The Paradox of Libertarianism
by Tyler Cowen
March 11th, 2007
Brian Doherty asks: “Did this libertarian movement . . . actually accomplish anything of unquestionable significance?”
Yes: Bigger government.
But no, that isn’t as bad as it might sound to many Cato readers.
I see a few major policy achievements in a libertarian direction. In the United States inflation has come down from unacceptable levels in the 1970s to an eminently livable situation. Marginal tax rates have fallen from 70 percent to below 40 percent. There has not been a major cry to nationalize or otherwise cripple the hi-tech sector. Private capital markets have become more advanced, more liquid, and better able to fund new ideas. Of course on a global scale communism has fallen and many nations have reformed and improved their economies in a freer direction.
Libertarian ideas also have improved the quality of government. Few American politicians advocate central planning or an economy built around collective bargaining. Marxism has retreated in intellectual disgrace.
Those developments have brought us much greater wealth and much greater liberty, at least in the positive sense of greater life opportunities. They’ve also brought much bigger government. The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats.
I am not so worried about this paradox of libertarianism. Overall libertarians should embrace these developments. We should embrace a world with growing wealth, growing positive liberty, and yes, growing government. We don’t have to favor the growth in government per se, but we do need to recognize that sometimes it is a package deal.
The old formulas were “big government is bad” and “liberty is good,” but these are not exactly equal in their implications. The second motto — “liberty is good” — is the more important. And the older story of “big government crushes liberty” is being superseded by “advances in liberty bring bigger government.”
Libertarians aren’t used to reacting to that second story, because it goes against the “liberty vs. power” paradigm burned into our brains. That’s why libertarianism is in an intellectual crisis today. The major libertarian response to modernity is simply to wish that the package deal we face isn’t a package deal. But it is, and that is why libertarians are becoming intellectually less important compared to, say, the 1970s or 1980s. So much of libertarianism has become a series of complaints about voter ignorance, or against the motives of special interest groups. The complaints are largely true, but many of the battles are losing ones. No, we should not be extreme fatalists, but the welfare state is here to stay, whether we like it or not.
The bottom line is this: human beings have deeply rooted impulses to take newly acquired wealth and spend some of it on more government and especially on transfer payments. Let’s deal with that.
My vision for classical liberalism consists of a few points:
- A deep belief in human liberty, but seeing positive liberty (“what can I do with my life?”) as more important than negative liberty (“how many regulations are imposed on me?”).
- Accepting the package deal when it is indeed a package deal.
- Identifying key areas where we can strengthen current institutions and also strengthen liberty.
We need to recognize that some of the current threats to liberty are outside of the old categories. I worry about pandemics and natural disasters, as well as global warming and climate change more generally (it doesn’t have to be carbon-induced to be a problem). These developments are big threats to the liberty of many people in the world, although not necessarily Americans. The best answers to these problems don’t always lie on the old liberty/power spectrum in a simple way. Defining property rights in clean air, or in a regular climate, isn’t that easy and it probably cannot be done without significant state intervention of some kind or another.
Yes, I know some of you are climate skeptics. But if the chance of mainstream science being right is only 20% (and assuredly it is much higher than that), we still have, in expected value terms, a massive tort. We don’t let people play involuntary Russian roulette on others with a probability of 17% (one bullet, six chambers), so we do need to worry about man-made global warming.
Intellectual property in vaccines and drug patents also will become an increasingly critical issue on a global scale. The more human biomass there is in the world, the more humans will become a major target for viruses and diseases. No matter what our views, I don’t see any uniquely libertarian approach to the resulting questions of intellectual property. More and more economic value is being held in the form of intellectual property. The new libertarianism will have to be pragmatic at its heart.
Another major problem – the major problem in my view – is nuclear proliferation. What will the world look like when small and possibly non-traceable groups can afford their own nuclear weapons, or other weapons of mass destruction? The Cato Institute has pointed out many things America could do to become less of a target for terrorists. We could take in all this good advice and there would still be a big big problem.
In short, I would like to restructure classical liberalism, or libertarianism — whatever we call it — around these new and very serious threats to liberty. Let’s not fight the last battle or the last war. Let’s not obsess over all the interventions represented by the New Deal, even though I would agree that most of those policies were bad ideas.
If libertarians were to follow this course (and I don’t expect they will), the libertarian movement would become far more diffuse. It would run the risk of losing its intellectual and moral center. It would be less of a beacon. Many people fear such a development, and I can understand why. I don’t have any comforting means of outlining how a new liberty movement might look, how its slogans might sound, or what might prove to be organizing issues. We would run the risk of being too kooky and too mainstream at the same time.
In intellectual terms, we are cursed to live in interesting times.
These ruminations bring me back to Brian Doherty’s wonderful book. It is truly an amazing effort of intellect and of love. I can’t say enough good things about the book.
This will sound a little funny, but what I liked most about the book was how little I learned from it. (NB: most readers won’t have this same reaction, but I knew personally most of the people covered.) It felt like reading about me. On a few pages it was reading about me. The book got just about everything right.
The book hearkens back to those good old days when the nature of the fight, “liberty vs. power,” was really quite clear. America in the mid to late 1970s was a wreck, and libertarians indeed had a lot of the right answers.
Not all of those answers were adopted, but the new America is no longer a wreck. Where to go from here?
There is no simple answer to that question, but to understand the future we must confront our past. Doherty’s book is a very important and very thorough step in that dialog.
Read it, and ponder it, but don’t stop there.
March 12th, 2007 at 7:35 am
[…] Tyler Cowan, of Marginal Revolution, makes a good and interesting observation… The bottom line is this: human beings have deeply rooted impulses to take newly acquired wealth and spend some of it on more government and especially on transfer payments. Let’s deal with that. […]
March 12th, 2007 at 10:43 am
[…] Tyler Cowen has a pretty interesting essay. […]
March 12th, 2007 at 1:18 pm
[…] There are a couple of very good essays floating around out there in the blogosphere today, touching upon those of us who lie somewhere within the “mighty middle” of the political spectrum; one by Paul Silver of The Moderate Voice entitled “Endangered Moderates“; another by Tyler Cowen at Cato Unbound entitled “The Paradox Of Libertarianism” — BOTH are “must reads“. […]
March 12th, 2007 at 4:32 pm
[…] When I and others have discussed the idea of a fusion of libertarian and liberal ideas there have been supporters and detractors both among libertarians and liberals. This is largely because of the variety of beliefs in both groups. An article by Tyler Cohen at Cato Unbound provides further evidence that there can be areas of common ground between libertarians and liberals. Liberals can range from more classical liberals whose primary interest is in civil liberties and social issues while supporting a free market system to supporters of a big government welfare state. The former group shows an overlap with libertarian beliefs, while the latter has far less common ground with libertarians. Libertarians range from those hostile to any form of government whatsoever, to those who accept varying degrees of government. There is often a fine line between the later form of libertarian and the first group of liberals I mentioned. (This could be confused further by a number of right wingers who have taken the libertarian label while rejecting basic libertarian principles in supporting Bush and the Iraq war. To consider these faux-libertarians to be libertarian strips the libertarian name of any real meaning, which has been a complaint of many libertarians.) […]
March 12th, 2007 at 9:36 pm
[…] A good example of this comes in Tyler Cowen’s response essay, “The Paradox of Libertarianism,” in which he argues that not all increases in the size of government are either bad or avoidable. In principle, this is undoubtedly correct. While libertarians for decades assumed that every increase in the size of government was invariably a bad thing, this is not necessarily the case. If we accept that a night watchman state really is the best, there may still be times when the size and scope of the government must nevertheless grow, as when new forms of social and economic life require new forms of protection against force and fraud. Agreed entirely. But I cannot bring myself to accept uncritically the “package deal” that Cowen proposes, which seems to make a virtue — more government is good! — out of a necessity — libertarian ideas increase wealth, and wealth increases the temptation to compromise on libertarian ideas. Yet more government still tends overwhelmingly to mean worse government, and exceptions are rare indeed. […]
March 14th, 2007 at 3:14 pm
The libertarian paradox, or: how I learned to stop worrying and love handouts
Cowen:
The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more governm…
March 14th, 2007 at 9:08 pm
Worst Advice to Libertarians Ever?
I’m not sure if Tyler Cowen’s advice to libertarians is the worst any serious thinker has ever given us. But…
March 15th, 2007 at 2:38 am
[…] Arnold Kling comments on an essay by Tyler Cowen that I have not yet read: But let me offer a cynical alternative. Government got off of the “commanding heights” of nationalized steel, coal, and railroads not because it rejected command-and-control, but because those no longer represent the heights. The commanding heights of the economy today are education, health care, and leisure, and government is doing everything it can to take over those sectors. […]
March 15th, 2007 at 5:10 pm
[…] Tyler Cowen offers some typically contrarian fighting words: And the older story of “big government crushes liberty” is being superseded by “advances in liberty bring bigger government.” Libertarians aren’t used to reacting to that second story, because it goes against the “liberty vs. power” paradigm burned into our brains. That’s why libertarianism is in an intellectual crisis today. The major libertarian response to modernity is simply to wish that the package deal we face isn’t a package deal. But it is, and that is why libertarians are becoming intellectually less important compared to, say, the 1970s or 1980s. So much of libertarianism has become a series of complaints about voter ignorance, or against the motives of special interest groups. The complaints are largely true, but many of the battles are losing ones. No, we should not be extreme fatalists, but the welfare state is here to stay, whether we like it or not. […]
March 16th, 2007 at 12:33 am
[…] On March 11th he posted a rather jaw-dropping essay over at Cato Unbound, entitled “The Paradox of Libertarianism.” No doubt many think they see a whole host of paradoxes in libertarianism, but Cowen is talking about one paradox in particular, one that is particularly prone to refutation. He calls it the “package deal”: …Those developments have brought us much greater wealth and much greater liberty, at least in the positive sense of greater life opportunities. They’ve also brought much bigger government. The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats. […]
March 17th, 2007 at 3:53 am
Does Libertarian Success Just Produce Big Government, and does that Mean We Should Give Up Trying to Make It Smaller?
In his contribution to the recent C…
March 19th, 2007 at 4:31 pm
Ci sacrifichiamo per voi… luridi statalisti!
Tyler Cowen, un economista il cui blog è Marginal Revolution, ha scritto un articolo su Cato Unbound, dal titolo "The paradox of libertarianism", in cui risponde alla domanda "" con un provocatorio "". Cowen d&agra
March 19th, 2007 at 9:08 pm
[…] Does the libertarian movement need to accept government intervention as an unalterable fact? Should libertarians try and improve government programs rather than end them? Those are the questions that Tyler Cowen attempts to answer in his essay “The Paradox of Libertarianism” posted at Cato Unbound. We should embrace a world with growing wealth, growing positive liberty, and yes, growing government. We don’t have to favor the growth in government per se, but we do need to recognize that sometimes it is a package deal. […]
March 20th, 2007 at 6:32 am
[…] In his provocative reaction essay, Tyler Cowen argues (not convincingly in my view) that the success of libertarian ideas leads, paradoxically, to bigger government. […]
March 20th, 2007 at 10:41 am
[…] Or so says George Mason University economist Tyler Cowen in an odd review essay of Brian Doherty’s new book on the history of the libertarian movement. […]
March 21st, 2007 at 1:23 am
[…] Tyler Cowen, who must be some sort of libertarian, wrote an article called “The Paradox of Libertarianism.” I don’t have much to say about Libertarianism, though the article is a great read. I think a lot of conservative-ish people who maybe don’t go to church a whole lot are attracted to it for a variety of reasons. It’s also fun to call yourself one, because it means you can always always always complain about the government guilt-free. “Sure I voted for him, but I voted for him in the hopes that he wouldn’t really do anything!” […]
March 21st, 2007 at 1:36 pm
[…] Tyler Owen of Cato Unbound wrote an interesting article recently claiming that libertarian ideals are responsible for bigger government: Those developments [brought about by libertarian ideals] have brought us much greater wealth and much greater liberty, at least in the positive sense of greater life opportunities. They’ve also brought much bigger government. The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats. […]
March 22nd, 2007 at 7:33 pm
[…] Tax futures and the libertarian paradox The libertarian paradox whereby free markets spur wealth creation which in turn supports the growth of the state suggests a potential issue with tax futures. Tax futures are hedging markets that predict future tax rates and could trade alongside more specific policy event derivatives. Such markets are naturally attractive to libertarians but, as with liberal institutions, we have to be wary of unintended consequences. This specific issue echoes the broader libertarian paradox and is summed up in this brief exchange with Patri Friedman last year: Me: Yes, this is one of the deepest worries with ideas like futarchy or legislation-linked markets. The latter have a libertarian slant insofar as they mitigate the state’s ability to redistribute wealth, but if they were actually widely used, these effects might be canceled-out — or worse. Maybe the state and its taxing/spending would balloon as it would be more tolerable given the recourse of hedging against it. […]
March 27th, 2007 at 3:43 pm
Fashion!
No, not the mildly successful and mildly innovative ’80s David Bowie single. But rather, intellectual fads in the world of blogs. Fad and fashion… the latest craze is “the unlibertarian libertarian”, people who, for one reasons …
March 29th, 2007 at 3:39 pm
Latest trade tidbits
1) Remember the hints of a trade deal that came out earlier this week? Over at US News and World Report’s Capital Commerce blog, James Pethokoukis has more juicy details about the how this may or may not play out….
March 30th, 2007 at 9:02 am
[…] David Brooks, writing in yesterday’s New York Times, riffs on a perceptive piece by Tyler Cowen in Cato Unbound [the essential blog for libertarians]. Brooks’ piece is behind a subscription firewall so I will quote it extensively. The Cowen piece is online and can be read here. […]
April 7th, 2007 at 3:12 pm
[…] Apr 7th, 2007 by Lawrence Whiteberg First post here is a link to an interesting essay by my favorite blogger Tyler Cowen from Marginal Revolution. Its is a month old, but still merits attention in my opinion as it very succintly describes the challenges for Libertarianism in the 21st century, where most of the old dangers of stagflation and nationalizations are no longer as prevalent, but where we’re still stuck with “big government”. Its an answer to the questions put forward by Brian Doherty in connection with his book Radicals for Capitalism: “Did Libertarianism accomplish anything?” […]
May 29th, 2007 at 8:16 pm
[…] It’s because, somewhat contradictorily, as people get richer, in general, government gets bigger. The expansion of government under Johnsnon in the 60s was closely connected with the liberalization and expansion of deliberative and substantive freedom for blacks, as well as the advances under civil rights law for women. Conservatives, of course, were not all too happy about Great Society liberalism, and sought to overturn the “managerial” state, or at least hold it back, under Reagen. Expanded government spending and power in the service of liberal social ideas is any good conservative’s worse nightmare, so it had to be attacked by any “conservative” administration. But after Reagen, the democrats (at least for the 90s) absorbed the conservative critique of massive, managerial government but kept on keeping on with liberalizing social norms, making no efforts to stop it. And so, we have the Bush administration, too far removed from the horrors 70s style paleoliberalism to have the same energy as the Reagenites and too enthralled with preventative war to follow up on the reformist undercurrents of his first campaign. […]
July 11th, 2007 at 9:10 am
[…] First post here is a link to an interesting essay by my favorite blogger Tyler Cowen from Marginal Revolution. Its is a month old, but still merits attention in my opinion as it very succintly describes the challenges for Libertarianism in the 21st century, where most of the old dangers of stagflation and nationalizations are no longer as prevalent, but where we’re still stuck with “big government”. Its an answer to the questions put forward by Brian Doherty in connection with his book Radicals for Capitalism: “Did Libertarianism accomplish anything?” […]
September 21st, 2007 at 11:14 am
[…] self-actualization on a individual basis. Tyler Cowen, in seeming synthesis with Lindsay, has also pointed out that as countries get richer, their people are more positively free and will demand larger […]
October 12th, 2007 at 2:57 am
[…] openness that has marked post war America, seeing them as distinctly intertwined. Tyler Cowen even lauded bigger government as the likely outcome of increases in both positive and negative liberty. Will […]