Liberals and Markets
By Arnold Kling
libertarians are liberals who like markets.
This is a succinct way of suggesting that libertarians and liberals share similar personalities and outlooks. There is just an intellectual difference concerning markets and government.
I will be speaking on the subject of markets vs. government in a number of upcoming talks. The first one will be at Campbell University in North Carolina on Thursday, March 18th at 6 PM. I assume this is open to the public. If you have a group in your area that would like me to speak, let me know (you can leave a comment).
Below is a sketch of some of my thoughts.1. Since I was once a liberal and am now a libertarian, I might count as evidence for Will’s thesis. I don’t think that my personality or outlook changed as much as my intellectual framework.
2. I think that most liberals I know would say that they like markets, “but…” The “but” is that they think of markets as serving some basic human needs, but not higher human needs. For liberals, the market is to government as the saloon is to the art museum. People do need to visit a saloon now and then, but the art museum represents the higher form of civilization. To stretch the metaphor a bit, liberals think that the saloon needs to be regulated, by sophisticated art patrons.
3. Liberals are more confident about social science and technocratic expertise. Libertarians are more confident about decentralized trial-and-error learning.
4. I think that liberals have a more romantic concept of democracy. I keep going back to Daniel Callahan’s statement on p.215 of Taming the Beloved Beast:
In the end, government must answer to the public, forcing an accountability that is absent in private sector medicine.
To me, government is a mechanism that diffuses and dilutes accountability. If government does something wrong, does a bureaucrat get fired? Does an agency go out of business? Do legislators suffer financial losses?
If I shop for a coat, the store is accountable to me. If government decides on a policy, my affect on that policy is at best very indirect. Will my vote be determined by that policy, or by my feelings about the elected officials based on other factors? Even if I vote on the basis of a single policy, will others vote the same way? Will the elected officials understand what the voters want? etc.
5. I think that liberals see markets and government as representing different facets of human nature. The market is where we go to channel greed, aggression, and the desire to outwit and take advantage of others. The government is where we go to channel compassion, kindness, and community spirit.
The libertarian view instead sees a common human nature at work in markets and government. With Adam Smith, we see bread on our table coming not from the benevolence of the baker but from his self-interest as filtered through the mechanism of the market. We see the government as an arena where rent-seeking is just as aggressive as in the market–except that the forces of competition are weaker for government-generated rents than for rents that can be temporarily captured in the market.
I think that compassion, kindness, and community spirit are best channeled through voluntary activities, such as charitable organizations. I tend to think of government as a particular form of charitable organization, one which is rendered corrupt and horribly inefficient by the fact that it obtains its funding via coercion rather than via voluntary donations. Charitable organizations themselves are far from perfect. But I think that, dollar for dollar, I get more community benefit out of my charitable contributions than out of my taxes.
6. I think that liberals view the market as a somewhat barbaric and unfair mechanism for allocating resources. They view government as a mechanism for restoring fairness and justice.
To a libertarian, the market mechanism is civilized. When people buy and sell in the market, they are making voluntary, mutually beneficial exchanges. In contrast, government is an arena where one side wins and the other side loses.
When I shop for a coat, if I do not like the way a coat fits or how it looks, or how much the seller wants me to pay, I do not buy that coat. I buy a different coat, perhaps in a different store. The shopping process leads to peaceful, mutually satisfying trade.
On the other hand, look at how the issue of health care reform is going to be resolved. It is like gang warfare, where the Democrats and Republicans are going to rumble, and at least one side is going to be very unhappy with the outcome. For me, it is the democratic process that is barbaric, and it is the market process that is comparatively peaceful and civilized.