Philosophy and Consequences

Liberty and good public policy are not the same thing.

Libertarianism, from A to Z, by Jeffrey A. Miron, Basic Books, 224 pages, $24.95

The cover of Libertarianism, from A to Z, by the Harvard economist Jeffrey Miron, offers to "take the reader beyond the mere surface of libertarian thought to reveal the philosophy's underlying—and compelling—logic." In fact, the book fails to reveal much underlying philosophy at all. It offers a lot of good sense in a small package, but it's really a handbook on public policy rather than a guide to libertarianism. Miron's conflation of the two raises important questions about whether liberty is a value in itself or merely a means to some other end.

Miron locates libertarians within the liberal tradition, writing that "liberalism used to be the term for the perspective now generally known as libertarianism." A short digression into the origins of liberalism and the emergence of the term libertarian may shed some light on the discussion here.

The term libertarian came to be used in Anglo-Saxon countries, particularly the United States, as a replacement for the older term liberalism, which had gone into sharp decline at the end of the 19th century. The ultimate insult was the appropriation of "liberalism" by illiberal thinkers who advocated replacing plain ol' freedom with one or another sort of "higher" or "authentic" or "true" freedom, the achievement of which required using what the old liberals would have denounced as arbitrary power. As the free market economist Joseph Schumpeter later noted, "As a supreme, if unintended, compliment, the enemies of private enterprise have thought it wise to appropriate its label."

Both liberal and libertarian are built on the root term liber, Latin for "to be free." Thus the etymology of liberalism and libertarianism direct us to a philosophy that focuses on human liberty. In the great tradition derived from the Spanish Scholastics, the English Levelers, the radical Whigs, and others, enjoying individual liberty means not being subject to the arbitrary power of others or, alternatively, not being subject to the use of force initiated by others. In his Second Treatise of Government, John Locke defined an individual's freedom as "a Liberty to dispose, and order, as he lists, his Persons, Actions, Possessions, and his whole Property, within the Allowance of those Laws under which he is; and therein not to be subject to the arbitrary Will of another, but freely follow his own." Much discussion has since gone into the problems of what constitutes an "arbitrary will," what constitutes "whole Property," what constitutes force, what role rights play in defining liberty, and so on.

Miron's focus, by contrast, is not the nature of liberty but the nature of good government. The classical liberal historian Lord Acton wrote: "Liberty is not a means to a higher political end. It is itself the highest political end. It is not for the sake of a good public administration that it is required, but for security in the pursuit of the highest objects of civil society, and of private life." Rather than focusing on the role of good government in securing liberty, Miron instead focuses almost exclusively on "good public administration," providing short essays on such topics as monetary policy, externalities, drug prohibition, and unintended consequences. 

Philosophical arguments for freedom, Miron writes, "can seem difficult to evaluate because they start from assertions that are not readily amenable to analysis or empirical examination." Instead, he offers what he calls "consequential libertarianism," based on his belief that "most government interventions are undesirable because they fail to achieve their stated goals or because they generate costs that are worse than the problems they purport to fix." For Miron, "The consequentialist approach is thus a cost-benefit calculation, albeit one with a broad view of costs and benefits."

Although Miron concludes the book by noting that "Whether one argues that the goal of government is protecting individual rights or promoting policies with the greatest ratio of costs to benefits, the answer turns out to be similar," it muddies the water to confuse the two. Acton also wrote, "liberty and good government do not exclude each other; and there are excellent reasons why they should go together," but concluding that they "go together" does not make them identical. Policy makers should be mindful of tradeoffs, alert to perverse incentives, and ready to compare costs and benefits, but that mindfulness, alertness, and readiness are not ipso facto libertarianism. 

Miron does offer what seems like an olive branch to "philosophical libertarians," as he believes their view "is in fact a consequentialist perspective; it has simply concluded that principles like 'always respect individual rights' are useful rules-of-thumb for balancing the positive and negative consequences of interventionism." The "philosophical" argument for rights, he suggests, is invariably based on a hypothetical imperative, along the lines of: If you want prosperity, health, and long-life, you should respect rights to manage your own life, and to acquire, own, and transfer property in a free market economy.

But there's a lot of "philosophical" content smuggled in there. For example, what constitutes a good or a bad consequence? Many anti-libertarians have explicitly preferred war over peace, for example. Consider such illiberal writers as the political theorist Carl Schmitt, whose works are much in vogue again, or a wide variety of nationalist, racist, and chauvinist movements. Or consider the Marxists, who reject liberalism because they disagree on the nature of humanity, arguing that man is a "species being." When Lenin and his cohorts exterminated "class enemies," they believed nothing was really lost, for the individual human entity is not what matters; the individual is merely epiphenomenal, a mere moment in the process of the attainment of human self-awareness, the overcoming of history, and the conscious determination of mankind's own future.

To make his consequentialist case for limited government, then, Miron has to rely on "philosophical libertarian" arguments about the importance of the individual. Without them, he can't determine which consequences are good and which are bad.

Moreover, Miron's argument is circular. He tells us freedom is valuable because it generates good consequences, but among the good consequences he counts is…freedom. Discussing advertisements, for example, Miron places much weight on freedom as valuable for its own sake: "Restrictions on advertising are infringements of free speech. Existing jurisprudence in the United States holds that commercial speech does not deserve the same legal protection as political speech, but this distinction is meaningless. Earning a living is a crucial freedom, and advertising helps many people earn a living. Indeed, technologies like the Internet make it difficult for governments to restrict freedom, and advertising is one mechanism that supports the Internet. Commercial speech is therefore an important protector of the freedoms safeguarded by political speech." So freedom is one of the consequences of good policies, but freedom is valuable only because of the good consequences of respecting it. This seems less than tightly argued.

All that said, Miron does a good job of explaining what outcomes different public policies may unleash. One of the book's insights, brought home again and again, is that consequences and intentions are not the same. As Miron notes, "interventions change incentives, sometimes in ways that are hard to predict." If you guide policy entirely by intentions (what you want to happen) without attention to incentives (how people will react to the changes as they affect them), you are almost certain to cause more harm than good. Furthermore, uncertainty about the rules can generate its own set of perverse incentives, which is why libertarians put so much emphasis on the rule of law. Miron does a good job of explaining how this applies to issues ranging from antitrust policy to campaign finance controls and from prostitution to the war on terror.

Even here, though, there are gaps. One reason Miron rejects "philosophical libertarianism" is that "philosophically based defenses of libertarian policy conclusions seem to be assertions that lack factual justification." Yet for all the important material it contains, there is very little factual evidence presented anywhere in Libertarianism, from A to Z.

In contrast, in another short work, What It Means to Be a Libertarian: A Personal Interpretation (1997), Charles Murray offered specific evidence and a general method to verify claims about public policies: the trend line test. Rather than merely measuring the outcomes that came about after the enactment of a policy, Murray suggested looking at the trend line before the change. It often turns out that the line was trending down or up at about the same slope before the policy's enactment, which tells us to be suspicious of claims on behalf of interventionism. Something like that simple scientific test would have greatly improved Libertarianism, from A to Z. And since Miron is a distinguished economist whose empirical work (notably on the disastrous effects of drug prohibition) is formidable, he could have included a bibliography at the end pointing to data that support his assertions about the failures of interventionism.

I encourage Miron to implement the insights of two other economists, Adam Smith and David Ricardo, who explained how the division of labor and specialization on the basis of comparative advantage generate value. It seems that his comparative advantage is explaining incentives and using data to evaluate policies, rather than plumbing the depths of moral and political thought.

Tom G. Palmer ([e-mail]), vice president for international programs at the Atlas Economic Research Foundation, is the author of Realizing Freedom: Libertarian Theory, History, and Practice (Cato).