From Far Left to Libertarian

In addition to Kip’s point I think that you have to add – people don’t every do anything because “its the right thing to do.” Action is driven by selfish self interest.

I have long regarded libertarianism as a movement of the Left. Its overlap with conservatism is purely a historical accident.

Someone once characterized a libertarian as a liberal who became acquainted with sound economics. Works for me.

What about John Gray?

My own journey from far left to libertarian was complicated, but there are two large factors. First, I learned a lot more about economics in general and public choice theory in particular. This was a major “gestalt switch” with regard to social reality. Some of my “far left” views survived, but were re-contextualized. Second, I saw what really happens when an institution enacts and self-enforces Marcusean “liberating tolerance.” Yikes!

Isn’t that true for right wingers too? I doubt many in the Republican leadership are ex-libertarians.

Here is a great link for FAE
http://www.chacocanyon.com/pointlookout/040505.shtml

Arnold,
Most non-American cultures suffer from FAE. Your journey to enlightenment came about from your watershed event studying economics. Leftists are closed minded fools that love elites, they don’t like the other guys elites.

The real political spectrum: repression-socialism-Democrat-Republican-Conservative-Libertarian-anarchy

If libertarians study context, then why do they ignore the context that would be created by legalization of all drugs? Also, why do Libertarians not recognize that unfettered capitalism leads to concentration, where as some free enterprise anti-trust has created a better economic environment that has allowed innovation to flourish? Like John Nash said, that way we all get laid.

(1) and (2) sound like a polite way of saying that Far Leftists think everyone else is evil, while libertarians know everyone else is stupid. You can pretty much get the same view of the world by reading an issue of The Nation and an issue of Reason (under Nick Gillespie). I don’t think you arrive at either extreme without being iconoclastic, intelligent, and damned persistent. It’s way easier to just be a knee-jerk liberal or conservative and get your talking points from Hannity and Colmes.

The Far Left is characterized by judgmentalism. Think hatred of WalMart, Hummers, etc. My favorite Far Lefty friend’s favorite song is Little Boxes. The way I was raised, people’s houses represented their hopes and dreams. Even my little $500K condo in a place I affectionately call “The Projects” wraps up a great deal of my own hopes and dreams. It seems a strange thing to mock.

Libertarian circles, by contrast, are often characterized by cynicism. Why bother fighting a war in Iraq (or Afghanistan for that matter)? Why attempt to secure our planes when it just inconveniences travelers and brings us a step closer to dictatorship? While politically closest to what I think, the “mud hutter” mentality wears thin qucikly.

Honestly Arnold, I don’t think “libertarian” is a great label for you. Nor is Conservative, Republican, Democrat, or Liberal. Nor Independent. I’d stick with “essayist” and “economist” and let the factions fight over you as they wish. I don’t think anyone can look at your body of work and call you a partisan hack.

Interestingly, my career paralled yours very closely. I started at the CIA — a large govt organization — moved to a large multinational financial organization, next to a smaller investment firm and finally ran my own consulting firm.

But I stayed a liberal. Maybe your problem is that you really never worked for a large private firm — I don’t think Freddie Mac during the transition really qualified as private.

While I saw much of the waste and problems with government you see, I also saw exactly the same problems with the private sector. If you had observed up close how Board of Directors actually make decisions you would never believe most of the economic theories you espouse. From my experience there is little difference between large private and large government organizations.
But if you want to talk about waste, remember half of all new business fail — it may be the best way to do it but it is still extremely wasteful.

You say politicians market their product to the public. Guess what, they learned to do this from private firms doing the same thing.

While I believe in markets and agree with you completely that free market capitalism is the greatest wealth creater ever devised it does not mean that I believe that it is perfect. It is like Churchill said about democracy, it is a bad system, but it is still the best we have devised.

What I have concluded is that the modern mixed economy of countervailing powers between market and non-market forces is clearly superior to
unfettered capitalism.

If I’m really a cycnic I suggest that you look at the capitalist system as it existed in 1848.

The marxist looked at it and said it was a horrible system and we should destroy it.

The conservatives said we do not care, as long as we can make money it does not matter.

The liberal looked at it and say it has its positives and negatives and if we can temper the rules and discourage the negatives and encourage the positive it will be a great system.

The libertarians look at it and say it is great, that is exactly what we want. The problem is that most libertarians think their system is some great theory that has never been tried.
But the truth is that the we tried the libertarian system and in almost every respect it proved inferior to the modern mixed economy that the liberals and capitalist have created.

That was for Fritz, by the way…

Well, “libertarian” is a term that originated in France in the 1800s and was first used in English in the 1920s. Until it got picked up by former “classical liberals” in the 1950s, unhappy about what had happened to the term “liberal” in the US/UK traditions, it was always associated with socialist and even communists movements. Even today, Noam Chomsky calls himself a “libertarian socialist.” For that matter, I gather James Buchanan does as well.

Regarding anyone going the “wrong way,” I did it, although I have drifted back to a position I refuse to label (although some call me a Post Keynesian). In the early 1960s I was a libertarian, although I did not know the term at the time. I first began to move after reading Barry Goldwater’s _Conscience of a Conservative_ (I read Hayek a bit later, and Friedman still later), and found him supporting “property rights” over “civil rights.” By the early 1970s, for a variety of reasons, I had drifted to being a heterodox Marxist. Then I began my drift back towards wherever the heck it is I am now, which contains elements of all my earlier stages, including the libertarian…

Libertarians neglect the issue of taxes. They keep flattening taxes and wonder why the wealthy buy more government as a result. The libertarian position is unstable in this regard.

The problem, that economists force themselves to ignore, is that the immediate benefits of governnment growth depend upon the marginal benefit/cost ratio at various income levels.

Libertarians often fail to realize just how fast the return on investment of the wealthy increase as the wealthy shift more of their corporate expenses onto government.

I think you’ve run into the traditional problem of identifying political views along a left/right spectrum. My sense of libertarianism is that it judges political ideas from the perspective of whether they encourage more or less freedom. In that sense the far left and the far right are “opposite” only in being opposite sides of the same coin.

To answer your questions from that approach, then:

1. Libertarians per se have little in common with the far left — and the far right.

2. It’s not so much a case of knowing something different but of interpreting things differently; after all, the argument continues long after the facts are all established.

I agree that the Fundamental Attribution Error is alive and well in far-left circles. (One of the most remarkable things about the original Free To Choose series is that the leftists disdain corporations because they’re corporations; one goes so far as to say that a plan which would widely and undoubtedly benefit consumers shouldn’t be followed because it would also benefit multinationals.)

However, it is not always. A complaint I often hear from the left is that the capitalist system forces people into specific decisions because it puts emphasis on greed. I saw an example of a Spanish business which set up an almost hilariously inefficient business model and was forced to change to a typical corporate structure. The person offering the example lamented that the capitalist system–the context–forced this horrible catastrophe on the well-intentioned business owners.

Furthermore, a well-studied Marxist would likely argue that the capitalist exploiters and economists who support them do so not because they are evil but because material conditions–again, context–caused the new mode of production and theories defending it. (That’s not to say they wouldn’t call capitalists and economists evil in general. Well-studied Marxists also have this little problem with rhetoric.)

So I can’t agree that the principal difference between libertarians and far-leftists is the understanding of context, though that surely has something to do with it. Much like Thomas Sowell’s thesis on the constrained and unconstrained visions (which Bryan Caplan aptly critiqued), it’s only part of the story.

Did it? I have an alternative theory. There were coincidental rising trends in living standards and in the scope of government involvement in the economy, but the trend in living standards happened in spite of, not because of, the growing scope of government. Why don’t you propose an empirical test by which we can decide which theory is closer to the truth?

James from 1850 to 1950 real per capita gdp growth was about 1.5%. Since 1950 it has been about 2.1%, or about 50% higher.

The biggest difference after 1950 was the size and role of big government.

I think this is a very good response to your request for an empirical test.

Spencer,

I can think of a few problems. Among them:

The year 1950 looks like a cherry-pick to me. We didn’t suddenly shift from “trying the libertarian model” to “big government” in 1950. Do you really think that the US was a libertarian place before 1950, what with an income tax, a central bank, a history if conscription, antitrust regulation in place, the “American System,” etc? The US was already significantly un-libertarian by 1850 if not before. Check the dates in my prior post. The increased role of government was a gradual process so there is no reason to model it as a binary variable.

Also, even when I use your preferred coding of 1850-1950 as a binary for the libertarian model (I can’t help but cringe at the idea that anything after 1900 could be called trying the libertarian model, but whatever) and 1950 to the present as the big government model, the difference between periods isn’t statistically significant. A t-test gives a p-value of 0.63.

And of course all this only compares once model of un-libertarian government with another model of un-libertarian government. Given the dates I mentioned above for various departures from a model where government only exists to prevent force or fraud, would you still claim that the libertarian model has been tried?

“Also, why do Libertarians not recognize that unfettered capitalism leads to concentration, where as some free enterprise anti-trust has created a better economic environment that has allowed innovation to flourish?”

This is simply refuted by the facts. Businesses began lobbying for anti-trust laws in order to restrain competition by rivals. Unfettered free markets lead to highly competitive markets in nearly every industry – and a few indistries with naturally high barriers to entry and large economies of scale that are dominated by a few firms — but where potential new entry and new technologies (driven by the high profits) keeping prices low and innovation strong.

Great Keynesian thinkers like Galbraith predicted that by now the few dominant firms of the 1960s would dominate the USA and the world by now. In fact, many of them have long since gone under and whole new industries exist. Many of the Big Firms of today didn’t exist then (think Microsoft and Wal-Mart) and won’t exist in another decade or two.

Finally, I want to add my two cents to whether we have ever experienced libertarianism and what it was like. First of all, libertarianism is not anarchy — it requires strict property rights and protections. We did not have libertarianism at the founding of the country because not all rights were protected — for example blacks did not have property rights and men were granted the right to own them, violating the blacks’ rights to liberty.

However, by the turn of the 20th century we did have libertarianism – but it was very short lived. In the first decade of the 1900s we started to see new anti-trust laws and other limitations on property rights, contracts and the free market. (Even before that we had trade restriction and tarrifs). Antitrust laws allowed firms to strangle their competition and begin to concentrate market power. There was also some public ownership of industry and control of banks — but this didn’t really begin to get out of control until the 1920s when some combination of these new regulations (along with the end of the gold standard and the effects of the first world war) may have contributed to the Great Depression. Then of course the 1930s really took it to a whole new level.

Businesses like regulations – as do politicians. Concentration of industry using government coercion, whether it is publicly owned business or nominally private, is not an effect of the free market. Anti-trust has not enhanced competition or limited concentration. We have never truly been a libertarian country but at the end of the 1800s we came closest — and that was a time of exceptionally high growth. Libertarianism requires strong defense of property rights and all human rights, and enforcement of contract – and a very limitied government that does only that.

Arnold’s comment that he stopped attributing evil motives to those he disagreed with was an important realization.

As a born-liberal until my late 30’s, I too described all ideological opponents with Hitlerian traits despite always being mildly charmed by Bill Buckley and Barry Goldwater. I also began to see my liberal compatriots never being able to offer reasonable explanations for or against any policies. The reasons were always emotionally inspired. Upon reflecting upon many of Reagan’s policies I began to admire him on many fronts as a president. I began to analyze whether the Big Government programs of the liberal government had borne fruit as intended. The opposite wound up being the empirical conclusion.

I realized that a limited government approach complied with my Jeffersonian inclination and Constitutional bearings. I found that empowering individuals was more beneficial than following the dictates of the elites. The elites are not evil people. They possess hubris and excessive self-regard.

I save the Hitler appellation for Hitler.

You can find the data here:
http://eh.net/hmit/gdp/

economic history resources.

Or here:http://www2.census.gov/prod2/statcomp/documents/CT1970p1-01.pdf

Historical statistics of the US,
Colonial Times to 1970.

Liberty: I am not denying that there was growth, or that the capitalist system, including Henry Ford did great things.

What I am arguing is that the capitalist system and free markets have actually worked better in the era of big government then they worked before big government.

Capitalism requires good government. I can cite many, many examples of government without capitalism but I can not cite a singl example of good capitalism without good government.

Spencer,

Re; “Capitalism requires good government.”

I disagree. Free markets have existed since the earliest civilizations, and governments were created to protect and/or plunder the wealth that the free markets created. I would call a government good to the extent that its primary purpose is to protect the free markets that give it a reason to exist.

But I must also admit that a government that plunders well is also “good” for those who benefit from the plunder. Certainly the government of Ghengis Khan was good for the Mongols, and the government of the Soviet Union was good for the apparatchiks.

Our modern economy is a combination of both protection and plunder. Does this work “best”? Perhaps. An argument could be made that such a government is the most stable.

P.S. I dislike the word “Capitalism” as used to describe an economic system. Capitalism is simply a tool of free markets. So perhaps you will allow me to substitute.

As usual the arguments here presume that we have a choice in the style of economy we choose. Our choice is limited by the existance of democracy. Democracy always imposes an imperfect market, the public sector market.

The public sectors market is a market just like the private sector market, only very imperfect. We cannot “sell” the concept of libertarianism, marxism or the rest. We can only buy and sell public services in that market, not philosophies.

By the way Liberty, when you look at gdp growth — not per capita gdp growth– in the 1890s you are looking at the era that was recovering from what economic historians call the “long depression” of the 1880s or what they use to call the great depression. It was an era very similiar to what japan just went through. But what your are doing is like comparing the real gdp growth rate from 1934 to 1944 of nearly 9% to the long term trend.

spencer,

At least we agree on our data source for historical GDP…

“I selected 1950 so that the big boom of the 1940s would go to the liberaterian side”

I thought I had already made it clear that there is no libertarian side.

“and inflated that performance so you could not accuse me of cherry picking data. You want me to end it in 1933 at the bottom of the depression and when big government really started?”

No, I’d have mentioned 1933 if I areed that there was a libertarian period and only disagreed with your identification of its end. In case I’ve not been perfectly clear, contrary to your claim that libertarianism has been tried and found wanting, THERE HAS NEVER BEEN A LIBERTARIAN PERIOD IN US HISTORY. THERE HAS NEVER BEEN A SET OF YEARS THAT YOU COULD SAMPLE TO DRAW A CONCLUSION ABOUT THE EFFECTS OF LIBERTARIAN POLICY BECAUSE THERE WAS NEVER A SET OF YEARS IN WHICH THE ROLE OF GOVERNMENT WAS LIMITED TO PROTECTING PEOPLE FROM FORCE AND FRAUD. THERE HAVE ONLY BEEN DIFFERENT MODELS OF BIG GOVERNMENT.

That said, there have been yaers which were more libertarian and years which were less libertarian. Capturing the differences would require the use of multiple continuous explanatory variables and a few binaries as well.

“I’m sorry, i do not understand what your t-stat is of.”

You should have read my last post where I wrote that it was a t-test of the “difference between periods.” As in:

H0: the growth rates from the years 1850-1950 are not significantly different from the growth rates of the years 1951-present.

H1: the growth rates from the years 1850-1950 are significantly different from the growth rates of the years 1951-present.

Note: I’m not endorsing the approach of comparing periods without controlling for other variables, only noting that your claim is not statistically significant.

“Since when is a 50% increase in the growth rate only a minor increase?”

When the variation within periods exceeds the variation between periods.

The simple comparison of averages only uses descriptive statistics. This is insufficient for drawing an inference. For that, you need inferential statistics. Consult any college level stats text for the difference between descriptive statistics and inferential statistics.

“Many of the basic building blocks of modern capitalism were too underdeveloped to make pre-1850 eras a good example.”

I agree actually. But why not go all out and use multiple continuous variables?

“But to take on your issue, the dominate cause of the exponential growth in technology after 1950 was government support of basic research and education. I challenge you to show me examples of the great growth in technology after 1950 that were not strongly supported by government subisidies in its early stages. That is one of the reason that the mixed system works better. Government supporting research in its early stages before it is commercially viable has massively improved the production of research. Even the research at AT&T where the semiconductor was invented was due to government regulation, not the free market.”

I wasn’t the one who brought up the issue of technology, (I was only challenging your claim that libertarianism had been tried and found wanting.) but I question your logic. Even if government funds were used to support every single invention post 1950, that would not be evidence that big government is better than libertarianism. It wouldn’t even be evidence that the government makes better research funding allocations than private corporations. It would be evidence that the government spends too much on research. The growth maximizing allocation would leave some projects (the ones that are not cost effective on a net present expected value basis).

How about this for a corrolary.

A conservative is a libertarian only if he is out of power. Conservatives now have power, and thus most of them have abandoned what they once called a core value.

If you’ve got kids in a public school, this is likely to ring true for you.

Yeah, the world is complex and people have diverse views. Therefore there are forms of coercion which I should object to when committed by private actors and condone when committed by persons acting on behalf of a state.

I’m convinced.

Herding versus individualism.

Evolution gave mammals the herding instinct, which helps us to get more biological work from scarce resources (the evolutionary imperative). The more efficient work comes from economies of scale.

Herding, however, occurs if we can delay individual instinctive behavior, repression. Individual action on behalf of our instics results in families, offspring.

Herding vs mating.

It is not government vs private. There are lotta private herds out there, and much of government evolved to keep herding in check.

Tough call, my suggestion: Make government transparant and efficient as possible. As government approaches the efficiency of the private sector, Marxism and Libertarianism will converge.

RWD,

You wrote:
“You are not thinking very hard. We can explain this as selfish behavior as well. I help you because I get some sort of social cache from it or I assuage some of my moral guilt. Selfish economic behavior is not always about money.”

I think that existance of moral guilt is proof that we are not driven purely by self interest. Awareness of social cache contributes to good decision making, but I doubt most people (or even many people) are aware of it.

Further proof of people making decisions unselfishly can be found by quickly looking to the military.