Two Prominent Left-Liberal Thinkers Reconsider Libertarianism

Legal scholar Cass Sunstein and economic policy commentator Noah Smith haven't become libertarians - but they take a more favorable view of that ideology than before. This evolution might prefigure a potential alliance between libertarians and "abundance" liberals.

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Two prominent left-liberals who have spent much of their careers critiquing libertarianism recently wrote pieces indicating they now think they have underrated libertarian ideas. Harvard law Prof. Cass Sunstein and economic policy commentator Noah Smith are major figures in their respective fields, and their posts highlight potential points of convergence between libertarians and important elements of the political left.

Here's an excerpt from Sunstein's August substack post:

Once upon a time, I regarded Hayek, Ludwig von Mises, and the Austrians — and also Robert Nozick, Murray Rothbard, and the libertarians — with respect and admiration, but in important ways as adversaries.

They were not (I thought) on my team. I no longer think that. I think that they are on my team, or (much better), that I am on their team. Among other things, they saw something crucial about a foundation of the liberal tradition: freedom from fear…..

I like Hayek a lot less ambivalently than I once did, and von Mises, who once seemed to me a crude and irascible precursor of Hayek, now seems to me to be (mostly) a shining star (and sometimes fun, not least because of his crudeness and irascibility). The reason is simple: They were apostles of freedom. They believed in freedom from fear…

Hayek and the Mont Pelerins (and Posner and Epstein) seemed to be fighting old battles, and in important ways to be wrong. With respect to authoritarianism and tyranny, and the power of the state, of course they were right; but still, those battles seemed old.

But those battles never were old. In important ways, Hayek and the Mont Pelerins (and Posner and Epstein, and Becker and Stigler) were right.

Sunstein doesn't quite spell out here what he means by "freedom from fear." But the freedom from fear the libertarian thinkers he cites espoused is freedom from fear of the powers of overweening government. What has led Sunstein to conclude that this fear is more relevant than he previously thought? He again doesn't explain in any detail. But I think it may be the rise of illiberal right-wing nationalism in the US and Europe, which makes it likely that state power can be used in ways much more dangerous than Sunstein previously thought likely, in Western democracies.

In a 2024 article, Alex Nowrasteh and I explain why right-wing nationalist statism poses many of the same types of dangers as the left-wing socialist variety. Of course, Hayek and von Mises were well aware of this, themselves. They left Austria to escape the rise of fascism in  (Mises was an opponent of the Nazi regime, and also an Austrian Jew). Hayek's classic essay "Why I am Not a Conservative" highlights the dangers of nationalist statism, dangers he and Mises learned of through painful personal experience.

The rise of right-wing illiberalism may not be the only reason for Sunstein's increased sympathy for libertarianism. In recent years, he has also become more skeptical of the kinds of technocratic government interventions that he previously championed with fewer reservations. For example, his excellent 2020 book Too Much Information: Understanding What You Don't Want to Know is a critique of the dangers of excessive government-mandated warnings and information disclosures (see my review here). His more recent restatement of principles of liberalism contains a lot of points libertarians can readily agree with.

Here's an excerpt from Smith's April essay entitled "I Owe the Libertarians an Apology":

I definitely don't think libertarianism is the best political-economic philosophy possible, or the best one that exists in the world today. I have not become a libertarian, nor do I expect to.

But I feel like I owe libertarians an apology, for severely underrating their ideology. I was so focused on its theoretical flaws that I ignored its political importance. I concentrated only on the marginal benefits that might be achieved by building on our economic system's libertarian foundation, ignoring the inframarginal losses that would happen were that foundation to crumble. I had only a hazy, poor understanding of the historical context in which libertarianism emerged, and of the limitations of libertarianism's most prominent critics.

The most obvious thing that has prompted me to make this apology is Donald Trump's disastrous tariff policy….

The size and breadth of Trump's tariffs came as a shock to me. I never imagined that a U.S. leader would have such a deeply broken view of how trade works, or would willfully inflict such harm on the American people. But I should have known it was possible. I should have studied the historical example of Juan Peron, whose Trump-style policies of protectionism and fiscal profligacy combined to knock Argentina out of the ranks of the rich nations. I should have studied the failure of "import substitution" policies in the 1950s and 1960s. I should have known more about the political context that produced Smoot-Hawley in the U.S.

I should also have realized that as right-leaning ideologies go, American libertarianism was always highly unusual. I had lived in Japan, where the political right is protectionist, industrialist, and sometimes crony-capitalist. I should have realized that this was the norm for right-leaning parties around the world, and that the American right's Reaganite embrace of free markets and free trade was the anomaly. That, in turn, should have given me a warning of what would happen if libertarianism fell in America.

The rise of Trump and similar right-wing statists elsewhere has led Smith to have a greater appreciation of libertarianism's superiority to other non-left ideologies. He may not like libertarianism. But the alternatives are worse.

Smith also now recognizes some merit to libertarian critiques of left-wing economic policy:

I'd be lying if I said that Trump's madness is the only thing that made me feel more sympathy for libertarianism. Over the past decade, I've seen the excesses of progressive economic ideology more clearly than I ever did as a graduate student.

On the crucial issue of housing, I've seen anti-market ideas weaponized to trick people into thinking that allowing new market housing raises rents via "gentrification", when in fact it lowers rents, just as an Econ 101 textbook would predict. I've seen progressives pooh-pooh the idea of supply and demand as "trickle-down", even as cities that build more supply have generally succeeded in reducing rents. I've seen them decry new housing construction because it puts money in the pockets of developers. And I've seen progressives push rent control as an alternative, even though it ultimately reduces supply and creates artificial scarcity…

On macroeconomic policy, I've seen progressives push relentlessly for stimulative policies to push up labor demand, even as inflation brought down Joe Biden's presidency and government infrastructure programs turned into make-work programs that built nothing.

Neither Smith nor Sunstein has become a full-blown libertarian. Far from it. But they both have greater appreciation than before for the need to impose tighter limits on a variety of government powers, including those relevant to economic policy.

I won't go into detail here. But I see similar tendencies among a number of prominent left-liberal intellectuals associated with what many now call "abundance" liberalism. People like Jerusalem Demsas, Matt Yglesias, Catherine Rampell, Derek Thompson, Ezra Klein, and others. Like Sunstein and Smith, these thinkers appreciate the value of Econ 101, prioritize growth over redistribution, understand the threat posed by the statist illiberal right, and recognize that government power - at least in many areas - needs to be more tightly constrained than most modern left-liberals previously acknowledged.

There is also potential agreement between this camp and libertarianism on a range of important specific issues, most notably trade, immigration, civil liberties, nuclear power, and housing deregulation (all or most of these thinkers are big supporters of the cross-ideological YIMBY movement). My work on exclusionary zoning with Josh Braver is a small example of the kind of issue-specific cooperation that might be achieved. We also have obvious common enemies in the form of the nationalist right and the socialist far left.

For their part, libertarians should recognize that, in this era, the biggest threats to liberty in the US and much of the world come not from the "woke" left (though the latter is still problematic), but from the nationalist right. I wrote about this in the Dispatch last year (see also my article on how to update and improve libertarianism). But the second Trump administration has made the case far better than I could have, with its massive trade wars, draconian immigration policies, attacks on free speech, government control of business, and more.

The currently dominant forces on the political right are, to put it mildly, not our friends. We must therefore seek new allies elsewhere. People like Smith, Sunstein, and the  abundance liberals seem like a good place to start.