Chris Bertram’s case for libertarianism
(Note: This post is NOT part of our current Democracy Symposium. If you want to follow the Symposium – and you should! – you can find it here.)
They say that one man’s Modus Ponens is another’s Modus Tollens. Chris Bertram, a left liberal from over at Crooked timber, unwittingly paints a fairly strong case for libertarianism:
Some of you, I know, are worried about this so-called 1 per cent, and even about the 1 per cent of the 1 per cent: the people who own lots of stuff. Not only do they own lots of stuff, but they own the kind of stuff that is useful if you want to own even more stuff…
…Now I suppose you want to do something about that? Yes? One option would be to let them hang onto all their existing assets – after all, they got them justly (or at least non-criminally) according to the rules of the system they themselves helped to formulate – but to introduce a new system of rules (call it a “basic structure” if you like) that works to the greatest benefit of the least advantaged. Assume you have the knowledge to design it with the distributive effects you want (big assumption that!). Let that system grind away for long enough – a few generations perhaps – and you’ll have shifted things a little bit in the right direction…
… If you really want a shift in the distribution of wealth and income, if you really really want it, then realistically you’re going to have to use state power to do a bit of ex post redistribution. You’re going to have to take stuff from some people and give it to others. Doesn’t necessarily have to be that total Marxian expropriation of the expropriators: a comprehensive programme of debt cancellation would fit the bill. Life is about making choices: and you’re going to have to choose. Is it outrageous to dispossess someone of the wealth they acquired under the rules of the game; or are you going to say that substantive fairness sometimes matters more?
He concludes the post with:
If robbing the rich appals you, become a libertarian instead.
And down in the comments is this gem:
Look folks. There’s a reason why Hayek, in The Mirage of Social Justice exempted Rawls from his strictures against “social justice”, and that was because Rawls’s programme involved embedding redistribution into the design of a system of rules knowable ex ante by persons., thereby conforming with Hayek’s conception of the rule of law.
Of course I think Bertram et al underestimate the value of the rule of law. But if you are going to throw Rule of law under the bus in order to achieve redistributive goals, it says something about your ideological blinders. Of course, none of this is truly sufficient to make my point, but since this post is just a quickie, I will assume that it can be shown that we cannot throw the Rule of Law under the bus the way Bertram thinks we should.
Bailing out the banks by executive decree and failing to prosecute the massive fraud that’s underlain all of the recent bubbles is throwing the Rule of Law under the bus. But since it’s being done in a way that benefits the ones who run and own things, it’s only the nominal Law being abandoned, not the real one.Report
And somehow massive corporate welfare and interference in the market are supposed to libertarian positions?Report
They’re just as much Libertarian positions as steadfast opposition to any and all education reform is a Liberal position.Report
Only few if any actual self identified libertarians have said that the bank bailouts were good. In fact, I remember libertarians being one of the loudest voices arguing that it would create moral hazard. On the other hand, many actual liberals do in fact assume that anyone who mentions the word education reform is out to kill teacher unions.Report
Many Liberals assume Barack Obama is out to kill teacher unions? Links or it didn’t happen.Report
wait Barack obama is proposing education reform?Report
Not the kind that you want, but I don’t know what else you’d call Race to the Top, expanding charter schools, and the like.Report
Sorry, wasn’t paying attention.Report
Having wikipedia’d race to the top, I don’t find anything particularly objectionable about that kind of stuff, though they do seem to be the kind of thing which I think (perhaps erroneously) that many liberals would object to. The reforms seem like standard neoliberal faire, which are pretty unobjectionable (at least to me on their face). Yet I do remember lots of liberals wailing and gnashing their teeth when people talked about performance based standards and expanding charter schools. Did something happen and such programs became okay once Obama proposed them?Report
I think two things are going on. First, Liberals (and even the teacher’s unions themselves) aren’t as rabidly anti-reform as they are often characterized. Almost of all of us will support at least some types of education reform in some circumstances (charter schools being probably most acceptable). Second, the complicating factor in these debates is that most Liberals (and definitely most teachers unions) don’t trust Libertarians and they really, really don’t trust republicans to deal with them in good faith. Now I’m not saying that that lack of trust is reasonable or unreasonable, but it’s a fact of life in these debates. So when Barack Obama does something like Race to the Top, his side of the aisle isn’t worried that this is a stalking horse for voucherizing public education or gutting the teachers unions for partisan political purposes.Report
Of course not. We’re talking about the law as it exists, not as we’d like it to be.Report
Maybe I misunderstood you. What was your point again?Report
That the Rule of Law is thrown under the bus to achieve redistibutive goals all the time. But since it’s redistribution upwards, it’s hardly mentioned.Report
Which is not really true right? Actual libertarians have objected to violations of rule of law that favour corporations. Kelo comes to mind as do the bank and auto bailouts. I don’t see how the “law as it exists, not as we’d like it to be” comment makes sense with respect to this.Report
The left has confessed to playing favorites. Libertarians want the game to be fair. The recipe for this is easy…
Establish a game which all parties would agree to before the game starts, not knowing which role they are playing. Let’s call it a veil. Then avoid activist judging and mid game point redistribution and rule lobbying.
The recipe to get a game everyone agrees to is to give them competing games and let them choose which game to enter. Voila!
Fairness.Report
The left has confessed to playing favorites.
Well, that’s an improvement, I guess. Last time you said we were immoral.Report
Only if immorality is defined as liking to exploit others to achieve their desired outcomes.Report
Game, set, match!
If only moral people were allowed to control policy things would be perfect, no?Report
It’s not too late to convert. He who fishes nuns later joins the church.Report
I’ve yet to see anything to convert to. My summary of your policy proposals is that voluntary arrangments are better than coerced ones. I don’t know a single liberal who’d disagree with that. Where we differ is on the limits of voluntary action. At least, that’s where we differ from my pov. (Well, that and the whole “political reality” thing…)
From your pov, liberals are advocating the rise of Stalinism 2.0. Which is exactly like Stalinism 1.0. But since we liberals have re-written history, nobody will know that.
Except you.Report
sw,
“My summary of your policy proposals is that voluntary arrangments are better than coerced ones. I don’t know a single liberal who’d disagree with that. Where we differ is on the limits of voluntary action.”
All ribbing aside, really? It doesn’t seem that they prefer voluntary arrangements. Is this due to differences on the limits? And does this mean differences in the potential scope of non coercion? Or something else?Report
@Stillwater,
My summary of your policy proposals is that voluntary arrangments are better than coerced ones. I don’t know a single liberal who’d disagree with that
Liberty60 explicitly disagreed with it. But in fairness, he used to be a conservative, and hus argument on this issue struck me as more conservative than liberal sounding.Report
Libertarians, having no power, responsibility, or likelihood of gaining either, can insist that they’re fair-minded and impartial, and would always value principles about self-interest.Report
And thus it means nothing whatsoever when we point out the venality and partiality of today’s politicians.
I’d still rather be Diogenes than Alexander.Report
Take the threatened bank collapse as an example. It’s easy to focus on the moral hazard of the bailout when the consequences of letting the financial system collapse aren’t your responsibility. It’s true, but ultimately it’s not what matters.Report
In my mind, it’s more like this: suppose you have a good friend who’s behind on a payment of some kind, and if he can’t make it the domino effect will result in him losing his house, his car, his job, maybe his wife and kids. You have a choice to make: bail him out with a loan, or allow him and his family experience a hard earned lesson about financial responsibility.
People can go either way on it, but prioritizing the “lesson” part over the “consequences” part out of allegiance to a principle, and without due reflection, is just silly.Report
Stillwater,
But if we always prioritize the consequences, when o we learn the lesson? Is setting someone up to repeat the same mistake, so that they can be spared present pain, really either wise or just? You do hate to see your friend’s family hurt by his foolish spending,* but if he can count on being bailed out, why won’t he keep on doing the same thing, putting his family in that position over and over?
——–
* Note my change there. I think the banks didn’t just have a misfortune that we could appropriately help them through, but we’re engaged on a sustained course of foolish actions.Report
“You would have done the same in my case” is, as counter-arguments go, less convincing to most people than you’d think.Report
Especially when it’s true.Report
It depends. At least when it comes to Kelo, we can point to such opinions as the opinions held by the four rather than the opinions held by the five.
Were it a 9-0 decision, you might be able to argue that “you would have done the same”.
4-5?
I say thee “nay”.Report
Kelo’s a prefect example for that: muh heat, little light, and practical effect almost nil, especially now that almost every state has ether made the practice illegal or severely restricted it.
But tell me, President Lincoln, since in the abstract you can see that a compact entered by the states can be exited by them, why does it matter whether it’s over slavery or not?Report
The takings clause’s relationship to Kelo differs from the ratified 13th Amendment’s relationship to the War Between Brothers insofar as the former actually existed at the time of the dispute in question.Report
Mike, why don’t you write an OP explaining exactly what laws were broken and what fraud? I’m curious and I suspect we could point your eloquent piece at the proper authorities who are apparently unaware given their inaction. Or maybe it is just a problem with the Obama justice department, I’ve heard they don’t always prosecute crimes, sort of picking and choosing as they go along.Report
Give me a budget to hire some investigators, and I’ll get you the details.Report
Several people have done it Mike, and written books. The answer is “as far as we can tell, no laws were broken, but this is because the entities responsible for creating the necessary regulations were either asleep at the wheel or explicitly prevented from doing their jobs by congress”.Report
I’m skeptical. From what I’ve heard first-hand about the mortgage business, there was so much pressure back then to qualify people and get the loans made that at the very least, corners were cut, documentation not filed, policies violated left and right. Did this never rise to the level of criminal fraud? When tranches of mortgages were sold, and their solidity misrepresented, was that never fraudulent either?
And it’s well documented that banks have tried to evict people from their homes without being able to demonstrate that they’re the mortgage holder. That is fraud, but as far as I know it’s never been prosecuted as such.Report
A fine example of black and white thinking.
Well done, Sir.Report
Let me put it this wa: The Nuremberg trials insofar as they prosecuted evil creeps for things which were legal even if morally bad were more than morally problematic.Report
Write that up.Report
The Nuremberg trials may have been problematic, but to say the Nuremberg defendants were acting within the bounds of law is beyond obscene. Germany was a signatory to the Geneva Conventions and treated downed American airmen as decently as could be expected or managed in those times, though those airmen were bombing civilian population centres in violation of those conventions. Not everyone who fought for Hitler deserved death for his actions. The Nuremberg trials ensured some measure of justice was done, however imperfectly.
Nuremberg represents a unique chapter in military justice. They were not conducted by civilian rules. Moreover, they were international. If they were clumsy, they were the best which could be done under the circumstances and a vast improvement on the tens of thousands of summary executions proposed by Stalin. The defendants were represented by counsel, confronted with the evidence and faced their accusers in open court. They were not kangaroo trials. People were acquitted.
War and its aftermath are always morally problematic. Wars start when the politicians stop doing their jobs and wars stop when they get back to work. Inter arma silent leges. The Nuremberg trials were a first pass at justice for those who had destroyed good laws and enacted bad ones, the sort of laws you seem to feel might serve as insulations. The usual defence at Nuremberg was “I was under orders” not “My actions were legal.”Report
Abandoning Kant is something that I think more people ought to do (I mean, *I* have done it because I wouldn’t mind living in a world where everyone does) but there is one thing that continually bugs me and that’s the idea that sauce for the goose is not, in fact, sauce for the gander and the very idea that bad people might eventually get their hands on these particular powers we’re discussing should be waved away out of hand.
If there is a power that you wouldn’t want your worst political enemy having, it seems to me that you yourself should not hold it. If, for some reason relating to the consent of the governed, the tables turn and, suddenly, your worst political enemies have the reins of power? What will you then say? Some speech that begins with the word “Brothers!” and appeals to the higher selves of the people whose turn it is to hold the whip?Report
I’ve tried to abandon him, but I just Kant.Report
Oh, boo.Report
Sorry. 🙂
In retrospect, it might have worked better with a ‘Brokeback Mountain’ angle – something like, ‘Why Kant I quit him?’
Or not.
Whaddya want, I’m no MikeSchilling.Report
To be fair, Jaybird made him feel like that level of humor was OK with his parenthetical joke.Report
No, my parethetical joke was funny.Report
Perhaps it was funny in itself, but I couldn’t perceive it.Report
It was funny like a boot in the a posteriori.Report
Kant would not approve of you being so Mean to my End.Report
Sorry, I’m only Humean.Report
What exactly is wrong with Kant?Report
The discussion so far:
“Sure, whatever. But we can’t agree because libertarians supported the bank bailouts.”
“We didn’t support the bank bailouts.”
“…”
“Seriously, we didn’t.”
“Let’s change the subject.”Report
“It’s true that we oppose the sort of regulation that might have prevented their necessity, but that’s totally irrelevant.”Report
What did you have in mind?Report
I would assume leverage caps and a separation of retail and investment banking, with assorted other stuff like a transactions tax added to taste.Report
Add restrictions on the size of financial institutions, to prevent them from being too big to fail and requirements that things purporting to be insurance policies actually be insurance policies.Report
For a long time, the analysts at the Cato Institute were just about the only ones griping about the “implicit guarantee” contained in our financial system.
“This is going to cost us a lot of money one day,” the Cato people said.
“Nonsense,” said everyone else.
Then the crisis came. “We have to do what’s necessary,” said everyone else.
Everyone else? They’re the serious people.Report
Which doesn’t really address all the other problems in the mortgage market. Fannie and Freddie were the followers into the real estate/mortgage shitstorm. It was the private lenders that drove us into a ditch.Report
If it was the private lenders, what caused them to act this way?
The obvious candidates to me are interest rate policy and, again, an implicit guarantee of bailout, as per the Savings & Loan crisis.
I could rewrite the dialogue if it would help.Report
Greed made them act that way Jason. The private lenders had no guarantee of any bailout. They weren’t even thinking that way. They had struck gold and were getting rich of the big rock candy mountain.
Most of the lenders cranking out mortgages to anybody with a pulse weren’t even banks so they was no FDIC backstop. They were bundling crappy mortgages into bonds and selling them off because it was good business. Once they sold the bond they weren’t even on the hook for mortgage after, i think, six months or a year. They could make shitty loans, sell the loans for a profit and glow about their noble virtue. I don’t see any implicit guarantee of bailout, but more over i’ve never, ever seen any evidence from any of the people driving the RE market into a ditch that they even contemplated failure. Show me where they cared about failure or even contemplated it.Report
Greed is a singularly unelightening response. Everyone is greedy in a certain sense, but not everyone issues bad loans. There has to be more to the issue than the coincidental personal failings of a bunch of bankers.Report
Murali-Yes and no. Greed is a perfectly good response if we’re talking about cultural norms in the business world. I’d argue that in much of the US business world doing absolutely anything, regardless of long term outcome or relation to even the most minimal system of ethics is fine and encouraged. The culture of a lot of US business is “greed is good” to use an old movie cliché. However Gecko would be a hero to many. Culture matters.
No, greed is not sufficient to explain the systematic factors that led to the RE clusterfish. I agree. Greed was a good motive however to try to corrupt any sort of sensible regulation though.Report
They had found a way to make bad loans pay, and took advantage of that opportunity to create lots of them. There was lots of money being made in the short term. There’s no more reason to think that the assumption of a bailout was required than in any other irrational bubble.Report
” There has to be more to the issue than the coincidental personal failings of a bunch of bankers.”
You don’t know many people in the mortgage business.
I’m not talking about banking in general, or finance in general, but real estate mortgages in particular.
It does not align well with sane incentives.Report
Greed is a constant, not a variable, do it cannot explain why sometimes things implode and sometimes they don’t. In addition to which greed us not actually subject to diminish meant by regulation. Is greed part of the problem? Sure, the same way gravity was part of the reason I got hurt when I fell out of the tree. But focusing on either gravity or greed as a cause is unproductive.Report
Tanta vive!Report
I do agree with greginak that culture matters. And while I’m quite comfortable with people proposing cultural change, the reality is that culture is unlikely to respond to the complaints of scolds (I do not mean that term pejoratively: I’m something of a cultural scold myself, andit’s an old tradition).Report
People aren’t completely irrational, and banks measured their risks and rewards on a short time horizon. If you’re the one bank in 2004 that isn’t in the derivatives business, then everyone else is making money hand over fist and you’re the chump who’s not keeping up with the market. All of a sudden your shareholders are yelling at you, you can’t hire top talent, and your friends are all buying new yachts that you can’t afford. In that situation, it’s easy to convince yourself that these assets really are safe. And once you’ve got your piece of the gravy train, how are you going to react when your killjoy in-house economist starts telling you that the deluge is coming? Can you even be sure that your in-house economist is going to have the guts to be a killjoy?
The psychology of these bubbles has been repeated often enough, and in sufficiently varied governance structures, that I don’t understand why people still feel the need to explain them with interest rates and moral hazard. This is just what happens when you have an unregulated capitalistic financial sector. Everybody wants to get rich quick.Report
From what I’ve read, it’s unlikely that any of that stuff would do a lot of good. I do intend to write a post some day on how I’d use regulation to prevent a future crisis. But given how fast I write, I have no idea how far into the future that will be.Report
The entire One Percenter debate is specious. No matter how societies or economies are organised, we will always have One Percent on top for one reason or another. The Libertarians want to tell us the government is crooked. They grudgingly admit the Free Market is often run by crooks. What the Libertarian won’t admit, no matter how hard he’s pressed, is this: while our political process requires tens, hundreds of millions of dollars to get anyone elected to high office, those with money will make the rules.
Look at Romney as he becomes the puppet of Sheldon Adelson. It’s disgraceful. Look at Obama as he fails to prosecute the Wall Street grifters, sending forth his lying mouthpiece Tim Geithner to treat with these financial warlords. Fact is, most of what the Wall Street grifters were doing was perfectly legal. The laws which might have restrained them had been abolished in the Clinton era. Look at the Enron scandal: by removing the regulators from the picture, Enron was able to stuff its losing hands into the casino trash can and deal itself a new hand.
The Libertarians might not have supported the bank bailouts. Alan Greenspan, noted Libertarian, presided over the wholesale dismantling of the regulatory structures which would have prevented the collapse and obviated the need for a bailout. Let them again re-read their prophet Hayek, a rather wiser man than the current gaggle of simplistic Libertarians, for he explains this very well. Too little regulation is as bad as too much regulation. While the Libertarians only preach one half of Hayek’s gospel, they are not to be taken seriously.Report