Taking Libertarianism Down a Notch

Here is a bit from a wonderful article by Stephen Metcalf in Slate magazine on libertarianism and Robert Nozick:

"Libertarianism" places one—so believes the libertarian—not on the political spectrum but slightly above it, and this accounts for its appeal to both the tricorne fringe and owners of premium real estate. Liberty's current bedfellows include Paul Ryan (his staffers are assigned Atlas Shrugged), Glenn Beck (he flogged The Road to Serfdom onto the best-seller list), Slate's Jack Shafer, South Park, the founder of Whole Foods, this nudnik, P.J. O'Rourke, now David Mamet, and to the extent she cares for anything beyond her own naked self-interest—oh, wait, that is libertarianism—Sarah Palin.
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With libertarianism everywhere, it's hard to remember that as recently as the 1970s, it was nowhere to be found. Once the creed of smart set rogues, H.L. Mencken among them, libertarianism all but disappeared after the Second World War. What happened? The single most comprehensive, centrally planned, coordinated governmental action in history—that's what happened. In addition to defeating fascism, the Second World War acted as a magnificent sieve, through which almost no one, libertarians included, passed unchanged. (To pick one example: Lionel Robbins, the most prominent anti-Keynesian before the war, served as director of the economic division of the British War Cabinet; after the War, Robbins presided over the massive expansion of the British higher education system.) By the '50s, with Western Europe and America free, prosperous, happy, and heavily taxed, libertarianism had lost its roguish charm. It was the Weltanschauung of itinerant cranks: Ronald Reagan warming up the Moose Lodge; Ayn Rand mesmerizing her Saturday night sycophants; the Reader's Digest economist touting an Austrian pedigree.

Libertarians will blanch at lumping their revered Vons—Mises and Hayek—in with the nutters and the shills. But between them, Von Hayek and Von Mises never seem to have held a single academic appointment that didn't involve a corporate sponsor. Even the renowned law and economics movement at the University of Chicago was, in its inception, heavily subsidized by business interests. ("Radical movements in capitalist societies," as Milton Friedman patiently explained, "have typically been supported by a few wealthy individuals.") Within academia, the philosophy of free markets in extremis was rarely embraced freely—i.e., by someone not on the dole of a wealthy benefactor. It cannot be stressed enough: In the decades after the war, a kind of levee separated polite discourse from free-market economics. The attitude is well-captured by John Maynard Keynes, whose scribble in the margins of his copy of The Road to Serfdom reads: "An extraordinary example of how, starting with a mistake, a remorseless logician can end up in Bedlam."

And then came Robert Nozick.

You really should read the rest of the article since the author now launches into a critical evaluation of Nozick.

Nozick drank the Kool-Aid of libertarianism:

As a moral philosopher, Nozick was free to stretch liberty further than even an Austrian economist. That is, he was able to separate out a normative claim (that liberty is the fundamental value of values, and should be maximized) from an empirical claim (that the most efficient method for allocating goods and services is a market economy). Free to pursue liberty as a matter of pure principle, Nozick let nothing stand in his way. Should we tax the rich to feed the poor? Absolutely not, as "taxation of earnings is on par with forced labor."

... when Nozick published Anarchy, the levee broke, the polite Fabian consensus collapsed, and hence, in rapid succession: Hayek won the Nobel Prize in economics in 1974, followed by Milton Friedman in '75, the same year Thatcher became Leader of the Opposition, followed by the California and Massachusetts tax revolts, culminating in the election of Reagan, and … well, where it stops, nobody knows.

The author begins his attack on Nozick by asking:

Can it really be that eliminating the income tax shows maximum moral respect for others? I thought a fraction of a rich man's fortune is to the rich man only money but to a starving man is freedom. Am I a moral idiot?

...

When I think with my own brain and look with my own eyes, it's obvious to me that some combination of civil rights, democratic institutions, educational capital, social trust, consumer choice, and economic opportunity make me free. This is not what Nozick is arguing. Nozick is arguing that economic rights are the only rights, and that insofar as there are political rights, they are nothing more than a framework in support of private property and freedom of contract. When I study American history, I can see why America, thanks to a dense bundle of historical accidents, is a kind of Lockean paradise, uniquely suited to holding up liberty as its paramount value. This is not what Nozick is arguing. Nozick is arguing that liberty is the sole value, and to put forward any other value is to submit individuals to coercion.

Here is the dirty little secret behind the birth of Nozick's libertarianism:

But there was a historical reason for Nozick's belief: the magnificent sieve. Harvard's enrollment prior to World War II was 3,300; after the war, it was 5,300, 4,000 of whom were veterans. The GI Bill was on its way to investing more in education grants, business loans, and home loans than all previous New Deal programs combined. By 1954, with the Cold War in full swing, the U.S. government was spending 20 times what it had spent on research before the war. "Some universities," C. Wright Mills could write in the mid-'50s, "are financial branches of the military establishment." In the postwar decades, the American university grew in enrollment, budget and prestige, thanks to a substantial transfer of wealth from the private economy, under the rubric of "military Keynesianism." As a tentacle of the military-industrial octopus, academia finally lost its last remnant of colonial gentility.

At the same time the university boomed, marginal tax rates for high earners stood as high as 90 percent. This collapsed the so-called L-curve, the graphic depiction of wealth distribution in the United States. The L-curve lay at its flattest in 1970, just as Nozick was sitting down to write Anarchy. In 1970, there were nearly 500,000 employed academics, and their relative income stood at an all-time high. To the extent anyone could believe mental talent, human capital, and capital were indistinguishable, it was thanks to the greatest market distortion in the history of industrial capitalism; and because for 40 years, thanks to this distortion, talent had not been forced to compete with the old "captains of industry," with the financiers and the CEOs.

Buccaneering entrepreneurs, boom-and-bust markets, risk capital—these conveniently disappeared from Nozick's argument because they'd all but disappeared from capitalism. In a world in which J.P. Morgan and Cornelius Vanderbilt have been rendered obsolete, reduced to historical curios, to a funny old-style man, imprisoned in gilt frames, the professionals—the scientists, engineers, professors, lawyers and doctors—correspondingly rise in both power and esteem. And in a world in which the professions are gatekept by universities, which in turn select students based on their measured intelligence, the idea that talent is mental talent, and mental talent is, not only capital, but the only capital, becomes easier and easier for a humanities professor to put across. Hence the terminal irony of Anarchy: Its author's audible smugness in favor of libertarianism was underwritten by a most un-libertarian arrangement—i.e., the postwar social compact of high marginal taxation and massive transfers of private wealth in the name of the very "public good" Nozick decried as nonexistent.

And the screw takes one last turn: By allowing for the enormous rise in (relative) income and prestige of the upper white collar professions, Keynesianism created the very blind spot by which professionals turned against Keynesianism. Charging high fees as defended by their cartels, cartels defended in turn by universities, universities in turn made powerful by the military state, many upper-white-collar professionals convinced themselves their pre-eminence was not an accident of history or the product of negotiated protections from the marketplace but the result of their own unique mental talents fetching high prices in a free market for labor. Just this cocktail of vanity and delusion helped Nozick edge out Rawls in the marketplace of ideas, making Anarchy a surprise best-seller, it helped make Ronald Reagan president five years later. So it was the public good that killed off the public good.

The author goes on to point out that Nozick eventually repudiated his "libertarianism". But sadly, like Keynes pointed out the deadly hold that "well articulated" ideas, even wrong ideas, have on people:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.

The current popularity of libertarianism is the partying of small minds marching to great ideas that have been shown to be wrong. While the smart people have quietly slipped away from the party, the hangers-on are turning the party into a drunken debauch and long overstaying their welcome.

The author offers the proper way to look at life, a dynamic balancing between liberty and social responsibility:

Another way to put it—and here lies the legacy of Keynes—is that a free society is an interplay between a more-or-less permanent framework of social commitments, and the oasis of economic liberty that lies within it. The nontrivial question is: What risks (to health, loss of employment, etc.) must be removed from the oasis and placed in the framework (in the form of universal health care, employment insurance, etc.) in order to keep liberty a substantive reality, and not a vacuous formality?

Sadly, modern "libertarians" a simple-minded people who drive one idea right to absurdity, to a complete contradiction:

When Hayek insists welfare is the road is to serfdom, when Nozick insists that progressive taxation is coercion, they take liberty hostage in order to prevent a reasoned discussion about public goods from ever taking place. "According to them, any intervention of the state in economic life," a prominent conservative economist once observed of the early neoliberals, "would be likely to lead, and even lead inevitably to a completely collectivist Society, Gestapo and gas chamber included." Thus we are hectored into silence, and by the very people who purport to leave us most alone.

And:

Large-scale, speculative risk, undertaken by already grossly overcompensated bankers, is now officially part of the framework, in the form of too-big-to-fail guarantees made, implicitly and explicitly, by the Federal Reserve. Meanwhile, the "libertarian" right moves to take the risks of unemployment, disease, and, yes, accidents of birth, and devolve them entirely onto the responsibility of the individual. It is not just sad; it is repugnant.

Sadly "libertarianism passes for a political "philosophy" when in fact it is a simpleton's reduction of complexity to a dogmatic idiocy. Tragic.