in unions? You would think that free-market philosophers would encourage workers, as part of a free-market economy, to discover the market value for their services through negotiation.
Is our libertarian willing to acknowledge that workers who bargain for their services, individually and collectively, are also employing market forces?
The bankers who collude to deceive their customers, as US bankers did with the MERS mortgage system, were permitted to do so by the unwillingness of government to regulate them. The customers who were the victims of deception were essential to the production of Wall Street wealth. Why don’t libertarians recognize their role in the process, and their right to administer their own affairs?
That right includes the right to regulate the bankers who sell them mortgages. Libertarians say that the “free market” will help consumers. “Libertarians believe that people will be both freer and more prosperous if government intervention in people’s economic choices is minimized,” says Cato.
But victims of illegal foreclosure are neither “freer” nor “more prosperous” after the government deregulation which led to their exploitation. What’s more, deregulation has led to a series of documented banker crimes that include stockholder fraud and investor fraud. That leads us to our next test of libertarian hypocrisy: Is our libertarian willing to admit that a “free market” needs regulation?
But few libertarians are as hypocritical as the billionaires who earned their fortunes in the tech world. Government created the Internet. Government financed the basic research that led to computing itself. And yet Internet libertarians are among the most politically extreme of them all.
Perhaps none is more extreme than Peter Thiel, who made his fortune with PayPal. In one infamous rant, Thiel complained about allowing women and people he describes as “welfare beneficiaries” (which might be reasonably interpreted as “minorities”) to vote. “Since 1920,” Thiel fulminated, “the extension of the franchise to (these two groups) have turned ‘capitalist democracy’ into an oxymoron.”
With this remark, Thiel let something slip that extreme libertarians prefer to keep quiet: A lot of them don’t like democracy very much. In their world, democracy is a poor substitute for the iron-fisted rule of wealth, administered by those who hold the most of it. Our next test, therefore, is: Does our libertarian believe in democracy? If yes, explain what’s wrong with governments that regulate.
On this score, at least, Thiel is no hypocrite. He’s willing to freely say what others only think: Democracy should be replaced by the rule of wealthy people like himself.
But how did Peter Thiel and other Internet billionaires become wealthy? They hired government-educated employees to develop products protected by government copyrights. Those products used government-created computer technology and a government-created communications web to communicate with government-educated customers in order to generate wealth for themselves, which was then stored in government-protected banks—after which they began using that wealth to argue for the elimination of government.
By that standard, Thiel and his fellow “digital libertarians” are hypocrites of genuinely epic proportion. Which leads us to our next question: Does our libertarian use wealth that wouldn’t exist without government in order to preach against the role of government?
Many libertarians will counter by saying that government has only two valid functions: to protect the national security and enforce intellectual property laws. By why only these two? If the mythical free market can solve any problem, including protecting the environment, why can’t it also protect us from foreign invaders and defend the copyrights that make these libertarians wealthy?
For that matter, why should these libertarians be allowed to hold patents at all? If the free market can decide how best to use our national resources, why shouldn’t it also decide how best to use Peter Thiel’s ideas, and whether or not to reward him for them? After all, if Thiel were a true Randian libertarian he’d use his ideas in a more superior fashion than anyone else—and he would be more ruthless in enforcing his rights to them than anyone else. Does our libertarian reject any and all government protection for his intellectual property?
Our democratic process is highly flawed today, but that’s largely the result of corruption from corporate and billionaire money. And yet, libertarians celebrate the corrupting influence of big money. No wonder, since the same money is keeping their movement afloat and paying many of their salaries. But, aside from the naked self-interest, their position makes no sense. Why isn’t a democratically elected government the ultimate demonstration of “spontaneous order”? Does our libertarian recognize that democracy is a form of marketplace?
We’re told that “big government” is bad for many reasons, not the least of which is that it is too large to be responsive. But if big governments are bad, why are big corporations so acceptable? What’s more, these massive institutions have been conducting an assault on the individual and collective freedoms of the American people for decades. Why isn’t it important to avoid the creation of monopolies, duopolies and syndicates that interfere with the free market’s ability to function?
Libertarians are right about one thing: Unchecked and undemocratic force is totalitarian. A totalitarian corporation, or a totalitarian government acting in concert with corporations, is at least as effective at suppressing the “spontaneous order” as a non-corporate totalitarian government. Does our libertarian recognize that large corporations are a threat to our freedoms?
Extra Credit Questions
Most libertarians prefer not to take their philosophy to its logical conclusions. While that may make them better human beings, it also shadows them with the taint of hypocrisy.
Ayn Rand was an adamant opponent of good works, writing that “The man who attempts to live for others is a dependent. He is a parasite in motive and makes parasites of those he serves.” That raises another test for our libertarian: Does he think that Rand was off the mark on this one, or does he agree that historical figures like King and Gandhi were “parasites”?
There’s no reason not to form alliances with civil libertarians, or to shun them as human beings. Their erroneous thinking often arises from good impulses. But it is worth asking them one final question for our test.
Libertarianism would have died out as a philosophy if it weren’t for the funding that’s been lavished on the movement by billionaires like Thiel and the Kochs and corporations like ExxonMobil. So our final question is: If you believe in the free market, why weren’t you willing to accept as final the judgment against libertarianism rendered decades ago in the free and unfettered marketplace of ideas?