The Bush Administration, particularly in its final year, discredited the Republican Party as a proponent of free markets. What should come next?

One idea, promoted at Cato by Brink Lindsey and Will Wilkinson, is liberaltarianism. The idea is to approach liberals and say, “we’re with you on social issues and we’re also dovish on foreign policy. Let us persuade you that markets are good for the economy.”

The problem is that liberals tend to affiliate themselves with Harvard types, and Harvard types believe that they are smarter than markets. And, at this moment in history, the Harvard narrative is that the financial crisis was caused because of blind faith in markets regulating themselves. According to this narrative, the election was a mandate to Harvard to deal with huge market failures in finance, health care, aggregate demand (hence the stimulus), and climate/energy. Based on this narrative, Harvard is absolutely committed to expert control over the economy, liberaltarians be damned.

Another reaction to the Republican cratering has been the Tea Party. The Tea Party is, if nothing else, strongly resistant to the Harvard narrative. Is that where libertarians should be making our overtures? Should we be trying to be TeaPartarians?

The Tea Party poses a problem for libertarians in that the Tea Party is going to stay pretty far to the right on issues like immigration and gay marriage. But the bigger problem is one of social and educational class. The Tea Party does not have a liaison office with the Ph.D crowd. Unfortunately, it seems to me as if libertarian intellectuals would rather deal with Democrats than with the Tea Party because those intellectuals are socially more comfortable with Matt Yglesias than with Glenn Beck.

I think it might be good to have some TeaPartarians, meaning intellectual supporters of free markets who are comfortable working with the Tea Party folks. I worry that an electorally successful Tea Party movement might not have the focus and ideas to take on entitlements and other major contributors to fiscal problems. If the Tea Partiers are electorally successful and all they give us are a few symbolic budget cuts, the long-term trend toward concentrated government power will continue.

My worry is that the Tea Party movement will be satisfied with taking some Democratic scalps and restoring some of the sense of group status that the Tea Party demographic feels that it lost in 2008. Instead, I wish that the Tea Partiers would read the last chapter of Unchecked and Unbalanced and get some ideas from that book. I would like them to be less satisfied with achieving ballot-box validation along with status revenge and instead more interested in reforms that would make government more competitive.

[UPDATE: Will Wilkinson responds.]