Wednesday, March 9, 2011

Why I've Cooled to Libertarianism

Sharp-eyed readers may have noticed that I've removed "libertarian-leaning" from the subtitle of my blog.

That's because, over the last two years, I've had exchanges of ideas with leading libertarians Walter Block, Mary Ruwart, Robert Murphy, Michael Edelstein, Marc Joffe, and Anthony Gregory, as well as a very smart liberal friend of mine, David Brodwin, which have turned me from libertarian-leaning to more of a utilitarian moderate.

One of those libertarians, Dr. Michael Edelstein, asked me to explain why I have cooled to libertarianism. I reproduce that explanation for you here.

The debate on my radio show that I moderated between Walter Block and Jared Bernstein convinced me of the benefit of a minimum wage, indeed one set at a living wage. Yes, a small percentage of people lose their jobs as the result of a minimum wage. And a bit fewer low-level workers would be hired. But all the rest of the low-wage workers (a much larger number of people) improve their standard of living. Indeed, an admittedly nondispositive study of one state that raised the minimum wage resulted in only small migration of employers to other states and no decrease in hiring of low-wage workers. Meanwhile, all the low-wage workers derived an increase to their standard of living of far greater value than the decrease to the employers who had to pay the increased wage.
In a subsequent in-person discussion with me, Block argued that if the minimum wage were eliminated, job seekers whose value to employers was less than the minimum wage would get hired. I countered that not only would that lower the wages of the millions of workers currently making the minimum wage, many if not most of the people unhireable at the minimum wage would, at most, add $1 or $2 per hour of value and thus employers would only be willing to pay them that. $1 or $2 an hour isn't enough to motivate most people to get out of bed in the morning. Lest you think I'm exaggerating, aren't there people you'd pay NOT to work for you, for example, those with a personality that would alienate coworkers and customers, or who would require tremendous time to teach them the job, or who were unreliable or would steal from you?

I found the argument for replacing our government-plus-private charity safety net with a purely privately-funded safety net to be weak. Edelstein based his argument heavily on the fact that in Dickensian England, the poor were taken care of purely by the private sector. That's hardly a reassuring example even if we could validly generalize from Dickensian times to today. But we can't. Today, with a far higher percentage of the population lacking the skills and abilities to be self-sustaining in our information-centric global economy, the cost of providing even a basic safety net for people would be enormous, far greater than in Dickensian times. I believe the risk of mass destitution is far too high to risk moving to a libertarian, no-government-safety-net system.
Then there's the problem of negative externalities. I raised, for example, the issue of the polluting corporation: parties outside of the private contract between corporation and land owner are hurt by the resulting unpleasant, unhealthy, perhaps carcinogenic air. The libertarian defenses of a free-market approach to pollution control are unconvincing to me, for example, that polluting companies would develop a bad reputation, causing their sales to decline. It is too difficult to ascertain which company caused disproportionate amounts of pollution and, besides, the public has a short memory and it would have an even shorter memory of the many more companies that would pollute if it weren't against the law. I was even less persuaded by the argument that private policing firms would control the pollution adequately. It is too expensive for citizens, even if banding together, to pay to adequately police all the nation's polluting companies. If I ran a company wanting to pollute, I'd guess that I could, in the middle of the night, release the pollutants into the air and water, and it would be difficult for a private police to detect it. Remember, there are many thousands of businesses that can pollute, including in rural, out-of-the-way places.
I also do not buy the argument that the free market will result in better roads and water systems, let alone convenient-to-pay-for water or roads. For example, each water company wanting to compete would have to install its own extensive underground, expensive water pipes all the way from the source to all the homes it wishes to serve. The companies would have to pass on those huge costs to the customer rather than having the cost of one set of pipes amortized across all the population, as with the current system. Regarding private roads, I do not find the examples of small-scale gated community private roads convincing. To widely adopt private roads would likely require tolls or bills paid to many different companies, perhaps even for every block--each company is competing for that block's users. I found the libertarian defense of doing that unconvincing. For example, Block argued that all the hassles of multiple bills etc., would be compensated for by the fact that road companies would compete to provide extra benefits--he used the example of a higher speed limit.
Finally, most broadly, I do not believe that complete unbridled freedom is such a powerful good as to trump all other considerations. I believe that the benefits of a particular freedom (e.g., the freedom to pollute, the freedom to introduce a pharmaceutical drug without government review) need to be weighed against its liabilities.
Thus, our exchanges have moved me from libertarian-leaning to a moderate utilitarian: I like making decisions based on what will do the most good for the most people, while not imposing clearly inhumane treatment of anyone in the process. In a given situation, the benefit of a particular freedom is merely one benefit that must be weighed alongside all the other benefits and liabilities accruing to a particular decision. That will many times argue for a free-market solution and other times for a government approach.

This is not to say that I like big government. Indeed, I support reducing the national debt to zero and having a balanced budget. And yes, that means dramatic cuts in entitlements and in defense, not to mention the mammoth fraud, waste, duplication, and abuse in government. We must live within our means. To do anything else is a Ponzi scheme and greatly increases the risk that our creditors (e.g., China) will render us inert.


Jeffrie said...

"Our exchanges have made clearer to me that I am not a libertarian but more of a utilitarian: I like making decisions based on what will do the most good for the most people, while not imposing inhumane treatment in the process."

That's not a bad description, and I would be willing to guess that many of us are that way. We would not want government to go away entirely, but we would not want it to be too imposing, either. Same with the private sector. No matter how we grumble about one & praise the other (depending on which side you're on), a balanced dose of both would provide what you've stated.

Kathryn Alexander said...

My biggest issue with Libertarianism is that it undercuts systems as in systems thinking. It is all about parts and seeks to undermine wholes. In the human body all parts work together for the good of the whole. The same is true of ecosystems. Libertarianism would have all the parts out working for themselves and that would destroy the United States as they would not be united anymore.


blogger templates | Make Money Online