Libertarian History/Philosophy

The Consequences of Liberty

Whether you're a libertarian for consequentialist or deontologist reasons, freed markets are good for prosperity.

|

Consistent free-market advocates — and not just professional economists — are not only enthusiastic about their preferred system of political economy; they are very enthusiastic. At least part of that enthusiasm is fueled by a well-grounded conviction that the general level of prosperity would be unprecedentedly high if people were free to engage in peaceful production and exchange without forcible interference by the state or freelance aggressors.

This enthusiasm is found in two broad categories of radical free-market advocates, or libertarians: those who regard themselves as consequentialists (or utilitarians), that is, those who think moral acts are acts that maximize some good like pleasure or happiness or well-being, and those who regard themselves as deontologists, or advocates of doing one's moral duty (say, respecting other people's rights) as good in itself, without reference to consequences.

In chapter one of Gary Chartier's Anarchy and Legal Order, he explains certain fundamental problems with consequentialism.

There is no underlying thing that well-being is. "Well being" or "welfare" or "flourishing" or "fulfillment" should simply be seen as a summary label for all the different aspects of a life that goes well. There is no quantity, no substance, that underlies all dimensions of well-being qua dimensions of well-being. And the absence of such a substratum, a definable common element, means that the various aspects of well-being are incommensurable — that there is no way of measuring them in relation to each other.… Similarly, particular instances of the various aspects of well-being are non-fungible: there is no objective basis for trading one off against another.

If this is true, utilitarianism, which implores us to maximize social well-being, must be a nonstarter.

I ignore for now a third category of libertarian, the eudaimonists, or virtue ethicists, with whom I identify. Eudaimonist libertarians are also enthusiastic about free markets in part because of the prospect for a high level of general prosperity. (See my "The Moral Case for Freedom Is the Practical Case for Freedom" and this video lecture by Roderick Long.)

It's no surprise that consequentialists would embrace free markets on grounds that they will produce general prosperity. In their view, they would be touting the (supposed) maximization of a good, which is what interests them. And we can understand a deontologist's joy at the prospect of high general prosperity. Why not rejoice that one's moral duties yield good consequences even if yielding good consequences is not their objective?

But this raises a question: what if we suspended disbelief and supposed that free markets could reasonably be expected to impoverish most people while benefiting only the few? What then?

I would still favor freedom, but I don't mind confessing I'd have decidedly less enthusiasm for it. Why wouldn't I be less than thrilled by the prospect of human suffering? On the other hand, prosperity is not the only important thing in life. The ability to be self-directed counts for a lot in my book. Money, to be sure, can enhance self-directedness by expanding options, but it's better to be poor and free than poor and unfree. Those who would suggest a third alternative — unfree and wealthy — have entirely too much faith in the state.

Some deontologist free-marketeers may insist that their enthusiasm for markets would go on even if most people faced poverty. I have trouble believing that. I would suspect secret disappointment. For one thing, I doubt that this type of libertarian is as pure a deontologist as claimed. Roderick Long has something to say on this matter:

In real life, one rarely finds members of either camp [deontologist and consequentialist] relying solely on a single set of considerations. It is a rare moral or political polemic indeed that does not include both consequentialist and deontological arguments.…

Whatever they may say officially, most consequentialists would be deeply disturbed to discover that their favoured policies slighted human dignity, and most deontologists would be deeply disturbed to discover that their favoured policies had disastrous consequences.

Fortunately, this discussion is purely hypothetical. We know that a radically freed market would create a high level of prosperity even for the "poorest." But before getting into the reasons for that, there is a point worth putting on the table. Sometimes the question posed to deontologists is different: What if free markets increased income inequality (not poverty)? The switch from poverty to income inequality is sometimes unnoticed, but it is significant. I noted recently that increasing "market inequality" (as opposed to what I call "political-economic inequality," which results from government privilege) is consistent with dramatically rising prosperity for all:

Let's remember that it is entirely possible for the poorest in a society to become richer even as the gap between the richest and poorest grows. Imagine an accordion-like elevator that is rising as a whole while being stretched out, putting the floor further from the ceiling.

I don't think a growing income gap is likely in an increasingly prosperous freed market, but the scenario is not logically absurd. At any rate, I am not concerned about the prospect of growing market inequality the way I would be about mass poverty if I thought a freed market would produce it. My view accords with that of Benjamin Tucker: "Equality if we can get it, but Liberty at any rate!" (Hat tip: Roderick Long.)

As I say, this discussion is hypothetical. Freedom (or justice) can be counted on to produce good outcomes, in a eudaimonistic way, for everyone. But is this just a lucky break? Or is there a more solid explanation? It's long seemed obvious to me that good should be expected to come from abiding by natural law (including respect for natural rights). I recall that somewhere Murray Rothbard said the same thing. This is a fairly general statement, however, and it would be better to have a detailed explanation of why this is the case.

Fortunately, we have one — from Roderick Long in his paper "Why Does Justice Have Good Consequences?" I recommend reading this paper in its entirety. Here I will only hit the highlights. Long first shows "the concurrence of deontological and consequentialist criteria" by arguing that, as Socrates, Plato, Aristotle, and the Stoics taught, the contents of the individual virtues reciprocally determine one another. This is part of what is meant by the "unity of virtue." For example,

What courage requires of me [in a given instance] cannot be determined independently of what prudence [which is concerned with consequences] requires of me, and vice versa.… This does not make justice a consequentialist notion, since the direction of determination runs both ways; what counts as a beneficial consequence will be partly determined by the requirements of justice.… Aristotle defines virtue and human flourishing in terms of one another. " [Emphasis added.]

Because "justice and benefit are conceptually entangled," it's no mere "happy coincidence" that justice has good consequences.

This is Long's "unity-of-virtue solution" to the puzzle of why justice is beneficial. But he can't leave it at that because his "solution gives us no reason … to expect any concurrence between the prima facie contents of justice and benefit, before they have been mutually adjusted." After all, if the pre-adjusted prima facie contents can be mutually adjusted to each other, that cannot be explained via the unity of virtue.

Here I can only summarize Long's answer. He finds that the prima facie content of justice, "considered apart from consequentialist considerations," is represented by libertarianism, that is, the principle that each person is an end in himself and therefore is equal in authority to everyone else. On the other hand, "the prima facie subjectivist content of benefit, considered apart from justice," would entail the long-run satisfaction of people's preferences.

The social theorists of the Austrian School have shown, on praxeological grounds, how a libertarian social order constitutes an economic democracy, in which consumer preferences direct the productive resources of society through the imputation of value from consumer goods to goods of higher order. Hence justice, as it would be conceived prior to adjustment, does a reasonably good job of producing beneficial consequences, as those would be conceived prior to adjustment. Whether one thinks that the alterations to be produced in these two concepts after adjustment would be great or small, the fact remains that there is a rough concurrence prior to adjustment, and this rough concurrence seems to require explanation.

That explanation, Long says, is to be found in the work of the Austrian economists.

If the Austrians are right, and I think they are, then a solution to our problem may be in sight. The fact that a libertarian social order tends to satisfy consumer preferences is not a contingent empirical fact; the Austrians argue at length … that this concurrence can be established by conceptual analysis.

But if this is so, then the concurrence requires no explanation. It makes sense to ask why there are four shrimp on my plate instead of five, because the alternative is all too conceivable. But it doesn't make sense to ask why two plus two equals four instead of five, because the alternative is incoherent. Nothing could count as two plus two equaling five, so "Why don't two and two make five?" is no more coherent a question than "Why isn't MOO?" If the praxeological approach is sound, then demanding to know why the laws of social science are as they are is equally incoherent. That whose alternative is inconceivable requires no explanation.

It may be an interesting exercise to imagine how we'd feel about freed markets if the consequences were generally bad, but we need lose no sleep over the question. And now we know why.

This article originally appeared at the Future of Freedom Foundation.

NEXT: WATCH: Campbell Brown on Her Fight To Get Lousy Teachers Fired

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. But is either Benjamin Tucker or Roderick Long a hero?

  2. If free markets are the morally right thing because they allow everybody to maximize their own happiness, satisfaction, or well-being, as long as they don’t harm others, then how can society as a whole not also have maximal happiness, satisfaction, or well-being? Even if you could come up with some contrived example of making a few sad sacks suffer unwillingly to increase the happiness of some sadists so that overall happiness did increase, free market society would still be pretty high on the meter.

    1. “…..society as a whole not also have maximal happiness, satisfaction, or well-being?”

      Society is not an entity and therefore cannot be in any of those states. This is no small point. The fiction that society is an entity is the basis for making the individual subservient to it; the basis for the evils of collectivism.

      1. Thank You

      2. I used it in the sense that if you could measure an individual’s happiness, then summed them up for everyone in society, there are minor ways you could boost the sum by forcefully making some people worse off against their will.

        Not everything is an ideological rant a la Marx, full of buzzwords and signifying nothing.

      3. ” At any rate, I am not concerned about the prospect of growing market inequality the way I would be about mass poverty if I thought a freed market would produce it.

        Collectivists gotta collectivize.

        A Frankfurt School wolf in libertarian sheepskin.

  3. We know from research by Dierdre McCloskey and others that widespread abundance, not poverty, is the natural result of a (relatively) free economy. We also know on both theoretical and empirical grounds that political force is often used to increase inequality, in spite of claims to do the reverse. In fact, some theorists point to “social welfare” as a palliative to make the lower socio-economic classes happier with their lot.

    When allowed to do so, the poor do improve their own lot in many ways, as shown by Mary Ruwart’s Healing Our World, by James Tooley’s The Beautiful Tree, and by the work of the Institute for Justice.

    http://papalibertarian.wordpre…..-the-poor/

    1. You’re right — we DO know this stuff to be true. Yet, generation after generation, we’re forced to fight the same old battles.

      It’s a lot like religious indoctrination. This anti-free market thinking unsurprising in, say, a 12 year old. But with all the evidence, with all the history, with all the data over all the years, people go from being 12 to being 42 or 82, and still hold tight to their chests the fantasy that somehow people who are selfish, power-hungry, and corrupt in the private sector will suddenly become honest and altruistic when their given power and government jobs.

      1. the fantasy that somehow people who are selfish, power-hungry, and corrupt in the private sector will suddenly become honest and altruistic when their given power and government jobs.

        And its counterpart, that we who are too dumb, ignorant, naive, and greedy to run our own lives are somehow magically imbued with wisdom when it comes to elections.

        A similar paradox is juries. During the trial, jurors are so naive and gullible that they must be protected from seeing all the evidence — “strike that!”, “the jury will disregard that” — yet deliberations are so sacred that no juror’s individual decision can be questioned unless it comes to fisticuffs in the jury room or outright bribery.

        1. yet deliberations are so sacred that no juror’s individual decision can be questioned unless it comes to fisticuffs in the jury room or outright bribery.

          I don’t know about that. It may not be questionable when that juror finds in favor of the state, but judges and prosecutors implicitly threaten jurors with contempt charges every day.

    2. “We also know on both theoretical and empirical grounds that political force is often used to increase inequality, in spite of claims to do the reverse.”

      As an example consider tax increases. Low prices greatly increases the purchasing power of everyone, but proportionally more so for the poor. By increasing prices purchasing power is reduced, that tax money is then sucked up by a massively inefficient bureaucracy. Even if it were all slated for redistribution to the poor only a small fraction would make it through the system and back in their hands. Their purchasing power has been reduced by higher prices and at the end of this loop the money they have available to them has been reduced.

      Government doesn’t just decrease people’s wealth when it is trying to, it increases it even when it is trying (ostensibly) not to.

  4. Once you understand what causes prosperity — people making trades that they both feel will make them better off, whether it is you growing wheat so you can trade it for the auto repair work that I will do for, or me trading backrubs given to my girlfriend in exchange for her giving me sex — it becomes evident that any government interference with this process of free trade is highly unlikely to improve outcomes, and almost certainly will make us both poorer and less happy.

    And thus the utilitarian and moral arguments collapse into a single argument.

  5. the fantasy that somehow people who are selfish, power-hungry, and corrupt in the private sector will suddenly become honest and altruistic when their given power and government jobs.

    This fantasy is due in part to the logical mistake of thinking that families can scale up to bigger units.

    Families can have workable socialism because our parents can be honest and altruistic toward us. Thinking you can scale that up to government treating us all like family members is a logical error, because strangers who are government officials are not going to regard us with the same love and affection, and will likely be sociopaths who murder us for resisting paying parking tickets if we fight back hard enough.

    1. Q: What’s the difference between a social path and a psychopath?

      A: Psychopaths get locked up in metal institutions.

  6. what if we suspended disbelief and supposed that free markets could reasonably be expected to impoverish most people while benefiting only the few?

    This might be fodder for a good debate about theories of ethics/morality but no way would this sort of free market be tolerated by the body politic or the public.

    1. This might be fodder for a good debate about theories of ethics/morality but no way would this sort of free market be tolerated by the body politic or the public.

      To be fair to the public and/or body politic, they have historically and presently accepted all manner of indignities and impoverishment on the basis of superstitions, wishful thinking and other irrational justifications.

  7. The problem with the article is that when speaking of morality one must specify is it objective or subjective. Objective being actions between two or more individuals and subjective being actions effecting only an individual.

  8. I sometimes used utilitarian arguments when advocating liberty, but I loth doing so. It is like begging a majority not to step on me.

    1. Don’t. Utilitarianism is a collectivist argument and you are right to loth doing it because you have already lost the argument in using it. Freedom is a matter of survival. Humans require the freedom to think and act on their thoughts to produce values that allow them to survive and ultimately flourish. The right to life and the right to be free are one in the same and the only moral argument for freedom.

  9. New York City has all the features that “smart growth” advocates love such as high density and low car use. It became that way, because it was Capitalistic enough to allow skyscrapers in the early 20th Century. Ever since the city became Socialist, skyscraper construction paled in comparison to those early days. Oh and the subway system was built through private enterprise too.

  10. Never did find liberty discussion. All I read was about free markets. I guess the headline served its purpose, i.e. I read and re-read the ‘research paper’, which has a “Reason”-able nature to it.

  11. Being “self-directed” (free) is not just a personal preference as Richman identifies utilitarianism and deontology (adherence to duty) as the only two intellectual basis for justifying freedom. He is wrong. Any reasonable person can observe that human thought and the ability to act on those thoughts is a requirement for human survival. Humans without thought (humans who have lost brain function for instance) or humans unable to act on their thoughts (humans confined in some way) will soon perish. Thus freedom–the ability to think and act on your thoughts–is a requirement for individual survival–to the degree we are free to think, reason and act on our thoughts is the degree we will be able to survive and (if we think really well and act really well) flourish. Individual freedom is a matter self-preservation–it is not a matter of preference as Richman contends.

  12. It may be an interesting exercise to imagine how we’d feel about freed markets if the consequences were generally bad, but we need lose no sleep over the question. And now we know why.

    The reason for the parallels between justice and prosperity is that one begets the other. The consequences are generally good because of the inherent justice of private property. The existence of some semblance of justice creates an environment in which people produce and work to improve their economic well-being.

    The justice system as administered by the state is the antithesis of private property and justice, making the individuals in society just that much less prosperous as a result.

  13. Yes, to the article.
    It’s always seemed childishly simplistic to me to act like issue of process/justice are separate from issue of utilitarianism/ consequence. Liberty bring good results BECAUSE it is moral and just. Not every issue matches with doctrinaire interpretations exactly, and some issues are so screwy (usually those brought by technology) that even talking about justice can be confusing, but on the broad scale justice and property rights leads to prosperity. Guys like Tony can really only claim “the aggregate is different from the atomistic”, as though large groups of people magically somehow behave differently or have different outcomes from the sum of all the individual interctions. There is some merit to the conceptual difference on some issues, but it only goes so far.

    1. Details on that?
      Hmmm… let’s think of some examples. Lets say Keynesianism. Keynes theories suggest that some government spending can help boost an economy temporarily. The fact is, Keynes was right and the aggregate economy is different and some spending indeed can boost. However, Keynes theories DO NOT suggest that any amount of government spending will yield returns forever, but someone like Tony will try to claim that that’s what it means. Sorry, Keynes theories suggest a BALANCED BUDGET government can MOMENTARILY boost the economy with a LITTLE surplus spending.

      Just one example of how guys like Tony and the left in general butcher the individualist-aggregate dichotomy.

Please to post comments

Comments are closed.