Three items crossed my computer screen recently:

–the launch of by the folks at Cato. It looks like a nice web site, one that invites exploration.

Tyler Cowen’s link to a piece by Will Wilkinson.

–two older pieces by Jeffrey Friedman, namely What’s Wrong with Libertarianism (WW) and The Libertarian Straddle (LS).

Wilkinson and Friedman are partially-lapsed libertarians. More on their views below the fold.Wilkinson writes,

organized groups can be effective agents of real change. (It takes a village.) And groups are easiest to organize along lines of common material interest. That’s why, for example, “right-to-work” laws look to progressives like unilateral disarmament of the working classes, next to which the right of an individual to opt out of collective bargaining seems trivial. What’s the value of having the right to individually negotiate your terms of employment when all that gets you is screwed over? A politics of nothing but individual rights in a world dominated by social forces is a recipe for domination by those sufficiently powerful or organized to shape those forces.

Earlier, he writes,

I’ve come to accept, for example, that diffuse cultural forces, such as racism or sexism or nationalism or intergenerational poverty, can deprive an individual of her rightful liberty without any single person doing anything to violate her basic rights. This takes me a long way toward standard liberalism. But I find that my gut nevertheless leans right on issues of personal responsibility.

I think a lot depends on whether you think that people who are “screwed over” will benefit from collective, coercive action or not. I worry that it is too easy to assume that collective action works and to forget how often it fails.

Labor unions would be a prime example. In the gauzy, Whig history of the left, unions did wonderful things, and their decline is to blame for our problems today. But if you wanted to unionize 30 percent of the private sector work force today, how would you do it? By industry, so that everyone in health care, from the brain surgeon to the janitor, belongs to the same union? By trade, so that you have a union of adjunct professors of European history, another union of aspiring Asian-fusion chefs, another union of experts on sustainable development, and so on?

Turning to Friedman, I did not expect to find these sentences, in LS:

Attempting to understand not only what someone is doing, but why he may go wrong in doing it–even with the best of motives–is an inherent task not only of the social sciences but of daily life…we have to go a little deeper than the overt intentions of those we are trying to understand. Otherwise, we would never be able to explain (as opposed merely to identifying) their errors…

…if we are to understand those with whom we disagree, we must go beyond their conscious motives and examine the subconscious impulses to which their
ideas and assumptions may commit them. the goal of understanding. If we fail to go deeper than motives, we will have to attribute error to mendacity

He is the last person I would have expected to make the case for type M arguments. The problem is drawing the line between doing intellectual history–understanding someone’s views in terms of where they came from–and doing reductionism. For an example of the latter, consider the famous piece by Nozick on intellectuals, featured on He wrote,

The intellectual wants the whole society to be a school writ large, to be like the environment where he did so well and was so well appreciated…Those at the top of the school’s hierarchy will feel entitled to a top position, not only in that micro-society but in the wider one, a society whose system they will resent when it fails to treat them according to their self-prescribed wants and entitlements. The school system thereby produces anti-capitalist feeling among intellectuals. Rather, it produces anti-capitalist feeling among verbal intellectuals.

Does this analysis substitute for rebutting an intellectual’s anti-capitalist argument? I would think not. The argument could be right or wrong on its merits, regardless of how it relates to the status needs of the arguer. (And, yes, I am sure that you could find plenty of instances in which I have been guilty of similar reductionism.)

Perhaps Friedman would say that he is trying to explain why libertarians avoid certain issues or consistently make certain unwise intellectual moves. But the line between what he thinks of as intellectual history (good) and what he would regard as uncharitable reductionism (bad) appears blurry to me at this point.

The point of WW and LS is that libertarians should choose between a consequentialist defense of liberty and an a priori defense of liberty. I think that LS makes the point well enough, but it makes some sense to read WW first.

I have two issues with WW, one minor and the other major. The minor issue is that Friedman gives a simplistic rendition of Public Choice theory as saying that government officials are self-interested. But at least one important element of Public Choice theory, rent-seeking, does not require self-interested politicians. It simply says that government intervention invites actions by interest groups to influence the direction of intervention. They do not have to corrupt the government officials. They can use pure powers of persuasion. Failing that, they can use the electoral process to get the officials they want.

The major issue is that Friedman argues that consequentialist libertarianism (the side that I would put myself) is threatened by the possibliity that some government interventions might have good consequences. This makes libertariansim a tenuous proposition, at best requiring case-by-case analysis.

I reject the case-by-case approach. Instead, I want to focus on process. Sure, government can do something right every now and then. In some instances (urban water sanitation), government has so much experience with solving the problem that it would be nuts to go full-Monty anarcho-capitalism with no thought about transition issues. But when it comes to institutional processes, I think that exit works better than voice.

Set up two societies. Society C relies on competition, choice, and the consumer’s right of exit. Society P relies on planners and policy wonks who are given monopoly power backed by the coercion of the state. Which society will, on average, arrive at the technological, economic, and institutional outcomes that make for the greatest happiness for the greatest number? I think that one can make a strong empirical case for Society C. Moreover, I think one can make a case that movements in the direction of Society C tend to be welfare-improving, and movements in the direction of society P tend to be welfare-destroying.

Focus on dynamics. Focus on process. What are the conditions under which a monopoly of policy wonks will function better than a competitive, trial-and-error system at groping for solutions in a world that is too complex for any one person to understand? I think those conditions are highly unlikely to be observed.

Case-by-case thinking reverts to neoclassical economics, in which economics is about the “allocation of resources” in a static sense. The neoclassical economist uses mathematically elegant formulations to determine when markets will and will not achieve an optimal allocation. Then, pretending that we have a policy wonk with perfect information, we proceed to prescribe interventions, such as central boards to influence medical practice in order to reduce spending.

The focus on process instead looks at dynamics. It underlies the slogan “Markets fail. Use markets.” The fixes for market failure are more likely to emerge from competitive evolutionary processes than from top-down planning.

The focus on process allows radical ignorance to be the justification for liberty. What we know is trivial compared to what we have yet to learn. We can support limited government on the grounds that larger government does more to impede learning.