Home > Philosophy, Politics (general) > In praise of libertarianism

In praise of libertarianism

March 17th, 2007

I got a great response from libertarian readers to the Great Shave Appeal, and so the final instalment in my ‘In Praise of ..’ series is addressed to them.

Although they are often at loggerheads, libertarians and social democrats share plenty of ideas, derived in large measure from common sources. Both draw heavily on the 19th century liberalism of John Stuart Mill, who managed to write effectively in support of both classical free-market economics and, later in life, a rather abstract form of socialism.

It’s not surprising then, that I broadly agree with libertarians on the classic civil liberties issues – freedom of speech, freedom from arbitrary arrest and detention, opposition to government intervention in private decisions such as sexual activity and drug use and so on.

The attacks on civil liberties since the Iraq war have made many of these issues more vitally relevant and led me and others to stress our areas of agreement with libertarian defenders of freedom such as blogger Jim Henley. They have helped to distinguish genuine libertarians from otherwise orthodox authoritarians (typically US Republicans), who happen to take a relaxed view on sex and drugs.

The war in Iraq has also led me to recognise, more than before, the merits of certain styles of argument typically associated with libertarians. The Iraq war is, after all, a paradigm case of a failed government intervention, based on fanciful blueprints that bore no relation to reality. Some who supported the war have sought to argue that it was a good idea, badly implemented, and this is an argument often brought forward in favour of other failed policies. However, it was obvious enough, even before the war, that it would only work if everything went to plan, including things where the ‘plan’ was little more than wishful thinking. Different policies after the invasion (for example, not disbanding the army or sacking Baath party members en masse) might have avoided some of the disasters we saw, but perhaps different disasters might have ensued.

More generally, whereas I once used to be strongly in favour of economic planning, I’m now a lot more sceptical. Although I still see a large role for government in the financing and provision of public goods, I think it’s important to maintain as much scope for individual choice as possible, and to seek to use the power of the state as lightly as possible to achieve policy goals. Particularly in relation to the environment (my main area of research) I’m a strong, though not uncritical, supporter of market-based instruments such as cost-based pricing and emissions trading schemes.

I got a specific request from Terje Petersen to write about the Australian Banknotes Act of 1910, of which I have to admit I’d never heard. A quick check suggests that it’s the basis (in Australia) for the government monopoly over the issue of paper money. I haven’t had time to think about this very carefully, but my preliminary view is that Terje is right. The proliferation of private near-monies, such as gift cards and similar, has not caused huge problems, except as regards their lack of convertability, which leads to a lot of them never being cashed (a form of private seignorage). As long as it is made clear that privately issued notes are not legal tender (that is, no one can be required to accept them as payment), they would represent an improvement on these near-monies.

Coming back to libertarian thinking in general, our current exercise in raising funds has been a highly successful piece of voluntary collective action. I’m very grateful that so many readers, libertarian and otherwise have pitched in to help.

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  1. libertarian
    March 17th, 2007 at 10:01 | #1

    Thanks JQ. I definitely got my money’s worth. Even though it was a private payment for a public good :) [or public good(s) - the funding for the leukemia folks and your post].

    Except for your “large role for government in the financing and provision of public goods”, you could be a libertarian. In fact, the only apparent difference between you – a self-declared social democrat – and me – a self-declared libertarian – is that I see a large role for government in financing, but not providing, public goods (since government is usually very inefficient at the provision). Provision should be contracted out except where impractical, eg defense.

  2. March 17th, 2007 at 11:35 | #2

    I suspect that JQ’s seeing a limited role for government is like being a little bit pregnant. It creates a need to keep it down, where people like me would rather engineer out the need for a “tame” government. I have somewhere heard that “the only good government is a bad government in a hell of a fright”, i.e. one being kept honest. But look what happens to those who take on that duty – they too get captured, so the institutional process just becomes a closed shop the way Italian parliaments became just before Fascism. That cost them a lot of legitimacy…

  3. MP
    March 18th, 2007 at 16:41 | #3

    Deleted: I’m happy to respond to questions and comments from people who contributed to the appeal, but I don’t feel like opening up a general debate on libertarianism right now. Repost on one of the open threads if you want to

  4. March 19th, 2007 at 09:47 | #4

    I haven’t had time to think about this very carefully, but my preliminary view is that Terje is right. The proliferation of private near-monies, such as gift cards and similar, has not caused huge problems, except as regards their lack of convertability, which leads to a lot of them never being cashed (a form of private seignorage). As long as it is made clear that privately issued notes are not legal tender (that is, no one can be required to accept them as payment), they would represent an improvement on these near-monies.

    There are lots of legacy laws that obstruct innovation because nobody has the time to revisit old legislation. In my view a law should need 75% parliamentary support to become a permanent law and if you want to pass legislation without that level of support then you should be constitutionally required to include a 25 year sunset clause (except for repealing laws). But I digress.

    The perth mint does issue a form of promisory note in the way of gold certificates. However they don’t run into trouble with the above legislation because they are not payable to the bearer but rather they are payable only to the original recipient. As such they have no chance of becoming liquid.

    More generally, whereas I once used to be strongly in favour of economic planning, I’m now a lot more sceptical. Although I still see a large role for government in the financing and provision of public goods, I think it’s important to maintain as much scope for individual choice as possible, and to seek to use the power of the state as lightly as possible to achieve policy goals.

    Well John that sounds encouraging. I hope that we might hear you defend that line in future when those that advocate crushing individual choice start their chanting.

  5. Sean
    March 19th, 2007 at 12:57 | #5

    Thing is, if you mislay a “pineapple” and find it five years later you’ll be pleasantly surprised, unlike that expired Bunnings voucher I found in my recent move.

    [No comment required Prof].

  6. March 19th, 2007 at 15:29 | #6

    Within the Iraq adventure there are a number of items which in a smaller way are representative of the failures of government. Take for example the 9 billion in funds which cannot be accounted for.

    I mean, good God. Does anyone seriously believe that if this happened in a private corporation, mass sackings would not ensue? Instead Bremer gets the Medal of Freedom. It’s a little hard to comprehend.

  7. Duh
    March 20th, 2007 at 02:41 | #7

    Enron?

  8. Terje
    March 20th, 2007 at 10:58 | #8

    Everybody involved in Enron lost their job.

  9. Majorajam
    March 20th, 2007 at 12:25 | #9

    Actually they didn’t lose their job until Enron went bust by way of a “run on the bank” ignited by a conspiracy of journalists and short sellers. And when that was over they moved on to new jobs and, unless now in prison, are better off for all the fraud. The only people unequivocally worse off are the stupid non-management plebes silly enough to have listened to management and invested their retirement in the stock as the top brass were getting out from under, (them and the other private and public pension funds that are now massively underfunded and closing shop by the dozen). Indeed, the free market is a beautiful thing.

  10. jquiggin
    March 20th, 2007 at 17:01 | #10

    I’m going to close this off and move discussion to the Monday Message Board.

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