Down with Policy Libertarianism

Note: This can also be found on The Distributed Republic.

Libertarian thinkers can be plotted on many axes. Presently, the axis I am most concerned with is Policy Libertarianism vs. Structural Libertarianism.

Policy Libertarians (PLs) include the vast majority of the most visible organizations and writers in the modern libertarian movement: the Reason Foundation, the Cato Institute, the Ron Paul campaign, the LP, the Constitution Party, most libertarian economists (e.g. Milton Friedman), and single-issue organizations like Students for a Sensible Drug Policy. PLs, as their name suggests, focus their energies on inventing and advocating a list of policies that governments should follow. For example, you can find policy libertarians opposing liberal eminent domain laws, fighting for lower taxes and deregulation, supporting cultural tolerance, opposing invasive police searches, and advocating the rest of the familiar libertarian manifesto.

Structural Libertarians (SLs) are much rarer in modern times than PLs, although the opposite used to be the case. Structural libertarians include Patri Friedman, Mencius Moldbug, David Friedman, Murray Rothbard, all libertarian Public Choice economists, Lysander Spooner, and the classical liberals that libertarians have adopted as intellectual ancestors. SLs often have the same moral and policy beliefs as PLs, but they focus their energies on the alternative ways to structure a government and the effect that government structure has on its incentive to adopt good policy. At their most extreme, SLs barely sound like libertarians. Under a market-based government system (a common SL proposal), the architects of Singapore would likely find plenty of customers for a burbclave that is incredibly prosperous and clean, but where communists are sent to jail and litterbugs are viciously beaten with sticks.

The decline of the structuralists and the rise of the policyists is a phenomenon that should interest us. It is a by-product of general political trends in the modern western world. Simply: democracy has won. Democracy is considered to be righteousness and goodness and freedom, all else is tyranny. Didn't the American colonists risk their lives and fortunes to institute democracy and overthrow monarchy? And wasn't America the shining example on a hill, leading the rest of the world into a democratic century?

Today all competing political ideas acknowledge this. Conservatism, libertarianism, liberalism, environmentalism, socialism, and nationalism are all strictly policy movements. Since our government structure is sound, they focus on advancing their agendas through electoral politics.

But what if democracy is not the impartial "marketplace of ideas" that moderns assume? What if liberal democracy contains its own unwholesome incentives and biases? In other words, what if the game is rigged?

This is why policy libertarianism seems like a weak and incomplete philosophy to me. Presumably if libertarians believe that libertarian policies are just and beneficial, then they would want to live in a world where those policies are implemented. However, if the incentives of the political system are stacked against libertarianism, then their efforts advocating libertarian policies are futile. No amount of pamphleteering and blogging will make vast amounts of people act against their self-interest. Quoting Jefferson at housewives isn't going to sway them when Obama Claus is on the television offering free college educations and health insurance. Putting 51% of the country on welfare programs and then campaigning to enlarge the payments will remain a winning strategy no matter how many DVDs of "Freedom to Fascism" are printed.

Policy libertarianism is only valid in a particular time and place, and then only if you have certain beliefs about the political system at that juncture.PL is useless otherwise. If we kidnap Ron Paul and ship him back in time to live under the Bourbon Dynasty in France, what should he do? Presumably he still thinks that libertarianism is as just and wise in Bourbon France as it is in 21st century America. Should he write florid epistles to the king, trying to convince him of the value of universal human rights? Should he try to marry a princess?

Or suppose we send Ron Paul to live under a government run by evil robots that grow humans in vats and then suck out their life force to power their machines in some physics-defying green energy scheme. Likely Ron still thinks the evil machines should respect his property rights and freedom of speech. I don't see how Ron's beliefs matter very much. He is going to have to hire a damn good lobbyist to overcome the sway of the human-vat-maker union.

Under an incompatible government structure, policy libertarianism is an impotent philosophy. As soon as your faith in liberal democracy wavers, PL looks naive. It's as useless as a lawn ornament. It's gazelle trying diplomacy with lions.

My faith in democracy is at a low ebb, so I think structural libertarianism should be given more thought and policy libertarianism less. As one of the 200 million most influential people in America and one of the 20 most influential writers on this blog, I hope I can lead the libertarian discussion in that direction.

Back in Time

Hulu.com is awesome. Like Youtube before the copyright lawyers hit it.

Contra Libertarianism

Picture yourself as Lee Kwan Yew in 1965, the Prime Minister of Singapore the year it gained independence. You are in control of a third-world, multi-ethnic nation on a small island off the coast of southeast Asia. Communism is at its high-tide; the red fever has already swept over many of your neighboring countries. In your own country, communist parties are growing in popularity and calling for more social welfare policies. What do you do?

This is a situation where libertarianism fails to be a synonym with good governance. Would you recommend that Yew stubbornly cling to a low-tax, laissez-fare social policy? It is not hard for me to imagine what would happen in that case. It is a familiar pattern in history, populist pressure building until it bursts forth in a communist revolution. Yew is eaten by a hungry mob, his wife and children are slow roasted, glazed with cinnamon, and eaten for dessert. American fighter planes douse the island in napalm.

That is not what actually happened. We know that Yew served as Prime Minister in Singapore for thirty years, and his political party has stayed in power for five decades. So, what did he do?

Yew's key insight is that while democracy might elect government by the will of the people, government policy also influences the peoples' will. He knew that he had to address communist agitation for welfare policies or lose popular support. At the same time he was worried that welfare recipients would provide a permanent constituency for the left-wing parties who always supported more welfare.

It is remarkable how closely this mirrors the current concerns of the American right-wing about Universal Health Care. They fear that once a majority of the population depends on government welfare programs, it will grow harder and harder to forge a majority that opposes them. Also, for the same reason Social Security is considered the "third-rail" of American politics. Both political parties don't dare oppose it unless they anger the legions of voters dependent on SS payments. Any mainstream criticism of SS is carefully framed solely about concerns for its long-term solvency.

The policy that Yew's decided on used the same logic in reverse. It has another close parallel in recent American politics, President Bush's ill-fated "ownership society" program, which was a part of his attempt to build a permanent right-wing majority. He believed that increasing the average American's asset balance through home ownership, private retirement accounts, and private medical spending accounts would increase support for property-friendly, libertarianish, right-wing economic policies. I think his plan would have worked, had its implementation not suffered from the usual level of Bush-regime competency.

I would not be surprised if Bush's advisors drew inspiration from Singapore's experience. Yew's government instituted a forced savings program with enough government and employer subsidies to satisfy the left-wing. Part of the forced savings program was for medical expenses. However, the other part was Yew's masterstroke - the retirement account. Money in the individual retirement accounts could be used to make investments in housing and securities, but it could not be withdrawn for ordinary consumption uses until retirement. Over time, the average Singaporean's asset balance waxed, and the support for communism waned. Just as welfare recipients would be natural constituencies for left-wing parties, home owners with substantial investment portfolios were natural constituents for Yew's center-right party. However, Yew was careful to call his party "socialists" on his diplomatic trips to Europe, while it remained fashionable.

It is interesting to briefly compare Yew's electoral strategy with modern libertarians', which mostly consists of handing out pamphlets. We are a movement that believes that people respond to incentives, and yet we trust that the eloquence of our rational arguments will move people to vote against free education, free health insurance, and the other goodies that Barack Obama promises like Santa Claus.

What should libertarians think of Singapore's experience? Given the results, it is hard to argue with Yew's decisions. I am no fan of a forced savings regime, but it is better than the transfer programs we have in the United States, and it is certainly better than a communist revolt. Today, Singapore has a free market economy with strong property rights, it is richer than the United States, and three times richer than Malaysia, its closest neighbor.

Perhaps a libertarian would say that Singapore should have followed libertarian policies all along and developed a free and prosperous economy, but that option simply wasn't on the table. It was either meet the communists half-way, or perish. In the same light, maybe a pacifist would say that Finland should not have fought the Soviet invasion in World War II and remained independent. It's wishful thinking. The advocated cause does not lead to the desired effect.

Practical libertarianism is my new area of interest. My political goals are different from Yew's, but like Yew, I recognize that the incentives facing a political system determine its destiny. In order to accomplish his goals, Yew had to restructure the incentives present in his society. He kept the legal framework of democracy in tact, but he changed the lifestyle of the voting populace.

As a libertarian, I am a bit more squeamish about reengineering peoples' lives. However, I recognize that our constitutional democracy is not an impartial arbiter between competing political philosophies. It is not an idealized marketplace of ideas. Rather, it has built-in biases. If we ignore reality, then we will never change it to our liking.