Saturday, May 30, 2009

In my heart of hearts, I'm pretty libertarian.

TO BE NOTED: From the Economist's View:


In my heart of hearts, I'm pretty libertarian. I really don't want government looking over my shoulder and telling me what I can and cannot do.

Where I part with many libertarians - perhaps due to my background - is in the idea that government is almost always at odds with liberty. In my case, government played a key role in providing me with opportunity - education is one example, without tuition of $100 per semester at a state school, I probably would not have gone to college - but the opportunities government provided me go beyond education (and also see the examples given in the article for women and minorities).

Governments also need to intervene to prevent monopoly and political power from building up. Without such interventions, power will tend to concentrate and we will likely be exploited in one way or another, so government needs to ensure that our opportunity to enter a particular business - that our economic opportunities generally - are not limited by these factors.

I'm doing this in a bit of a rush (during a seminar, but don't tell), so one more quick point. I was very disappointed in the silence from many libertarians when the Bush administration was taking away, one by one, many of the liberties we enjoy. It was hard not to conclude that for many, the label of libertarian is simply an excuse to be concerned with little more than their own pocketbook.

In any case, I agree with much of what Bruce Bartlett has to say:

Liberaltarians?, by Bruce Bartlett, Commentary, Forbes: I recently attended a dinner with a group of prominent liberal and libertarian bloggers to see if there is a community of interest that might lead to closer cooperation on some issues.

On the surface, there would appear to be potential for an alliance. Libertarians tend to be liberal on social issues, favoring such things as gay marriage and drug legalization; and also liberal on defense and foreign policy, opposing the wars in Iraq and Afghanistan, and opposing torture and restrictions on civil liberties in the name of national security.

But libertarians are conservative on economic policy--favoring a free market with virtually no government intervention except the enforcement of contracts, and no government spending or taxes except those to pay for a very minimal police force and military.

Libertarians' views on social policy and national defense make them sympathetic to the Democrats, while their views on economic policy tend to align them with the Republicans. If one views social, defense and economic policy as having roughly equal weight, it would seem, therefore, that most libertarians should be Democrats. In fact, almost none are. Those that don't belong to the dysfunctional Libertarian Party are, by and large, Republicans.

The reason for this is that most self-described libertarians are primarily motivated by economics. In particular, they don't like paying taxes. They also tend to have an obsession with gold and a distrust of paper money. As a philosophy, their libertarianism doesn't extent much beyond not wanting to pay taxes, being paid in gold and being able to keep all the guns they want. Many are survivalists at heart and would be perfectly content to live in complete isolation on a mountain somewhere, neither taking anything from society nor giving anything.

An example of this type of libertarian thinking can be found on the Web site of a group called the Campaign for Liberty. It pays lip service to the libertarian philosophy on foreign and social policy, but says little about them. The discussion of economic policy, however, is much greater. But its only major proposal is abolition of the income tax. No ideas on how government spending would be cut to make this possible are put forward except to eliminate the congressional pay raise. Perhaps this group really believes that will be enough to abolish the income tax, but I suspect not. Whoever wrote these talking points is simply pandering to the stupid, the ignorant and the unsophisticated.

One is not likely to run into that type of libertarian at a Washington dinner party. These libertarians tend to be well-educated, arriving at his or her philosophy through reading obscure books or random contact with some libertarian in graduate school. They don't own guns--probably never even fired one, don't mind paying taxes too much, have no particular nostalgia for the gold standard and certainly would not choose to live in isolation on a mountaintop. They are cosmopolitan, urbane, articulate and interested in ideas more than just about anything else. They are not especially career-oriented--they are happy to be paid less than they probably could make as long as they don't have to compromise their principles and can do work that advances the cause. For the most part, they aren't family-oriented or religious, and they mostly fit the stereotype of a nerd.

But even these metro-libertarians tend to be more concerned about economics than social or foreign policy. The Cato Institute publishes an annual survey of economic freedom throughout the world, but produces no surveys of what countries have the most political or social freedom or those that have the most libertarian foreign policy.

Furthermore, economic freedom tends to be determined primarily by those measures for which quantifiable data are available. Since it is very easy to look up the top marginal income tax rate or taxes as a share of GDP, these measures tend to have overwhelming influence on the ratings. As a result, countries like Denmark, which are very free every way except in terms of taxes, end up being penalized. Conversely, authoritarian states like Singapore don't suffer for it because they have low taxes.

An unstated implication of these rankings is that freedom is the highest good--the thing that brings the greatest happiness to the most people. Since low taxes are taken as the sine qua non of a free society, one would therefore expect the happiest countries to be the lowest-taxed countries. In fact, this is not the case. Based on a recent study by the Organization for Economic Cooperation and Development, most of the world's happiest countries are high-tax countries.

Taxes and Happiness, 2006

Country Happiness Index Taxes/GDP

Denmark 8.0 / 49.1

Finland 7.6 / 43.0

Netherlands 7.6 / 39.3

Norway 7.5 / 43.9

Switzerland 7.5 / 29.6

New Zealand 7.4 / 36.7

Australia 7.4 / 30.6

Canada 7.4 / 33.3

Belgium 7.4 / 44.5

Sweden 7.4 / 49.1

United States 7.3 / 28.0

Source: OECD

At the liberaltarian dinner, many of the liberals persuasively argued that the pool of freedom isn't fixed such that if government takes more, then there is necessarily less for the people. Many government interventions expand freedom. A good example would be the Civil Rights Act of 1964. It was opposed by libertarians like Barry Goldwater as an unconstitutional infringement on states' rights. Yet it was obvious that African Americans were suffering tremendously at the hands of state and local governments. If the federal government didn't step in to redress these crimes, who else would?

Since passage of the civil rights act, African Americans have achieved a level of freedom equal to that of most whites. Yet I have never heard a single libertarian hold up the civil rights act as an example of a libertarian success.

One could also argue that the women's movement led to a tremendous increase in freedom. Libertarians may concede the point, but conservatives almost universally view the women's movement with deep hostility. They think women are freest when fulfilling their roles as wife and mother. Anything that conflicts with those responsibilities is bad as far as most conservatives are concerned.

In short, there is a theoretical case to be made for liberals and libertarians at least continuing a dialogue. But for it to go anywhere, libertarians must scale back their almost single-minded focus on economic freedom as the sole determinant of liberty. They must work harder to defend civil liberties and resist expansion of the police state whether it involves suspected terrorists, illegal aliens or those who enjoy smoking marijuana.

Libertarians should also be more outspoken about America's disastrous foreign policy, which Obama seems to be doing very little to fix. This would seem like an obvious area for cooperation. The main problem seems that neither liberals nor libertarians are up to challenging the loudmouthed bullies on talk radio and Fox News who equate anything less than a 100% commitment to the "war on terror" as treasonous.

I believe there should be more balance in the libertarian strategy, with civil liberties and non-interventionism having closer to equal weight with economic freedom.

In return, liberals can learn something important about economics from libertarians. Liberals often turn to government to solve social problems simply because that is their default position. But often, there are private-sector alternatives that may in fact be superior. The rich diversity of America's states and localities shows there are many different ways of dealing with social problems that don't necessarily require more government.

I hope the dialogue continues.

Posted by Mark Thoma "

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