Libertarians for social democracy ?

Several commenters on this post about the asymmetry of the case for and against war made the suggestion that, if I applied similar reasoning to domestic policy I would come out with libertarian conclusions. So can I be a libertarian social democrat?

To recap briefly, I observed that the supporters of the war had many different and logically incompatible ideas about what sort of war should be pursued. By allying to support the war they all assumed that their own version (or something near enough to be acceptable) would be the one that would be pursued.

The same point can be made as part of a more general libertarian response to arguments for an extension of state power. There are many instances where replacing individual decisions with a single collective decision would reduce costs or generate other benefits. So, as long as the collective decision is close to what I would choose, it’s reasonable for me to support choosing in this way. But obviously, if people have very different preferences, this condition can’t be satisfied for everybody.

This is an important point, and a valid criticism of various forms of central planning. But if we agree that it’s good to expand the range of choices available to everybody, we don’t, in general, reach libertarian policy conclusions. To take one example, a society where inherited wealth is very important is one where, for many people, all sorts of opportunities and choices are closed off at birth. And in the case of public goods, a decision to provide them collectively means that everyone can choose whether or not to take advantage of them; the choice set is reduced if they are not provided (though of course there is an offsetting contraction in the quantity of private goods that are available).

Social democracy and its key institutions, the mixed economy and the welfare state, require a balance between collective and individual actions and decisions. On the whole, in my judgement, the result has been to make more choices available to more people than any alternative system.

Another aspect of the asymmetry I discussed is that between the status quo (peace in this case) and a poorly-understood alternative. Arguments for the status quo lead in the direction of conservatism, and there is a conservative component to the argument. But that’s for another day.

80 thoughts on “Libertarians for social democracy ?

  1. Unless that was what the Milton Friedman clip was about (my computer doesn’t like it for the time being.)

  2. Andrew,

    Thanks for providing the evidence that you have no information about my knowledge of ‘the markets’. Your belief rests on your interpretation of a comment I made but not on what I actually said. So, please retract.

  3. A ‘perfectly competitive market’. What a georgeous phrase, so redolent of the 17th century clockwork universe, to which adolescent economic liberals are so attached. I suggest the purveyors of the simplistic, historically illiterate nonesense concerning markets, freedom, competition blah blah blah, go pick up a book and read up on the history of actually existing markets. It might prove more useful in a practical sense to observe what actually happens in the world we all live in, rather than argue about what it would be like, if weren’t for those pesky old issues concerning people, their values, and the franchise, aka social democracy.

  4. Michael G, stoptherubbish – could you please point out where I have relied on there being a perfect market. I have said strong competition, not a perfect market.
    Nowhere, AFAIK, do I refer to a perfect market being needed, merely a strongly competitive one. If I am incorrect, please let me know. Otherwise, please rephrase your points to discuss a strongly competitive market.
    If you want an example of one, go here. Or to Hong Kong prior to 1997. Or many of the bazaars in the Middle East. Or the market for most good in this country. Or the stock markets. Or the bond markets. Or plenty of others.
    None may be perfectly competitive, but in all of them neither the sellers nor the buyers can exert significant price pressure. This is all that is needed.
    Please let me know how I can interpret your linked comment in a way that discloses a strong knowledge of the market and I will retract wholly and unreservedly. Otherwise, retract your comment and I will then indicate that I do not know your experience in the markets and we return to status quo pro ante.

  5. Andrew,

    I request you retract your statement

    “From your lack of knowledge on the markets, though, I suggest you stick to theories in academia. A move into the real world may improve your analysis.â€?

    on the grounds that you have no information about my knowledge of ‘the markets’. I am asking you to retract your statement and to apologise for substituting your beliefs for your lack of information and writing as if your beliefs were facts.

  6. Ernestine,
    You have impugned my intelligence, knowledge and ability several times – and probably many times by inference. I will withdraw when you demonstrate me wrong – not before. So far, all I have is a comment that seems, on first sight, to indicate a lack of knowledge of the way a real market works. I pointed this out. If you do not like it, prove me wrong.

  7. Andrew,

    You wrote, “From your lack of knowledge on the markets, though, I suggest you stick to theories in academia. A move into the real world may improve your analysis.�

    I asked you immediately to retract your statement and to apologise on the grounds that you substitute your beliefs for information you don’t have and write as if your beliefs were facts.

    I have not changed my mind on this.

  8. Very well, I shall have to live with that – as you will if you provide no evidence. You made a comment that, to me, discloses an ignorance of the operation of markets. If you provide me with evidence of an error on my part, as I have indicated I will happily retract. I see none so far.
    You have, as I stated, previously commented on my lack of knowledge on certain issues – a point I concede. I see no shame in it. I just ask you to return the compliment.
    On reflection, perhaps the first line should read “From your apparent lack of knowledge on the markets…” to correctly affect appearances.

  9. Yeah. This ‘perfectly competitive market’ appears to have been my creation. A ‘situation where trade and business is freed from restriction’ were the original words I took off from. I interpreted this to mean as perfect as it gets and was lazy with my words.

    In any case, you made a reasonable attempt at answering my question. You’re examples are interesting, but obviously each of them have their own spatial or temporal restrictions. So i guess my question regarding empirical evidence is flexible depending on how great a role for the market you are envisioning.

    Even so, is it generally considered that Hong Kong up to 1997 was a success? I know there is controversy over some of the actions that take place inside the tent of the stock market. Ebay I haven’t followed that much but I tend to think that the E-world provides some of the more fruitful opportunities for successful and ethical markets. Largely this is because it has a particular ability to encourage communication and to build trust, which is exactly why the bazzaar example, with its face to face bartering and its sensory overload, is the most interesting to me. Surely, even among strongly competitive markets there are umpteen different forms conducive to all kind of different outcomes? And are these differences not to do with conditions we have, to some extent engineered?

    Perhaps I’m projecting on to you the more extreme libertarian views of others but isn’t it all much more complex than market logic ueberall?

  10. Michael,
    There is plenty of controversy in the stock market, as there is in any bazaar. People getting fleeced, others making a packet. The important thing is that, in the long run, there is no systemic way to consistently win; except to do as guys like Buffett do and buy and hold. Pick your stocks well and then try (if you have that sort of pull) to influence company management to do better.
    Examples of weak competition in markets abound – but these are almost always temporary and the actions of a government to fix them are almost invariably worse than the problem. The ‘solution’ also tends to hang around, long after the reason for it is gone (if there was one).
    Hong Kong from the 1960s to 1997 was an enormous success. The colonial administrators ignored their democratic socialist masters in the UK government, instituted free trade and a 15% income tax and stood back. The wealth generated was staggering.
    Every government action, like every other action, includes an opportunity cost. To me at least, because governments tend to be big, slow to react and acting on information that will almost always be less than the active participants in a market, that opportunity cost will almost certainly be higher, and higher than the cost of doing nothing.

  11. Bah, I’m no fan of that Planck quote. Scientific evidence frequently convinces its opponents. Continental drift and quantum mechanics are two big examples, where establishment beliefs phase-shifted upon new data coming in. More recently we have the accelerating universe, where an idea *no one* believed in is now standard… of course, that might be psychologically easier than capitulating to opponents. Various scientists who were skeptical of global warming ten years ago have caved in since.

  12. Observa, maybe the short answer is that Middle Eastern oil states have to sell their oil; they really don’t have the option to just leave it in the ground. There are other factors too: there are sources of oil and gas outside the Middle East; there are considerable efficiency gains available in our use of petroleum (and coal), and there are possibilities of substitution of renewables. So the Middle Easterners’ market power is not unlimited – and they know it. Nor should we forget that oil is a special case – there are the WTO and OPEC which, though they aren’t the ACCC, can and do make trade rules and (in the WTO case) have a sort of arbitration power for many sorts of non-oil trade disputes. Not that I’m a great admirer of the WTO, but it does exist. Maybe you are arguing for inclusion of oil within the WTO ambit? Would be fun to watch, and a change from the eternal wrangling about agriculture.

    As far as “tyrannical regimes� is concerned, I fear this is hysteria. There are lots of tyrannical regimes, but it seems the oil producing ones are regularly singled out for attack. The real issue, I think, is State ownership of oil. If the Saudi government was a corporation, would anybody worry about its being tyrannical? Most corporations are, and many are just as corrupt as the oil-producing tyrannies. There are a lot of oligopolies in raw materials production, but anybody who complains about “market power� is called a radical leftist greenie. I suspect Rupert would just buy shares in “Saudi Inc.� and call off the attack dogs.

  13. Question to the Libertarians:

    Does your notion of ‘freedom of choice’ involve chosing to tell other people what they should do or think?

    Does your notion of ‘freedom of choice’ include chosing to represent your beliefs as facts?

    My questions arise because of Andrew Reynold’s correspondence. Maybe Andrew Reynolds is not a representative Libertarian. I have inadequate information on ‘politics’ and labels that go with it to form an independent opinion on this one.

  14. Andrew Reynolds,

    You have not taken up the option of simply retracting your statement, to which I objected for stated reasons, but you added a lot of other statements.

    I don’t wish to bore the audience of this thread with going through all your statements one by one, each one of them would require a lot of questions on my part (what does it mean? where? when?, etc). And, I don’t want to waste my time either.

    To bring this to a closure, my first request for you to retract your statement remains and I don’t agree with all your other statements .

    If you have a gripe, please let me know the details and I shall address it.

  15. I have no gripe, Ernestine – I am not the one seeking a retraction.
    I have never told you what to think, nor do I believe I have misrepresented the position in any way. If you want to continue this, feel free to do so. I will feel free to ignore you, as others may.

  16. I am glad you accept the apology over your sex – not, perhaps that any was needed as there is nothing inferior or superior that arises from either sex.
    I am still waiting to see if you have any evidence to prompt me to accede to your request to retract on other statements made in this thread.

  17. Andrew Reynolds,

    I did not ask for an apology for gender confusion. If you think different, as you apparently do, then this is nothing but yet another one of your misconceptions which you asked me to correct.

    Since you ask for the correction of your latest misconception, I suppose I have to do it, although with considerable displeasure.

    Gender turned out to be a critical parameter in the unravelling of your cross-thread obfuscations.

    I asked you explicitly who the ‘he’ is in one of your cross-posts. Since you insist on knowing everything better than everybody else, I took your no-response seriously and then draw the logical conclusion.

    Here are the details from the thread “Back to Full Employment?�

    1. Andrew Reynolds Says:
    June 30th, 2006 at 11:33 am
    Apologies for the double comment.
    I also note that Ernestine has not yet responded with any proof that one of:
    1. His earlier comment can be understood to reveal a deep understanding of the operations of a market; or
    2. It was an abberation used merely to try to score a cheap point and that he actually knows much better.
    3. Some other reason why I should withdraw other than his apparently hurt feelings.
    On any of those proofs being presented I will happily withdraw my earlier comment regarding his academic approach. Until then, it stands.

    2. Ernestine Gross Says:
    June 30th, 2006 at 11:46 am
    To whom is your last post addressed? I am asking because my name appears in it.

    3. Andrew Reynolds Says:
    June 30th, 2006 at 1:34 pm
    Perhaps you should read the advice you ascribed to me here.

    4. Ernestine Gross Says:
    June 30th, 2006 at 1:59 pm
    Andrew, You are talking in riddles.
    My question remains: To whom is your post of 11.33 am addressed?
    My second question is: Which advice do I ascribe to you where and where would I locate it?
    For your information, the heading of this thread is “Back to Full Employment�. If you don’t understand any one or all of these words, please ask JQ or read up.

    5. Ernestine Gross Says:
    July 1st, 2006 at 12:11 am
    Who is “He� in your post, reproduced below? This is a serious question.
    “Apologies for the double comment.
    I also note that Ernestine has not yet responded with any proof that one of:
    1. His earlier comment can be understood to reveal a deep understanding of the operations of a market; or
    2. It was an abberation used merely to try to score a cheap point and that he actually knows much better.
    3. Some other reason why I should withdraw other than his apparently hurt feelings.
    On any of those proofs being presented I will happily withdraw my earlier comment regarding his academic approach. Until then, it stands. “

    6 Ernestine Gross Says:
    July 1st, 2006 at 5:00 pm

    Alright, Andrew, as you wish.

    I am not the ‘he’ in the questions because I am a female.

    Given the links you have set, the he is you.

    So, I shall answer your question:
    1. You have failed to provide a proof that your earlier comment can be understood to reveal a deep understanding of the operations of a market.
    PS1:I am the only Ernestine on this blog site for at least 8 months. If you want to go back through all the blog threads, you’ll find a post by Katz in which he wrote to you something to the effect that he would not give to much weight to comments made by a man by the name of Ernestine. You left out part of the statement and started talking about ‘him’. I made a post, which reintroduced the distinction between ‘a man by the name of Ernestine’ and Ernestine. So, Andrew, academic rigour may be quite useful in ‘the real world’. You and I were part of the same ‘real world’ at the time. I do hope this is the last time you or any of your ‘mates’ will talk about none-sense such as ‘ivory tower’ and the ‘real world’ versus academics.
    PS2: I am going on an extended blogging holliday�

    The link you gave is:

    This site contains a post by me, followed by a post by you.

    I don’t want to know why you seem to think that a share market trade, which is profitable under very special circumstances is (a) a ‘standard share market theory’, (b) works in the ‘real world’ when one of the conditions of trading share in ‘the real world’ does not hold, namely that share market regulations require that listed (traded) companies file annual reports, and ( c ) why your verbal cocktail of ‘standard share market theory’ com special case trading strategy com imaginary real world stock market without a financial reporting requirement should have anything to do with the labour market.

    And, I also don’t want to know why you carry on, given that you publicly stated that you have no gripe.

    I hope I can return to my holliday from blogging.




  18. Ernestine,
    I have no gripe, I just wanted the point, and apology, to be clear. Your cross posting to the other thread seemed to imply that I was apologising for my market related comment. I was not. I was apologising for making a mistake vis-a-vis your gender, which you seemed to think was an issue, having looked back over 8 months (as you put it) for another Ernestine to make the point about “He”.
    If you care to come up with some evidence on the market related point, I will read it and retract if appropriate. If you do not, I don’t mind. Failing that, this comment will be my last word on the matter as I consider I have made my case clear.
    I have replied to you as I believe that polite – not through any real concern as to whether a “gripe” exists or not.

  19. Andrew Reynolds, hope you enjoy your conversation with your own perceptions.

  20. I think that where JQ gets it wrong is in assuming that the core of libertarianism is somehow about maximising the choices available to people. In my view that is not the core ideal. The core ideal within libertarianism is that no person should interfere in another persons life without justification (ie except to right a wrong pepetrated by that other person).

    As I opened a couple of letters from the government today (FAO and the ATO) I summed up the idea to my better half as follows: “In an ideal world the government would only be interacting with me if I had done something wrong”.

  21. Terje (and others), I suspect JQ may be confusing a question of essential identity of concepts with the everyday working questions of who they might line up with, tactically. It’s like the difference between a communist party and a popular front which also includes useful idiots and insightful fellow travellers fully intending to get off at Redfern.

    But for those going all the way, a social democrat has already made up his or her mind on the end of socialism, only embracing democracy as a tactical means to get enough people onside so as to enable coercing the rest. A libertarian, however, reads that last stage – however democratic – as fundamentally flawed and mere force, i.e. he or she does not accept that even the democratic endorsement confers any ethical justification.

    So there is a fundamental incompatibility between being a social democrat and a libertarian, arising not from the “social” part but from the “democrat” part. Interestingly, social democracy itself involves a previous ingenious way of systematically deferring conflicts between socialists and democrats, rather like renormalising an infinity away. The socialists accept what could theoretically be “never, i.e. no”, since they suppose that it won’t work out as never – even though they are genuinely committed to socialism and not open to persuasion.

    JQ may be a full blown committed socialist of this sort, the analogue of an atheist, or he may be a fellow traveller under the social democrat umbrella, the analogue of an agnostic who is open to persuasion but not expecting reality to support it. Either way, he cannot be a libertarian, since they are by definition people who have made their minds up already on a different and incaompatible basis.

  22. Andrew Reynolds, I don’t have conversations with my perceptions. Holidays are sometimes interrupted.

    P.M. Lawrence, are you suggesting that Libertarians are fundamentalists who have a closed mind (ie “libertarians… are by definition people who have made their minds up already on a different and incompatible basis”).

  23. Ernestine,
    The way I saw PML’s missive was that the mindset of democratic socialism and libertarianism is different to the way I think you saw it.
    A democratic socialist, at least from my reading of PML, is someone who sees the socialist path as a desirable outcome and mass democracy as the way to achieve it. If you can get the majority, presumably the lumpen proletariat, to agree to a socialist outcome it would be alright to force those who disagree to conform to the will of the majority as this is the democratic outcome.
    A libertarian, on the other hand, would tend to agree with the old Millsian statement that “If all mankind minus one were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be justified in silencing mankind.”
    I would tend to disagree with PML on this, if I have correctly represented his position. I see democratic socialism more as socialism-lite. A truly socialist outcome must (IMHO) involve some degree of force and the more extreme the socialism desired, the more force involved. I see democratic socialism as the movement that involves using only as much force as the majority would vote for.
    A true libertarian (IMHO), however, would not countenance any use of force beyond that necessary to secure their person and property rights. A true socialist would feel the use of whatever level of force appropriate to achieve their desired outcome is OK. A democratic socialist would countenance the degree of force approved by the majority of the voters.

  24. PML’s statement about the unethical nature of state coercion applies also to even the most minimalist of proponents of government.

    This is because there always exist people who disbelieve in the morality and/or efficacy of any government.

    Thus PML’s attempt to draw a bright line between socialists and libertarians thus creates a false dichotomy.

    The real dichotomy exists between those who abdure all government and those who accept some government.

  25. I’ll follow this up with more clarification later, as and when practical. For now, I only want to say that – contra Katz’s reading – I wasn’t trying to draw a “bright line” so much as to demonstrate that the idealised libertarian has no overlap with the idealised democrat (and so, by extension, with social democracy). I was not trying to suggest that there were no modi vivendi so much as to illustrate the incompatibility of the ideal forms – which, as I read it, is where JQ is coming in. That leaves open (or for JQ himself to explore) whether he himself is an idealised democrat or a working soultion democrat.

    But either way, the question JQ brought out related to ideals, which remain of value even to the practical minded if only for providing a frame of reference.

    The other follow up should, I believe, relate to my own views of what are the essential and/or material features of libertarianism and/or democracy, and social democracy as a special applied case of the latter.

  26. “Question to the Libertarians:

    Does your notion of ‘freedom of choice’ involve chosing to tell other people what they should do or think?”


    I dont belive a libertarisn should support the so called “social-democracy” mainly because like any socialist derivation the state doesnt know when to stop coercing the people from their resources.

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