Why No One Should Ever Be Afraid of Libertarians
by Tom Trumpinski • Oct 18th, 2007 at 7:00 am •
This is the best example that I have ever seen, I think, of a demonstration of why no matter what your political beliefs are, libertarians are less dangerous than you are.
If you all don’t read this guy already, you really, really should do so. He’s got a Mohawk and a flaming sword.
Tom
Comment by Hanno on 18 October 2007 at 9:14 am:
Here’s where I roll my eyes. We don’t need governments to be jerks. People do that pretty well on their own. Even the Nazi argument falls flat. Think about it. What existed before the Nazi state? The National Socialist Party. The Nazis had a huge paramilitary organization, the brown shirts (http://en.wikipedia.org/wiki/Brown_shirts) that would have gladly started the pogrom. Without some countervailing force to keep them in check it probably would have happened anyway because people like to band together into groups whether it’s family, linguistic, religious, or national. People will always form into groups. Autonomous individuals sound fine on paper, but in practice they’d have their asses handed to them by Mad Max style roving gangs in oh about a month.
Comment by Phil on 18 October 2007 at 9:38 am:
If libertarians dismantle the government, then the next Hitler will be the CEO of Exxon-AT&T-Blackwater-NewsCorp inc.
Comment by tet on 18 October 2007 at 9:44 am:
You missed the point. Unlike the National Socialists, libertarians have minimal power. Prior to Hitler possessing a government with power, the SA were a bunch of gay, drunk thugs that were fought to a standstill in the German streets by Commies.
The ideal libertarian state has just enough power to prevent the rise of Mad Max-style roving gangs and no more. Any greater collection of power would inevitably lead to its misuse to coerce other individuals.
We do not need government to be jerks. However, without a government to provide him with efficient weapons, the guy in the brown shirt on the corner is just another sociopath. People (even collected into street gangs) kill dozens while nation-states regularly kill millions. Which is truly the greater threat?
Phil, the only reason that a CEO currently has as much power as he does is because the government passes and enforces laws designed to give him that much power even if he’s incompetent. Without the support of the Federal government, industries would be subject to the laws of economics which would, over time, ensure that we get the most for the money that we spend each day. I’m sure that our crew of economists would be willing to explain in detail to you how that would happen.
Tom
Comment by kofi the democrat = socialist = nazi. there. i said it. on 18 October 2007 at 9:50 am:
What existed before the Nazi state? The National Socialist Party.
i’m confused. weren’t these one and the same?
Comment by kofi the when push comes to shove, i care about people on 18 October 2007 at 9:58 am:
People (even collected into street gangs) kill dozens while nation-states regularly kill millions. Which is truly the greater threat?
You’re confusing what is greater threat to ‘people’ (collectively as a species) with what is a greater threat to ‘people’ (as in you and me).
Comment by tet on 18 October 2007 at 10:06 am:
The National Socialist Party existed for well over a decade before they gained power, Kofi. They tried to gain power by a coup in 1923–the Beer Hall Putsch–but were unsuccessful, and Hitler did some jail time.
They had gotten a fairly respectible membership in the Reichstag by the time that Hindenburg was elected (democratically) and decided to make Hitler Chancellor.
Without an existing government to place it in power–note that Hitler was never elected to anything–there would have been no Nazi state.
Kofi, I will be dead in a decade or less. You may have a very long life (millenia perhaps) if you take care of yourself now, but, even so, you are going to die someday.
Therefore the only sane way of looking at things is to apply them to the survival of the species, rather than you or I as individuals. We’re easily replacable with a bedroom and a bottle of Captain Morgan’s.
Tom
Comment by kofi the of course it was last the A i ever got on 18 October 2007 at 10:20 am:
I read Hanno’s post to imply the National Socialist Party != Nazis. I am aware they existed before they took power. I did get an A in my fourth grade history class.
Comment by Brian on 18 October 2007 at 10:25 am:
“Without the support of the Federal government, industries would be subject to the laws of economics which would, over time, ensure that we get the most for the money that we spend each day.”
Do you really believe that? In other words, you’re making a blanket statement against the existence of ALL market failures? I’m no economist, but even I know that’s completely wrong.
Comment by tet on 18 October 2007 at 10:33 am:
Brian, I leave this question for Billy Joe, Prescott and Allan. I have been excorated in the past for getting too wild on my statements about the economy, so I will bow to their greater knowledge.
Guys, how true is this?
Tom
Comment by J. Prescott on 18 October 2007 at 11:34 am:
Tom -
Its not so much not true, as just plain wrong up and down and all around.
You forget transaction costs, or if you remember them, think that the federal government is the source of all of them. Some of them, sure. All of them, no. They are naturally occurring and because of them, it is impossible for the market to “ensure that we get the most for the money that we spend each day,” by its natural self. This was stipulated in Ronald Coase’s “The Problem of Social Cost,” the most quoted law review article in American history and one for which he won the Nobel Prize. Without government intervention, there would be no efficient market. In fact, I’ll go further; without government there is no proliferation of computer technology to the average human, no widespread stock market, no corporation, or any sort of large business, which would in turn stifle development and scientific advancement. Its no coincidence that scientific advancement started speeding up as economics become more entrenched and stronger.
And what laws are you referring to that are designed to give the CEOs significant powers?
Comment by tet on 18 October 2007 at 12:16 pm:
All right, Prescott, got another “stretch” question for you.
Let’s assume that you and Phil are right–that there are social costs that are high without government intervention….
Invent a form of government that can lower those costs to an acceptible level without having any power of coercion whatsoever.
Just on a side note…wasn’t there stock markets, corporations and large businesses long before there were governments with much of a reach at all? They seemed pretty prosperous, too–keep in mind that this is not meant to be incindiary, but is a sincere question, since I know the history far better than the economics.
As far as protecting incompetent CEOs go–stockholders aren’t allowed to execute them in America, are they? :)
Tom
Comment by tet on 18 October 2007 at 12:25 pm:
Oh, I will concede that the ‘Net was a result of a cooperative effort between the DoD and private industry. There still would have been a ‘Net, I am certain, but it would have been delayed by about ten years and it would have been a lot more vulnerable to attack, since it would not have been built as a dispersed array.
Tom
Comment by tet on 18 October 2007 at 12:39 pm:
“Oh, one other thing,” Detective Columbo took his cigarette out of his mouth for a second and shuffled his feet while questioning Mr. Prescott.
“Aren’t Hayek and Friedman both Nobel Prize winners, too? What are their views on the efficiency of government and its role in reducing transaction costs?”
Tom
Comment by J. Prescott on 18 October 2007 at 1:34 pm:
Tom -
Alright. A lot of stuff. I will try to discuss all of them in some semblance of order. I am going to put a hold on the government thing, as that is a larger topic that requires more than a knee jerk reaction.
I don’t know where you are getting your idea of “wasn’t there a stock market before government without much reach,” because even the basest of stock exchanges have always been coupled with large governmental powers. 11th century Cairo (Fatimid empire), was the first, and I think the government there was pretty hands on. And even that was more of a market, and less of a stock market, in that they traded in debt and goods as opposed to business equity. In my mind, the first real stock market didn’t come around until the Dutch East India company, who actually sold shares of their equity. And why did people want to buy into that firm? Because the government issued a monopoly permit to the company. And even then, government intervention was not as indispensable then as it is now, because the pool of investors were considerably smaller. Everyone knew everyone, so in terms of a double-cross or pulling the wool over someone’s eyes, it was much harder to do, because the other investors could see the product and performance. Try walking onto the Microsoft campus with your share of stock and say, “Excuse me…yeah. Could I see your processes? I want to make sure you are not screwing us over.” Not going to happen. You could be from Sun or some other feasible competitor and they are not going to let you in. Instead, a third party
Your Columbo impression could use work, as the question is neither hard nor disproves my central thesis. Hayek and Friendman were against active participation by the government to allocate resources within the market. But they were all for supporting the rule of law. Go check. And rule of law includes torts, property, and contracts, which while is strongly based on economic theory and predicated on facts presented, still requires government intervention and a judgment call. So even Hayek and Friedman support government intervention; not through the Fed, not through social programs or welfare, but through the implementation of the rule of law, which in turn, does require some coercion. So Hayek and Friedman do not necessarily preclude Coase. They are against haphazard interventionism in the form of subsidies and pay-offs (which, incidentally, so am I).
As for your “come up with a form of government that is non-coercive yet mitigates transaction costs,” I don’t think that it is possible, and my reason springs from simple game theory. So, to do this, I am going to set up a little mind experiment with auditing, since I am more aware of that.
Lets say there is no civil or criminal penalties for white collar crimes. The government’s role is limited to criminal penalities: thou shalt not kill, steal, rape, etc. Instead, the government relies on the market to punish those that violate its precepts.
I am a young auditor and I start a firm and I am working hard. For ten years, starting small and building my reputation, I eventually rise up from auditing Ma & Pop shops til eventually I seize an auditing job for one of the Fortune 500 companies. The pay is good, and I am paid by the firm whose books I am auditing. My responsibility is to produce a year-end report which will go out to the thousands of individuals who are investors.
As an auditor, I look at EVERYTHING. I am not just making sure that 1+1 = 2. I am on the floor, inspecting safety procedures, doing walkthroughs with a product. That’s what auditors do. Based on my investigation I determine there is significant risks that require a significant write down of assets and profits to hedge for the risks I have found.
I go to the CEO, and tell him this. He comes back and says, “alright. I have to have pay you for this report. But I think your assessment is way off. So I tell you what. You don’t make the assessment, not only am I going to keep my business with you, you also get my tax work, and a bonus to you that won’t show up on our books cause, while sizable to you, is immaterial to this multi-billion corporation. Odds are, nothing is going to happen anyway; its only a risk.” So what do you do? There is only one really bad thing. If you stick by your principles, you lose the contract, probably get blackballed, and no more big pay days for you. Even if they get caught after your write down, all the other businesses won’t want to work with you because you could be the “goody two shoes” auditor, and people would be scared that you could do the same to them.
The next bad thing that could happen is you don’t make the adjustments, and next year the multi-billion dollar company goes down the tubes because of the risks you found. This matters less. You lose your business cause you lost your good name, but you still have the sizable pay off, which if you are smart you negotiated to be high enough so you could retire in style. No more work. You may not have the crazy nice lifestyle, but you are comfortable enough so you are not in pain. The best option for you is the corporation doesn’t get caught, and you keep their business and the pay-off. So what does the rational person do? Some will still take the high road. I like to think that I would. But most wouldn’t. And the market would soon understand that absent an unbiased third party, they lose confidence in the market and don’t invest. And thus we have an economic crisis.
Governmental coercion changes the game. Currently, auditors who do this type of fraud can get caught EVEN if NOTHING BAD HAPPENS TO THE CORPORATION. So yeah, you get the money. But you also get 5-9 years for fraud in Levenworth. And while money may be nice, no auditor is going to do well in prison. So now, the cost of fraud to either side, both auditor or corporation, is prohibitive, and the people have more confidence in the market.
This may be garbled. I pretty much just vomited on the page. I apologize in advance for any typos or incomplete sentences, or anything nonsensical on its face. I will correct any or all problems if brought to my attention.
Comment by tet on 18 October 2007 at 3:05 pm:
No, Prescott, this is good stuff. I’m learning a lot. Theories have to be refined, always.
Couple notes–the Dutch East India’s government monopoly was only for the first 21 years of its existence. Because of distances and speed of communication, there was actually no real way for the Dutch government to “force” compliance or punish non-compliance with this monopoly. Once the 21 years had passed, the Company did quite well on its own.
I am really big on the Rule of Law, Prescott. Where we differ, I think, is that I only figure that there should be the minimum number of laws necessary to allow individuals to deal with each other successfully.
Your auditor story is an example that I think demonstrates my tenet that one cannot have a free society without morals enforced by religion. While the auditor in the libertarian society you are imagining could take the money and run, one in a libertarian society where his religious beliefs prevented him from doing the evil act would not create a financial crisis because he’d tell the CEO politely that it would not be possible for him to go along with the plot. Odds are that in such a society, the CEO wouldn’t dream of asking him in the first place.
You have to remember that my future societies are not secular, that religious morality and political freedom have to go hand in hand. I am increasingly of the opinion that completely secular societies cannot be free–they have to have restrictive laws because without agreed-upon morals, you have a jungle.
[My societies are also hell on people who knowingly cause measurable damage--we've been over that one, too, so not all white collar crime would go unpunished.]
Tom
Comment by Hanno on 18 October 2007 at 3:13 pm:
“Your auditor story is an example that I think demonstrates my tenet that one cannot have a free society without morals enforced by religion. While the auditor in the libertarian society you are imagining could take the money and run, one in a libertarian society where his religious beliefs prevented him from doing the evil act would not create a financial crisis because he’d tell the CEO politely that it would not be possible for him to go along with the plot. Odds are that in such a society, the CEO wouldn’t dream of asking him in the first place.”
When do we put flowers in our hair and start singing kumbaya around the bonfires?
Comment by tet on 18 October 2007 at 3:24 pm:
Hanno, just because you haven’t ever experienced a society where people don’t casually do socially unacceptable things because of religious morality, don’t try to pretend that it’s impossible for one to exist.
I was born into and lived within such a one no more than a hundred miles from here. It was what America was like prior to the 1960s.
Few cops and low crime. It had its problems–racism and sexism for sure. But don’t knock it–I wish like hell I had a time machine so that I could prove it to you. You’d freak, looking at a 100 square mile area without a single law enforcement official and doors left unlocked for years.
People didn’t steal things because it was wrong to do so. Sometimes I look out at the city at night and wish so hard for it to return….
Tom
Comment by Hanno on 18 October 2007 at 4:58 pm:
You mean the same society that would burn you, your husband and wives at the stake? Sounds like a great place to live. That’s not America in the 60s Tom, it’s America in your head and in small towns. You’d be right to say I wasn’t there, but I certainly have parents who grew up in the era. In fact, they’re a little older than you and quite consistently your visions of the country in the 60s are pretty different. That’s probably largely a function of geography and location - my father grew up in Harlem - but it wasn’t all sunshine and puppy dogs man. It never has been. Murder rates are lower today than they were in pretty much all of human history with our secular society. After a certain size, people really sort of do need a strong referee.
Comment by Allan Niemerg on 18 October 2007 at 6:28 pm:
A quick summary of the thread so far (as of Prescott 2:34):
tet: “The ideal libertarian state has just enough power to prevent the rise of Mad Max-style roving gangs and no more. Any greater collection of power would inevitably lead to its misuse to coerce other individuals.” Because our government is larger than that optimum, the government is stifling competition in some areas creating inefficiencies.
Brian: Tet, you’re forgetting market failures. Because markets can fail, we need government intervention.
J. Prescott: Also, Tom, you’re forgetting your Coase: transaction costs prevent many efficient transactions from occurring. Government is the natural institution to remove these transaction costs to make a more efficient market.
So this has been a good thread so far. (Apologies if I’ve misinterpreted anyone.)
Also, I think this thread has highlighted two(if not many more) important points:
1.) There is a tension between minimizing market failure by the government creating and regulating markets, and reducing efficiency by governments determining market outcomes.
2.) There is an inherent tension between minimizing the bad coercion of the government by limiting its size, and minimizing the power of bad private actors by increasing the size of the government.
The tension in 1.) is not obvious, so let me explain. In many situations where government is called on to fix “market failures” government must be fairly large. Large governments, in turn, often make it easy for regulatory capture, or special interest control, to proliferate. Special interests, as we all know, tend to favor the connected and entrenched. A decent example of this tradeoff is the FDA. The FDA creates a market in drugs by keeping “counterfeit”(although identical) drugs off the market and by creating confidence in our medical supplies. Simultaneously, the FDA reduces efficiency by two different, but complementary ways. First, the FDA drug testing requirements create enormous costs often in excess of what is useful to prove whether a drug is safe. Second, those same enormous costs limit the entry into the marketplace of smaller competitors who might bring in new and innovative ideas about how to research, discover, make, and sell drugs. I think this example, and others, show that it is exceedingly difficult to pick the “right amount” of government to maximize efficient outcomes.
As to my own personal thoughts on the “right amount” of government, while I am not quite as anarcholibertarian as tet, I am definitely of the school that says “Markets can fail. Let’s use markets.” In other words, the best way to improve imperfect markets is through dynamic competition. Often, an imperfect market is a profit opportunity.
Comment by Mike Täht on 18 October 2007 at 9:21 pm:
OK, I’ll bite.
I don’t think the largest problem in Libertarianism is the power of government, but the power of corporations.
Libertarians rail often about the excess power of government and espouse the power of the individual, but are strangely silent on the role of the corporation.
I think giving corporations the rights of a person while only requiring the morals of a child has caused many profound effects on this century, many negative, that few seem to understand.
Some people seem to think we need big government to combat with big corporations. I am not so deluded as that, as collusion between big government and big corporations is more usually the case - but I would like some far more profound limitations on corporations before I’d be comfortable scaling back government.
A few authors have tackled this issue head-on - John Varley for example - by, proposing that corporations have a limited lifetime, or a limited purpose, as was the case before this century.
I like those two ideas (and many more that are too long for a blog comment), perhaps I’ll elucidate a bit on the history of the corporation in my own blog in a bit.
Comment by kofi the we peaked a score ago on 18 October 2007 at 11:37 pm:
Government exists to protect us from each other. Where government has gone beyond its limits is in deciding to protect us from ourselves.
Comment by tet on 19 October 2007 at 8:06 am:
Hanno, I certainly was not attempting to paint the United States of the 1950s as some kind of paradise. I can speak from personal experience that it was not. As a matter of fact, I’d venture to say that from the earliest time that I can really remember (about 1955) to 1962 or so I was going to bed hungry about ten percent of the time.
I find your remark about our religion pretty amusing, really–you’re speaking a lot more about 1657 than 1957. In the Midwest of the 1950s, one thing that was never, ever discussed in polite company was what religion one belonged to. None of my farm family were churchgoers–my father came back from WW2 a proselytizing atheist (as a matter of fact, I often see echoes of the discussions that we had when I was growing up when I talk to you or Brian.) My mother secretly burned candles to the Virgin upstairs when my father was in the fields working and my grandmother (as I described in Nightlights) believed that churches were too worldly and spent her Sundays on her knees in her flower beds.
No one, in my entire childhood and adolescence, ever mentioned the fact that we were not participating in the local services. We could very well have been witches and as long as we didn’t dance naked in the town square no one would have cared, period.
I don’t know what kind of nightmare you think existed before you were born, Hanno, but it sure as hell wasn’t out here.
Now, I admit that we were white, for what that was worth. The racism of the 1950s in the North was tacit, but you also have to realize that virtually every adult male had been, over their last decade of life, in a situation where he was mixed in with people from all over the country. The black soldiers were in separate units, but they drove the supply trucks. For many people like rural Midwesterners, that was the first time that they had ever seen a black man. The general attitude that I saw growing up was that they “were all right, nothing important.”
I think my biggest point, though, Hanno is that you cannot use your father’s experiences in Spanish Harlem to make a generalization about what was going on in the Midwest during the same period. The US was a patchwork of regional cultures–the present homogeniety is an artifact of a powerful central government, instant communications and rapid transportation. None of these were in existence in 1957.
I brought up the Midwest’s 1950s in reply to your statement in reference to a culture in which citizens did not steal because it “just wasn’t right,”–“When do we put flowers in our hair and start singing kumbaya around the bonfires?” because that’s where such a culture existed. It most certainly didn’t exist all over the world, or perhaps even in the cities of the Midwest, but it did exist.
Hanno, I’ve got proof that this existed as a matter of fact. We could not have locked the doors to the farmhouse that I grew up in when we left for vacation because the doors did not have locks on them–no keyholes, no deadbolts, no hooks. There were no keys to my house. This isn’t a hippy dream or my interpretation–it’s physical effin’ reality.
Don’t reject information because it doesn’t fit with your preconceived notions, especially if it comes from someone’s personal experience–that leads to wallowing in ignorance.
Oh, one parting shot–if you have information that the crime rate in Harlem is less now than it was in 1957, I’d like to see it. I checked recently and the crime rate in the area that I was speaking about from my youth (the one that had no police) has had a factor of ten per capita increase in the last fifty years (and a notable police presence.)
Tom
Comment by Hanno on 19 October 2007 at 9:09 am:
“brought up the Midwest’s 1950s in reply to your statement in reference to a culture in which citizens did not steal because it “just wasn’t right,”–”When do we put flowers in our hair and start singing kumbaya around the bonfires?” because that’s where such a culture existed. It most certainly didn’t exist all over the world, or perhaps even in the cities of the Midwest, but it did exist.”
Actually I won’t disagree with you on that, I’m sure that in a small community with high solidarity and cultural commonalities crime rates are insanely low and people are relatively unmolested. What I take issue with is whether it will work in the future in a complex society. No matter how hard we try our society isn’t going to become less complex any time soon absent a collapse of some sort which will likely be followed by a period of conflict and then a new, probably lower equilibrium. The thing is that religious morals don’t work in complex societies where everyone has different ideas about which morals are more important and where morals may outright conflict. That’s why we have rule of law. I don’t imagine cities going anywhere, so as long as we have that I just really don’t see the yeoman farmer ideal springing up. Given our present population levels and projected growth we’re not going to have the elbow room to do that. Now in some distant future where the planet’s population has fallen by maybe 80-90% that would be more feasible and could work quite well. The thing is that since the turn of the 20th century the planet’s population has gone up by a factor of almost 7 and since you were born it has increased by a factor of about 2.5. That kind of growth causes huge dislocation and all sorts of craziness as people reel to adjust - it’s one of the principal factors in a good number of our present conflicts. Too many people too little space (or space poorly utilized). Unless humans appropriate even more of the planet’s total net energy and essentially destroy anything except what is blatantly and directly utilitarian, or curb population growth and begin a decline, these growing pains will likely continue.
Comment by tet on 19 October 2007 at 9:56 am:
While the population density was high in the cities, I think the same kind of solidarity existed there. I hear a lot of stories from people like Bill Cosby or Walter Williams about the culture of the projects in Philadelphia during the late-40s and early 50s. The stories of Chaim Potok about the Hasidim in New York City also seem to point to a safe, free culture. Division Street America by Studs Terkel is also a collection of interviews that talk about urban societies that work.
This would all lead me to the conclusion that urban density has very little to do with how well people get along. The three societies above and my rural society have some things in common…
1) The people within the area were homogeneous–my culture was white, mildly Christian, poor and rural. The Hasidim were separatist Jews from Russia–they had little contact with the rest of the city except as buyers or sellers. Chicago was a city of semi-homogeneous independent neighborhoods during the time that Studs was talking about and the projects in Philly were solidly black, poor, urban and heavily religious.
If there is a connection (which is not proven here by any means) between inhomogeneous populations and higher crime and lower freedom, diversity is looking more and more like a bad thing.
2) There was an agreed-upon, tacitly-understood level of morality among men. This applied to everyone, even those at the fringes of the culture:
“You did not steal, even when hungry. You treated elders and women with respect. You were able to use a weapon and would not hesitate to do so to protect your family or property. One could take financial charity if necessary, but it had to be paid back–it was an embarassment to have done so. If a neighbor needed physical help (like a barn burning down,) you gave it to them, no questions asked. You protected children, even at the cost of your own life.”
3) Privacy was respected. There were a couple of older women that worked at my school. One of them was very pretty, wore perfume and taught poetry. Her housemate was big, tough, had short hair and worked in the lunch room. Nobody ever said a word about it. Ever. As I said above, asking someone about their religion or mentioning sex in public was simply not done.
If it is a commonly held set of beliefs plus a homogeneous population is what is required, there is some hope for the future, Hanno.
One of the things that has happened with the advent of the Internet is the coalescence of “interest groups” whether they be gay Republicans, libertarian gamers or furries. These groups are interesting in that they have, in the special case of their main focus, eliminated diversity and re-established a homogeneous society.
Therefore, if the nation splits not into geographical or ethnic groups, but instead into a hundred or thousand collections of homogeneous groups with common interests, and agreed-upon moralities, we may be able to get over your hump, Hanno, without killing off 80% of the population first.
This, at least, is my fervent hope.
Tom
Comment by tet on 19 October 2007 at 10:23 am:
Unrelated, but not worth a new post:
I guess they’ve already drafted three of them.
I’ll never look at Cheron’s Roombah quite the same way. No wonder Java doesn’t like it.
Tom
Comment by kofi the skynet nods approvingly on 19 October 2007 at 11:29 am:
Article about SWORDS: The machines had a tendency to spin out of control from time to time. That was an annoyance
Comment by kofi the even i forget a link sometimes on 19 October 2007 at 11:30 am:
I guess a link could’ve helped.
here it is