Montreal, January 15, 2011 • No 285


Bradley Doucet is a writer living in Montreal. He has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness. He also is QL's English Editor.



The Trouble with "The Trouble with Liberty"


by Bradley Doucet


          If nothing else, Christopher Beam’s recent New York magazine profile of libertarianism is a sign that our political philosophy is gaining currency. No mainstream cultural outlet would have even considered running a piece like “The Trouble with Liberty” just a dozen years ago. It may be a small victory, but an article that more or less accurately sketches the outlines of libertarianism for a wide audience is worth remarking upon.


          And despite its title, Beam’s article is far from entirely negative. For one thing, the author acknowledges our philosophy’s deep historical roots. “Every political group claims the [American] Founders as its own,” he writes, “but libertarians have more purchase than most. The American Revolution was a libertarian movement, rejecting overweening government power. The Constitution was a libertarian document that limited the role of the state to society’s most basic needs.” Beam further recognizes that “libertarianism is more internally consistent than the Democratic or Republican platforms,” given that it encompasses both economic and social liberty. “There’s no inherent reason that free-marketers and social conservatives should be allied under the Republican umbrella, except that it makes for a powerful coalition.” It’s a marriage of convenience, since libertarians actually straddle the current partisan split.

          Alas, although most of the essay is fair and factual, and might well leave a reader feeling rather positive toward libertarianism, Beam jams his many criticisms into the final quarter of the piece. The gist of his attack is that libertarianism is “oversimplified,” that it doesn’t “deal with reality as it exists.” In the end, he writes, “Libertarian minarchy is an elegant idea in the abstract. But the moment you get specific, the foundation starts to crumble.”

          It would take me a year to challenge all of Beam’s illiberal beliefs in detail, but seeing as he himself provides little or no support for his (yes, oversimplified) arguments, the briefest of retorts should suffice. Here, then, are my bite-sized responses to 12 of Beam’s arguments(1) against libertarianism:

Adopting a gold standard would lead to economic meltdown.

The only support Beam provides for this belief is that “most economists agree” with it. Whether or not he’s right about what a majority of economists think, various gold standards did in fact exist prior to the First World War—and they were generally much more successful at avoiding economic meltdown than fiat currencies have been.

We need a central bank to print money.

Without a central bank, Beam writes, “you’d have a thousand banks with a thousand different types of currency.” He then adds, in parentheses, “Some libertarians advocate this,” as though it were a crazy thing to advocate. But surely Beam is aware that the United States was without a central bank from 1837 to 1913, when the Federal Reserve was created. Canada did not have a central bank until 1934. And yes, in those benighted times, individual banks did in fact print their own currencies. But the sky did not fall, nor did chaos rein. As Robert P. Murphy points out in his recent response to Beam’s article, “There are strong market forces limiting the number of different kinds of underlying money, because the whole purpose of money is to provide a common good against which all other items can be traded.” (Emphasis in original.)

The Federal Reserve was created in order to reduce economic uncertainty.

This bare assertion is surely the reason given to justify the creation of the Fed, but the crucial question is whether or not it succeeded in this task. Prior to its creation, booms and busts (aided and abetted by other government regulations) had usually been of short duration, normally lasting less than two years and never more than four. Subsequent to the creation of the Fed, we got the Great Depression, which began in 1929 and did not truly end until after WWII, sixteen years later. We also got stagflation in the 1970s, and of course, our current financial mess, which is far from over.

Without a welfare system to cover basic needs, people will start stealing.

This is another bare assertion, but in a free market, all who are willing and able to work will find work at wages determined by market forces. Those unwilling to work but willing to steal are undeserving of sympathy and should be dealt with as the thugs they are. As for the small minority truly unable to work, they would presumably also be unable to steal. At any rate, they would have to rely on voluntary charity. The alternative is for government actors to steal on their behalf, which, for all its ersatz legitimacy, is no better from a moral standpoint.

Without government schools, some people would remain uneducated.

That may well be, but with government schools, many remain uneducated today, diploma notwithstanding. A free market in education would reward good schools and good teachers. It would promote research and innovation instead of blindly adopting passing fads. It would provide accountability instead of helping mediocre educators hang on to their sinecures. And in general, as with all markets, it would drive prices down and quality up. More people would be educated, and better educated, in a free market.

"It would take me a year to challenge all of Beam’s illiberal beliefs in detail, but seeing as he himself provides little or no support for his (yes, oversimplified) arguments, the briefest of retorts should suffice. Here, then, are my bite-sized responses to 12 of Beam’s arguments against libertarianism."

We can trust that our doctors are qualified because they have government licenses.

Government licenses do not serve the interests of patients. Rather, they protect the interests of doctors by limiting competition, the same way medieval guilds used to. Beam argues that doctors and patients are in a situation of asymmetrical information. Most people do not have enough knowledge to judge their doctors directly. True enough, but in a free market, we can trust that our doctors are qualified because intermediaries can help us judge them. Those doctors who, through incompetence or ill will, breach their patients’ trust do not remain doctors for long. The effects of reputation cause them to lose patients and hospital postings, while malpractice claims quickly drive them out of business.

Governments should pay for vaccines since their use benefits everyone.

Yes, if I vaccinate my children, other children benefit whether or not they too are vaccinated. This is an example of the free rider problem. Intractable free rider problems can be dealt with through social pressure (you should do your part and vaccinate your kids) and voluntary charity (if you can’t afford it, we’ll help you pay). But it should also be noted that free rider problems that seem intractable at first glance may just be an opportunity waiting for the next clever entrepreneur to come around. Lighthouses were famously thought to be an example of an intractable free rider problem—until Ronald Coase (who celebrated his 100th birthday last month) did some research and discovered that they had been privately and profitably run before being taken over by the state.

Less government regulation would mean firms could hire cheap child labour.

The harsher forms of child labour have largely vanished in the developed world not because these were outlawed, but because we became wealthy enough to invest in educating our children instead of sending them out to work. We still allow older children to babysit and deliver newspapers, to mow lawns in the summer and clear driveways in the winter. Less government regulation would expand the opportunities for young people to gain valuable life experience and learn the value of a dollar. It would not herald a return to Dickensian squalor.

A free market would allow bankers to deceive investors.

No. Fraud is a form of theft, and no free market enthusiast I have ever spoken with thinks it should be allowed. A free market is not a jungle; it is a space in which private property and contracts are respected and protected. It is free from unobjective regulations that punish the innocent and reward the well-connected, but it is constrained by objective rules that allow honest people to flourish.

Without mandatory fire insurance, houses will be allowed to burn down.

In a bizarre case in Obion County, Tennessee, a homeowner who had not paid the annual $75 opt-in fee for fire protection saw his house burn to the ground. The fire department refused to come and put out the fire even though the owner declared he would pay the full cost of doing so. As Beam points out, a court would have enforced that verbal contract. So why didn’t the fire department put out the fire? I have absolutely no idea. Sounds to me like they’re a bunch of idiots. Sounds to me like it’s time for a little competition in the fire department business in Obion County.

If everyone pursued his own self-interest, we’d all be living in Somalia.

As I wrote at some length a couple of years ago, yes, Somalia is largely a basket case. But so is much of Africa, and in some ways Somalia is actually better off than its neighbours. Somalis, though, are not in the mess they’re in because they are pursuing their own selfish interests. They’re in the mess they’re in because the gangs (mini-governments, really) fighting for control have a too-narrow conception of their interests. Everyone’s true, long-term interests are served by peace and prosperity, which are best secured through objective law and free markets.

“Libertarianism and power are like matter and anti-matter. They cancel each other out.”

Beam means that libertarians will never gain real power, that a politician like Ron Paul is an aberration. Only by compromising their principles and being more “realistic” will libertarians get elected in any kind of numbers, and therefore the libertarian ideal is nothing more than a pipe dream.

          Well, it is certainly true that the world at large is not ready for full-blown libertarianism. One step at a time. But as Conor Friedersdorf points out in his witty response to Beam’s article, several policies dear to the libertarian heart—ending pot prohibition, reining in defence spending, rolling back the nanny state—could very plausibly come to pass if more libertarians were elected.

          And turning Beam’s accusation on its head, Friedersdorf writes,

[A]s I survey the biggest policy disasters in recent American history—the push liberals made in California to vest public employees with obviously unsustainable pension deals, the conservative approach to the Iraq War, the non-libertarian, bipartisan consensus that we ought to continue waging a War on Drugs in scores of countries despite the utter implausibility of victory in that struggle—I cannot help but conclude that it is the serial refusal of non-libertarians to grapple with the world as it is that causes our country the vast majority of its avoidable trouble.

          In other words, if we can only manage to get non-libertarians to be a little bit more realistic, we just might dig our way out of this mess they’ve gotten us all into.


1. For the sake of succinctness, most of the arguments in this list are not direct quotes, but I have made every effort to represent Beam accurately. Readers are of course invited to examine the original document and draw their own conclusions.