Libertarianism and Privilege

Well, the last few days have certainly be interesting around here, haven’t they?

After Erik’s excellent and widely-commented-on post a couple of days ago, I’ve stewed over Freddie’s article, Erik’s reply and the replies to Erik’s reply in the comments.

First, to the substance of Freddie’s post – I agree with Erik.  You can, without much effort, find plenty of libertarians who are notably unconcerned with non-state power or the welfare of the poor in all but the vaguest sense.  Which it is why it’s so remarkable that despite the target-rich environment Freddie managed to hit the entirely blameless Reason piece.  The article he quoted was effectively a curtain-raiser for a 5 minute video in which the issue of the Reason journalists was mentioned for about 10 seconds.  At least 10 times as much time was devoted to taxi drivers themselves, including a great many who at least sounded like ethnic minorities (I listen to the audio version of their videos, so I haven’t actually watched it) explaining how they feared their autonomy would be lost to larger corporate taxi companies.  And yet all Freddie could do was focus on the fact they also wrote about the DC local government violating the First Amendment and how it meant  that really all libertarians care about is white privilege?

And what did Freddie himself say about the actual issue?  – “the issue is a complicated one”.  The thing is, it isn’t.  I feel pretty confident is saying that there is no good reason to impose a medallion system.  Note that “this medallion system is bad” is not the same as “all regulations are bad”.  If there is a problem with taxi drivers causing a lot of accidents require taxi drives to get a special endorsement on their drivers’ license that requires a special (harder) drivers’ test to get (we actually do this in New Zealand).  If there’s a problem with taxi drivers blocking up the roads or otherwise causing problems for other drivers then tax taxi drivers by requiring them to buy a monthly license, but don’t limit the number of licenses and don’t make the licenses persistent – that way competitive forces aren’t overly affected.  If there’s a problem with rouge taxis screwing passengers or kidnapping people for zoo meat or something then require all taxi drivers to register (for a nominal fee – cost recovery only) and make them display the registration number.  Any of these policies would be defensible in principle (whether they were in practice would depend on facts on the ground), and if we were talking about one of them and Freddie had said “the issue is a complicated one” then I’d be OK with that, but the specific regulation being proposed is a fairly blatant privilege grab, and it went over Freddie’s head.  How well can he defend the poor and politically disadvantaged when he can’t identify attacks against them reliably?

But enough of beating up on Freddie, I’d like to consider some of the themes raised in the comments to Erik’s piece.

1) Corporations.  Corporations can exercise a lot of power, it’s true.  They use the power of the state to enrich themselves at the expense of wider society, at least sometimes.  I don’t think liberals and libertarians disagree on this at all.  The point of disagreement between us is in how to fix it, not that there’s a problem (though I concede there can be disagreement in the scope of the problem).  Libertarians think the solution is to take away the government’s ability to do special little deals for corporations.  Liberals want the government to refrain from using its power in that way.  Both of these options have the same problem – they require the existence of a large number of well-intentioned political actors who are immune to the incentives of the political process.  On that basis I declare the battle between libertarians and liberals on this point a nil-all draw.  Rather than throwing stones at each other, how about we spend some time brainstorming ways to change the political incentive so we can actually get some traction on this issue – let’s fix the car before we start arguing about where we want to drive to.  Furthermore, it’s worth point out that corporations aren’t the only groups that rent seek, unions and non-profit advocacy groups also do it.  I find the union opposition to liberalising international trade to be particularly damming.  Not unexpected, but a clear indication that this is a multidimensional issue.

2) Welfare.  I’m actually more with the liberals on this issue.  There is no price mechanism for charity, so there is no reason why one would expect the “market” for charity to clear.  It is likely that even if the government abolished welfare and returned all welfare appropriation as tax cuts, there would still be a bunch of poor people (as an aside, I use Adam Smith’s definition of poverty – being without something that is necessary to life or being without something society considers it indecent to be without; this definition allows for changing standards of poverty over time, but in a more deliberate way than a crude % or average income metric).  While I’ve read the libertarian moral critiques of compulsory charity, and I do find them morally persuasive, I don’t find them persuasive enough to want to abolish welfare in the face of the increase in suffering it would cause.  I have principles – but not at any price.  However, I would also point out that the two largest item in the American welfare State are Social Security and Medicare, these programmes are not designed to transfer income from rich to poor, but rather from young to old.  And older people are, on average, richer than young people.  I’m not saying there isn’t a legitimate purpose behind these policies, but I think it would be a good if liberals were more interested in finding ways to reform these programmes so as to make them less likely to ruin you country’s finances (ideally by targeting them better at people in need, there are a lot of rich old people out there).  For their part, libertarians should at the very least let abolishing the welfare state slide down their list of priorities – the night holds greater terrors than the unemployment benefit and food stamps.

3) The causes of the Financial Crisis.  There’s a lot of argument about this, among experts and amateurs.  And I expect there still will be in a few decades – economic historians still argue of the causes of the Great Depression and the merits of the New Deal.  From my perspective, the financial crisis was a classic clusterfish – systems as robust as markets don’t collapse for just one reason.  On the one hand there was a speculative bubble, a failure of market rationality for sure, but also effectively impervious to policy solutions.  Debt securitisiation was clearly a major aggravating factor, but government and banks had their hands all over that one.  And even if the bailouts were necessary (something I am not convinced of), it takes no genius to realise they have stored up trouble by giving banks less of an incentive to pay attention to what they are doing.  There are probably solutions out there, and some of them may involve regulation, but government contributed to the problem in a lot of ways too, and that needs to be addressed as well.  Also, “too big to fail” must be banished from the public lexicon.  Failure must always be an option because there’s no sure-fire prophylactic for failure.  If the current system does not support failure as an option, this must be changed.

4) The War on Drugs.  In general this is an issue liberals and libertarians agree on, but libertarians seem to make a lot more noise about.  While liberals tend to claim the Democrats are better than the Republicans on this, that’s only true when examining rhetoric.  In terms of policy enacted, Obama is indistinguishable from Bush on this issue.  Hell, when Obama was asked about legalising marijuana during hi selection campaign he laughed the question off.  As if the idea of halting a policy that has failed as spectacularly as any policy since the USSR’s collective agricultural policy was too ridiculous to even address.  The fact the Republicans have more prominent politicians ending the War on Drugs than the Democrats do should be cause for concern on the left.  This is an area that is ripe for cooperation between libertarians and the left.

I think the reason that liberals and libertarians argue so much with each other is that we have similar ideas about what a good society is, but very different ideas about how to get to it.  That we share common goals means we’re halfway there.  There are things we can teach each other, and I think that if the future of government is to be brighter than its present smart liberals and smart libertarians need to work together to improve our respective ideologies and their policy recommendations.  Petty sniping across the aisles does none of us any good, and I don’t feel Freddie’s post was more than that.