About a year and three months ago Brett S Morris posted Libertarianism Debunked: Why Libertarianism is a Total Sham on his website. While well written the content was awful.

First he goes on

“The first problem with libertarianism is that so-called “libertarians” are not being honest with the history of the word they have stolen from real libertarians – from those who actually favor freedom. Traditionally, libertarianism has always been associated with anarchism, a political philosophy that opposes authority in all circumstances, in both the state and the economic spheres.

Le LibertaireThe word libertarian was first used in a political sense by the anarcho-communist Joseph Déjacque, who was the first to call himself a libertarian and ran a publication in France called Le Libertaire. At this time, a libertarian was a socialist who wanted to abolish both the state and capitalism. Sometimes they called themselves libertarian socialists to differentiate themselves from authoritarian/state socialists as exemplified by Lenin.

It was not until the mid-20th century that the word libertarian became associated with the ultra-right, which is what modern libertarianism represents. Murray Rothbard, the founder of so-called “anarcho-capitalism” (essentially an extreme form of modern libertarianism that calls for the dissolution of the state in favor of organizing society along purely capitalist grounds), was one of modern libertarianism’s primary thinkers. Indeed, he was one of the founders of the Libertarian Party and the Cato Institute.

Other writers, such as Milton Friedman (“I regard myself as a libertarian”), Robert Nozick (author of Anarchy, State, and Utopia), and David D. Friedman (“I am an anarchist”) began calling themselves “libertarians” or “anarchists” and published books arguing for a society based on capitalist principles while using these proud traditions as their guise, totally ignoring the fact that real libertarians and anarchists have always been both anti-state and anti-capitalist. When they use these words, they are basically being deceitful, pretending they are in favor of human freedom when in fact they are in favor of total tyranny – in the form of capitalism.”

The first thing that comes to mind is that the exact same thing can be said today with calling themselves “liberal”. The second thing that comes to mind is how relevant this is. No one, to my knowledge, deny’s this. This has nothing to do with today’s libertarians beliefs. Thirdly capitalism cannot be “total tyranny”. Tyranny, by definition, is the cruel or oppressive rule. This is basically impossible in a system of voluntary exchange and competition.

Next he goes on about how he, falsely, believes that libertarians are dedicated to “total tyranny”.

“Modern libertarians say they are in favor of freedom for the individual in every circumstance. It’s true that libertarians are ostensibly opposed to the power of the state. However, libertarians have no problem with private tyrannies known as corporations or other entities. They are just fine with that. The Libertarian Party of the United States “defend[s] the right of individuals to form corporations.” Never mind the fact that corporations are legal entities sanctioned by the state.

What is a corporation? A corporation is a textbook example of a tyrannical institution. You have one person or a few people at the top, with layers of hierarchy beneath them. Orders flow downward and you have to obey those orders or you’re a out of a job. In other words, the exact opposite of liberty. Somehow “libertarians” fail to see this contradiction. Ayn Rand revealed her contempt for freedom:

Freedom, in a political context, means freedom from government coercion. It does not mean freedom from the landlord, or freedom from the employer, or freedom from “the laws of nature which do not provide men with automatic prosperity. It means freedom from the coercive power of the state — and nothing else!
Libertarians want to privatize almost everything. They believe they have a right to appropriate whatever resources they find without regard to the larger community. This is antithetical to a free society, since it would inevitably lead to vast inequality. There would be a few rich guys at the top, with the mass of humanity working to enrich them further. Somehow all this is supposed to represent “freedom.” But any reasonable person can see that this is the opposite of freedom – in fact, it would mean slavery for the vast majority of humanity.”

First off sitseems that Mr. Morris seems to use corporations as synonyms for “big business” but strangely he goes on to correctly define one. These “private tyrannies” cannot be “tyrannies” as they have no rule. They cannot provide cruel or oppressive rule in a system of voluntary exchange and competition. Any attempt to do so will be met with undercutting competition but in the case of that failing the state has the role of stepping in and protecting the rights of the population. Mr. Morris continues to argue corporations are oppressive but again ignores the fact that they cannot force anyone to do anything. Next he says that a free society would lead to “cruel or oppressive rule.” My response is simple… so what? Some people will get richer than others but the pie of wealth is not fixed. It is constantly growing. It is a common fallacy to believe that people getting rich is because others are not. This is the fallacy that is seemingly being made. Lastly he states that a free society will lead to slavery as the majority of the population will be working for the few rich but this is simply not true. No one is forced to work for anyone, their is not one set  of the “rich few” and economic freedom leads to greater per capita income, per capita GDP and less poverty.

Libertarians like to think the free market is the best way to organize the economy. The theory goes that, free of government interference, every individual will rationally decide what is in their self-interest. This will apparently lead to a flowering of innovation and prosperity. Government is just getting in the way. This is not only totally wrong and flies in the face of real economic history, but a society organized along these lines would lead to total collapse.

First, no modern industrialized society got where they are today through free markets. They got there through state intervention and protectionism. As economist Ha-Joon Chang says:

Almost all of today’s rich countries used tariff protection and subsidies to develop their industries. Interestingly, Britain and the USA, the two countries that are supposed to have reached the summit of the world economy through their free-market, free-trade policy, are actually the ones that had most aggressively used protection and subsidies.

Second, libertarians fail to see that a society based on a free market cannot and would never truly exist. There is actually no such thing as a free market, because there would be nobody around to enforce the rules of that market. And a market without rules is a market that cannot exist. Libertarians like to say property rights are inherent to an individual’s existence. And who, exactly, is supposed to enforce an individual’s property rights? The government! The same libertarian who wants government out of his life is the same libertarian who will go to the powerful government to protect his property. You can’t have it both ways.

Furthermore, societies that do have a semi-market system, like our own, will, by definition, lead to total collapse. If every individual is going around rationally deciding what is in their self-interest, “externalities” build up and will eventually destroy the society. Two individuals coming to an agreement that is in their mutual self-interest might be good for them, but what about people who had no say in that transaction? As Noam Chomsky says:

So, for example, if one of you sells me a car, we may try to make a good deal for ourselves, but we don’t take into account in that transaction the effect of the transaction on others. Of course, there is an effect. It may feel like a small effect, but if it multiplies over a lot of people, it’s a huge effect: pollution, congestion, wasting time in traffic jams, all sorts of things. Those you don’t take into account — necessarily. That’s part of the market system.

Over time, these externalities add up, leading to the biggest externalities of all: financial collapses like in 2008 or the looming environmental catastrophe.

First Mr. Morris uses a quote from economist Ha-Joon Chang to argue that it is protectionist policies that lead to where we are today. On trade liberalzation and growth one study found “Per capita growth of countries liberalization was some 1.5 percentage points higher than before liberalization, and investment rates were 1.5- 2.0 percentage points higher.” A subsequent study found that “[the authors] find strong evidence that liberalization of tarrifs on imported capital and intermediate goods raised growth rates by about one percentage point annualy in the liberalizing countries.” Second Mr. Morris seems to believe that a free market means no government and this is simply not true. To have a free market the ability of use force cannot be in play hence it must be monopolized by the government. Harry Binswanger has a great piece on this in Forbes. Finally Mr. Morris claims that externalities from a free market will lead to a economic collapse like 2008 or a environmental catastrophe. This ignores the fact that 2008 was due to the Federal Reserve or that, for example, the negative effect of economic freedom on air pollution as defined as the concentration of fine particle matter in the air. To be fair their was no relationship found between economic freedom and carbon emissions

.

The main problem with libertarianism is that it is simply a type of fundamentalist religion. It starts with its ideological beliefs first and then forces policies to fit that ideological belief structure, even if evidence runs strongly counter to the efficacy of those policies.

As I discussed above, libertarians strongly believe in a “free market.” Never mind that there are no examples of successful free market economies on the planet. Never mind that “free market” policies don’t work – unless your goal is to subjugate poor people and countries around the world. Never mind that societies based on “free market” principles will lead to total destruction.

With no evidence to support their claims, libertarians clearly have an unhealthy fixation on the “free market.” It is time to call out libertarianism for what it is – a cult-like religion using a stolen word, radically opposed to what it originally meant, the goal of which is some mythical society based on market principles, but in actuality will lead us all into the abyss.

Finally Mr. Morris makes maybe his most ridiculous claim. That libertarianism is a fundamentalist religion with no evidence. This is, frankly, a lie. Free markets have a massive amount of evidence to support them. He claims that “subjugate poor people and countries around the world.” This is clearly a attack on free trade which ignores the fact that, according to the NBER, “As an empirical matter, some anecdotal evidence notwithstanding, there is virtually no careful and systemic evidence
demonstrating that, as a generality, multinational firms adversely affect their workers, provide incentives to worsen working conditons, pay lower wages than in alternative employment, or repress worker’s rights. In fact, there is a very large body of empirical evidence indicating that the opposite is the case. Foreign ownership raises wages both by raising labor productivity and by expanding the scale of production and, in the process, improves the conditions of work… This evidence indicates that multinational firms routinely provide higher wages and better working conditons than their local counterparts” and that “Studies for the United Kingdom, United States, Germany and Italy reach the conclusion that offshoring immediate goods has either no or positive effects on both employment and wages…A study of EU [European Union] countries, Switzerland, and the United States shows that off-shoring services also tends to complement local employment”. The lack of negative effects of trade can be seen here, here, here and, here. He ignores that “…industrialization and economic growth brought rising incomes, which allowed parents the luxury of keeping their children out of the work force”. He ignores that according to a World Bank study ““This evidence confirms the central importance of economic growth for poverty reduction… institutions and policies that promote economic growth in general will on average raise incomes of the poor equiproportionally, thereby promoting “shared prosperity” and that economic freedom increases economic growth (here and here). He ignores that “On net, the effect of financial liberalization on growth is economically sizeable: around 1% increase in per-capita annual growth rate.” As Antony Davies and James R. Harrigan point out

economic freedom benefits just about everyone in ways that most people would never realize. Countries with more economic freedom have more gender equality and less income inequality. And this isn’t because rich countries tend to be both more free and more equal. Even among the poorest countries, those with more economic freedom enjoy more equality. Child labor rates in the 20 most economically free countries are half what they are in the 20 least economically free countries. And this isn’t because the rich-and-free countries import cheap goods from countries that exploit children. Among the most impoverished countries, those that are more free have significantly lower child labor rates than those that are less free.

Even the environment does better with economic freedom. The 50 countries with the least economic freedom suffer significant deforestation. The 50 countries with the most economic freedom enjoy significant reforestation. The least free countries experience nearly three times the air pollution of the most free countries, and the least free countries experience five times the amount of CO2 emissions per GDP than the most free.

Almost every political hobby horse would be better achieved if governments would simply adopt economic freedom as their primary goal. And this isn’t just a cross-country phenomenon. A comparison of the 50 states yields eerily similar results.

Using the Fraser Institute’s Economic Freedom of North America index, we divide the United States in half and compare the most free states to the least free states. From 1985 through 2009, unemployment in the 25 most economically free states averaged 5.2 percent, versus 5.8 percent in the 25 least free states. That 0.6 percent difference is equivalent to 460,000 additional jobs that might exist if the least free states were more free. Over the same period, median household income was 7.8 percent greater in the most free states. The rate of homeownership is higher in the most free states. The poverty rate in the most free states averaged 1.6 percentage points less than in the least free states. Income inequality was lower in the most free states than in the least free states. Interstate migration data shows that people voted with their feet, moving from the least free to the most free states. This made population growth in the most free states 60 percent greater. Economic growth is a full percentage point greater in the most free states, and state and local debt as a fraction of GDP is significantly lower in the most free states.

The conclusion is simple: Economic freedom yields beneficial results. If politicians really wanted the results they claim, they would fight for economic freedom. That they do not suggests that they have other goals. Meanwhile, the data bears out what Americans know intuitively: The United States is less free than it once was, and our lives are the worse for it. The way to improve our lives as citizens is to return to our birthright as citizens: liberty. As strange as it may seem, the government that has been “protecting” us has been the problem all along.

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Posted by Roman Bilan

2 Comments

  1. ! Religion is not less than a truly contrast, a perfect rhythm of rise and fall, beautiful and ugly, yin and yang, goodness and evil. a never ending endeavour of rise and fall with in oneself of extremes, which looks two but becomes one , , at ti;e#&s8230m……

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  2. 1. Tyranny… is basically impossible in a system of voluntary exchange and competition.
    Ah but what about property? If someone will shoot you for walking on a piece of the earth because it is their “property” isn’t that coercive? The initial distribution of wealth and property is fundamental to the fairness of any exchange. A slave-owner trading a slave’s freedom for some special task may be a “voluntary exchange” but one wouldn’t say the slave wasn’t oppressed or coerced.

    2. Growth is higher after liberalization.
    It is true that countries that liberalize see GDP growth but this is merely circular reasoning to some extent, what is GDP growth? it is the volume of market transactions within a given time. So yeah, you allow more market transactions and more market transactions will happen. GDP could also just mean that costs are rising, resources are being plundered, etc. GDP is very useful, but by itself it means nothing.

    3. “free” countries do better
    “freedom” is hard to quantify, and easy to fiddle with. When I see places like Singapore, a highly mercantilist dictatorship where the state owns much of the wealth touted as “free” I start to think maybe they are confusing high incomes with freedom. The bottom line is, all rich countries have gone further away from “the free market” over the past century, and the ones that have gone most social-democratic: Sweden, Norway, Japan etc. have by far the highest standards of living for the typical person.

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