Daily Archives: October 19, 2010

What is Libertarianism?

Ends not means

A political philosophy should be about ends not means because there is never a single certain way  by which a political  end can be achieved and  the  interpretation of  what constitutes the attainment of an end is subjective.  Moreover,  the prescription of means may subvert  the desired ends,  the most common example being the corrupting nature of violence used to gain that which is morally desirable.  

 Where a political philosophy hardens into an ideology (a menu of ideas which supposedly acts as a sociological algorithm to answer all political questions),  the individual who accepts it unconditionally has given up his or her personal autonomy and has  moved from rationality into the realm of religious belief.  This is pernicious because  all ideologies are  inadequate descriptions of reality  at best and contain internal contradictions at worst.  These deficiencies mean that any attempt to rigorously apply the tenets of an  ideology leads to outcomes which are dmaging because they conflict with reality. Sadly, many libertarians have crossed the line between philosophy and ideology.

 An example of  rigidly inappropriate  adherence to ideology is the distinction being made  between depositors and shareholders in the present banking crisis. The argument that shareholders by definition take a risk while depositors do not  looks attractive at first glance but has no logical substance. Any arrangement an individual or corporate body  makes  with a private company other than a bank has exactly the same status as  the relationship between a bank and a depositor.  For example, if I  put down a deposit on a fitted bathroom and the company liquidates before I receive the  goods  I have almost certainly lost  my deposit..    That is exactly the same  situation as a depositor who has placed their money in a bank which then finds itself insolvent.  The depositor has provided the bank with his or her money to purchase banking facilities (and possibly interest) on the money deposited.

A rigid follower of laissez faire would say let the depositors lose their deposits., arguing caveat emptor and  suggesting that  depositors  had only themselves to blame  if they failed to take  out insurance to guarantee their  deposits.   This is correct in logic if you accept the premise that  what  primarily  matters is maintaining the principle of personal responsibility, a “let justice be done although the Heavens fall” approach. If it was their own savings at risk,  the odds are that no libertarian would be arguing that the depositors should be left to stew in their own responsibility. Moral: don’t subscribe to a philosophy which is too demanding.

The  sane and practical way for libertarians to proceed is to identify their general ends and then look at what type of society will bring them closest  to those ends. This assessment should  into account human psychology and sociology,  for any system of thought  which is incompatible with human nature  or its sociological expression is at best futile and at worst destructive.  Because of  the emphasis on personal freedom and responsibility,  the danger for any libertarian is that they concentrate so much on the individual that they  recklessly neglect the fact that Man is a social animal.  Where that happens, their vision of what a libertarian society should be becomes utopian and consequently unobtainable.

There is plentiful evidence that the  extent to which human beings will behave badly  or well is to a large extent determined by their circumstances. As a general rule those with power, wealth and influence will behave with less restraint than those who lack such advantages. The reason for this is easy to see: power, wealth and influence remove the social restraints which keep most people within  the bounds of reasonable behaviour. The powerful tend to believe they are beyond  criticism or punishment; and  think they do not  need the  voluntary help of others because they can purchase what assistance they require,   while those without power fear retribution, for bad behaviour and recognise  that  they need the voluntary assistance of others. The lesson for libertarians is that their philosophy must be designed to create a society which produces not  complete equality of circumstances for all its members but enough similarity between each  to prevent significant abuses of power.

What are the general ends of libertarianism?

All libertarians  support  the idea of laissez faire (generally, not only in economics), although  they vary  considerably in the role they allow the state, They  are united in their desire to see as much as possible of social interaction  left to voluntary  agreement between individuals,. They wish, if they wish  for a state at all, for it to be the absolute minimum required to provide the necessary framework around which society can  coherently form and survive.   They are strongly opposed to the state intervening in the  decisions  the individual makes which are private to themselves..  They  wish to see  human beings  living lives in which the individual  takes, as far as is possible,  responsibility for  his or her  life  and   for  any dependants. They expect  to provide  voluntary aid  to those  in need. 

Perhaps most importantly  libertarians  give a central place to the notion of property, a word which  in libertarian thought  has a connotation  which  extends far beyond its commonplace meaning of the ownership of physical objects to such things as a man’s labour  and his  very  body.  

Varieties of libertarianism

The most unblemished libertarians favour  a world in which each individual provides for and protects his own family and property, a world in which voluntary aid from relations and friends are the bulwarks against misfortune or incapacity, a world in which everything, including the right to property, is governed by personal relationships and behaviour is moderated not by laws or official force but the moral context in which people live, with good and bad behaviour being rewarded and punished by the informal responses of others.

Most of those who call themselves libertarian would subscribe to something a little less demanding of the individual. They want a world in which the state interferes with their lives as little as they deem practicable while providing a secure social structure comprised of  defence, diplomacy, justice and policing to protect both their persons and their property. Some libertarians  such as Hayek would go beyond the  routine minimalist state and allow  basic welfare provision.

The problem for libertarians, whether they be those who want no state or  those such as Hayek who would allow quite a large role for the state, is that there is no instance in human history of  a single  community which has  corresponded to any of the envisioned societies or even come close to it.

Where there is no formal authority the societies which result invariably lack the qualities which allow  libertarian ends to be attained: property is not respected, there is no system of law to which individuals can appeal, the strong dominate the weak simply by their power. 

No state has ever concentrated solely on those items which are considered to constitute the minimalist state.  Even the enhanced minimalist state of Hayek has never been realised, although it is comes closer to reality than the others.

 Societies which has never existed may reasonably  be assumed to be incompatible with being human. Libertarians need to accept that fact and ask what else is needed to produce the ends they seek.

What is missing from most  libertarian thought is an understanding of  the need for positive  as well as negative freedom. Most human beings are not and never will be thorough going libertarians even in theory. That being so, libertarians need to re-configure their philosophy to  aim for  a society in which  those libertarian ends which are most widely shared throughout society are best achieved. The ends which are most widely consciously  shared,  are those which relate to the state not intervening in private lives in matters such as raising children. . In addition, libertarians need to understand that the intervention by the state to create  material conditions which  produces a rough equality of power and opportunity  between individuals promotes the ability of all to take responsibility for their own lives.

The money  problem

Money is the elephant in the minimalist state room. This is unsurprising because it presents  a tremendous problem for all libertarians  except those  who would be satisfied with a society based on barter, for if the state  controls the money supply it has immense power.,  Hence, libertarians prefer not to mention it if they can possibly help it. But money cannot be ignored because it is the oil which drives the entire economy.  If a currency fails general economic disaster ensues in an advanced economy.  It is not just another commodity.

The record of state control of money (state being defined as a central controlling power) is not encouraging,  history telling us that  it has commonly resulted in the  debauching of currencies through the diluting  of precious metal content or by  recklessly   printing money and expanding credit  in the case of  a fiduciary currency.

That might seem an excellent reason for not  trusting the state with administration of the currency and leaving the matter to private initiatives. The problem is that experience says that  private initiatives to produce and maintain fiduciary currencies are  vastly  riskier, the record of private banks failing being legion.  The current credit crisis is a prime example of the dangers. Governments  in Britain and elsewhere have allowed banks to  expand the money supply vastly through  promiscuously granting  credit with the consequence that is now upon us, a freezing of credit  to the point where most, probably all,  British banks are in reality insolvent, their insolvency only being hidden by the lines of credit and guarantees offered by the British government.

By allowing private institutions to inflate the money supply governments to their hearts’ content , governments have effectively privatised monetary policy. When currencies were based on precious metals monarchs and states debased the currency: now it is the financial institutions which achieve the same effect.  An analogy would be with a government with a currency based on gold  minting coins of a standard gold content whilst allowing private mints to produce coins with whatever gold content they chose.

Some libertarians hanker after a return to a currency based on a precious metal such as gold. This would be completely impractical in the modern world, not least because the amount of gold available is merely a tiny fraction of that which would be needed to be held to make the currency fully convertible as it was before the Great War..

The dominance of economics 

Much of the  difficulty with libertarian thought lies in the central position given to laissez faire economics., a system of thought which is intellectually incoherent and impossible to defend at any level other than that of  emotional exhortation and has consequences which lead to non-libertarian ends.

A truly free market by definition must be one in which no artificial restrictions exist. Yet the so-called free markets we have rely on the most fundamental restriction of all, state-regulation to prevent the natural workings of a market.

 How unnatural the idea of a “free” market as (defined by laissez faire economics)  is can be seen by the complete absence of such markets throughout history. Economic history is a record of men attempting to reduce competition.

But the intellectual incoherence is not the main problem with laissez faire. Those lie in it Its practical effects. These are to create greater wealth divides and produce regular bouts of  serious economic instability. This has been true since its first real trial in Britain  from the 1840s onwards (Trollope’s great political novel The Way We Live Now was an early critique of its effects), the bank crises of the 1890s, the banking  crisis of 1907, the Wall Street Crash and Great Depression and currently the credit crisis the world is presently undergoing.  These crises have  all occurred during periods when  laissez faire has been the dominant economic credo of the most powerful economies in the world.   

Contrariwise, the period from 1931(when Britain came off the Gold Standard) and 1979 saw  state intervention in the economy  and protectionism re-established. During that time no major banking crises occurred. There were of course other financial problems, most notably the defence of the pound and a period of high inflation in the 1970s, , but the period overall was remarkably stable and there was nothing as dangerous as the present situation. Draw your own conclusions.

 Plutocracy and the quasi-state

 The central position given to property by libertarians , including the unfettered right to inherit,, subverts the ends of libertarianism.  Even in a society which starts out with a large degree of democratic control, the inevitable outcome of unhindered  passing down of wealth through the generations is the rapid formation of a plutocracy. Such a society is a  form of  authoritarianism,  and arguably the most potent form of authoritarianism because it is not the direct and overt consequence of  an elite which has seized power at a given point and wielded it unashamedly  for  its own advantage. Rather, it is a social state which develops organically and is all the stronger for that.

There is no obvious villain for the have-nots to attack for there is no monarch, no party,  no dictator to direct anger at, merely a group  of the privileged who colonise and control the political system,  reducing the democratic process to an pantomime of elective oligarchy in which parts of the elite compete for formal power.  

 A plutocracy  also passes its power and privilege down the generations through  inheritance . This avoids the  habitual cause of  failure amongst authoritarian regimes, the problem of succession.

Once a plutocracy is established , the state becomes less important because the elite have power which is not solely dependent on the formal positions of power as it is in states such as the Soviet Union.  The elite’s power ultimately  flows from the wealth they command, which allows them to effectively buy command of  society, both formally and in their relations with other individuals.

Wealth, as my old history master never tired of saying, is power. The consequence is that substantial differences in wealth mean that those without wealth are left in a grossly subordinate situation which undermines their ability to attain libertarian ends. Inherited wealth reinforces and amplifies these power relationships and very rapidly produces a plutocracy. a social state utterly at odds with the ends of libertarianism.

How  to judge an ideology

A good way of testing the moral  nature of an ideology is to ask  what would be an honest  election manifesto for  a party  adopting  it. In the case of  most libertarians   it would be this: We shall pursue a policy which will make around a third of the population richer, leave a third of the population  as they are and make a third poorer.  There will be  great  differences in wealth which will  increase with every generation.  Wealth being power, this will  mean those born to wealth  and high social position will be able to exercise  authority over those who are significantly poorer than themselves. Those who through incapacity or misfortune cannot support themselves  will have to rely on  the charity of others to survive at worst or  on a meagre subsistence at best. .  Society will not be a race in which everyone starts at the same point but a handicap gallop with the handicaps being decided not by Nature but by man made laws and customs.  Would any libertarian be comfortable standing on such a political platform?

Libertarians also need to ask themselves whether they want the world reduced to the banality of a system of economic relationships, ironically exactly what Marxists do. That is the danger with making gods out of property and laissez faire economics.

It is a singular fact that I have never come across anyone who was poor, either through knowing them personally or through their writings, who was a libertarian or even just a supporter of laissez faire economics.   That tells its own story. Only those who feel themselves beyond the reach of poverty or unemployment are comfortable with the idea that everything will work out in the end for the best aggregate result.

Voluntary action is simply too weak and  unreliable an engine to drive and maintain a society. For example, to argue that private charity will make good that which is provided by the welfare state is simply to go against all historical experience. There has never been a society in which private charity ever came close to meeting the needs of the incapable or the misfortunate. America in the Great Depression is a classic example of what happens. Until then the USA had been a society in which welfare even art the local or state level was very limited. 

If libertarianism is to be more than simply an ideology for the haves, whether through their own efforts, luck or the accident of birth, then it must take into account the way societies actually work and cater for the  wide range of ability, personality and personal circumstances which always occur. That can only be done if the positive freedom side of the liberty equation is given equal weight to that of the negative freedom side.

An ideology which unwittingly subverts its ends is worse than useless, it is absurd. That is what the libertarian thought does all too often through its emphasis on the individual to the exclusion of the social nature of human beings.

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