Adam Smith turns 300 this week, and the July issue of Reason commemorates his life and legacy with a great set of articles by fantastic economists such as Deirdre McCloskey and Nobel Prize–winner Vernon Smith (no relation!), both of whom are recent guests on this podcast. My favorite piece in the issue, though, was created by today's guest, Peter Bagge, the legendary alternative comics genius behind Hate, Neat Stuff, and graphic biographies of Margaret Sanger, Zora Neale Hurston, and Rose Wilder Lane.
Born in 1957, Peter has been drawing professionally for over 40 years and contributing to Reason for the entirety of the 21st century. I talk with him about Adam Smith, material and moral progress, and what it's like to be an ardent libertarian in a creative space dominated by liberals and left-wingers. An eyewitness to the punk scene in New York in the late 1970s and the grunge scene in Seattle in the late 1980s, we also talk about what might be coming next in politics and culture and why he's optimistic that the future will be better than the past.
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]]>Northwestern University law professor Andrew Koppelman and Soho Forum Director Gene Epstein debate the resolution, "Libertarianism has been thoroughly corrupted by delusion, greed, and disdain for the weak."
Taking the affirmative is Koppelman, John Paul Stevens professor of law and professor of political science at Northwestern University. He received the Walder Award for Research Excellence from Northwestern, the Hart-Dworkin Award in Legal Philosophy from the Association of American Law Schools, and the Edward S. Corwin Prize from the American Political Science Association. He has written more than 100 scholarly articles and eight books, most recently Burning Down the House: How Libertarian Philosophy Was Corrupted by Delusion and Greed. You can find his recent work at andrewkoppelman.com.
Arguing for the negative is Epstein, the director of the Soho Forum and former economics and books editor at Barron's. He's the author of Econospinning: How to Read Between the Lines When the Media Manipulate the Numbers. Epstein has taught economics at the City University of New York and St. John's University and worked as a senior economist for the New York Stock Exchange. He has defended the negative at six Soho Forum debates. His November 2019 debate on socialism with University of Massachusetts professor Richard D. Wolff has gained almost 6 million views on Youtube.
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]]>Northwestern University law professor Andrew Koppelman and Soho Forum director Gene Epstein debate the resolution, "Libertarianism has been thoroughly corrupted by delusion, greed, and disdain for the weak."
Taking the affirmative is Koppelman, John Paul Stevens Professor of Law and a professor of political science at Northwestern University. He received the Walder Award for Research Excellence from Northwestern, the Hart-Dworkin award in legal philosophy from the Association of American Law Schools, and the Edward S. Corwin Prize from the American Political Science Association. He has written more than 100 scholarly articles and eight books, most recently Burning Down the House: How Libertarian Philosophy was corrupted by Delusion and Greed. You can find his recent work at andrewkoppelman.com.
Arguing for the negative is Epstein, the director of the Soho Forum and former economics and books editor of Barron's. He's the author of Econospinning: How to Read Between the Lines When the Media Manipulate the Numbers. Epstein has taught economics at the City University of New York and St. John's University and worked as a senior economist for the New York Stock Exchange. He has defended the negative at six Soho Forum debates. His November 2019 debate on socialism with University of Massachusetts professor Richard Wolff has gained almost 6 million views on Youtube.
The post Are Libertarians Greedy and Delusional? A Soho Forum Debate appeared first on Reason.com.
]]>The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market, by Naomi Oreskes and Erik Conway, Bloomsbury, 576 pages, $35
Historian Richard Hofstadter once wrote that "the paranoid is a double sufferer, since he is afflicted not only by the real world, with the rest of us, but by his fantasies as well." A compelling case could be made that this affliction has taken hold among the highest ranks of Hofstadter's own profession. New academic "histories" now appear on a near-monthly basis, each blaming a variety of social ills on the conspiratorial machinations around a single idea: the free market.
Almost everything in this genre follows the same formula. When the American electorate fails to embrace the political priorities of an Ivy League humanities department, these disheartened authors cast about for a blameworthy culprit. They settle on "market fundamentalism" or "neoliberalism." The explanation then takes a paranoid turn, declaring the targeted theories a "manufactured myth" arising from the "inventions" of 20th century business interests, which allegedly hoodwinked voters into accepting the "magic" of the free market as a matter of received wisdom. Certain that they have found the source of their political obstacles, these historians then claim to uncover a "secret" history that has been hiding in plain sight. All eventually settle on a mundane conspiracy of business interests and libertarian economists, who allegedly derailed America from its progressive path by convincing people that markets work better than government at solving problems.
At some 550 pages, The Big Myth: How American Business Taught Us To Loathe Government and Love the Free Market is among the most loquacious entrants into this crowded literature. Harvard University's Naomi Oreskes and California Institute of Technology historian Erik Conway lay out their conspiracy theory with formulaic precision, but their book is atypical in one significant way. While most of the other works in the anti-neoliberalism genre manage at least to excavate some interesting archival findings about libertarian economists (before badly misinterpreting them), this book is remarkably light on original content.
The Big Myth's argument most closely resembles that of Cornell University historian Lawrence Glickman's 2019 book Free Enterprise: An American History, which advanced a nearly identical thesis wherein the concept of "free enterprise" allegedly arose as a myth in the service of anti–New Deal business interests. But The Big Myth also weaves in recent tracts by Philip Mirowski and Dieter Plehwe, Kim Phillips-Fein, Kevin Kruse, Quinn Slobodian, and Jane Mayer. Oreskes and Conway round out their spartan use of economic sources (their recounting of "market failure" theory makes heavier use of Pope Francis' encyclicals than any actual economics texts) with a dash of Thomas Piketty's dubious inequality empirics and a touch of Ha-Joon Chang's attempts to resurrect trade protectionism.
A reader with even casual awareness of these other authors will be left wondering why this same story needed yet another repackaged recitation. The result is a meandering journey through secondary sources and Wikipedia entries, presented as if they were tacked to a basement wall amid a disorderly web of yarn and dental floss in a progression that only its authors truly comprehend.
The Big Myth is structured in sequential vignettes about various themes and figures such as Ludwig von Mises, Leonard Read, Friedrich Hayek, Rose Wilder Lane, and Milton Friedman, all of whom are portrayed as either willing propagandists for big business or hapless dupes of the same. The authors expend almost no effort on understanding the arguments of the thinkers they set out to debunk.
A revealing example appears in the book's treatment of Leonard Read's 1958 essay "I, Pencil." Read's story is a fairly straightforward allegory for Adam Smith's famous concept of the "invisible hand," showing how complex social coordination arises from routine economic exchanges and signals in the absence of a centralized design. To Oreskes and Conway, however, the metaphor is literally the hand of God working from above to ensure the market system provides. As they put it, "God made the marketplace and the marketplace made the pencil; ergo God made the pencil."
This peculiar reading originates in a remark by Read's titular pencil: "Since only God can make a tree, I insist that only God could make me." While Read was a practicing Christian who used religious imagery in his writing, this quip was not an invocation of divine intervention to account for the assembly of pencils. It is an allusion to a famous line from Joyce Kilmer's poem "Trees," a point that Read made obvious in a later printing that credited the saying to "a poet." Oreskes and Conway nonetheless carry their mistake to absurd lengths, sneering all the while that deviation from the progressive economic planner's impulse is a sign of superstitious philosophical Occasionalism about markets.
Interpretive peculiarities continue in their treatment of Ludwig von Mises' Socialism. After initially acknowledging that the book was written in German in 1922, Oreskes and Conway soon drift into anachronism by insinuating that it was intended as a critique of President Franklin Roosevelt. ("Mises's use of the term socialism was misleading," they contend, "because no credible American political leader in 1944 was advocating central planning.") They augment this ascription of prophecy with a sleight of hand, replacing the revolutionary Marxists of Mises' original commentaries with the comparatively benign Norman Thomas as their own preferred avatar of socialism. Like other texts in the anti-neoliberalism genre, The Big Myth removes 20th century free market authors from their historical context by hand-waving the Soviet Union out of existence and proceeding as if socialism means nothing more than a narrow swath of modern Scandinavian social democracies.
Such errors are frequently paired with another recurring theme: the authors' fundamental inability to approach their opponents with anything remotely resembling intellectual charity. The book is filled with gratuitous swipes, many of them comically ahistorical.
This usually means either a false accusation of racism or a disparaging attack on a target's qualifications. Mises receives both types of abuse. After dubbing him an "absolutist who sympathized with fascism," Oreskes and Conway launch into an extended attack on the Austrian economist's migration to the United States in 1940. In their telling, Mises was a relic of a bygone laissez faire ideology who struggled to find a respectable academic job until "dark money" funders created a succession of positions for him at New York University. It is doubtful they would pass similar judgment on the many academic refugees from Nazi Germany who hailed from the political left. Meanwhile, Mises' academic work in the United States gained higher honors than either Oreskes or Conway has ever achieved. By the decade's end, he had published three monographs with Yale University Press, including the decidedly anti-fascist book Omnipotent Government. Upon his retirement from teaching at age 88, Mises was named a distinguished fellow of the American Economic Association.
Only a paragraph after branding Mises a fascist sympathizer, Oreskes and Conway shift into gushing praise for John Maynard Keynes' "The End of Laissez Faire." Keynes' lifelong support for eugenics extended to this famous essay, which called on governments to "pay attention to the innate quality as well as to the mere numbers" of their citizenry. Interestingly, Keynes first delivered this message as a 1926 lecture at the University of Berlin. Mises, who attended as an academic observer, lambasted Keynes' irresponsible remarks out of concern that they could be interpreted as support for Nazi race theory. Keynes continued to flirt with fascist elements through at least 1936, when he penned a notoriously tone-deaf preface to the German edition of his book General Theory, announcing that he "expect[ed] less resistance from German, than from English, readers."
Oreskes and Conway's penchant for disparagement apparently extends only in the free market direction. They casually brand Milton Friedman a "racist extremist" and defender of segregation, but not for any actual defense of segregation. The authors simply disagree with his argument that markets were more effective tools for bringing about integration than government edicts.
Hofstadter wrote that the paranoic's accounts of his enemies "are on many counts the projection of the self." It is hard to resist a similar conclusion here. Oreskes and Conway label their opponents racists and eugenicists while lionizing progressive racists and eugenicists. They accuse Friedrich Hayek of eschewing "the essence of scholarship," which "is to look past the immediacies of time and place," while themselves constantly processing history through their modern partisan commitments. They accuse free market economists of venturing outside their scientific expertise while offering their own decidedly nonexpert opinions on everything from economic inequality to COVID-19.
The authors' discussion of the latter subject, which closes the book, is unintentionally comedic. Oreskes and Conway use the pandemic to contrast U.S. "market failure" with the alleged success of "countries that mounted a strong, coordinated response," China foremost among them. As their book went to press, China's centralized "zero-COVID" regime was collapsing into the same unfettered disease spread that Oreskes and Conway ascribe to free markets. But readers should not expect any self-interrogation from this pair.
The post <em>The Big Myth</em> Is Full of Recycled Anti-Capitalist Cheap Shots appeared first on Reason.com.
]]>"It is time to accept our failures and strategic mistakes if we are going to grow into a viable political vehicle," writes Aaron Harris, author of "Project Decentralized REVOLution: For a New Libertarian Party," a document laying out the political strategy of the Mises Caucus that took control of Libertarian Party last May. The document declares that the party must accept "certain realities about the political landscape in the United States, and where third parties are within that landscape" and that although "some of this may be bitter medicine….it's crucial that we get real with ourselves."
So what are the goals and strategies of the new Libertarian Party? What does it mean for the party to "get real" about electoral politics? To help answer these questions, Reason will speak with Michael Heise, the chair and founder of the Mises Caucus, this Thursday at 1 p.m. eastern. Watch and leave questions and comments on the YouTube video above or on Reason's Facebook page here.
The post What Does the Mises Caucus Really Want? Live with Michael Heise, Nick Gillespie, and Zach Weissmueller appeared first on Reason.com.
]]>The libertarian movement has lost its way over the past 60 years as it's shifted from Friedrich Hayek's classical liberal corrective to Depression-era central planning to Murray Rothbard's full-blown anarcho-capitalism in which all taxation is theft and all transfer payments are immoral.
That's the argument in a provocative new book called Burning Down the House: How Libertarian Philosophy was corrupted by Delusion and Greed, by Andrew Koppelman. Along the way, he critiques major libertarian figures such as Ayn Rand, Robert Nozick, Ron Paul, and Charles Koch.
I spoke with Koppelman, a law professor at Northwestern University, about why he believes classical liberals have given ground to anarchists and how that fundamentally changes not just the rhetoric but the political goals of the libertarian movement.
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The post Andrew Koppelman: 'Delusion and Greed' Have Destroyed Libertarianism appeared first on Reason.com.
]]>Angela McArdle became the head of the Libertarian Party (LP) in May 2022 at the national convention in Reno, Nevada. She represents the Mises Caucus, a group that aims to take the LP in a new direction. Under McArdle's leadership—officially, she's the chair of the Libertarian National Committee—the LP's social media messaging has angered some members, and a handful of state chapters have disaffiliated or dissolved.
What's been going on behind the scenes at the LP? Is the party growing or shrinking? How did LP candidates fare in the midterms? What's the plan looking ahead to 2024?
Join Reason's Nick Gillespie and Zach Weissmueller for a live conversation with McArdle about all this and more on Thursday, November 10 at 1 p.m. Eastern. You can watch it above, on Twitter, or at Reason's Facebook page. We welcome comments and questions at YouTube and Facebook, and we'll put the best to McArdle.
Addendum: Several current and former members of the Libertarian Party disputed a claim that McArdle made in this livestream beginning at the 55-minute mark.
"We're going to build actual infrastructure for our candidates and [state] affiliates," McArdle told us. "Training. How to run a campaign, how to be a treasurer. This is this is like nuts and bolts stuff that is not that exciting…. How to fundraise, how to use tools, how to get earned media. That just hasn't been there in the past. It just doesn't exist."
In response, Libertarian Party members shared photos on social media of past trainings. McArdle responded to our inquiry by saying, "This was clearly said in the context of candidate trainings, and my comments about it not existing were specific to these topics. Certainly, regional trainings with overviews on campaign management exist, and I've attended them, but that is not what I mentioned."
The post How's the New Libertarian Party Doing? Live with Angela McArdle appeared first on Reason.com.
]]>Today's guest is Phil Magness, the intellectual watchdog based at the American Institute for Economic Research (AIER) who is keeping tight tabs on suspect claims from journalists and academics.
His targets have included Nikole Hannah-Jones, the creator of The New York Times' Pulitzer Prize–winning series The 1619 Project, which Magness documented was being stealth-edited after several prominent historians pointed out major errors in its analysis. He's also gone after Hans-Herman Hoppe, a professor emeritus at the University of Nevada, Las Vegas, and a distinguished senior fellow at the Mises Institute. Hoppe is an arch critic of democracy and increasingly influential within the Libertarian Party. But despite his affiliation with a group named for the eminent Austrian economist Ludwig von Mises, Magness says that Hoppe presents "the complete inversion of Mises' thought," especially when it comes to immigration.
Magness has a Ph.D. from George Mason University's school of public policy, and he's written and co-written books on what he calls "the moral mess of higher education" and on Abraham Lincoln's plan for black resettlement after emancipation.
This interview was recorded at FreedomFest, the annual July gathering in Las Vegas, and we also talk about specious attacks on the school choice movement and Nobel laureate economist James Buchanan as racist, as well as Magness' excellent Reason article from earlier this year that has led to the ongoing plagiarism investigation of Princeton historian Kevin Kruse. We also discuss Magness' new project of figuring out how Karl Marx became such a powerful influence on 20th- and 21st-century thinking despite being relatively obscure during his lifetime.
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The post Phil Magness: Holding Leftists and Libertarians Accountable appeared first on Reason.com.
]]>Who watches the intellectual watchmen?
When it comes to historians, especially those purporting to tell the truth about the founding of America, the Civil War era, the Nobel Prize-winning economist James Buchanan, and the revered Austrian economist, Ludwig von Mises, it's Phil Magness of the American Institute for Economic Research (AIER).
Magness has a Ph.D. from George Mason University's school of public policy, and he's written and co-written books on what he calls "the moral mess of higher education," on Abraham Lincoln's plan for black resettlement after emancipation, and on inaccuracies in The 1619 Project.
He has emerged as that offering's most dogged critic, finding that the Pulitzer Prize–winning series, developed by Nikole Hannah-Jones, was quietly revised on the New York Times website after several prominent historians pointed out major errors in its analysis. Magness has also been a leading critic of Duke University historian Nancy MacLean, whose National Book Award-nominated Democracy in Chains attempted to brand the school choice movement as motivated by racism and white supremacy.
And he's a critic of Hans-Herman Hoppe, a professor emeritus at the University of Nevada, Las Vegas and a distinguished senior fellow at the Mises Institute, who is increasingly influential within the Libertarian Party. "Hoppe has tried to invent this kind of carved-out counter-narrative while still claiming to be a representative of Mises that says we can use this propertian concept of the nation-state to exclude…immigrants from crossing the borders," says Magness. "He gets the complete inversion of Mises' thought."
In June, Magness wrote an article for Reason that inspired an ongoing plagiarism investigation at Princeton University of Kevin Kruse, a high-profile, very online professor of history. "This is a guy that would tweet 100 or 200 times a day," says Magness. "As soon as the word got out about plagiarism, he's dropped off the face of the earth." Indeed, Kruse's Twitter feed has stayed silent since June.
Reason's Nick Gillespie caught up with Magness at FreedomFest, the annual gathering in Las Vegas, to talk about intellectual accountability in academia, journalism, and the libertarian movement.
*Correction: The video introduction incorrectly states that Nancy MacLean's Democracy in Chains won the National Book Award. It was a finalist.
Interview by Nick Gillespie. Edited by Regan Taylor and Adam Czarnecki. Camera by Door Greene.
Photo Credits: Acroterion, CC BY-SA 4.0, via Wikimedia Commons; Beowulf Sheehan/ZUMA Press/Newscom; Economic Policy Institute; CC BY 4.0, via Wikimedia Commons; Dreamstine; Fotostand / Freitag/picture alliance / Fotostand/Newscom; Gage Skidmore; James Cridland, CC BY 2.0, via Wikimedia Commons; Richard B. Levine/Newscom; Slowking4, CC BY-SA 2.5, via Wikimedia Commons; Wittylama, CC BY-SA 3.0, via Wikimedia Commons.
Music Credits: "Divine Attraction," (Instrumental Version) by A Seal to See, via Artlist.
The post Beyond The 1619 Project: Holding Academics and Journalists Accountable appeared first on Reason.com.
]]>Is the Libertarian Party (LP) being "trumpified?" Or is it now—finally!—home to the second coming of the Ron Paul Revolution?
If you're a watcher of Reason's videos, you know that a few weeks ago, I went to Reno, Nevada, to cover the long-awaited, much-anticipated Libertarian Party national convention, where a group called the Mises Caucus took over the party by winning all the leadership positions. I'm joined today by Reason video producer Zach Weissmueller, who coordinated and directed our video coverage (here's a full playlist).
Founded in 2017 by Michael Heise, the Mises Caucus has long pledged to "make the Libertarian Party libertarian again." Over the past several years, it's taken control of several dozen state parties. Caucus members call themselves the Ron Paul Revolution 2.0, stress the need for bolder messaging, and came to Reno promising to remove the party's longstanding pro-choice plank, push for less emphasis on open-borders-style immigration, and strip out platform language condemning "bigotry as irrational and repugnant" that dates back to 1974. They also stress that the L.P. national's response to Covid restrictions was far too timid and accommodating.
Critics of the Mises Caucus say the group is filled with shitposting edgelords who are tacking hard toward Trump fans, social conservatives, and even people with alt-right sympathies. They worry that the Mises Caucus takeover will be the end of the Libertarian Party.
For today's podcast, I talk with Zach about we saw in Reno, the often-heated response to Reason's coverage of the convention, and what the future not just of the L.P. but of the bigger libertarian movement looks like.
Today's sponsor:
The post Zach Weissmueller: Will the Mises Caucus Save or Kill the Libertarian Party? appeared first on Reason.com.
]]>"The main function of the Libertarian Party is to try to make the United States a freer place," says Angela McArdle, who won her election for Libertarian National Committee chair with an overwhelming 70 percent of the vote at the party's national convention in Reno, Nevada, last May. "People disagree on what strategy to take to achieve that purpose. I believe there's room for both strategies: to send out strong messaging campaigns and to win elections."
McArdle had the backing of the Mises Caucus, whose candidates swept all the leadership positions at the convention. Reason's Nick Gillespie sat down with her in Reno a day before she became the party's new chair to better understand what changes she wants to make to the party's messaging, political strategy, and official policies.
Produced by Nick Gillespie and Zach Weissmueller; editing by Adam Czarnecki and Danielle Thompson; sound editing by John Osterhoudt; camera by James Marsh and Weissmueller.
The post Ron Paul Revolution 2.0: Angela McArdle's Plan for the Libertarian Party appeared first on Reason.com.
]]>"I think that the [Libertarian Party's] emphasis should be on getting us back to our roots as a country," says Justin Amash. "What this country is about is liberalism in the classical sense, the idea that people should be free…to make their own decisions about their lives, and government to the extent possible should just stay out of it."
Amash was a Republican congressman from Michigan once described by Politico as the House's "new Ron Paul" because of his willingness to buck party-line votes on principle. He switched his party affiliation to Libertarian in his fifth and final term, making him the party's highest officeholder since its founding in 1971. He explored a run for the Libertarian Party presidential nomination in 2020 before changing his mind, paving the way for a run by longtime Libertarian Party member Jo Jorgensen.
Amash was in Reno, Nevada, during the Mises Caucus takeover of the Libertarian Party. He is not a member of the caucus but plans to remain in the party.
Reason's Nick Gillespie sat down with Amash in Reno to ask him about his views of the Mises Caucus, his vision for the future of the party, and his political ambitions for 2024 and beyond.
Produced by Nick Gillespie and Zach Weissmueller; edited by Adam Czarnecki and Danielle Thompson; camera by James Marsh and Weissmueller; sound editing by John Osterhoudt; additional graphics by Regan Taylor and Isaac Reese.
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]]>The Libertarian Party (L.P.) is under new management, tweeted Angela McArdle, shortly after she became the National Committee's new chair at its 2022 annual convention in Reno, Nevada, which was attended by more than 1,000 delegates from around the country.
"We're obviously at a crossroads right now," McArdle said during a debate for the chair position. "I hate to sound like a scumbag politician…but we are going to move heaven and earth to make this [party] functional and not embarrassing for you. We are going to change the country."
McArdle, who won her election with about 70 percent of the vote, is part of the Mises Caucus, which swept all the national leadership roles and is now in complete control of the nation's third-largest political party.
Mises Caucus supporters say they want to "make the Libertarian Party libertarian again," that it should no longer be concerned about offending progressives or Beltway types and shouldn't be afraid to reach out to the coalition that elected former President Donald Trump. McArdle says that the party faceplanted during the pandemic by failing to take a strong stance against lockdowns and vaccine mandates and that its messaging is far too tame and conventional to counter the power of the authoritarian state.
"If something like a lockdown or a vaccine mandate happens [again], we won't whiff the ball and humiliate ourselves and alienate everyone out there," she said in her acceptance speech.
Critics say they're shitposting edgelords who make controversial statements just to attract attention and that they have no interest in running viable candidates for office.
"If Angela McArdle becomes chair of the Libertarian National Committee and makes the party welcoming to bigots, the committee she is in charge of will shrivel and die," says Nicholas Sarwark, the chair of the Libertarian Party from 2014 to 2020 and a frequent critic of the caucus.
The Mises Caucus' namesake is the Austrian economist Ludwig von Mises, but its members are especially influenced by his student Murray Rothbard. Like Mises, Rothbard was a radical capitalist, who, unlike his mentor, favored the complete abolition of the state. Rothbard also advocated forming strategic political alliances with the New Left in the 1960s and then with paleoconservative figures like Pat Buchanan in the early '90s.
Rothbard was an enthusiastic supporter of Ron Paul's run on the Libertarian presidential ticket in 1988. He wrote that the party had become "increasingly flaky…libertine and culturally leftist" and saw Paul's campaign as a "last desperate attempt" to save the party. But it ultimately failed, in his view, leaving the L.P. "spiraling downward into oblivion." The Mises Caucus likewise looks to Ron Paul as a political role model, pointing to his 2008 and 2012 Republican presidential campaigns (which generated huge crowds and interest in libertarianism). Paul attended a Mises Caucus event in Reno to signal his support.
"These are the kids who came up in 2008 and 2012 inspired by Ron Paul," says Scott Horton, a popular anti-war radio host, author, and founder of the Libertarian Institute. It was Horton who officially nominated McArdle for the chair position. "Now they've been to college, grown up. They got their own lives and families and things, and they're ready to move in and take the next step."
As examples of the kinds of bold messages the party should be sending, McArdle points to Paul's famous 2007 confrontation with Rudy Giuliani during a nationally televised Republican presidential debate over the root causes of the 9/11 terrorist attacks, and when Paul told a Republican audience in South Carolina that heroin shouldn't be illegal.
"The priorities of the Mises Caucus have always been basically the priorities of the Ron Paul Revolution," says Dave Smith, comedian and host of the libertarian podcast Part of the Problem, who is also a likely contender for the party's 2024 presidential nomination. "Being anti-war…[and] with inflation raging, I think is a really good time to be sound on [Austrian economics]," he told Reason. "And then, of course, throughout the last two years, just completely opposing the rise of the COVID regime."
But when does "bold messaging" become counterproductive trolling? It's a line that several high-profile Mises Caucus members and official Libertarian Party social media accounts have struggled to identify.
"I think bolder messaging is important, but we don't need edgelording," former U.S. Rep. Justin Amash told Reason.
Amash rode to office on the 2010 Tea Party wave, representing Michigan, and Politico once described him as the "new Ron Paul" in Congress because of his willingness to buck party-line votes on principle. He switched his party affiliation from Republican to Libertarian in his final term, making him the L.P.'s highest officeholder since its founding in 1971. He's not a member of the Mises Caucus but says they've brought new energy to the party and that the important task now is "channeling that energy in the right direction."
"I don't think [Mises Caucus members] are coming here because they're nationalists or bigoted or any of that stuff," says Amash. "That's not to say that there aren't people within the Libertarian Party, just as there are within the Democratic Party and Republican Party and throughout the whole world who are bigoted and racist…And I think we should call out people like that and we should denounce those kinds of statements. But, do I think that the caucus as a whole is like that? I don't think so."
The convention was buzzing over an article that had just been published by the Southern Poverty Law Center (SPLC) titled, "Mises Caucus: Could It Sway the Libertarian Party to the Hard Right?," and McArdle gave out a mock "Failed Grifter of the Year" award to the SPLC at a Mises Caucus event.
"The Southern Poverty Law Center, or the Soviet Poverty Lie Center as [historian] Tom DiLorenzo calls it… is the ideological enforcement arm of the regime," Tom Woods told the audience at a Mises-sponsored event at the convention. "And I would want to repel anybody who was clueless enough to treat it as a source worthy of a moment's attention."
Sarwark booked whistleblower Edward Snowden to speak in a different room at the same time as Woods, he says, in order to give the attendees "an option."
"I came to the conclusion that there is no magic combination of words I can ever utter that will make somebody who…would put Snowden against me [to] suddenly make him say, 'Oh, I've been wrong about you my whole life,'" Woods told Reason when asked about the double booking.
Woods is a best-selling author, historian, and host of the immensely popular libertarian podcast, The Tom Woods Show. When asked by Reason what the biggest misconception about him was, Woods replied that it was his association with the League of the South. It's not an organization that "these days…I, nor anybody I know, would join."
In 1994, Woods attended the group's founding meeting. He maintains that it only later became a neo-Confederate white separatist organization, one which was involved in the Charlottesville "Unite the Right" rally. In 1994, the League of the South was a group of "nerdy academics" like him, Woods says, and he had no idea what it would later become.
"I've never apologized for it," says Woods. "The easiest thing in the world for me would be to say, 'I'm so sorry. I joined an organization, or I was at the founding meeting of an organization, that is outside the allowable range of opinion…I'm not sorry because I didn't do anything wrong. Yeah, it was edgy to be in that group, but we never meant any harm to anybody."
Critics of the Mises Caucus worry that the group won't do enough to keep bigots—the sort of person that might join the present-day version of the League of the South—out of the party.
"There is a tendency for outsider groups to attract other outsiders," says Sarwark. "That's the nature of entryism into political movements…The only way to stop entryism is to put up clear signs that say 'no bigots allowed.'"
Dave Smith told a Mises Caucus audience in May 2021, "I speak for everyone in the Mises Caucus when I say it: We reject racism. It's collectivist, toxic garbage." But some delegates at the convention were alarmed that the caucus wanted to strike a sentence from the L.P.'s party platform condemning bigotry as "irrational and repugnant."
"What is a bigot? No one can agree," says McArdle. "All it leads to is everybody in the party pointing fingers and calling each other a bigot. I believe in freedom of speech. I prefer when people don't say horribly racist offensive things. I think that it's not well-met. It's pointless."
Mises Caucus founder Michael Heise defended the deletion of the language because "libertarianism isn't about wrongthink. It's about non-aggression, self-ownership, and property rights," and said he believes that the anti-bigotry condemnation fed what he calls a "woke," or "cultural Marxist" agenda.
"What is happening nowadays with the 'wokeism' is people are using language as dialectics along cultural lines to push for collectivist ends," says Heise. "So back in the day…the Marxist revolutions, they had the dialectics of the rich versus the poor and the owner versus the worker. And they were pushing towards collectivist ends. It's the same ideology that's happening now, but they're pitting cis versus straight and male versus female and trans versus whatever."
The delegates ultimately voted to remove the anti-bigotry statement. But on the initiative of Spike Cohen, L.P.'s former vice-presidential candidate, they added a new line stating that the party would "uphold and defend the rights of every person, regardless of their race, ethnicity, or any other aspect of their identity."
The Mises Caucus also succeeded in removing the party's pro-choice plank, which McArdle said was called for because abortion represents "an irreconcilable difference" within the libertarian movement.
"We tend to push out people who are a little bit more socially conservative," says McArdle. "And I think that there's room in the party for people who are libertine and socially conservative. And I would like them to feel that way."
Mises Caucus leadership also says it's a mistake for the Libertarian Party to take an unequivocally open-borders stance on immigration. The current platform states that the "crossing of political boundaries" should not be "unreasonably constrained by government," and that language did not change during the convention.
"When you put open borders, plus pro-abortion in there…it kind of forms a cultural hegemony for one side that might not be indicative of the wider libertarian movement," says Heise.
Along with Rothbard, one of the biggest influences on prominent members of the Mises Caucus is the political theorist Hans-Hermann Hoppe, who disagreed with the pro-immigration views of Ludwig von Mises. He wrote that politicians have a perverse incentive to let in "unproductive parasites, bums, and criminals" and that "the power to admit or exclude should be stripped from the hands of the central government and reassigned to the states, provinces, cities, towns, villages, residential districts, and ultimately to private property owners and their voluntary associations." Hoppe advocates for "the Swiss model, where local assemblies, not the central government, determine who can and who cannot become a Swiss citizen." Hoppe has also suggested that "democrats and communists" will have to be "physically separated and expelled" from a libertarian society.
"Open borders and private borders are not the same," says Heise. "But they're both libertarian canon. So…by taking a side on this [in the party platform], we're representing one side and basically pushing out another side or making them feel not represented."
Like the Mises Caucus, Amash often talks about the decentralization of political power, but he is also insistent upon the central importance of liberalism, or the protection of individual rights even at the hyper-local level of government. He says this idea is foundational to the United States and should be one of the Libertarian Party's core messages.
"I think that the emphasis should be on getting us back to our roots as a country," says Amash. "What do we believe in as a basic set of principles? And, really, what this country is about is liberalism in the classical sense, the idea that people should be able to free…to make their own decisions about their lives and government, to the extent possible, should just stay out of it."
On the first day of the convention, guest speaker Snowden made a similar point.
"Freedom from permission: That is what liberty is," said Snowden. "Just the ability to act without asking, to speak and to write, to do, and to be yourself without getting the paper stamped, without submitting yourself and the completed form alongside it to some central authority."
While Mises Caucus–endorsed candidates swept all other leadership positions that were up for grabs, there remains a discontented minority within the party, and McArdle says that about 40 members quit after the Mises Caucus took power.
"The party has been an embarrassment to libertarians for a very long time," says Brianna Coyle, an Ohio delegate who quit the party during the convention. She's clashed with Mises Caucus members online in the past. "I think, quite frankly, it's going to be even worse than it used to be….This is the paleo strategy happening yet again."
Others are taking a wait-and-see approach.
"I think it's going to be interesting," says Avens O'Brien, a California delegate who opposed the Mises Caucus' removal of the pro-choice platform language. "I welcome new membership. I welcome change…I think right now there are a lot of complicated feelings from a lot of delegates, and I'm hoping that the people who get elected are willing to work with everyone. And if they are, I think that there could be good things."
Amash, who is both sticking around and a rumored 2024 presidential candidate, says that he hopes the energy from the Mises Caucus can be channeled in a positive direction that grows the party. He says it should prioritize supporting candidates committed to protecting individual rights.
"It's not going to be easy to get this party on track," says Amash. "It's an uphill battle. I want to give [the new leadership] the opportunity."
He says that if the Republican Party sticks with Trump, and the Democrats continue to bring forth disappointing national candidates, it presents "an opening" for the Libertarian Party to draw from both the right and the left.
"This is maybe the chance of a lifetime over the next couple of years to bring people into the party," says Amash.
Heise said that delegates disappointed by or anxious about the Mises Caucus takeover should give them a chance to show results, which should be measured not only by electoral success but by party membership growth and donations.
"By our fruits, you'll know us," he says.
Produced by Nick Gillespie and Zach Weissmueller; edited by Danielle Thompson; additional graphics by Regan Taylor; camera by James Marsh; sound editing by John Osterhoudt.
Photos: Keiko Hiromi/AFLO/Newscom; Brian Cahn/ZUMA Press/Newscom; Paul Hennessy/ZUMA Press/Newscom; Brian Cahn/ZUMA Press/Newscom; Jeremy Hogan/Polaris/Newscom; Albin Lohr-Jones; John Lamparski/ZUMAPRESS/Newscom; Brian Cahn/ZUMAPRESS/Newscom; Tim Evanson, CC BY-SA 2.0, via Wikimedia Commons; tedeytan, CC BY-SA 2.0, via Wikimedia Commons; Ludwig von Mises Institute, via Wikimedia Commons; LvMI, CC BY 3.0, via Wikimedia Commons; Stefani Reynolds/CNP / Polaris/Newscom.
Music: "Abstract Emotion" by Stefano Mastronardi via Artlist / "Bang the Drums" by Rhythm Scott via Artlist / "Born Tough" by Falconer via Artlist / "Coriolis" by REW<< via Artlist / "Counting the Money" by Ian Post via Artlist / "Deep Blue" by Stefano Mastronardi via Artlist / "Galaxy" by Sunny Fruit via Artlist / "Glass" by Claudio Laucci via Artlist / "Hajimari" by Searching for Light via Artlist / "Pistol" by Phototaxis via Artlist / "Poetic Sushi" by Amparo via Artlist / "River Runs Deep" by SLPSTRM via Artlist / "Roar" by Peter Spacey via Artlist / "Slow Down" by REPINA via Artlist / "Vendetta" by AlexGrohl via Artlist / "Voyager" by Vis Major via Artlist / "Yes I Am" by Zach Sorgen, The Wildcardz via Artlist
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]]>In this week's Reason Roundtable, editors Matt Welch, Peter Suderman, Katherine Mangu-Ward, and Nick Gillespie scrutinize Florida Gov. Ron DeSantis' style of conservatism and touch on President Joe Biden's upcoming visit with the House of Saud.
1:28: DeSantis and his approach to governance
30:36: Weekly Listener Question: You guys occasionally talk about the Libertarian Party, and you might be aware of the recent convention which saw power go to one faction that many describe as quite alienating. This has led to many of the traditional libertarians leaving the party altogether. My question for you all is do you think that the Libertarian Party is necessary for facilitating more libertarian representation in politics? If not, how do you see libertarian ideals grow in the traditional duopoly?
38:39: Biden's forthcoming visit to Saudi Arabia
52:30: Media recommendations for the week
This week's links:
"The Death of Walt Disney's Private Dream City?" by Zach Weissmueller and Danielle Thompson
"Anti-LGBT Panics Are Bad for Everyone's Liberty," by Scott Shackford
"Blame Biden for High Gas Prices," by Nick Gillespie and Regan Taylor
"Saudi Prince's Plan for 'Walkable' City of Single-File Buildings Could Be Two Miles-Long Skyscrapers Instead," by Christian Britschgi
"Alex Epstein: Why the Future Needs More Fossil Fuels," by Nick Gillespie
Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.
Today's sponsor:
Audio production by Ian Keyser
Assistant production by Hunt Beaty
Music: "Angeline," by The Brothers Steve
The post Is DeSantis a Principled Governor or a Retaliatory Culture Warrior? appeared first on Reason.com.
]]>In this week's Reason Roundtable, editors Matt Welch, Peter Suderman, Katherine Mangu-Ward, and Nick Gillespie consider the slate of policy prescriptions on offer in the wake of the Uvalde school shooting.
1:21: the gun control debate after Uvalde
27:41: Weekly Listener Question: My question to you pertains to guns and gun culture, specifically "Where are the gun nuts?" Where at Reason or elsewhere in the high-profile, opinion journalism world are the people who love guns or at least enjoy being a gun owner, enjoy going to the shooting range or participating in shooting competitions or what have you? Why aren't they more common among the pro-liberty or even the conservative press? It seems to me that there is a class divide in this country on guns. Upper-middle to upper class urban dwellers (such as the media class) all seem to hate guns and do not partake in gun culture, while more "blue-collar" and, of course, rural Americans are heavily into guns yet get little to no representation in media. Is there a class element to the gun control debate which is not being given proper attention?
49:08: the Libertarian National Convention and the Mises Caucus
1:00:54: media recommendations for the week
This week's links:
"If You Want Protection for Your Loved Ones, Do It Yourself," by J.D. Tuccille
"Unfazed by the Second Amendment, Democrats Want To Ban Gun Purchases by Young Adults," by Jacob Sullum
"While Dying Children Called 911 for Help, 19 Uvalde Police Waited in the Hallway. For 45 Minutes.," by Robby Soave
"There Have Been 13 Mass School Shootings Since 1966, Not 27 This Year," by Robby Soave
"Mises Caucus Takes Control of Libertarian Party," by Brian Doherty
"Netflix Airs Ricky Gervais' Controversial Standup, Chooses Actual Entertaining Over Woke Pandering," by Liz Wolfe
Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.
Today's sponsors:
Audio production by Ian Keyser
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Music: "Angeline," by The Brothers Steve
The post Cops, Gun Restrictions, and Mass Shootings appeared first on Reason.com.
]]>The post The Perpetually Canceled Ludwig von Mises appeared first on Reason.com.
]]>It wouldn't be entirely accurate to say that no one knows what the hell neoliberal means. Plenty of people are quite sure they know what it means. It's just that they can't agree on a common definition.
Consider two articles published in two different left-wing magazines. The first, written by Megan Erickson for Jacobin, is a critique of "unschooling," an informal, self-directed, countercultural sort of homeschooling that dispenses with tests, lectures, and predetermined curricula. The movement is beloved by many anti-corporate leftists, but Erickson warns them that its "values of freedom, autonomy, and choice are in perfect accordance with market-based 'reforms,' and with the neoliberal vision of society on which they're based."
The other story, published by Dave Zirin in The Nation, denounces the Brazilian authorities for pouring public money into stadiums for the World Cup and the Olympics. Such subsidies are "neoliberal plunder," Zirin declares, because "neoliberalism, at its core, is about transferring wealth out of the public social safety net and into the hands of private capital."
So unschooling is neoliberal even when it is explicitly anti-corporate, because it resembles an idealized free market. And stadium subsidies are neoliberal because they rain wealth on corporations, even if they override market principles in the process. What a capacious word this is.
Now, politics is filled with words that mean different things in different mouths. The world has never come to a complete consensus on the meaning of capitalism, socialism, conservatism, or just plain liberalism, without the neo attached. But neoliberalism is an especially tangled case. It has two entirely separate etymologies, one of which essentially reversed the term's meaning midway through its evolution. On top of that, the word became a popular epithet at a time when hardly any people were using it to describe themselves—that is, at a time when there wasn't much of a constituency for keeping a stable definition in place. It's a bit easier to find self-proclaimed neoliberals today, but they arrived so late that they may have muddied the waters even more.
For all that, there arguably is a coherent way to use the term. But first we need to cut through that historical tangle.
* * * * *
Most histories of the word neoliberal start in Germany between the world wars, with a group of intellectuals who today are usually called the ordoliberals. At the time they often called themselves neoliberals, because they were trying to develop a new alternative to the old laissez faire liberalism of the 19th century. At one famous gathering—the Walter Lippmann Colloquium, held in Paris in 1938—they mixed with, and sometimes clashed with, several prominent laissez faire liberals of the day, including Ludwig von Mises and F.A. Hayek.
This wasn't the first time "neo" and "liberal" (or their counterparts in other languages) had been put together. Notably, Phil Magness of the American Institute for Economic Research (AIER) has pointed to the pejorative use of neoliberalismus and neuliberal among certain socialist and proto-fascist German-language writers in the 1920s. But the ordoliberals are especially significant when you're tracing the term's meaning, because they explicitly rejected the views derided today as "market fundamentalism." (One of them, Alexander Rüstow, once declared that Mises and Hayek "should be put into a museum, conserved in formaldehyde.") A few decades later, by contrast, many writers were using neoliberalism and market fundamentalism interchangeably. That shift is traced in "Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan," a 2009 paper by the political scientists Taylor C. Boas and Jordan Gans-Morse.
"The German neoliberals accepted the classical liberal notion that competition among free individuals drives economic prosperity," Boas and Gans-Morse explain. But they "sought to divorce liberalism—the freedom of individuals to compete in the marketplace—from laissez faire—freedom from state intervention." The ordoliberals were a strong influence on West Germany's postwar "social market economy," in which officials abolished food rationing, swept away price controls, lowered taxes and trade barriers, and contracted the money supply, but also embraced interventions intended to foster competition and ensure a safety net.
When those German ideas were exported to Latin America in the 1960s, they were known in Spanish as neoliberalismo. But the word's connotations started to change, Boas and Gans-Morse argue, after some University of Chicago–trained economists convinced the Chilean dictator Augusto Pinochet to adopt a number of market-oriented policies in the 1970s: privatizing state enterprises, lowering tariffs, eliminating various economic controls. Pinochet was not liberal at all when it came to human rights and civil liberties—his regime was notorious for censoring, imprisoning, torturing, and killing its enemies. But under the new meaning of neoliberal that began to take hold, that didn't matter; this was a liberalism where non-economic liberties were expendable. The important thing was Pinochet's alleged market fundamentalism.
As it happens, Pinochet was not any kind of market purist. He fixed the price of his country's currency to the U.S. dollar and, when that overvaluation helped bring on a recession, reacted by raising domestic taxes, doubling tariffs, and bailing out the financial sector; that bailout included the temporary nationalization of several banks. And even at the peak of the Chicago crew's influence, his government put a lot of shackles on labor-management negotiations. But we are speaking here of how he was perceived, not how he consistently governed. This post-Pinochet spin on neoliberal, Boas and Gans-Morse conclude, "diffused directly into the English-language study of political economy."
Even as those writers were turning the term inside-out, an American pundit started using the word in yet another way, with an entirely different set of reference points. In the 1970s and '80s, The Washington Monthly and its founder, Charlie Peters, got a reputation for challenging some of the shibboleths of the old New Deal order. Peters himself admired the New Deal, but he was more willing than the standard Democrat to criticize regulatory agencies and organized labor. Seeing similar heterodox attitudes among some of the younger journalists and politicians around him, he recoined the word neoliberal to describe their emerging belief system. This time, the liberalism being updated wasn't the laissez faire liberalism of Adam Smith; it was the welfare-state liberalism of Franklin Roosevelt and Lyndon Johnson.
And so, in a 1982 op-ed for The Washington Post, Peters laid out "A Neoliberal's Manifesto." Here he presented the label as a riff on the word neoconservative: "If neo-conservatives are liberals who took a critical look at liberalism and decided to become conservatives," he wrote, "we are liberals who took the same look and decided to retain our goals but to abandon some of our prejudices." Specifically, they "no longer automatically favor unions and big government or oppose the military and big business." They celebrate the entrepreneur, want to means-test entitlement programs, oppose "the kind of economic regulation that discourages healthy competition," and are "against a fat, sloppy, and smug bureaucracy" (but not "against government"). In Peters' telling, they also backed a military draft, no-fault divorce, and a return of the New Deal–era Works Progress Administration. (Like many wishcasting pundits, Peters may have mixed some personal hobbyhorses into his trendspotting.) Their ideas turned up not just in the pages of magazines like The Washington Monthly and The New Republic but on the lips of certain Democratic officials: Sens. Gary Hart of Colorado, Bill Bradley of New Jersey, Paul Tsongas of Massachusetts.
This use of the word caught on in the American press, and many young politicians were tagged with it over the next few years. Randall Rothenberg's 1984 book The Neoliberals roped in two future Democratic presidential nominees, Michael Dukakis and Al Gore. (It also listed Pat Choate, who went on to be Ross Perot's 1996 running mate and a harsh critic of globalization.) At the time, few of the pundits slinging the word around in the U.S. seemed aware of its parallel history in Europe and Latin America. But these neoliberals were skeptical about regulation at the same time that those other neoliberals were taking on parts of the regulatory state, so there was just enough coincidental convergence to confuse everyone. If you're an American pundit of a certain age, it's the Charlie Peters crowd that comes to mind when you hear someone say "neoliberal." And if you're a leftist academic prone to complaining about neoliberalism, there's a good chance you think the Peters crew was market-friendly enough to qualify for the label, even if they weren't exactly market fundamentalists. (Many of them were big on industrial policy, which is the sort of thing conservatives tout today if they want to demonstrate that they're going "beyond neoliberalism.")
Those leftist academics started using neoliberal as an insult more often in the 1990s, and their fondness for the word really took off in the early 21st century. The two most influential figures here were the Marxist geographer David Harvey, whose Brief History of Neoliberalism was published in 2005, and the radical philosopher and historian Michel Foucault, whose 1979 lectures on neoliberalism were published posthumously in 2004 as The Birth of Biopolitics. Confusing matters still more, Harvey and Foucault came to the topic from rather different directions.
For Harvey, the heart of neoliberalism was a reconfiguration of state power, not the anti-statist ideas of people like Hayek, even if the latter helped create "a climate of opinion in support of neoliberalism as the exclusive guarantor of freedom." In practice, he wrote, neoliberalism is marked by partnerships where "the state assumes much of the risk while the private sector takes most of the profits," and neoliberal states will often enhance policing, surveillance, and incarceration "to protect corporate interests and, if necessary, to repress dissent." (He adds: "None of this seems consistent with neoliberal theory.") Foucault, on the other hand, was grappling primarily with neoliberal ideas, both the older German kind and the later Chicago kind. While this partly reflected the fact that he was speaking more than two decades earlier, he also just didn't share Harvey's hostility to his subject—though not everyone citing him noticed that.
This tangled history gives people a lot of ways to talk past each other, so any scholars, journalists, or activists who want to use the word neoliberal carefully should take the time to define exactly what they mean by it. But not everyone is interested in using it carefully. Many have taken to treating it as a broad smear-word for everything they dislike about globalization, markets, or modernity—as Boas and Gans-Morse put it, "a vague term that can mean virtually anything as long as it refers to normatively negative phenomena associated with free markets." When Boas and Gans-Morse examined 148 papers that used the word, they found only four that deployed it in a consistently positive manner.
While a few free market economists, such as Scott Sumner, were willing to call themselves neoliberals, this wasn't very common at the time. In the last decade, though, some pundits, activists, and academics have tried to reclaim the phrase. Some of them are libertarians, but most are either Democrats who have made their peace with market-driven trade and housing policies or ex-libertarians who have made their peace with government intervention. (Reason's Christian Britschgi once cracked that the neoliberal coalition has "a commitment to freedom that's one NBER working paper deep.") Unlike the self-proclaimed neoliberals of the 1980s, they are likely to have read Hayek. How reverently they'll quote him varies widely.
With all these competing uses floating around, the word often seems to lose all coherence. The P2P Foundation, for example, published a post in 2017 that said several cities in Europe have been letting civic groups use municipally owned space "up until the time when real estate companies start re-developing these urban areas." Such temporary measures, the author argued, did not "directly challenge neoliberal real estate speculation." But in The Hague, an artists' and designers' collective tried something more radical: "They started paying rent for the free space, and used the accumulated capital as down payment for rebuying the space from the city." In this way, he wrote, they moved "from tenancy to collective ownership."
So apparently, you can challenge neoliberalism by buying real estate. From the city. A process otherwise known as "privatization." Which, word has it, is extremely neoliberal.
* * * * *
Is there a way to use this word that reflects these contradictory meanings without pretending they're all the same thing? There might be. Neoliberal may not describe a coherent force or worldview, but it's not a bad way to describe a distinct historical era. We need some label for the period, at any rate—and for all its flaws, this one has the advantage of already existing.
The epoch in question began in the 1970s, when a series of economic crises hit: a global oil shock, a fiscal emergency in New York City, a simultaneous surge in unemployment and inflation. That last challenge, called stagflation, wasn't just bad news for people facing higher prices and joblessness at the same time; it was bad news for economic officials, most of whom had long believed that increases in inflation and unemployment were mutually exclusive. The door was open for alternative ideas and institutions.
And so—starting in the '70s, then going into overdrive after the fall of communism—those new ideas and institutions took hold. Or rather, some of them did. That's the thing about historical periods: The people in them don't move in lockstep.
For a comparison, think of the Progressive Era. In the traditional triumphalist take on the first two decades of the 20th century, popular protest pushed reformist politicians into office, where they broke up corporate monopolies and ended some of the business world's worst abuses. A revisionist argument, born in the 1960s New Left and popular among libertarians, takes a darker view: It sees the Progressive Era as an age of technocratic consolidation, marked more by state-corporate cooperation than by reductions in corporate power, with reforms that often did more to stabilize cartels than to dismantle them.
The revisionist argument is true. But so is this: All sorts of progressives were running around in the Progressive Era, with all sorts of different goals. Some of them really were opposed to concentrated power, be it public or private. Some were all for greater concentration of power, as long as they felt enlightened experts were in charge. Some were suspicious of corporate power in theory but fell in behind reforms that ultimately did more to protect that power than to roll it back. And all of them were active at once.
So it was with the Neoliberal Era. Almost every nation has adopted at least some degree of market reform in the last half-century, and that economic liberalization was often joined by advances in free expression, sexual liberty, women's rights, and other forms of personal autonomy. When grumpy conservatives claim that libertarians run America, that's the combination of trends they usually have in mind. But libertarians don't run America, as you can tell by examining the size of the federal budget, the size of the surveillance state, the size of the U.S. military footprint, and the size of the carceral archipelago. Those arms of the authorities may be neoliberal in some David Harvey sense—witness the role that networks of nominally private contractors play in each of them—but they're not anti-statist at all. (Neither are their counterparts in other countries: Since the mid-'70s, public social spending as a share of GDP has increased not just in the United States but in France, the U.K., Japan, and many other rich nations.)
A committed libertarian looking at the Neoliberal Era should feel a lot like a committed socialist looking at the Progressive Era: happy about many changes, unhappy about many others, and disturbed at some of the people adopting their rhetoric. "It was not that liberal ideas were now consciously and openly held and dominant," the libertarian historian Stephen Davies wrote of this period in a 2020 article for AIER. "Rather it was that explicitly and openly anti-liberal ones had been discredited." If the era "can be said to have a philosophy behind it," he added, "it is best described as technocratic managerialism."
A case in point would be the transformation of New York after the city's fiscal crisis of the mid-1970s: The government fired public employees and cut back social programs, and a new Manhattan emerged that was dominated by the FIRE economy (finance, insurance, and real estate). This is often described as a triumph of neoliberalism, yet it was driven not just by those austerity measures but by urban planners, who didn't roll back their interventions so much as they redirected the benefits. So central a role did they play, in fact, that one of the best-known leftist accounts of the transformation, Robert Fitch's The Assassination of New York, includes a plea that readers encountering his attacks on the planners not mistake him for "an advocate of laissez-faire." Meanwhile, the city's budget was climbing again by the mid-'80s.
But just as we shouldn't lose sight of the different flavors of progressives, we need to remember the sheer variety of the neoliberals. To appreciate the ideological diversity of the period, ask yourself: Who enacted the era's market reforms?
Some Democrats adopt a simple partisan narrative focused on President Ronald Reagan and his British counterpart, Margaret Thatcher. That obviously won't do, given the ways Bill Clinton and Tony Blair consolidated the Reagan-Thatcher order. There are somewhat more sophisticated accounts in which right-wing parties launched neoliberalism and then nominally left-wing parties accommodated themselves to the changes. (The socialist writer Nancy Fraser splits neoliberals into "reactionary" and "progressive" camps, with the former looking like Reagan and the latter like Clinton.) This is more defensible, but it still makes the mistake of starting with Reagan and Thatcher. Their predecessors—Jimmy Carter and James Callaghan, respectively—each enacted market reforms too. Carter, who deregulated several industries, was arguably more of a market reformer than Reagan was. And he wasn't an outlier: In many places that made serious steps toward freer markets, from New Zealand to Sweden, left-of-center parties took the lead.
And while Charlie Peters' neoliberals are often seen as precursors to the Clintonian centrists, they had roots in the left-wing "New Politics" movement that fueled the insurgent presidential campaigns of Eugene McCarthy in 1968 and George McGovern in 1972. The McGovernites were anti-war, unimpressed with appeals to law and order, critical of the national security agencies, and supportive of a universal basic income. The Clintonites bombed the Middle East, passed a draconian crime bill, deferred to the national security agencies, and made it harder for poor people to collect welfare benefits. But both broke at key moments with organized labor, were open to deregulation and decentralization, and issued rhetorical jabs at big government. In 1971, the year McGovern entered the presidential race, the National Taxpayers Union had him tied for second in its Senate ratings.
In a new book, The Rise and Fall of the Neoliberal Order (Oxford), the Cambridge historian Gary Gerstle argues that "support for neoliberalism spilled beyond Reagan and his political precincts and into the districts of the New Left," whose "engagement with neoliberal principles can be discerned in the vehemence of its revolt against what it regarded as the over-organization and bureaucratization of American society." Gerstle also sees signs of neoliberalism in that hippie bible the Whole Earth Catalog and in the consumer movement led by Ralph Nader. The Naderites, he stresses, did not want to deregulate everything. But their "determination to strengthen consumers meant that they, too, began to give priority to improving markets. This meant attacking corporate oligopoly on the one hand and excessive and counterproductive government regulation on the other. Their shared goal was to make consumers sovereign in the marketplace." Nader's role in the revolt against the New Deal order is also central to Paul Sabin's recent Public Citizens (W. W. Norton & Co.).
How far left did neoliberalism go? In yet another recent book, The Last Man Takes LSD (Verso), the sociologists Mitchell Dean and Daniel Zamora put Foucault's interest in neoliberal ideas in the political context of 1970s France. Foucault, they note, was attracted to a political current called the Second Left, which offered autogestion—self-management—as an alternative to the centralized statism embraced by the Socialist and Communist parties. These were not squishy centrists, and their views should not be mistaken for those of Nancy Fraser's socially H.R.-compliant, fiscally creditworthy "progressive neoliberals." Their roots were in anarchism, the militant Catholic left, and the revolutionary ferment that swept France in May 1968; their ideal of autogestion had been embraced, though only temporarily, by the radical regime that took power in France's former colony of Algeria. Yet by the end of the '70s, the sociologist George Ross writes, their efforts to exorcise statism from the left were leading them to call "for decentralized bargaining as an approach to social problems of all kinds, for a revitalized 'civil society,' and for recognition of the utility, as a decentralized mechanism, of the market."
They did this just as parts of the French right, led by President Valéry Giscard d'Estaing, were breaking with old Gaullist statist traditions, tentatively turning to more market-oriented policies even as Giscard liberalized divorce, contraception, and abortion laws, rolled back censorship, and adopted immigration and prison reforms. (The president's closest point of intersection with the left was more personal: He had a mistress in common with the exiled Black Panther Eldridge Cleaver.)
To some French radicals, Foucault among them, these parallel developments on the left and right suggested a new political alignment. That's the backdrop for, say, Foucault's discussion of Milton Friedman's negative income tax, in which the government maintains a safety net by simply sending money to citizens whose income falls below a certain level. Giscard flirted with this idea, to Foucault's apparent approval: In one of his lectures on neoliberalism, he notes that the "negative tax," as he calls it, would be "much less bureaucratic and disciplinary" than traditional welfare programs.
And that was before the USSR collapsed, throwing the advocates of state socialism into disarray. After that, the most militant opponents of the institutions that represented David Harvey's neoliberalism sounded a lot like the Second Left. "Since the end of the Cold War, Neoliberalism has become so ideologically dominant that it is no longer clear whether the real Neoliberals are the leaders of the G8 or the people outside in the balaclavas and the overalls," Malcolm Bull wrote in 2001. "Take Ya Basta!, the Italian group formed in 1996 in support of the Chiapas uprising….They are fighting under the slogan 'per la dignità dei popoli contro il neoliberismo,' but their two key political demands, free migration and the right to a guaranteed basic income, are policies that were once largely the preserve of Neoliberal think-tanks in the United States." Bull was being cheeky, but he had a point.
* * * * *
If neoliberal is flexible enough for people to fling it at both the anarchists and the G8, it shouldn't be surprising to see the word applied to both the unschoolers and the World Cup. That's what happens when you're talking about a multifaceted era instead of a unified movement. But eras eventually end, and there are signs that this is happening, or perhaps has happened already. Nostalgia for pre-neoliberal days has been rising on both the left and the right, and countries around the world have been erecting new barriers to trade, travel, and communication.
But the end of the Neoliberal Era doesn't necessarily mean the end of its signature ideas. Progressives did not disappear when the Progressive Era petered out: They spent the 1920s running on fumes, butting heads with each other, and finding homes across the political spectrum. The decade's Republican presidents did not take a machete to the progressives' changes, even if they pruned a few; the last of them, Herbert Hoover, was a product of the progressive moment himself. The New Deal of the 1930s was in many ways a resuscitation of progressive reform. At the same time, some of the New Deal's noisiest opponents were old progressives of the decentralist sort, who distrusted the new concentrations of power and sometimes sounded rather libertarian. When the Progressive Era died, its corpse fertilized the soil for what was to come.
Like the old progressives before them, the old neoliberals will spread out across the spectrum, finding new allies and in many cases new goals. We don't know whether they'll fade away or reconstitute themselves and create something as transformative as the New Deal. And if such a transformation does come, we don't know which side of the old neoliberal order it will reflect. Whichever it is, let's hope we can come up with a better word for it.
The post It's the End of the Neoliberal Era, and We Still Don't Know What Neoliberalism Is appeared first on Reason.com.
]]>The comedian and podcaster Dave Smith, a rising presence in Libertarian Party (L.P.) circles, says he's considering running for the party's presidential nomination in 2024.
Smith says a major reason he expects to run is that even though the 2020 nominee, Jo Jorgensen, got the second-highest vote total in L.P. history, he thinks she didn't push back hard enough on government lockdowns and overreach in its fight against COVID, which he sees as a missed opportunity to build a bigger libertarian movement.
A vocal opponent of wokeness and political correctness, Smith is quick to attack fellow libertarians whom he thinks are naive about how the state maintains its power. He's said that he'd "take a red-pilled leftie over a blue-pilled libertarian any day."
After the Biden administration revealed it was pushing Facebook to restrict accounts it says are spreading misinformation about COVID-19, Smith tweeted, "This administration has exposed the useful idiots who call themselves libertarians. Saying 'it's a private company' for the last few years, ignoring what is obviously the biggest threat to liberty. They unwittingly support the largest government in human history."
After that take was discussed on a recent Reason Roundtable podcast, Smith tweeted that my fellow panelists and I had misrepresented his views. So I reached out to him so he could clarify his views on the intersection of big government and Big Tech, and discuss the future of the L.P., why he has no plans to vaccinate himself or his young daughter, and why he believes libertarians should be more engaged in the culture war.
The post Dave Smith: Libertarians vs. Big Tech, Big Government, and…Other Libertarians appeared first on Reason.com.
]]>With unemployment around 13 percent and talk of recession—or even depression—in the air, libertarian ideals of free minds and free markets need champions now more than ever.
Rory Sutherland, the vice chairman of the legendary global advertising agency Ogilvy UK, may seem like an unlikely defender of capitalism, but he is one of its most persuasive and engaging.
Sutherland calls the stentorian Austrian economist Ludwig von Mises his hero and celebrates not capitalism's ruthless efficiency and capacity to outproduce a command economy but its ability to create seemingly trivial products such as Red Bull and to transform the disgusting-sounding Patagonian toothfish into the delicacy known as Chilean sea bass.
Fittingly enough, Sutherland's latest book is called Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. It explains why the real genius of capitalism isn't maximizing output but the ways in which creative destruction fulfills desires we never knew we had, allowing us to become whatever we want to be. He's a critic of economistic thinking on the right and the left that reduces all human activity to mere utility and material considerations.
The post Rory Sutherland on How Red Bull Explains Why Capitalism Is Great appeared first on Reason.com.
]]>With unemployment at 15 percent and rising and the hashtag #RIPcapitalism trending on Twitter, libertarian ideals of free minds and free markets need champions now more than ever.
Rory Sutherland, the vice chairman of the legendary global advertising agency Ogilivy UK, may seem like an unlikely defender of capitalism, but he is one of its most persuasive and engaging.
Sutherland calls the stentorian Austrian economist Ludwig von Mises his hero and celebrates not capitalism's ruthless efficiency and capacity to outproduce a command economy but its ability to create seemingly trivial products such as Red Bull and to transform the disgusting-sounding Patagonian toothfish into the delicious delicacy known as Chilean sea bass.
Fittingly enough, Sutherland's latest book is called Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. It explains why the real genius of capitalism isn't maximizing output but the ways in which creative destruction fulfills desires we never knew we had, allowing us to become whatever we want to be. He's a critic of economistic thinking on the right and the left that reduces all human activity to mere utility and material considerations.
I spoke with Sutherland, who is equally likely to quote Friedrich Hayek, Andy Warhol, or the left-wing social critic Pierre Bourdieu, just a few weeks before the coronavirus pandemic hit. Ironically the subsequent lockdown that has cratered the economy makes his views more relevant than ever.
Edited by John Osterhoudt, intro by Lex Villena. Cameras by Jim Epstein and Kevin Alexander.
Photo credit: Ludwig von Mises Institute / CC BY-SA (http://creativecommons.org/licenses/by-sa/3.0/); "Redbull" Photo 153155282 © Ilkin Guliyev – Dreamstime.com; "Chilean Sea Bass: ID 12955855 © Boris Ryzhkov | Dreamstime.com; "Pierre Bourdieu" SELDERS ANNE/SIPA/Newscom
The post Red Bull Is Disgusting. And It Perfectly Captures Why Capitalism Is So Great. appeared first on Reason.com.
]]>From the good folks at the American Institute for Economic Research (AIER) comes "The March of History: Mises vs. Marx—The Definitive Capitalism vs. Socialism Rap Battle."
Watch below or at YouTube and go here for full lyrics and a wealth of resources.
The video was produced by Emergent Order, the crew responsible for the immensely popular (and edifying) Keynes vs. Hayek rap videos.
The post Watch 'The March of History: Mises vs. Marx' appeared first on Reason.com.
]]>Sherlock Hibbs, a wealthy Wall Street financier with ties to the University of Missouri, died in 2002. A fan of free market economics, the Austrian School, and Ludwig von Mises in particular, Hibbs specified in his will that $5 million would go to the university for the purposes of hiring "dedicated and articulate disciples" of this philosophy.
There was an interesting catch. If Mizzou failed to use the money to fund acolytes of Mises, the donation would instead go to Hillsdale College, a conservative institution in Michigan. Hibbs seemingly did not trust Mizzou to fulfill his terms and thus structured the gift so that an ideologically sympathetic college would have an incentive to hold the Mizzou accountable.
Hibbs was apparently right to worry. Hillsdale is now suing Mizzou, and alleges that the university willfully misspent the funds on faculty members who have nothing to do with either von Mises or Austrian economics.
"MU has never appointed a dedicated and articulate disciple of the Ludwig von Mises (Austrian) School of Economics to a Chair or Distinguished Professorship funded by Mr. Hibbs' gift," wrote Hillsdale's attorneys in the lawsuit. "Instead, MU provided millions of dollars over 15 years to individuals who were not Austrian economists."
Ironically, Hillsdale is being represented in this lawsuit by Jay Nixon, a former Democratic governor of Missouri. Four of the current curators of Mizzou's governing board were previously appointed by Nixon.
The professors currently funded by Hibbs' donation are Dan Turban, Karen Schnatterly, Rhonda Reger and Lisa Scheer, according to The Columbia Daily Tribune. In 2018, each of them signed a statement attesting that "consistent with the stipulation in the will of Mr. Hibbs, each of us believes we are 'a dedicated and articulate disciple of the free and open market economy (the Ludwig von Mises Austrian School of Economics).'"
But Phil Magness, an economic historian and senior research fellow at the American Institute for Economic Research, disputes that any of the above individuals are followers of von Mises.
"None of the named faculty appear to have any meaningful research in or connection to Austrian economics," Magness tells Reason. "It looks like Missouri accepted the cash, then failed to honor the terms of the donor."
I reached out to Turban, Schnatterly, Reger, and Scheer for comment, asking whether they could point me to any research they have done or coursework they've assigned, that references von Mises. Only Schnatterly responded: She directed me to speak with Mizzou's director of media relations, Christian Basi, instead.
In an email, Basi said my line of inquiry was not warranted.
"I've been forwarded a couple of your requests to the professors asking about classes they taught or studies they've completed," he said. "The gift agreement does not place any restrictions on the curriculum nor the research work of professors holding those appointments. It only asks about their belief in that particular economic model."
I replied that if these academics were indeed "dedicated disciples" of von Mises and Austrian economics, then I would expect it to be evident in their work or at least hinted at.
"I understand that perspective, but it is not a requirement of the gift," said Basi.
That strikes me as splitting hairs. Quite literally, the requirement was that Mizzou spend the money on "dedicated disciples" of von Mises and the Austrian school. The individuals who benefited from the gift do not appear to fit that definition at all, regardless of what they claimed in their signed statement.
We will see how the legal battle unfolds, but the just outcome would be Mizzou writing Hillsdale a check for $5 million.
The post Mizzou Received $5 Million to Hire Austrian Economists. A Lawsuit Claims It Misspent the Money. appeared first on Reason.com.
]]>A quarter-century ago, it was Walmart, Borders and Barnes & Noble bookstores, and a few other bricks-and-mortar retailers that touched off panics over "the tyranny of choice." Too many flavors of Pop-Tarts, don't you know, was the new slavery, paralyzing us mere homo sapiens, who had evolved really only to choose between strawberry, blueberry, and brown sugar–cinnamon (either with or without frosting). Suddenly the breakfast aisle was overflowing with a few dozen types of breakfast pastries and we just couldn't deal with it. "Choice no longer liberates," wrote psychologist Barry Schwartz in a 2004 best-seller called The Paradox of Choice, "but debilitates. It might even be said to tyrannize."
Unsurprisingly, the same basic argument migrated frictionlessly into cyberspace, where the Long Tail wags us all near to death. When faced with such plenitude, who can decide? Here's the latest, steaming-hot iteration of that basic take, courtesy of Amanda Mull of The Atlantic. "There Is Too Much Stuff," reads the article's headline, neatly summarizing its argument. "The human brain can't contend with the vastness of online shopping," insists the sub-headline. A search for clothing hangers at the online retailer Amazon, writes Mull, yields over 200,000 options, which are too many to sift through, proving that "contemporary internet shopping conjures a perfect storm of choice anxiety." Even as she grants that it's "tempting" to see more choice and variety as "advantageous to consumers," she concludes that "infinite, meaningless options can result in something like a consumer fugue state" and that "after shopping online, I often don't remember days later whether I actually made a decision."
She links to a 2010 New York Times story that recounts a famous 1995 experiment involving displays of jam flavors in supermarkets. The researchers found that customers bought more jams when they were offered six flavors rather than 24 flavors. "Having 'too much' choice seems…to have hampered their later motivation to buy," they concluded.
Talk about your First World problems! So what is to be done? Should we limit consumer choices to help our mental health? But then we'd buy more, right, if the jam experiment is true and can be universalized to other goods and services? That doesn't seem to be what Mull or The Atlantic is after; each exudes an unambiguously anti-consumerist vibe.
Discussing the jam experiment in a 2005 Reason story, Virginia Postrel drew different lessons. The larger display may have drawn different sorts of customers (such as herself) who don't buy jam but were surprised or delighted by the range of choices. Postrel pointed to a related experiment by the same researchers, one in which they asked people to choose from a smaller or bigger variety of chocolates. The people faced with more choices said it was frustrating and annoying to have so many choices but also that the act of choosing was enjoyable. Go figure.
"Knowing we may regret any particular decision," wrote Postrel, "sometimes we simply won't choose." At the same time, we come up with ways to structure or limit our choices so we aren't overwhelmed during each and every trip to the grocery store. We actually do a pretty good job, Postrel explained, of limiting our choices so that we don't drive ourselves crazy or slip into paralysis. We keep going to the same restaurants and ordering the same dishes. We limit the number of stores or sites we look at while scoping out a new purchase. We rely on reviews and guides that we come to trust through experience. But the anti-choicers aren't comfortable with these heuristics. From Postrel again:
At the heart of the anti-choice argument is a false dichotomy: We can have a narrow range of standardized choices, or we can live with options that are infinite, dizzying, and always open.
[Barry] Schwartz treats commitment as the opposite of choice rather than its complement. By this logic, a market without contracts is freer than one in which contracts are enforced. After all, what if I sell you my car and then change my mind and want it back?
"Social ties actually decrease freedom, choice, and autonomy," he writes. "Marriage, for example, is a commitment to a particular other person that curtails freedom of choice in sexual and even emotional partners." So gays who cannot legally marry their partners are somehow freer than heterosexuals who can? There's something deeply wrong with this understanding of choice. Freedom to choose must include the freedom to commit.
Which brings me to a larger problem embedded in anti-choice arguments of the sort made by Mull. It's easy to mock the idea of 200,000 types of hangers (or, close enough, 200,000 search results at Amazon). Who needs that many hangers, right, or 24 flavors of jam, or…anything else that I don't particularly care about? Why do we have so many types of music, or eggplants, or nail polish?
I'd argue that the social-economic-political system that generates such a proliferation of choices in seemingly banal consumer goods also does the same when it comes to other choices in our lives that are arguably more central to our flourishing and self-expression—things such as sexual orientation, religion, personal dress, race, and ethnicity. You don't get 58 gender choices on Facebook without having to put up with a near-equal number of Pop-Tarts. A liberal order predicated upon individual rights, tolerance, and pluralism is going to generate a ton of SKUs in shit that you and I may not care about. That's not a problem to be solved, it's a dynamic to be defended and expanded to all aspects of human activity.
"Choosing determines all human action," pronounced the great Austrian economist Ludwig von Mises.
In making his choice, man chooses not only between various materials and services. All human values are offered for option. All ends and all means, both material and ideal issues, the sublime and the base, the noble and the ignoble, are ranged in a single row and subjected to a decision which picks out one thing and sets aside another.
Choosing among competing options isn't easy, but it beats the alternative, which is being denied alternatives not just when it comes to hangers but to all parts of life.
The post If You Think Having Too Many Choices Is Tyranny, Wait Until You Have Too Few appeared first on Reason.com.
]]>Tom Woods stands accused of many things, but laziness is not one of them.
A senior fellow at the Ludwig von Mises Institute, Woods is the author of a dozen books, including The Politically Incorrect Guide to American History. He's written curricula for the Ron Paul homeschool program; he co-hosts, along with economist Robert Murphy, the weekly Contra-Krugman podcast, which dissects columns by New York Times Nobel laureate Paul Krugman; and he posts a new episode of the popular Tom Woods Show every day.
A champion of the Austrian School of economics and a devotee of Murray Rothbard, Woods didn't exactly start out as a radical anti-statist. He was, he says, a "moderate Republican," happy to lavish government spending on domestic programs and to launch bombs at evildoers abroad. It was the 1992 presidential campaign of Pat Buchanan, who was against the Gulf War and opposed to new military adventures abroad, that began the transformation. Now, Woods is one of the leading antiwar voices in the libertarian movement.
Never one to shy away from a social media scrap, Woods got into an epic Twitter feud last summer with the leadership of the Libertarian Party. One side called the Mises Institute a gateway drug to white nationalism and the alt-right, while Woods and his allies mocked the Libertarian National Committee as a bunch of "social justice warriors." Then something curious happened: After the L.P.'s Mises Caucus failed to dislodge party chair Nicholas Sarwark at this year's national convention, Woods and his friends redoubled their efforts to transform the party from within.
I sat down with Woods recently to talk about his ideological journey, his plans with the Libertarian Party, his past associations with such controversial entities as the League of the South, and his assessment of Donald Trump, among many other topics.
Edited by Mark McDaniel and Todd Krainin. Cameras by Jim Epstein and McDaniel.
Oxygen Garden by Chris Zabriskie is licensed under a Attribution License.
Photo credit: George Skidmore. (CC BY-SA 2.0.)
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The post Tom Woods: The Making of an Anti-War Libertarian appeared first on Reason.com.
]]>Actress Jennifer Lawrence is in the news this week for a number of reasons, including her impromptu performance at a Vienna strip club and her stepping out in a $700 Dior T-shirt that proclaims "We Should All Be Feminists." The Daily Mail even devoted a whole article to the shirt, noting that "the 26-year-old actress beamed as she left the set of her film Red Sparrow with her dog—and a balloon—in tow." But the Mail fails to note the other thing that J-Law was spotted carrying: a book with famed Austrian economist Ludwig von Mises on the back cover.
The Facebook group Being Classically Liberal first noted Lawrence's reading material yesterday, suggesting that perhaps she had picked up the von Mises book Socialism thinking it took a positive view of the subject. Lawrence—star of a slew of recent hit movies, including Joy, The Hunger Games, and American Hustle—has been outspoken in her criticism of conservative politicians (The Daily Beast even deemed her "Hollywood's Next Big Power Liberal").
But some crowdsourced sleuthing revealed that Lawrence's book isn't by von Mises but about him and other Austrian School economists. The book—Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan—was written by New York University professor Kim Phillips-Fein and looks at the rise of free-market economics in post-New Deal America and the role that businesses played in shaping mid-20th Century conservatism.
"Starting in the mid-1930s, a handful of prominent American businessmen forged alliances with the aim of rescuing America—and their profit margins—from socialism and the 'nanny state,'" says the publisher's blurb for the book. "Long before the 'culture wars' usually associated with the rise of conservative politics, these driven individuals funded think tanks, fought labor unions, and formed organizations to market their views."
So does this mean Lawrence is rethinking the reflexive Hollywood hate for free-market capitalism? It's probably a bit too soon to roll out the libertarian welcome mat just yet; for all we know, Lawrence is reading Invisible Hands as some sort of resistance manual, or doing research for a role in an exciting new film about economic theory. (OK, probably not that last one.) But, hey, you know what they say: Once you go Austrian School…
No? Nobody says that?
Whatever, look, Jennifer Lawrence is holding a book with Ludwig von Mises on it! Happy weekend, y'all.
The post Jennifer Lawrence, Libertarian Feminist? appeared first on Reason.com.
]]>Donald Trump has promised to slash taxes, junk regulations, repeal Obamacare, and expand school choice.
Given all that, shouldn't libertarians give him at least a little (maybe even a whole lotta) love?
No, says Reason Senior Editor Brian Doherty in the latest Reason podcast, because Trump is actually trafficking in a "Dangerous Anti-Libertarian Nationalism" that is actually the antithesis of classical liberalism. "Free trade and free migration are…the core of the true classical liberal (libertarian) vision as it developed in America in the 20th century," says Doherty, author of Radicals for Capitalism: A Freewheeling History of the Modern Libertarian Movement. "If you don't understand and embrace them, you don't understand liberty, and you are not trying to further it."
In a wide-ranging conversation, Doherty and Nick Gillespie talk about the rise of Trump and the role of Steve Bannon in the president's administration; why being a "rootless cosmopolite" isn't in any way antithetical to patriotism; and why the great Austrian-born economist Ludwig Von Mises—a Jew who escaped Nazism—provides the strongest possible case against Trump's "America First" message.
Produced by Mark McDaniel.
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The post The Cosmopolitan's Case Against Donald Trump or, Make Mine Mises! [Reason Podcast] appeared first on Reason.com.
]]>President Donald Trump has signed an executive order claiming that in the future the total number of federal regulations will shrink, via the elimination of two regulations for every new one. He has nominated an FCC chief and a department of education chief who advocate choice-enhancing changes in the way their agencies run. He says he's a hardcore Second Amendment supporter (although he also supports taking away the right to bear arms based on mere suspicion). He's offered up a Supreme Court justice willing to seriously question government regulatory and police powers. He at least claims he wants to see spending cuts and tax cuts.
Should libertarians—who are supposed to advocate those goals as part of a larger vision of reducing government power over our property and choices—admire and support Trump? Even a little?
Libertarianism is more than just advocating a random checklist of disconnected actions that in some respect limit government's reach or expense. (See Steven Horwitz, an economist in the Hayekian tradition, for valuable thoughts on why judging Trump via a checklist of discrete changes in specific government behavior doesn't work in libertarian terms.)
Libertarianism is a unified skein of beliefs about how the human social order should be shaped. What binds the philosophy is the understanding (or belief, for the skeptical) that using violent force against the peaceful both makes us, overall, poorer and is, at any rate, almost always or always wrong.
For most libertarians, the practical and moral arguments against aggressive force on the innocent support each other; the sense of what's morally right for most libertarians is rooted in a generally rule-based sense of what furthers human flourishing overall. To most libertarians, that is, freedom is both a valuable part of human flourishing, and a necessary part of most other aspects of it.
That we should be free to do what we want with ourselves, and with our justly owned property, is the core of libertarianism. (A swirling, complicated debate surrounds questions about what behavior is truly about ourselves alone, and how, why, and under what circumstances property is justly owned and what that implies about how we can use it. Such questions can't be resolved in a blog post.)
Given the nature of human beings' productive powers, the best way to ensure the collective "we" gets richer faster is to ensure the individual freedom to exchange with others as we choose, and by doing so build long and complex chains of production and exchange that benefit us all (or even just some/many of us), irrespective of accidents like national boundaries.
Free trade and free migration are, then, the core of the true classical liberal (libertarian) vision as it developed in America in the 20th century: if you don't understand and embrace them, you don't understand liberty, and you are not trying to further it.
The Trump administration may not in every specific policy area do the wrong thing in libertarian terms. But whatever it gets right is more an epiphenomenon of certain alliances within the Republican Party power structure or the business interests he's surrounding himself with. Trump and his administration can't be trusted to have any principled and reliable approach to shrinking government or widening liberty, since Trumpism at its core is an enemy of libertarianism.
What appears to be the core of Trumpism, based on his earliest priorities and his closest advisers? The blatant, energetic, eager violation of the right to freely choose what to do with one's justly owned property and energy, and fierce denial of the principle that through such freedom we create immense and unprecedented wealth for the human race. (Again, most libertarians don't just clutch "freedom" as a value disconnected from all other values, although they privilege it in most cases. They also believe freedom is conducive to the greatest human wealth and happiness, overall. It's a philosophy of social betterment as well as a philosophy of individual rights.)
Not yet a month into his administration, Trumpism is most surely centered on a poorly considered nationalism. His administration, with each swift and relentless bit of dumb bullying over our businesses' right to choose what to do with capital, our right to buy from abroad unmolested, other humans' ability to move peacefully into our country, acts on the principle that it's best if we don't trade with people outside our borders, that the Leader gets to decide what private businesses do with their capital and resources, and that we should beggar ourselves for the sour joys of keeping fewer people not born here from coming here (in a time when that alleged "problem" barely exists).
Trump is openly a type of illibertarian leader we haven't seen in a while. The "open" part is important. Those wanting to downplay the threat of Trump can, justly, point to all sorts of crummy and illiberal policies that past administrations and imagined alternate administrations did or might also pursue. In the context of the current political debate, that scarcely matters. Trump is the president we have, and his policies are what we have to face, and fight. It may fit any given person's amour propre to not ever risk seeming to overstate or overguess exactly how bad Trump is or might be, but it doesn't necessarily help the cause of promoting liberty.
It does matter whether a president encases even protectionist or trade-managing or restrictionist policies with a stated appreciation for lower tariffs and more open migration, which at least on the margins likely keeps bad things from happening. By paying that tribute of statist vice to libertarian virtue, at least doesn't deliberately imbue Americans with the belief that the country will be stronger by making goods and labor more expensive.
A president who openly and firmly rejects the principle of, and fails to grasp the benefits of, economic liberty is indeed worse than one who merely casually violates those principles. (And economic liberty is the core of human liberty, in a world where we must produce and trade to live).
Trump and his administration don't merely violate the core principles of individual liberty carelessly or as a byproduct of other goals; he is against economic liberty, deeply and sincerely. More than anything else, Trump is a loud and proud enemy of libertarianism.
The continued presence and dominance of Steve Bannon in his inner circle indicates that Trumpian nationalism, though the administration doesn't spell this out explicitly, yearns toward ethno-nationalism. Bannon believes American "civic society" necessarily excludes too many immigrants from Asia (even though people of that descent make up over 5 percent of America.)
While he's been careful since taking his powerful position in the White House not to say much of what he thinks about anything, Bannon's stated belief that the news organization he ran, Breitbart, was "a platform for the alt-right" and his own site's definition of that often deliberately ill-defined term, it's hard to avoid the conclusion that his nationalism has an ethnic component.
The administration's choice, apparently at the driving of Bannon and his ally Steven Miller, to launch their administration with an expensive and absurd "border wall" and for a spate of pointless (except in their disruptive cruelty) blows at movement of people from a small set of mostly-Muslim countries (that are not the Muslim countries from which any serious terror threat to the U.S. has ever actually arisen) show that the "public safety" rationale doesn't hold up. They are either idiots, or the restriction has another purpose.
What the limited travel restrictions so vital to the Trump administration have demonstrated is that they are eager to build from the most speculative and phantom of fears an expensive and disruptive apparatus of control, one that Miller considers a test run to prove the president's unrestricted power over certain matters, even in the face of the courts. And the fears they decide to focus on are fears of the foreign "other," even if that foreign other is a legal resident of the United States or wants nothing more than to work for or with existing Americans.
If you are judging how to view Trump's administration, and make reasonable guesses about its future actions based on demonstrated core commitments, those demonstrated preferences, goals, and methods are seriously bad, and more serious than (so far) semantic stunts about cutting regulation or taxes.
Trump v. Mises
Free trade and migration is not just one of a random pile of "freedom-increasing policies" that one can grab from and hope the whole number ends up large enough. It's the heart. Trump's disdain for them shows he can't be trusted to stand for our core freedoms, for any reason other than pure political contingency, or perhaps as part of his unlovely desire to humiliate the enemies and opponents his administration is obsessed with. (Yes, someone out to stick it to the modern liberals may occasionally posit a freedom-enhancing policy. This doesn't make "sticking it to the liberals" itself inherently a libertarian attitude.)
Is it just a sign of pants-wetting Trump Derangement Syndrome to call Trump the quintessential anti-libertarian? The modern American libertarian tradition is not unitary or invented by one person—I wrote an over-700-page book about it, called Radicals for Capitalism.
That said, given his influence on nearly every thinker or institution that comprised modern American libertarianism from World War II to the dawn of the 21st century, Ludwig Von Mises, the Austrian emigre economist and social philosopher, can be relied on to reveal what is core about modern American libertarianism.
Mises, driven from his beloved Austria by the Nazis and firsthand witness to the death of liberal principles via strongman ethno-national fascism, thought and wrote diligently and brilliantly about every aspect of social philosophy. From the start of his career to the end he identified free trade and free migration in a regime of legal respect for individual private property as the core of a free society. Those, again, are the principles Trump has nothing but contempt for.
Mises' personal and intellectual experience taught him vividly why the nationalism at the heart of Trumpism is the worst enemy of classical liberalism, the humane and liberating and wealth-generating tradition Mises sustained and furthered.
Mises' liberalism, and thus modern libertarianism, was built not solely in reaction to Marxist communism but equally against the wealth- and life-destroying evils of autocratic ethno-nationalist autarkic statism.
As Mises wrote in his first magisterial work of social and political philosophy, Socialism (1922), almost as if he foresaw a Trump who would try to bamboozle a nation into thinking it could enrich "the people" as opposed to special interests via protectionism and exclusionary immigration policies, and wanted to warn the liberty-minded that would be not just one concession on a liberty checklist but the end of the benefits and glories of free markets (as well as a clear violation of any pretense that one is working for "the people" vs some privileged elite):
It becomes a cardinal point of the particularist policy…to keep newcomers out.
It has been the task of Liberalism to show who bear the costs of such a policy….
A system that protects the immediate interests of particular groups limits productivity in general and, in the end, injures everybody—even those whom it began by favouring. How protection finally affects the individual, whether he gains or loses, compared with what he would have got under complete freedom of trade, depends on the degrees of protection to him and to others….
As soon as it is possible to forward private interests in this way and to obtain special privileges, a struggle for pre-eminence breaks out among those interested. Each tries to get the better of the other. Each tries to get more privileges so as to reap the greater private gain. The idea of perfectly equal protection for all is the fantasy of an ill-thought out theory.
For, if all particular interests were equally protected, nobody would reap any advantage: the only result would be that all would feel the disadvantage of the curtailment of productivity equally. Only the hope of obtaining for himself a degree of protection, which will benefit him as compared with the less protected, makes protection attractive to the individual. It is always demanded by those who have the power to acquire and preserve especial privileges for themselves.
In exposing the effects of protection, Liberalism broke the aggressive power of particular interests. It now became obvious that, at best, only a few could gain absolutely by protection and privileges and that the great majority must inevitably lose….
In order to rehabilitate protection, it was necessary to destroy Liberalism….Once Liberalism has been completely vanquished, however, and no longer menaces the protective system, there remains nothing to oppose the extension of particular privilege.
When it came to free immigration, Mises was so intellectually and emotionally attached to it that this generally quite pacific man thought that immigration barriers nearly rose to a legitimate excuse for the excluded to wage war.
His writing after seeing the horrors that ethno-national autarky brought to Europe in his 1944 book Omnipotent Government bookend his explanation of the vital, core importance of free trade and migration:
….imagine a world order in which liberalism is supreme….In this liberal world, or liberal part of the world, there is private property in the means of production. The working of the market is not hampered by government interference. There are no trade barriers; men can live and work where they want. Frontiers are drawn on the maps but they do not hinder the migrations of men and shipping of commodities. Natives do not enjoy rights that are denied to aliens. Governments and their servants restrict their activities to the protection of life, health, and property against fraudulent or violent aggression. They do not discriminate against foreigners. The courts are independent and effectively protect everybody against the encroachments of officialdom. Everyone is permitted to say, to write, and to print what he likes. Education is not subject to government interference. Governments are like night-watchmen whom the citizens have entrusted with the task of handling the police power. The men in office are regarded as mortal men, not as superhuman beings or as paternal authorities who have the right and duty to hold the people in tutelage. Governments do not have the power to dictate to the citizens what language they must use in their daily speech or in what language they must bring up and educate their children….
….In such a world the state is not a metaphysical entity but simply the producer of security and peace. It is the night-watchman….But it fulfills this task in a satisfactory way. The citizen's sleep is not disturbed, bombs do not destroy his home, and if somebody knocks at his door late at night it is certainly neither the Gestapo nor the O.G.P.U.
The reality in which we have to live differs very much from this perfect world of ideal liberalism. But this is due only to the fact that men have rejected liberalism for etatism.
It's not merely that of a grabbag list of "libertarian positions" Trump is picking a few and neglecting the others and thus libertarians have reason to be hopeful; it's not merely that, oh, free trade and immigration were among Mises' many positions, and his reasons for positing them as core to liberalism were whimsical.
They were, as he explained and knew in his bones from the horrible history of Austria and Germany he lived through, the core of liberalism (libertarianism). If one doesn't understand that, as Trump and his people do not, then their instincts and intelligence can't be trusted for anything when it comes to liberty.
Why Some Libertarians Might Not Seem Particularly Alarmed by Trump
Conflicting concerns and perspective have dictated many libertarians' reactions to Trump. (In the social networking age, it is much easier, for better or worse, to understand a very wide range of perspectives not mediated through existing approved brands.) Libertarians tend to already see so much of what the American state has done, under control of both parties and a variety of politicians, as hideous evils that our sense of loud public outrage at what the government is up to generally has had to be kept in some form of polite abeyance, lest we become the sort of constant wild ranters that tend to be filtered out of any public discussion.
This sociological reality, perhaps, makes libertarians less likely to be the loudest and most panicked about Trump. Trump is, as we've heard from many in the past few weeks, inheriting powers and a system that have long existed and long been abused, from travel restrictions to deportations. I have seen an understandable wave from those of libertarian bent of "wait, you are telling me the government is scary now?" reaction to the more, let's say, acutely panicked complaints about Trump.
This is a time of high rhetorical tension in American political discourse. One with a contrarian streak (and libertarians of necessity have contrarian streaks) might be inclined to discount the apocalyptic sense that Trump represents a unique and freshly unacceptable blow to American liberty. Predicting an unusually dire event occurring has social and intellectual costs; even someone highly alarmed by Trump might be reluctant to predict severe and unprecedented domestic repression.
But Trump's very rise to power was unprecedented in many respects, and his core and proud illiberalism is fresh in modern America. (Again, governmental vice paying some tribute to the virtues of liberty is important.) The presence and growing power of Steve Bannon, a man near as we can tell genuinely and enthusiastically dedicated to ethno-nationalism, is what makes it hard to believe that Trump doesn't want to take his economic autarky and restrictionism as far as he can get away with.
And from the perspective of the first few weeks of Trump, any remnants of dedication to free markets and freedom in these realms has seemingly already been flushed out of the body of the GOP in order to make room for an injection of pure malignant Trumpism, so we can't count on his Party or its old rhetorical commitments to hold him back.
Trumpian nationalism and restrictionism is a philosophy that has already caused and will continue to cause misery, both direct and obvious in the lives of people whose movement is restricted and indirect and harder to see in the choking of the wealth-generating properties of international trade.
The president has chosen to make his leading adviser, one who seems to have outsized influence on the administration, a man whose sole political concern is both dumb and evil, and whose approach to that goal is, according to something historian Ronald Radosh reports Bannon said to him (though Bannon later said he did not recall saying this to Radosh, or meeting him at all), "Leninist," that is, dedicated to the revolutionary scorched-earth destruction of all existing institutions.
I know many libertarians who smile at that. Why, even early libertarian movement linchpin Murray Rothbard at times thought in Leninist strategic terms! Don't libertarians hate the system and want to see it fall?
I, and most libertarians, hate lots about the "system" and would like to see lots about it fall. But Bannon's hatred for modern institutions has almost no overlap with libertarians'. He doesn't want more freedom. He wants ruthless state power supporting his particular vision of a favored class.
He doesn't hate modern institutions for being tyrannical, for illegitimately bossing around or destroying people's lives. Bannon sees libertarians as his enemies, and he's right to do so. He hates the current establishment because he feels it insufficiently promotes war to the death against radical Islam. He hates it for insufficiently pushing an autarkistic ethno-nationalism that will make poorer and more miserable not only Americans but the world.
Trump's Temperament (And Why it Matters)
There is another reason to find Trump especially alarming as president. It touches on what's always undergirded why I was attracted to libertarianism on a sub-intellectual level when I was young, an inclination that made the explicit philosophy ring true. It is another reason I find it wrongheaded from a libertarian perspective to be a bloodless Vulcan tallyer of pluses and minuses for specific policies Trump has spouted or appointments he's made.
Many libertarians don't dislike the state out of some disconnected dislike for "government" qua government, but because they dislike cruelty and the needless causing of pain and misery to other human beings, and that underlies most of what government does, and appears to be Trump's favorite parts of government.
Yes, government is an institution whose very function is control backed by violence and funded via extortion and is thus inherently cruel. But not everything government does is inherently wrong, considered outside the funding mechanism. Some things government does, were they not done by government, are perfectly proper things to do. Trump and his people seem most focused on the things that aren't, like punishing and restricting the harmless and taking away our rights to trade outside barriers the leader thinks are appropriate.
From immigration to eminent domain to the drug war to asset forfeiture Trump seems to be particularly malign, particularly contemptuous of the shopkeeper virtues of trade and the American virtues of live and let live liberty, with a sort of Viking streak that appeals to many of his fans who love seeing an "alpha male leader" take the reins and punish their perceived enemies.
Trump tries very hard to delegitimize any countervailing structures, such as a free press or the courts, that could possibly make it harder for him to do what he wants. He is for making police stronger and will lie to make you agree with that. His attorney general Jeff Sessions is a pure exemplar of governing as a source to punish.
Even given any particular set of policies, even given whatever you know or think about past or potential other future presidents, these are a terrible, terrible set of attributes from a libertarian perspective for the president. Those long concerned about the fragility of our debt and monetary structures, or potential reactions to a new terror attack, should indeed I think be uniquely frightened by this caudillist sitting in the White House.
Some in the libertarian thoughtworld believe passionately that Trump will prove to be less likely to cause destruction and death abroad via war than the average American president. I simply don't think there is a good reason to believe that will prove true, though it will be wonderful if it does.
Trump's first week priorities indicate that what motivates him the most is ignorant malign cruelty, autocratic acts that disrupt other peaceful human beings' plans and lives and business, acts that don't need to be done and that cause immense harm.
Such acts are embraced by Trump and his supporters through some combination of economic ignorance (the trade autarky and desire to force companies to do with their property as the leader wishes) and mindless unsupported fearmongering (the border wall, the immigrant and refugee foolishness).
One may temperamentally enjoy seeing modern liberals cry because they presided over a growing state, or are contemptuous of other people's peaceful chosen values, or are smug, or you don't like the way they look, or whatever, but the ol' drinking of modern liberal tears is a large price to pay for someone who likely doesn't care if he wrecks international trade to show he's tough.
Through the bad luck of elections, Trump runs a pretty much one-party state. He is advised by a proud ethno-nationalist. He likes to govern by executive ukase. None of these clear and dominant qualities of Trump and his administration are at all promising for a libertarian.
The best one could say about Trump for libertarians playing the long game in American political culture is it could be a teaching moment about the dangers of centralized executive power, of centralizing our culture's institutions of humane care in a machine whose lever of control is won and lost as easily as is control of the federal government.
Previous administrations of course violated the principles of free trade and cosmopolitanism. But they did not gleefully and malignly and publicly reject them and expect the nation to come along. This devotee of Ludwig Von Mises is suitably alarmed. Instructing other libertarians on specific strategies isn't really my bag. But not being publicly obstructionist regarding Donald Trump, who represents a special and revived threat to liberty from the populist right, well, I can't see how it will do libertarianism's future in the United States in the 21st century much good.
Anti-regulatory preening or not, libertarians—those dedicated to the entire fabric of liberty and social peace and prosperty—should consider it vital to defend the entire edifice of libertarianism, particularly in the face of a leader such as Trump who, no matter what else he does, admires authoritarian strength, hates allowing people or companies to make their own choices about what to do with their money and property, and has chosen, of everyone in the world he could have chosen, as his ideological consigliere a man like Bannon willing to tear down the fragile but vital benefits of modern international civilization in pursuit of his mad, ugly dream.
It might not end up as bad as it looks for libertarians, and those who paint the ugliest picture of the next four years may end up seeming overwrought. But from what has already happened with travel restrictions and trade restrictions and the overarching ideas and attitudes that infuse the Trump administration, it looks extraordinarily bad.
The post Trump's Dangerous Anti-Libertarian Nationalism appeared first on Reason.com.
]]>New York University's Israel Kirzner took on the conventional wisdom yesterday at George Mason University's Arlington, Virginia, campus, at an event, hosted by the Mercatus Center's F.A. Hayek Program, commemorating the 40th anniversary of Friedrich Hayek's acceptance of the Nobel Prize.
As most historians would have it, the free market Austrian school of economics had faded to obscurity by the 1930s and '40s. In reality, Kirzner said, that was an incredibly fruitful period for the school, with Hayek and fellow Austrian Ludwig von Mises actively making a series of novel doctrinal contributions. For Kirzner, their understanding of market competition as a process, not an equilibrium state, was one particularly groundbreaking development that came about during those years.
The belief that had (mistakenly) evolved among mainstream economists at the time was that the goal of market competition was to bring about a general equilibrium in which all the facets of an economy are balanced with each other and all the resources are efficiently allocated. These economists thought it realistic to expect central planners to be able to replicate, and perhaps even improve upon, that equilibrium state. The Austrians were meanwhile busy reminding people that market competition is a process that creates value precisely when an economy is in disequilibrium.
In equilibrium, profits converge to zero—there can be no new profit opportunities by definition. But outside of a perfect equilibrium, people who are clever enough can find gaps in the market and fill them. Entrepreneurs are therefore able to drive societal improvements through dynamic competition—to literally innovate their way to greater wealth.
Markets are a process, not an equilibrium state, Hayek said. More specifically, they are a process for discovering new knowledge. The absolute best a central planner can hope to do is to aggregate the information that already exists at a given moment. But the market process not only gathers and makes sense of vast, disparate information—it ushers into being knowledge that was not there before at all. Vernon Smith, another of the day's speakers and a fellow Nobel laureate in economics, quoted Hayek as saying, "I propose to consider competition as a procedure for the discovery of facts as [otherwise] would not be known to anyone."
This was actually a fresh and exciting revelation, Kirzner concluded, and it came at the very moment most onlookers were declaring the Austrian tradition dead. Mainstream economists at the time truly believed it was possible for central planners to acquire the requisite information and construct from it a utopia. Fortunately, Hayek and his Austrian school contemporaries were there to show the economics profession that the journey—an ongoing process of experimentation and discovery driven by the pursuit of profits—is far more important than the destination.
Of course, not everyone has taken Hayek's central insight to heart. Earlier this week, Scott Shackford published a dispatch from CityLab, the annual conference for urban planner types that he described as the "temple of urban progressive leadership." Featuring panels with names like "Narrowing the Gap: How Cities Can Fight Income Inequality," the confab is apparently a magnet for people who retain an unmatched faith in the ability of central planners to eradicate all society's ills. Unlike the George Mason event's attendees, it would seem CityLab's participants aren't quite up on their Hayek.
The post Economic Historians Are Wrong About the Austrian School, Says Israel Kirzner appeared first on Reason.com.
]]>"I hear therefore with joy whatever is beginning to be said of the dignity and necessity of labor to every citizen. There is virtue yet in the hoe and the spade, for learned as well as for unlearned hands. And labor is everywhere welcome; always we are invited to work." '" Ralph Waldo Emerson, "The American Scholar," 1837.
"Work!" '"Maynard G. Krebs, The Many Loves of Dobie Gillis, circa 1960.
From the start, Americans have had a love-hate relationship with work. We tend to rhapsodize about labor, but, at least in our personal lives, we praise labor-saving devices and condemn "make-work" schemes. (Unfortunately, public policy is another matter.) Emerson and other pillars of American culture '" whom for these purposes I will call the moralists '" associated work with dignity and purpose. Historian Thaddeus Russell teaches us that when the slaves were freed from the Southern plantations, they were pounded with the gospel of work. "Slaves generally considered work to be only a means to wealth, but after emancipation, Americans told them that work '" even thankless, nonremunerative work '" was a virtue in itself," Russell writes in A Renegade History of the United States. He reports that the Freedman's Bureau admonished the former slaves, "You must be industrious and frugal. It is feared that some will act from the mistaken notion that Freedom means liberty to be idle. This class of persons, known to the law as vagrants, must at once correct this mistake." Russell notes that "thousands of black men were rounded up for refusing to work."
The message was that work is not just an honest and proper way to obtain the necessities of life without mooching off others. The activity in itself is a source of goodness, even saintliness, and should be engaged in unceasingly, taking time out only for eating sleeping, other bodily functions, and tending to one's family duties. One didn't work to live; one lived to work.
Whites had been subjected to the same harangue for ages: work was a reward in itself, apart from remuneration, because "idle hands are the devil's playground."
We must be clear that the message was not merely that work could be a source of satisfaction apart from the money. The message amounted to a vilification of leisure, indeed, of consumption. (Some conservatives seem to hold this view.)
In a good illustration of the "Bootleggers and Baptists" phenomenon, the moralists were joined in their labor evangelism by employers, who needed uncomplaining workers willing to spend long hours in unpleasant factories. People preferred leisure and looked for every opportunity to indulge in it. Hence, "Saint Monday," which, as Russell notes, Benjamin Franklin sneered at because it "is as duly kept by our working people as Sunday; the only difference is that instead of employing their time cheaply in church, they are wasting it expensively in the alehouse."
We get a different picture of labor from the economists. The classical economists and the Austrians (at least from Ludwig von Mises onward) stressed the unpleasantness '" the "disutility" and even sad necessity '" of labor. Adam Smith and other early economists equated work with "toil," which is not a word with positive connotations. In The Wealth of Nations, Smith writes,
The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it and who wants to dispose of it, or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, as much as what we acquire by the toil of our own body. That money, or those goods, indeed, save us this toil.
Frédéric Bastiat carried on this tradition by emphasizing that exchange arises out of a wish to bespared labor. One accepts the terms of an exchange only if obtaining the desired good in other ways would be more arduous.
For Bastiat and other early economists, exchange was the foundation of society. "Society is purely and solely a continual series of exchanges," Destutt de Tracy wrote. It follows that the penchant for economizing effort '" the preference for leisure '" is a beneficent feature of human nature. (Somewhere, the science-fiction writer Robert Heinlein has a character say that the wheelbarrow must have been invented by a lazy person.)
Further, Bastiat explained, technological advancement is valued precisely because it substitutes the free services of nature for human toil. In his uncompleted magnum opus, Economic Harmonies, he wrote,
It is characteristic of progress (and, indeed, this is what we mean by progress) to transform onerous utility into gratuitous utility; to decrease [exchange-]value without decreasing utility; and to enable all men, for fewer pains or at smaller cost, to obtain the same satisfactions.
By onerous utility, he meant utility bought with sweat and strain; by gratuitous utility, he meant utility provided by nature free of charge. When ingenuity is applied to the making of a good, "its production has in large measure been turned over to Nature. It is obtained for less expenditure of human effort; less service is performed as it passes from hand to hand." Needless to say, this is a good thing. Of course, some of the freed-up time will be devoted to producing other goods that were unaffordable yesterday, but some will be devoted to consumption, or leisure. The proportion set aside for leisure will likely increase as living standards rise (assuming government interference doesn't deny workers their rewards for higher productivity).
The goal of all men, in all their activities, is to reduce the amount of effort in relation to the end desired and, in order to accomplish this end, to incorporate in their labor a constantly increasing proportion of the forces of Nature.… [T]hey invent tools or machines, they enlist the chemical and mechanical forces of the elements, they divide their labors, and they unite their efforts. How to do more with less, is the eternal question asked in all times, in all places, in all situations, in all things.
(Bastiat elaborates on this in his remarkable chapter 8, "Private Property and Common Wealth," which was the subject of my article "Bastiat on the Socialization of Wealth.")
Bastiat agreed with Adam Smith, who wrote, "Consumption is the sole end and purpose of all production." Hence the economists rejected the moralists' view that production is an end in itself.
We see this same lack of enthusiasm for work in John Stuart Mill, an influential classical economist as well as philosopher. In 1849 Thomas Carlyle published an article lamenting that the end of slavery in Great Britain meant that white people couldn't make sure that blacks worked enough (for whites). ("Occasional Discourse on the Negro Question," Fraser's Magazine for Town and Country, December 1849.) Indeed, this is why Carlyle dubbed economics, which was premised on free labor, "the dismal science."
Mill wrote an anonymous response ("The Negro Question") in the following issue. He protested Carlyle's suggestion that blacks were meant to serve white people. Then, as I wrote previously:
Mill … turned to "the gospel of work," praised by Carlyle, "which, to my mind, justly deserves the name of a cant." He attacked the idea that work is an end in itself, rather than merely a means. "While we talk only of work, and not of its object, we are far from the root of the matter; or, if it may be called the root, it is a root without flower or fruit.… In opposition to the 'gospel of work,' I would assert the gospel of leisure, and maintain that human beings cannot rise to the finer attributes of their nature compatibly with a life filled with labor … the exhausting, stiffening, stupefying toil of many kinds of agricultural and manufacturing laborers. To reduce very greatly the quantity of work required to carry on existence is as needful as to distribute it more equally; and the progress of science, and the increasing ascendency of justice and good sense, tend to this result.
In Mises and Murray Rothbard we find similar views: work is to be economized. Mises devoted an entire chapter in Socialism to refuting the state socialists' claim that work is unpleasant only because of the market economy, and that it would be blissful if private property were abolished and the market were replaced with state central planning. Under any system, Mises wrote, labor may afford a small (and insignificant, he thought) measure of direct satisfaction, but that soon passes. Yet people must keep working to obtain its indirect satisfactions, the goods it enables them to buy.
Mises may overstate his case here, as did his mentor Carl Menger in the other direction (in 1871, mind you): "The occupations of by far the great majority of men afford enjoyment, are thus themselves true satisfactions of needs, and would be practiced, although perhaps in smaller measure or in a modified manner, even if men were not forced by lack of means to exert their powers."
Mises mocked the state socialists by putting scare quotes around the words joy of labor, asking, "If work gives satisfaction per se why is the worker paid? Why does he not reward the employer for the pleasure which the employer gives him by allowing him to work?"
What people often take for the "joy of labor," he said, was actually the satisfaction of finishing a task, the "pleasure in being free of work rather than pleasure in the work itself." Mises quoted the medieval monks who appended to the manuscript copies they had just painstakingly produced, "Laus tibi sit Christe, quoniam liber explicit iste" (which he translated inexactly as "Praise the Lord because the work is completed").
For Rothbard, leisure is a "desirable good," a consumer good, which people will forgo only if at the margin the fruits of a unit of labor undertaken are preferred to the satisfaction that a unit of leisure would afford. Rothbard acknowledged that labor can be satisfying and wrote,
In cases where the labor itself provides positive satisfactions, however, these are intertwined with and cannot be separated from the prospect of obtaining the final product. Deprived of the final product, man will consider his labor senseless and useless, and the labor itself will no longer bring positive satisfactions. Those activities which are engaged in purely for their own sake are not labor but are pure play, consumers' goods in themselves. Play, as a consumers' good, is subject to the law of marginal utility as are all goods, and the time spent in play will be balanced against the utility to be derived from other obtainable goods. In the expenditure of any hour of labor, therefore, man weighs the disutility of the labor involved (including the leisure forgone plus any dissatisfaction stemming from the work itself) against the utility of the contribution he will make in that hour to the production of desired goods (including future goods and any pleasure in the work itself), i.e., with the value of his marginal product. [Emphasis added.]
Rothbard's mentor, Mises, made a fundamental point about human action when he wrote, "Even if labor were a pure pleasure it would have to be used economically, since human life is limited in time, and human energy is not inexhaustible."
That being the case, I will reserve further thoughts on work for another time. Meanwhile, Laus tibi sit Christe, quoniam liber explicit iste!
This column originally appeared at the Future of Freedom Foundation.
The post America's Love-Hate Relationship With Work appeared first on Reason.com.
]]>See E.J. Dionne in yesterday's Washington Post:
today's conservatives are in thrall to Austrian thinking, and this explains a lot of what is going on in Washington. Broadly popular measures such as raising the minimum wage and extending unemployment insurance — normal, bipartisan legislation during the Keynesian heyday — are blocked on the assumption that people are better off if the government simply keeps its mitts off the market.
It is now difficult for Congress to pass even the kind of spending that all sides once saw as necessary public investment in transportation, research and education. It's that "road to serfdom" again: Anything government does beyond enforcing contracts and stopping violence is denounced as the first step of a fox trot toward dictatorship.
So let's give Ron Paul credit for unmasking the true source of gridlock in Washington: Too many conservatives are operating on the basis of theories that history and practice have discredited. And liberals have been more reluctant than they should be to call the ideological right on this, partly because they never fully got over the shell shock of the Reagan years and also because they have a strange aversion to arguing about theory. When it comes to government policy, the Austrian economists paved the road to paralysis.
Hm, what did the Congressional Budget Office say about government spending last week? "Federal outlays are expected to increase by 2.6 percent this year, to $3.5 trillion, or 20.5 percent of GDP—their average percentage over the past 40 years. CBO projects that under current law, outlays will grow faster than the economy during the next decade and will equal 22.4 percent of GDP in 2024." Is this a government gridlocked, prevented from functioning?
And is asking, as congressional Republicans are, for offsetting cuts elsewhere before voting for unemployment extensions truly a sign of embracing Austrian warnings about the bad effects of messing with free markets and market clearing in a way someone not desperate for a column hook would recognize?
The post It's Hayek's World, the U.S. Government Just Spends in It appeared first on Reason.com.
]]>Let's stipulate that most people who favor the ACA have honorable intentions: they want everyone, including people in ill health, to have access to good and affordable medical care. All decent people should want that. (How many favor it merely because it builds up government power and takes money from the well and well-heeled? I suspect it's the same number as those who oppose it out of a dislike of the poor and ill. Of course politicians who favor the ACA undoubtedly find that it lines up nicely with their political interests.)
The problem is that in making government policy, unmovable obstacles often stand between motives and desired results. The laws of economics and politics thwart the best intentions. Sheer will is not enough to overcome these obstacles, because they are implicit in the logical structure of human action.
One cannot merely decree that there be good and affordable medical care for all. Setting up a byzantine bureaucracy won't do the trick either. Reality is simply not subject to the human will in that way. The maxim "nature to be commanded must be obeyed" applies here.
If politicians, bureaucrats, and pundits do not understand this, it indicates that they are stuck in an outmoded mindset. Before the 18th century, Ludwig von Mises wrote, the "belief prevailed that in the field of human action no other criterion could be used than that of good and bad. If a policy did not attain its end, its failure was ascribed to the moral insufficiency of man or to the weakness of the government. With good men and strong governments everything was considered feasible." But, Mises continued,
Then in the eighteenth century came a radical change. The founders of Political Economy discovered regularity in the operation of the market. They discovered that to every state of the market a certain state of prices corresponded and that a tendency to restore this state made itself manifest whenever anything tried to alter it. This insight opened a new chapter in science. People came to realize with astonishment that human actions were open to investigation from other points of view than that of moral judgment. They were compelled to recognize a regularity which they compared to that with which they were already familiar in the field of the natural sciences.
News of this natural limit on the efficacy of power was not warmly received in all quarters. It did not sit well with those who found it inconvenient that, as Mises wrote elsewhere, "there is something operative which power and force are unable to alter and to which they must adjust themselves if they hope to achieve success, in precisely the same way as they must take into account the laws of nature." What did such people do? They denied that those natural market forces operated. The results were tragic.
The ACA is an excellent case in point. Barack Obama and his allies saw a problem: some people can't afford or qualify for medical insurance. But instead of investigating how market forces might currently be thwarted from addressing this problem, they used government (the blunt weapon of aggressive force) to decree that insurance companies — which are already largely creatures of the state — must accept all applicants regardless of their health (guaranteed issue) and must charge the unhealthy the same price as they charge the healthy (community rating); that is, premiums may not reflect actual risk, converting insurance into a covert transfer program.
Of course, in accord with the economic rule that you can never do just one thing, the matter could not be left there. If the young and healthy were going to subsidize the already sick, they would have to be forced to buy coverage at inflated prices; otherwise they would put off buying insurance until they got sick. (The current low penalty for not buying coverage can be expected to rise in the future.) And bureaucrats would have to set minimum standards, or else the mandate would be a mere formality. Thus, regardless of an applicant's preferences or situation, all coverage must include, among other things, maternity and "mental health" benefits and "free" preventative services (which means no one knows precisely who pays for them). Insurance policies may not have caps on the total dollar value of benefits, but this may not be reflected in the price.
Of course, bureaucratic rules thus take precedence over personal preferences. It doesn't matter what you want. Personnel at the Department of Health and Human Services and its myriad boards (advised by whom?) know better. Hence the cancellation of many individual policies that we're hearing so much about. Why should a man have to pay for maternity benefits he will never use? Questions like that are better left unasked.
Frédéric Bastiat taught us that thinking like an economist means looking for secondary unseen consequences. What will not happen because of the politicians' impositions? For example, insurance companies certainly have an interest in attracting young healthy people into the risk pool. Without the mandate, insurance companies competing for business in a freed market would discover ways to attract that group. Force would not be necessary. Competition is a "discovery procedure," F.A. Hayek explained. We don't know what we're missing.
What's also overlooked is that before passage of the ACA, we had no free market in insurance or medical care. Both industries had long been cartelized in the states through licensing and other regulatory barriers to free competition. When people say that the medical market failed, they really should say that a government-business partnership failed. In light of that failure, it makes no sense to expand the partnership further under the central authority of the federal government, as the ACA does. Single-payer would compound the error.
The public discussion of the ACA has mostly fixed on attractive mandated benefits, neglecting what matters more: the negative domino effects those mandates must set in motion. The insurance subsidies for people earning up to 400 percent of the poverty level are touted, but where is the discussion of how those subsidies, which are bound to grow in coming years, are to be paid for? (No doubt by raising the "debt limit.") The same question applies to the expansion of Medicaid. Remember that Medicare has trillions of dollars in unfunded liabilities. Little has been said about how insurance companies plan to restrict people's choices in doctors and hospitals to keep premiums low enough to meet government standards. (To its credit, the New York Times has reported on this.)
Also ignored is the cost explosion waiting to happen because of the mandated "mental health" benefit, which will add to the expense created by subsidizing demand for regular medical services. Contrary to popular impression, so-called mental disorders are not like physical ailments: the mind is not an organ subject to real disease, only to metaphorical disease. (If all that was meant was brain disease, the term "mental health" would not have been used and only neurological, as opposed to psychiatric, services would be covered.) Mandating insurance coverage for the "treatment" of this nonobjective category of complaints will create a cost burden that will inevitably be exploited to push for even more government control.
In sum, the laws of economics say that government cannot subsidize demand for services and respect freedom of choice and fulfill its promise to "bend the cost curve downward." Something will have to give. That something will be freedom of choice. As subsidized demand pushes up prices, government will impose service restrictions or price controls (it's already happening with doctor and hospital reimbursements). This in turn will create shortages and long queues, which the government will contend with through rationing, that is, limits on choice.
The laws of economics have not been repealed by the ACA. So how do we assure that all people will have access to good and affordable medical care? By permitting the evolution of a purely voluntary society. Conservatives claim that the pre-ACA medical system was the "best in the world." It was their blindness to the corrupt corporatism of that system, with a price inflation that harmed all but the wealthiest, that helped pave the ground for the ACA.
The radical libertarian position is not the status quo ante, but a radical freeing of society. Freeing the medical and insurance markets means abolishing all privileges provided by the regulatory cartel, which protects politically connected incumbent providers. It means no licensing. It means no FDA or patents. (Entrepreneurs can provide independent certification, like Underwriters Laboratories.) It means no restrictions on mutual-aid societies, which long ago figured out how to provide affordable basic medical care to their working-class members through "lodge practice," a voluntary institution that state-sponsored organized medicine denigrated and destroyed. It means a blossoming of philanthropy, which in the past provided medical care to the destitute. (Of course, a freed market would have few who are truly destitute. Government makes and keeps people poor.)
Good-faith advocates of the Affordable Care Act or of a single-payer system should see that they can only achieve their humanitarian objectives through freed markets.
This column originally appeared at the Future of Freedom Foundation.
The post The Humanitarian Shortcomings of the Affordable Care Act appeared first on Reason.com.
]]>Epstein spoke with Reason's Nick Gillespie about why he's a devotee of the renegade Austrian School economist, Murray Rothbard. Epstein says Rothbard made him understand how government is an actor in the economy, not an objective overseer, but an entity with its own interests.
He also talked about how Rothbard's combative personality made him ill-suited for the political arena, and lamented Rothbard's late 1980s infatuation with Southern populism, Pat Buchanan, and even Klansman-turned-Republican David Duke.
Even with this baggage, Epstein believes Rothbard's legacy is redeemed by the intellectual stature of his writing and prolific output of books and articles, especially For a New Liberty and Man, Economy, and State.
The interview took place at this summer's Freedom Fest. Held each July in Las Vegas, Freedom Fest is attended by around 2,000 limited-government enthusiasts and libertarians. ReasonTV spoke with over two dozen speakers and attendees and will be releasing interviews over the coming weeks.
About 6 minutes.
Produced by Anthony L. Fisher. Camera by Paul Detrick and Tracy Oppenheimer.
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]]>From the Instagram account of Tom Walls, resolute libertarian, friend of Reason, snapper of Ludwig von Mises selfies, and so much more.
Discuss.
Read Human Action online for no price (other than giving up your illusions).
The post "Bitches Don't Know Economics is About Human Action" appeared first on Reason.com.
]]>Rep. Justin Amash (R-Mich.), often touted as "the next Ron Paul" had a rocky start to his second term in Congress. After overcoming a redistricting effort to win re-election by a comfortable margin in November, Amash was welcomed back to Washington with a pink slip: He and a group of libertarian-leaning backbenchers were stripped of their committee assignments by the GOP leadership. Adding insult to injury, the party establishment claimed that the rebuke wasn't ideological; that it had more to do with what Rep. Lynn Westmoreland (R-Ga.) termed "the asshole factor."
Amash, seen as the ringleader of the House "liberty movement," responded by leading a failed coup against House Speaker John Boehner (R-Ohio) in what was supposed to be a rubber-stamped re-election as majority leader. Meanwhile, on a series of crucial votes—the "fiscal cliff" tax hike in January and the March agreement to raise the debt ceiling — Amash and several of his uppity libertarian colleagues voted against party leadership. If Rand Paul (R-Ky.) is the leading liberty-movement troublemaker in the United States Senate, Amash is shaping up to be his main counterpart in the House.
Endorsed by the Republican Liberty Caucus and Young Americans for Liberty, the 33-year-old Amash has made waves by explaining all of his votes on social media, a practice he began during his single term as a Michigan state legislator. He has earned a 100 percent rating from the fiscally conservative Club for Growth, and has taken up where Ron Paul left off on civil liberties.
The son of Syrian and Palestinian immigrants, Amash has made a name for himself as a non-interventionist. "It's very dangerous if we get in the habit of deciding who the good guys are and who the bad guys are," he says of Syrian dictator Bashar Assad and other unsavory characters. He's also a social conservative, describing himself as "100 percent pro-life," but opining that ultimately, "marriage is a private contract that has nothing to do with government."
In March, ReasonTV Editor-in-Chief Nick Gillespie interviewed Amash in his office, where the walls are adorned with likenesses of Frederic Bastiat, Ludwig von Mises, Friedrich Hayek, Carl Menger, Murray Rothbard, and Ayn Rand.
Scroll down for downloadable versions and subscribe to ReasonTV's YouTube Channel to receive notification when new material goes live."
Runs about 38 minutes.
Produced by Todd Krainin. Camera Meredith Bragg, Amanda Winkler, and Krainin.
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While Burgin's book was a history, with little to say about either ideology or reality since the heyday of Milton Friedman, it had some interesting elements, and interesting lacuna, of interest to those embroiled in now-age libertarian world history and controversy as well.
One of the more interesting new developments in attempts to embed libertarian thinking in the political philosophy academy has been the self-conscious branding of many libertarian and libertarian-ish thinkers as "Bleeding Heart Libertarians," and Burgin's book provides much evidence of recent historical pedigree for that notion.
Modern bleeding heart libertarians will be buoyed, perhaps, by some details about first-generation Chicago school founder Henry Simons. Simons lamented that "we old fashioned liberals have, at best, a hard time avoiding popular classification as reactionaries" and hoped that market advocates would "talk in what is recognized to be 'progressive' language" in 1939. Simons lamented how huge corporations made arguing for economic liberalism difficult in the public eye.
Hayek, as Burgin points out, also in the early Pelerin days "found particular values in those who could speak in a language persuasive to the Left." (One wonders why believing in freer markets than one's compatriots or competitors in intellectual discourse makes you the intransigent one, as in one pungent references to Mises in Burgin.) The Pelerines in Burgin's read (not that it did them any good) "were also quick to distance their ideas from reactionary sentiment and to associate them with the forward-looking language of progressivism."
Even Milton Friedman, who Burgin paints as the radical who shifted the general Pelerin consensus toward more radical and doctrinaire laissez-faire, liked to restructure the terms of the debate over market freedom by stressing the well being of the poor and "the establishment of a broad-based prosperity." Friedman also liked to emphasize how state actions hurt the poor and uneducated, often in order to prop up the well-to-do and well-connected, and the virtues of individual choice for all, not just elites.
Still, the early Pelerines were mostly not afraid to be anti-democratic—not, as Burgin too blithely notes, because they saw freedom strictly in economic terms, but because (at least in this case) they saw freedom in freedom terms, not in terms of social decisionmaking processes for governing.
For those embroiled or fascinated by the intra-libertarian debates over who is properly hardcore and who is a sellout (always fun for those who find fun in that sort of thing), they will find outsider historian Burgin at times sounding like the most angry modern Misesian in blaming weak-tea libertarianism on a desire for more widespread appeal. Between and even sometime in the lines Burgin indicates that the Pelerines disdain for pure laissez-faire had elements more strategic than intellectual. They "were acutely aware that if they were going to persuade others to adopt their worldview, they would need to differentiate their perspective from an uncompromising adherence to laissez-faire," he notes. Walter Lippmann condemned Mises for, as Burgin concludes, being too hardcore in defense of a traditional liberalism that "did not present a viable option to those in positions of academic or political power."
And it is an interesting lacuna in Burgin's book, about the influence of the Mont Pelerin market tradition, that he never once mentions the most successful modern American politician pushing the most radical end of the larger Pelerin tradition: Ron Paul.
Friedman in a 1962 memo written to the Republican Party that Burgin quotes at length sounds like the grandfather of Ron Paul, pointing out there is out no meaningful difference between Republicans and Democrats. Burgin writes of one of Friedman's mentors in the study of social change, the British historian A.V. Dicey, and quotes Dicey sounding like he's prophesying Paul: "the preachers of truth make an impression, either directly upon the general public or upon some person of eminence, say a leading statesman, who stands in a position to impress ordinary people and thus to win the support of a nation."
Friedman himself wanted to, as Burgin wrote, "present his minority perspective in a manner that would compel members of the younger generation to adopt it as their own," and Paul succeeded at this to an extraordinary degree. It is also curious to see a book out in 2012 arguing that the Austrian strain of free-market economics remains ghettoized while "Chicago economists…assumed positions of broad political influence" without mentioning the explicitly Austrian success of Ron Paul.
To repeat what I wrote in my review, all my little arguments with Burgin are because he has achieved something excellent in the outside understanding and appreciation of the world of libertarian thought with his book, and I repeat my high recommendation of that book.
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]]>Angus Burgin, an historian at Johns Hopkins University, has produced a well-researched, well-written, and largely well-thought-out study. The Great Persuasion chronicles the intellectual adventures of F.A. Hayek, Milton Friedman, and the other market-supporting academics, think tankers, and businessmen who comprised the Mont Pelerin Society, founded in 1947. It also offers Burgin's accounts of who he thinks were Pelerin's most important intellectual predecessors. The book's only overarching flaw is that Burgin at times seems confused about what ideology his book is a history of, conflating conservatism with libertarianism. It's a mistake I strove to correct with my 2007 book Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, which reports on many of the same characters and stories as Burgin.
Burgin knows there is a distinction between the two ideologies—he mentions libertarianism a few times—but he misses the importance of the distinction in ways that complicate his efforts to link post-Pelerin developments to pre-Pelerin forebears. In many respects Hayek and especially Friedman represented something new, or at least long missing in action, under the intellectual sun. So Burgin talks about evolutions in a body of thought that are more fruitfully explained by imagining a new species inhabiting fresh ideological space. When Burgin writes of a "they"—the free-market advocates he traces from the '30s to now—who saw "their assumptions and arguments discreetly but decisively transformed" in the direction of greater acceptance of untramelled free markets, I'd argue that there is no "they" there; that Burgin is really telling the story of the rise of libertarianism from its ur-roots, without crediting it as such or widening out its story from Hayek and Friedman.
Burgin starts with the king of 20th century interventionist economists, John Maynard Keynes, lamenting in 1924 that the popular mind had embraced a vulgar simplification of economists' thinking and thus believed in unrestricted free markets. (Those were the days: laissez-faire, allegedly the unconsidered prejudice of the masses.) Keynes declared laissez-faire intellectually dead among the more educated class and the economics profession, and by the end of World War II that death sentence seemed so obviously true that an international group of economists, philosophers, and businessmen who still believed in the competitive market (though even they tended to reject pure 19th-century laissez-faire) felt so embattled and lonely they create a brotherhood, the Mont Pelerin Society, to keep the flame of those ideas guttering in their professions and countries. While in and of itself the group, which met regularly to discuss and hash out ideas related to markets and liberty, did no persuading and produced no branded work, its members—especially Friedman—often identified the sense of fellowship, intellectual exchange, and connections it provided with helping cement their ideas and strengthen their intellectual work.
Burgin tries to create a direct lineage for Pelerin in the early 20th century, citing the first-wave Chicago School economists Frank Knight, Jacob Viner, and Henry Simons. Those figures did teach a second wave of strong free-market defenders, most importantly Friedman. But in modern, post-Friedman terms, they barely qualify as free-market advocates at all. As Burgin writes, "they varyingly embraced the prospects of public works programs, progressive taxation, social insurance, and vigorous antitrust policies." Knight was aggravated by the pro-market writings of the London School of Economics' Lionel Robbins (who brought Hayek to teach at the LSE), believing he promoted a "picture of laissez-faire bordering on the conception of a worldwide anarchist utopia…a vision of universal freedom and brotherhood, if only governments would cease from troubling and politicians go out and die, except for police functions."
Knight also worried over the morality of markets, sounding less like an ancestor of Milton Friedman than an ancestor of a Brooklyn lit-zine editor with his lament that "a considerable fraction of the most noble and sensitive characters will lead unhappy and even futile lives" in modern capitalism. When Knight wrote that neither "freedom nor truth can be treated as an absolute," he could have passed as an Ayn Rand villain. At best, these first-generation Chicagoites endorsed free markets as a least-bad solution; none saw particular virtue or creative power in them, and none saw himself as a part of a movement promoting them. Friedman when young believed Henry Simons was a free-market guy, but when he re-read Simons later he was shocked to think he had ever thought so.
Burgin admits that this generation's "measured approach proved ineffective in preventing the rapid expansion of the state," which is why a distinctly libertarian tradition arose not just from Hayek but from the more strongly free-market Austrian economist Ludwig von Mises, who gets too little attention in this book. This tradition spread through characters and institutions that Burgin only alludes to, from Rand to Leonard Read and the Foundation for Economic Education.
But Burgin's scholarship breaks some fresh ground in the popular history of market ideas. He rescues, and tells in as fine a detail as I've seen, the story of how the American star journalist Walter Lippmann rose then quickly fell from a position as leader of an ur-libertarian movement in the late 1930s. Lippmann was the direct inspiration when Hayek and others formed a proto-Mont Pelerin Society, which they threw together in 1938 for just one meeting under the name "Colloque Lippmann." Lippmann also inspired the strategy pushed by both Pelerin and the 1940s-'50s libertarian funding organization the Volker Fund (which funded Americans' travel to Mont Pelerin meetings): In a world where market advocates were scattered and alone, find them and get them communicating with each other, across national and disciplinary boundaries.
Lippmann pulled proto-libertarian thought together in accessible form in his 1937 book Inquiry into the Principles of the Good Society. He was no radical, explicitly distancing himself from Herbert Spencer, the 19th-century classical liberal who most closely resembles a modern libertarian. (While Spencer was willing to argue that, say, the state didn't have the right to protect people preemptively from quack medicine through licensing, Lippmann found such conclusions embarrassing.) It is a telling sign of the moribund quality of this pro-market crowd that when Mont Pelerin launched a decade after the Colloque Lippmann, a nearly identical team was responsible; hardly anyone new had arisen in defense of these ideas. Lippmann's work failed to gin up many new defenders. That perhaps justifies the general desuetude in which his reputation has fallen in the historiography of 20th-century market popularization, a fall Burgin laments. Lippmann was chary of seeming either a propagandist or tool of any moneyed interests, and by the end of World War II wanted nothing to do with any organized promotion of market ideas; Hayek, annoyed that Lippman refused to meet with him on his 1945 Road to Serfdom book tour, and noting Lippman was generally being aloof with all "our other friends in America with whom he used to agree," decided that Lippman had turned against his ideas; certainly he was never again an enthusiastic promotor of them.
Burgin admits that despite all their talk—and there was much such talk, though non-libertarian historians of the Pelerines make more of it than is warranted—about moving above and beyond 19th-century liberalism, the Mont Pelerin crew was "remarkably vague" about how or what needed changing in it. They never "identified precisely what the [non-laissez-faire but non-socialist] vision entailed," he wrote; nor is there a lot of evidence they tried very rigorously.
The Pelerines—according to a founding statement crafted by Lionel Robbins—claimed to believe in "moral absolutes," but they never dared make the anarchist leap of applying the moral standards of individual behavior to the state. Between the lines in Burgin one detects the aching need for the libertarian project that Rand and Murray Rothbard made popular; defenders of free markets needed the moral base and the outrageous consistency of their thinking.
These post-Pelerin libertarians who Burgin barely mentions, especially Rand and Rothbard, really did what he says the Pelerines strove for—"provide a convincing account of the ethical foundation of a market-centered world." An attempt to defend free markets without defending freedom—the ability to do what you want with your life and property as long as you aren't directly harming others—is going to seem wan, confused, or incomplete. One might question the rigor or success of Rand or Rothbard's project, but at least they really did it. Unfortunately for some of the Pelerines, who seemed to be dying for an airtight intellectual excuse for at least some interventionism, their side never succeeded in a complex defense of their non-laissez-faire attitudes.
Embedded in the original Pelerin group were the likes of the German-born economist Wilhelm Röpke, with his belief in, as Burgin categorizes it, "forceful state interventions" to guarantee a properly artisanal and agricultural economy. But rather than wonder how a Röpke perspective evolved into a Friedman one, it's better to recognize, as Mises did, that Röpke just didn't belong in the Mont Pelerin Society to begin with as far as its core commitments go. The stated distaste for laissez-faire and for market defenders who went "too far" is a real element of the early Mont Pelerin mix, and much beloved by those seeking surprising ironies in intellectual history. But too much is made of it, especially in the context of the important and lasting things that came out of Pelerin. Who today remembers Röpke?
Burgin interestingly contrasts Hayek and Friedman's two most popular early works, Road to Serfdom (1944) and Capitalism and Freedom (1962): Serfdom was "a defensive manifesto for an ideology in a state of retreat and disarray" while Friedman's work "provided a platform for a movement that was prepared for an aggressive offense." Friedman is presenting as evolving from institutions such as Pelerin and the Volker Fund with a bolder, more libertarian defense of markets, willing to admit he thinks "society needs a few kooks, a few extremists" and willing to argue that the supposed historical defects of 19th-century laissez faire might be largely mythical. Despite all this, his ideas shaped a lot of the modern Republican Party's stated views on everything from taxes to welfare to the draft to inflation. Burgin makes a convincing case that rhetorically, Milton Friedman created Ronald Reagan. Despite the president's failures, this might explain why so many libertarians still have deep affection for Ronnie. Burgin makes the case that Friedman succeeded with the public beyond the dreams of most other founding Pelerines even as he strode ever closer to true laissez-faire.
All my arguments with this book are presented in the spirit of engaging with a fine and important work. It is a very smart volume, well worth the time of anyone who cares about free-market thought, and Burgin almost never tips his hand about whether he believes his subjects were right or wrong. Even this libertarian partisan thinks Burgin somewhat overestimates the extent to which the Pelerines succeeded in reversing the victories of the Fabian socialists whose techniques they emulated. But they certainly played a role in forming what the British historian A.V. Dicey, who shaped Friedman's theories of social change, called the "spirit of an age," what Burgin colorfully calls "an implicit rebuke to the fatalism engendered by encounters with the real." They did it, contra what Burgin sometimes implies, not by being conservatives, but by being libertarians.
The post How Free-Market Thought Succeeded By Getting More Radical appeared first on Reason.com.
]]>Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics, by Daniel Stedman Jones, Princeton University Press, 424 pages, $35
The 20th century saw two great economic revolutions: socialism and neoliberalism.
Socialist ideas were already floating around the democratic West in the early 1900s, but they gained much greater popularity after the Great Depression, which was widely seen as a failure of capitalism. One part of this shift entailed a greater role for the government in regulating or owning business enterprises. The second part involved a major expansion of social insurance programs.
Beginning in the late 1970s, there was a backlash against excessive government intervention in the economy. This neoliberal revolution involved privatization, deregulation, and cuts in marginal tax rates, but it left most social insurance programs in place.
Daniel Stedman Jones, an independent historian (and barrister) in London, has written a balanced and informative study of neoliberal thinkers such as F.A. Hayek and Milton Friedman, exploring their impact on policy making, particularly during Margaret Thatcher's administration in the United Kingdom and Ronald Reagan's in the United States. Jones suggests a policy revolution that began in the 1970s drew on 30 years of neoliberal research and advocacy, partly financed by businessmen hostile to Franklin Roosevelt's New Deal policies. Although Jones is skeptical of the more radical elements of neoliberalism, he is mostly respectful of the major neoliberal figures, despite the fact that his own politics are clearly left of center.
Jones traces the origins of neoliberalism to the mid-1940s, specifically to the nearly simultaneous publication of Hayek's The Road to Serfdom (1944), Ludwig von Mises' Bureaucracy (1944), and Karl Popper's The Open Society and Its Enemies (1945). The appearance of these highly influential books was followed by the formation of the Mont Pelerin Society, a group of American and European neoliberals who met annually starting in 1947. Even within this group there were important ideological differences, with Popper being much more sympathetic to the democratic left than Mises. Early neoliberals rejected complete laissez faire, which was widely seen as discredited by the depression; they supported economic interventions such as antitrust laws, the regulation of natural monopolies, health and safety regulation, and government provision of education and other social services.
Over time the center of the neoliberal movement shifted from Europe to America, especially the economics departments at the University of Chicago, where Milton Friedman taught, and the University of Virginia, where James Buchanan and Gordon Tullock developed "public choice" theory, which aims to explain why government policies often end up serving special interest groups. At the same time, the ideology drew closer to laissez faire. Neoliberal economists were less likely to endorse interventions such as antitrust and more likely to support a radical program of deregulation.
Beginning in the late 1970s, neoliberal ideas began to have a significant impact on policy in the U.S. and Britain. Under President Jimmy Carter there was significant deregulation of transportation, utilities, and banking, and capital gains taxes were reduced. Deregulation continued in the 1980s under President Reagan, who also slashed the top income tax rate from 70 percent to 28 percent. In Britain the Labour Party began to move away from traditional Keynesian stimulus programs, as these policies were widely blamed for the high rates of inflation during the 1970s. Thatcher sped up that trend after taking office in 1979. Her Tory government privatized state-owned firms and public housing, deregulated the financial industry, weakened labor unions, and sharply reduced the top income tax rate.
My reservations about Jones' study start with the term neoliberal, which is often intended as an insult when used by people on the left. Jones places neoliberalism within the framework of modern conservatism. I see neoliberalism as exactly what the name suggests, a new form of liberalism. It might be viewed as classical liberalism with a welfare state added on, or mid-20th-century liberalism without government ownership of industry and without regulation of prices and market access.
Jones is aware that the neoliberal revolution was often a bipartisan affair. "Too often," he writes, "the adoption of certain key [neoliberal] policies by Labour or Democratic administrations during the 1960s and 1970s is assumed by conservative commenters to have been a sham, or by left or liberal commenters to be a source of shame. These views miss important elements in the successes and failures of the neoliberal political project."
But in the end Jones accepts the standard left-wing complaint that neoliberalism eventually turned into what the Nobel laureate economist Joseph Stiglitz has called "market fundamentalism." In Jones' words, neoliberalism became the "elevation of the market to an almost theological status."
There is a grain of truth in this charge, but Jones misses the bigger picture for three reasons: He underestimates the extent to which neoliberalism was built on impressive economic research, he overstates the extent to which neoliberalism became associated with modern conservatism, and he overstates the neoliberals' opposition to government. Most of the neoliberal critique was aimed at specific statist policies, such as nationalization and regulation, not at "big government" per se.
Consider Jones' description of neoliberalism's evolution from the late 1940s to the '70s: "The early neoliberals were marked by their desire to move beyond both laissez-faire economics and the New Deal. Later neoliberals, defined by the Chicago emphasis on unregulated markets, were less ambiguous in their opposition to the welfare state and to the need for government intervention in the economy."
In political practice, neoliberalism was not about abandoning the welfare state. It was about deregulation, privatization, freer trade, lower marginal tax rates, and keeping inflation under control. Thatcher's policies were viewed as a big neoliberal success, despite the fact that government spending remained close to 40 percent of GDP. There is far less regulation of investment, trade, market access, and prices in developed countries today than in the 1970s. Many state-owned enterprises have been sold to the private sector, and inflation has been brought down to relatively low levels. Virtually every developed country has sharply cut its top income tax rate from the levels of the 1970s. Yet the welfare state in those countries is roughly as large as it was four decades ago.
Nor was opposition to the welfare state ever a big part of the academic side of neoliberalism. I studied economics at the University of Chicago between 1977 and 1980, when the Chicago school had reached its peak of influence. There was a heavy focus on the failures of Keynesian demand-side macroeconomics as well as the often counterproductive effects of regulation. But if the welfare state ever came up, it was generally brushed aside with the comment that the optimal policy would probably be to just give money to the poor.
Milton Friedman proposed a "negative income tax" that would have replaced many welfare programs with direct cash payments. He also advocated vouchers for education and health care, plus a progressive consumption tax. Jones suggests that Friedman was opposed to both the welfare state and progressive taxes, but that's a bit misleading. What Friedman opposed was paternalism and inefficiency. At times Friedman indicated that his ideal society was a minimal state, but his policy recommendations would have given the government a substantial role in addressing issues such as health care, education, and income inequality. Hayek too supported a basic safety net.
A study by the libertarian political scientist Charles Murray in the mid-1980s did point to the pernicious effect of welfare on incentives, but the issue was not significantly addressed until the mid-1990s, when the welfare system was modified—under a Democratic president—to provide smaller benefits to the nonworking poor and more subsidies to the working poor. This wasn't a conservative plot to cut spending. It was an example of modern liberalism being transformed by academic research.
All the other major neoliberal initiatives in America were essentially bipartisan, including free trade agreements, cuts in capital gains taxes, the reduction of the top income tax rate, and the deregulation of transportation, utilities, and banking. Because big social programs such as Medicare and Social Security in America and the National Health Service in the U.K. are highly popular, criticism of the welfare state is often directed at relatively modest efforts aimed at groups not likely to vote for the more conservative party. Even as Mitt Romney complained about people "who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them," he campaigned vigorously against President Barack Obama's Medicare cuts.
Jones' focus on America and Britain leads him to exaggerate the affinity between neoliberalism and the right, since both countries elected relatively conservative administrations just as neoliberal ideas were gaining influence. If the study had focused on Australia and New Zealand, Jones would have described how a pair of labor parties radically transformed economies that had been hamstrung by regulation and barriers to trade.
In many respects the New Zealand Labour Party pushed its market reforms much farther than Thatcher did, and it did so without abandoning its left-wing commitments in civil rights and foreign policy. Indeed, by the 1980s and '90s virtually all countries were moving toward more market-oriented economic models, including those ruled by socialist and even communist parties. Because both Reagan and Thatcher are larger-than-life figures, people tend to overlook the quiet neoliberal revolution that was occurring simultaneously in many other corners of political life.
Jones does note that the Thatcher and Reagan administrations were products of their times. He acknowledges, for instance, that the backlash against Keynesianism in Britain actually began under James Callaghan's Labour government in the late 1970s. And in the early '80s the Thatcher government was initially reluctant to push neoliberalism too far.
The Tories' first efforts were focused on reducing inflation, not radical moves toward a more unrestrained market economy. The 1979 Conservative Party manifesto did not even mention privatization. As the 1980s progressed, however, the Tories were emboldened by neoliberal initiatives in other English-speaking countries, especially the U.S., and adopted a more extensive agenda of privatizing government enterprises and weakening labor unions. Jones points out that many Thatcher reforms were maintained after she left office and that the Labour Party "continued and deepened" them after 1997.
Jones often tries to distinguish a more pragmatic form of neoliberalism, whose policy reforms he sometimes supports, from a more far-reaching laissez-faire agenda, which he blames for major policy failures, including the financial crisis of 2007 to 2010. There is no question that free market ideology was ascendant in the latter part of the 20th century. But Jones presents no compelling argument connecting the crisis with "deregulation," other than vague references to the Glass-Steagall Act, derivatives, and other factors that are tangential to the subject. Progressives have an unfortunate tendency to call for more government intervention whenever they perceive a market failure, and they assume almost all failures are market failures, even those that stem from previous government interventions.
Specifically, government insurance creates moral hazard and encourages excessive risk taking. Neoliberal economists, aware of this problem, have proposed many regulatory reforms, such as breaking up the government-sponsored mortgage lenders Fannie Mae and Freddie Mac, reforming deposit insurance, and ending the "too big to fail" policy that encourages bailouts of financial institutions. Another neoliberal reform would require income verification and a minimum 20 percent down payment for all mortgage loans made with federally insured funds.
But the political establishment listens much more closely to the banking and real estate industries. Hence the authors of the 2,000-page Dodd-Frank bill neglected to ban subprime mortgages or rein in Fannie Mae and Freddie Mac, despite the fact that subprime loans were allegedly at the heart of the crisis. It's a perfect illustration of the "regulatory capture" argument developed by George Stigler at the University of Chicago and discussed by Jones.
All that said, Jones is right to suggest that a more dogmatic form of free market economics has been ascendant among conservatives in this century. For instance, Milton Friedman blamed tight money for the near-zero interest rates and depressed economy in the U.S. during the 1930s and Japan during the late 1990s. There is every reason to assume that if Friedman were still alive he'd again favor monetary stimulus over fiscal stimulus. Yet today most American and northern European conservatives have walked away from Friedman's argument that monetary policy is frequently too contractionary, moving toward a hard-money Austrian approach instead.
Nor is this shift confined to monetary policy. In just a few years conservative American think tanks have moved from embracing a health insurance mandate in Massachusetts (signed by Mitt Romney) to opposing a similar mandate proposed by Barack Obama. Among conservatives there is now much more suspicion of the welfare state and little support for a negative income tax. Conservative support for carbon taxes has declined. The euro crisis is seen by some on the right as an opportunity to dismantle many government programs in the Mediterranean countries, whereas Friedman would have blamed the crisis on the euro and called for the economies facing deflation to exit the euro and devalue their currencies.
Not all the changes to conservatism have moved the right in a more libertarian direction. Conservatives also have become increasingly hostile to immigration, which the early neoliberals saw as integral to an open society.
Jones should be applauded for trying to produce a balanced account of the neoliberal revolution. The book is not a conspiratorial view of the sort produced by the leftist writer Naomi Klein in The Shock Doctrine. But it hews too closely to the conventional wisdom that the neoliberals had some good ideas that transformed conservatism but that they went too far. It would be more accurate to say neoliberals transformed liberalism, and that there is much more work to be done on that project. It would be interesting to see Jones write a history of neoliberalism in Sweden and Denmark, where policies such as privatization, free trade, deregulated labor markets (in Denmark), and universal school vouchers (in Sweden) are still seen as highly successful.
In the end, Jones gives the neoliberals both too much credit and too little. Mainstream liberal economists probably would have eventually figured out how to stop inflation with something like the New Keynesian approach, even without monetarism. And it seems clear that the worldwide move toward privatization, deregulation, and lower marginal tax rates was driven mostly by pragmatic rather than ideological considerations, particularly in areas, such as Scandinavia, where laissez faire has little appeal. As is frequently the case, the neoliberals probably changed history less than either their opponents or supporters imagine.
At the same time, Jones underestimates the neoliberals' intellectual contributions. They were not merely advocates of monetarism and deregulation. They produced a mountain of very persuasive evidence that Keynesian and statist policies often did more harm than good. Given that between 1945 and 1970 they were often viewed as crackpots, their story is rather heroic. Just keep in mind that heroes are rarely as influential as they seem.
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]]>In a private property order isolated intervention fails to achieve what its sponsors hoped to achieve. From their point of view, intervention is not only useless, but wholly unsuitable because it aggravates the "evil" it meant to alleviate….
If government is not inclined to alleviate the situation through removing its limited intervention and lifting its price control, its first step must be followed by others.
Two things to note here: First, Mises distinguished interventionism from state socialism, or central economic planning. Unlike central planning, Mises wrote,
Interventionism seeks to retain private property in the means of production, but authoritative commands, especially prohibitions, are to restrict the actions of private owners.… It does not seek to abolish private property in production; it merely wants to limit it.… [I]t seeks to create a third order: a social system that occupies the center between the private property order and the public property order. Thus, it seeks to avoid the "excesses" and evils of capitalism, but to retain the advantages of individual initiative and industry which socialism cannot bring forth.
With emphasis he wrote, "Intervention is a limited order by a social authority forcing the owners of the means of production and entrepreneurs to employ their means in a different manner than they otherwise would."
Mises pushed the distinction between interventionism and state socialism hard, as when he stated, "Ever since the Bolsheviks abandoned their attempt to realize the socialist ideal of a social order all at once in Russia and, instead, adopted the New Economic Policy, or NEP, the whole world has had only one real system of economic policy: interventionism." True, he said, some interventionists believe that system is temporary. Nevertheless, "all its followers and advocates fully agree that it is the correct policy for the coming decades, even the coming generations."
Good intentions
The other notable point is that Mises assumed that interventionists were public-spirited. This doesn't mean he necessarily thought every interventionist had good intentions, but he was willing to grant this for the sake of argument. If he could show the flaws in interventionism even with this assumption, so much the better for his case. To some extent this distinguishes Mises's argument from the Public Choice school's case against intervention, in that the latter builds on the assumption that government officials are as self-serving as people in the private sector.
For Mises, the classic case of intervention and the process it sets in motion is the price ceiling. Milk is expensive, and low-income families have trouble buying all they need. A public-spirited legislator sponsors a bill to set a maximum price with the intention of making milk more accessible. But rather than making it more accessible, it becomes less accessible. Why? If the legislated price ceiling is below the cost of production, producers will withhold supply or leave the market, leaving some demand unsatisfied.
By assumption, this is not what the interventionists wanted, so (unless they understand economics) they must do more. They might decree that all the supply be brought to market, impose rationing on consumers, or legislate price and wage controls for the milk producers' suppliers and workers. Eventually "the controls must encompass all branches of production, the prices of all goods and all wages, and the economic actions of all entrepreneurs, capitalists, landowners, and workers," Mises wrote. "If any industry should remain free, capital and labor will move to it and thus frustrate the purpose of the government's earlier intervention."
The upshot for Mises is the incoherence and intrinsic instability of interventionism. It is incoherent because it "contradicts economic logic." It is unstable because the third way can't be sustained. "Government either abstains from limited interference with the market forces, or it assumes total control over production and distribution. Either [laissez-faire] capitalism or socialism; there is no middle of the road."
No clear direction
It's a powerful thesis, yet something is lacking. We see interventionist economies all over the world—including our own—that do not seem to be moving definitively in either direction. Over the last several decades we have seen episodes of deregulation—such as the Carter-era elimination of trucking and airline rules, and the Clinton-era banking deregulation—and episodes of regulation—such as the environmental legislation of the Nixon and later administrations, and the recent round of new banking regulations. Much of the time the economy occupies a narrow range. There is no clear move toward either laissez-faire or state socialism.
Can we save Mises's doctrine? Enter Sandy Ikeda, the excellent Austrian economist at Purchase College, SUNY, and author of Dynamics of the Mixed Economy: Toward a Theory of Interventionism. This 1997 book has not gotten the attention it deserves. I can understand why interventionists would ignore it. Libertarians should be familiar with it.
Ikeda's book is a sweeping start toward a unified theory of the different varieties of interventionism. Part of the book is a friendly critique of Mises's critique of interventionism, aimed at resolving what Ikeda calls the Misesian Paradox—namely, that theoretically unstable mixed economies nevertheless predominate and persist in our world. As I understand him, Ikeda concludes that the mixed economy does have the features of instability that Mises attributed to it, but compared to its alternatives, it can appear stable. Ikeda writes,
The key to resolving this paradox is to realize that to claim the mixed economy is unstable is not the same thing as asserting that it is transitory.… The roads between the minimal and maximal states can thus be very long and winding, and state expansion very gradual.…
Somewhat paradoxically, therefore, it appears that the product of interventionism, the mixed economy, though unstable, is likely to be more enduring than the pure forms of either collectivism or capitalism, offering as it does a much wider range of (ultimately futile) adaptive forms than either of its rival systems. The inherent instability of interventionism thus drives the mixed economy through a variety of transformations that are denied to the other systems.
Relative Stability
Ironically, then, the unstable mixed economy is more stable than its alternatives. Mises wouldn't be surprised at Ikeda's claim that central planning is unstable. That was the conclusion of Mises's economic-calculation critique of state socialism. But why does Ikeda say laissez-faire is unstable? Because, he writes, it is "highly sensitive to governmental error and to changes in ideological preferences (as well as exogenous shocks)." In other words, even a limited government is subject to the calculation and knowledge problems that plague totalitarian governments. And, it hardly needs pointing out, limited governments don't stay limited.
Is there a lesson to be drawn from Mises's critique? I think so. Intervention tends to beget intervention. Therefore, when you see a public problem, don't look to government intervention for a solution. Instead, look for the previous intervention that created it—and work to have the offending legislation repealed.
This article was originally published at the Future of Freedom Foundation.
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]]>Ideas may run the world. But no idea stalled in the world of professional intellectuals can run far. F.A. Hayek wrote that, to thrive, ideas must be spread by such "second-hand dealers in ideas" as journalists and teachers.
But what about a venue as purportedly third-rate as popular comics? At left, Hayek's mentor, the economist and philosopher Ludwig Von Mises, (1881-1973) is the surprising offstage hero in a recent issue of the DC comic Batman Chronicles, which uses the Batman concept in unusual settings. In a tale set in 1939, the "Berlin Batman" (by day the wealthy painter "Baruch Wane") tries to foil the Nazis' theft of Mises's papers. That theft really happened; the papers fell into Soviet hands after World War II and were thought lost until a Mises biographer found them in 1996.
Written and drawn by Paul Pope, the highly stylized comic is resolutely ideological in Mises's support. A postscript in the voice of the Berlin Batman's ward, Robin (here a young woman), describes how "Von Mises' anti-authoritarian ideas were first a threat to the Nazis, then the Soviets, and to all increasingly regulatory governments in our own times. He was against socialism in all its many forms. He was an advocate of individual liberty, free speech, and free thinking…and so, should I add, was the Berlin Batman."
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