The title of a Wall Street Journal story of two days ago was unambiguous: “Liz Truss Brought Libertarians to Power in the U.K. and Quickly Out Again.” Even if I found Ms. Truss more interesting than any recent British prime minister (including of course the previous one), which is not difficult, the WSJ ‘s claim and its implications seemed very doubtful.
The establishment’s contentment with the departure of the new prime minister could not dissipate these doubts as they usually struggle to distinguish libertarianism from a wheelbarrow. The WSJ reports:
“That libertarian view is unlikely to return to the U.K. for some time,” predicted Charlie Bean, former deputy governor of the Bank of England. “That vision has been pretty comprehensively blown out of the water by the events of the last few weeks.”
A general presumption for individual liberty is probably what defines libertarians better. If you include classical liberals, their tent is not a small tent. But it seems clear that nobody in the tent would want anything to do with government price controls (either floors or caps). Even Leviathan could deal with an emergency situation with less destructive means. Ms. Truss’s government had announced price caps on gas and electricity, which should be enough to deny her the libertarian label. But some people don’t seem to understand that.
Since my knowledge of British politics is limited, I wanted to doublecheck my intuitions. I asked Mark Brady, a long-term libertarian who teaches economics at San Jose State University and a careful student of his former country’s affairs:
Do you agree that her demission is a setback for libertarian ideas? Was she a libertarian? How could we square this with her plan to control gas and electricity prices?
Mark replied concisely to my three questions:
In brief, no and no. Easily, since she’s not a libertarian.
He added:
Re the WSJ article, no, she didn’t bring libertarianism to power in the U.K.
READER COMMENTS
Dylan
Oct 23 2022 at 8:26am
Does it matter much if she actually was a libertarian, if that’s what the narrative is? Look at how the Nordic countries are held up as a bastion for socialism, even if their success mostly came after liberalization.
Pierre Lemieux
Oct 23 2022 at 10:50am
Dylan: You are right that we should not be too much focused on labels. In some (or many) ways, people in Nordic countries have more economic freedom, narrowly defined, than Americans.
Craig
Oct 23 2022 at 10:09am
“In brief, no and no. Easily, since she’s not a libertarian.”
Ultimately Mark could wind up being correct, but the issue isn’t really whether she is or isn’t a libertarian but whether she is PERCEIVED to be a libertarian. So to a certain extent it could set back classical liberals in the marketplace of ideas if the other participants in the marketplace perceive her and her policies as being libertarian, even if to do so would be incorrect.
What we find, yet again, is the overwhelming bias for the government to ‘do something’ and the second things get difficult we see free market thinking members of the government quickly ‘lose their religion’
So she ultimately may have libertarian ideals but a libertarian may ultimately not be well positioned to be placed ‘in charge’ of the state over a social market economy. So she could have been compromising on her principles for the sake of pragmatism.
Pierre Lemieux
Oct 23 2022 at 10:45am
Graig: Good comments except for what may be a little contradiction. “The overwhelming bias for the government to ‘do something’” depends in part on, and has grown over time with, “compromising principles for the sake of pragmatism.” One consequence is that we end up with politicians who, as you suggest, are both pragmatic and (wrongly) perceived to be libertarians, and their failure is perceived as a failure of “the system of natural liberty” (to use Adam Smith’s expression). Volume 1 of Hayek’s Law, Legislation, and Liberty, has a useful chapter on “Principles and Expedience”–although this book is not easy reading; with your historical orientation, you would prefer The Constitution of Liberty.
Walter Boggs
Oct 23 2022 at 10:51pm
Libertarians are pretty open about what they believe. It’s odd that so many professional journalists are unable to correctly identify them in the wild.
nobody.really
Oct 24 2022 at 3:01am
So Liz Truss doesn’t qualify as a libertarian. Can we name any elected politician who DOES qualify as a libertarian?
Pierre Lemieux
Oct 24 2022 at 9:10am
Nobody: I admit that they are rare and, except in lost places, don’t stay long in the job. It’s like if, in the 16th century, you had asked me: Can you name me one country where there is free speech? Freedom of religion? Free trade (excluding city-states)? This being said, I agree that we should not require perfection, especially since we would not agree on what perfection is. But there is a difference between that and announcing (tougher) price controls on the first week on the job.
robc
Oct 24 2022 at 3:38pm
Thomas Massie may be the closest.
Ben
Oct 24 2022 at 6:15am
It wasn’t a typical “price cap”, it was a government subsidy for the unit price of electricity and gas, for as much as they went above some level. It still promoted conserving energy and it still rewarded producers at the fair market price – the government paid the difference.
One small praise I can give to British politicians and politics more generally is there general acceptance of market fundamentals – no one believes seriously in traditional price caps or theft of property, as they commonly do in France, for example.
The real libertarians were Thatcher, Locke, and Disraeli who let Britain to consistently champion free markets throughout her history.
Pierre Lemieux
Oct 24 2022 at 9:03am
Ben: The plan was (and still is) to cap prices. In fact, the plan was to cap them more then they then were. That the cap is hidden under an expenditure limit and that it disappears past a certain level of consumption does not mean that there is no cap below that. A lower cap is just a lower cap, even it is called a subsidized price. Only £400 was a cash subsidies, the efficient way to go. From the Wall Street Journal of September 8 (“U.K. Government to Cap Household Energy Prices for Two Years“):
You may be idealizing the Britain of your childhood or your grand-parents’ childhood. A good antidote is reading Friedrich Hayek’s Road to Serfdom, even if it has taken more time than Hayek thought for English liberty to practically vanish.
Jens
Oct 24 2022 at 7:51am
There may be several mechanisms at work here.
The first, of course, is that in the wild it can be quite difficult to distinguish the claim “these politicians are not libertarians after all” from the claim “real libertarianism has never been tried”.
Moreover, the British Conservatives have been involved in an intense kind of cosplay for some years now, wielding, among other things, libertarian positions and catchphrases like swords and shields (without being knightly after all).
And last but not least, one should not confuse the limits for energy bills – which are currently being partly worked out in Europe and which of course control prices for buyers – with price controls for producers, because these are largely outside the sphere of influence of European politics.
Rather, it is a kind of ex-post insurance in combination with redistribution; and perhaps history will even pass a just verdict – given the belligerent circumstances – on this political measure – I am not that pessimistic about that.
Jose Pablo
Oct 24 2022 at 12:45pm
“with price controls for producers, because these are largely outside the sphere of influence of European politics.”
Nothing is outside the sphere of influence of politics. Not in Europe, not anywhere.
And yes there are price controls for producers in the electricity market. Gas power plants will not be used as a reference to set the retribution of the rest of electricity producers, despite the fact that they are setting the marginal price.
That’s a price control for producers. Loud and clear.
Pierre Lemieux
Oct 24 2022 at 9:25am
Jens: You are making some good points, but redistribution must not be confused with price controls. Price control is the most inefficient and systemically detrimental form of redistribution. See my post “It Looks Like Putin Cannot Lose.”
nobody.really
Oct 27 2022 at 11:39am
Somewhat off-topic (and maybe too late), but on his blog, Steven Landsburg posed two hypotheticals about Earth’s subjugation. I’ll phrase the hypothetical in terms of Thanos.
A: Thanos conquers Earth and chooses you to pick the fate of the Earthlings, choosing between two options. On one hand, he has a glove; he could snap his finger, and half of all Earthlings would die instantly and painlessly. On the other hand, he has a coin to flip. If he flips it, and it comes up heads, he doesn’t kill anyone. If it comes up tails, everyone dies instantly and painlessly. Which hand do you choose?
The benefit of the gloved hand is that the human race endures–but endures with a 100% probability that each individual with either die or experience a level of bereavement and trauma such as the world has never seen. The benefit of the coin-flip is that there’s a 50% chance that no one gets killed–and even if people get killed, there will be a 0% chance of grief and trauma because no one will survive to feel those emotions.
If you see the world through a prism of individualism and utility, I surmise that you’d pick the coin-flip. The probability of any individual’s death is equal either way, but the probability of experiencing suffering is less. The primary reason to favor the snap is if you feel some kind of collectivism–if you see Earthlings, including the human race, as having interests independent of (and superior to?) the interests of the individual Earthlings.
I would be intrigued to see how people respond to this hypothetical, and track those responses against other measures of their embrace of libertarianism.
B: A variant on Hypothetical A–Thanos conquers Earth and chooses you to pick the fate of the Earthlings. But instead of one decision for the planet, the decisions for humans will be made household by household, and you can ask people what they want. Imagine a childless couple says that they wish to ensure that one of them survives, even at the cost of one of them dying. You could grant their wish–or you could overrule them and go with the coin-flip. If the coin turns out heads, they’ll both survive. If it turns out tails, neither of them will ever know it. What do you do?
Hypothetical B arguably illustrates different dynamics than Hypothetical A, and it’s less clear that libertarianism would correlate as strongly with the answers to this one. But it could generate interesting discussions, too.
If the moderators are hunting around for a quick topic to post on the webpage, feel free to use this one!
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