Daily Archives: June 19, 2011

Means subverting ends – The fatal flaw at the heart of 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 damaging 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 a basic welfare state.

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 it 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 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. The major  problems lie in 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, the importance being in the inheriting as a class rather than as an individual.  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 the 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 a god 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 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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