The rise and fall of libertarian thought

In a lengthy, passionate, and strident new essay on Slate.com, Stephen Metcalf cites the example of Harvard professor Robert Nozick’s transformation from libertarian champion-in-chief to apostate as proof of the ideology’s inherent inability to protect the very values it claims to hold most dear. The piece, appearing in Slate — that ultimate venue of glib, contrarian defenses of the status quo — is nothing less than a complete denunciation of what has been the dominant political ideology of the past generation; and, consequently, a joyful defense of the welfare state. Even if one vehemently disagrees with Metcalf’s arguments or conclusions, and I’ve no doubt that many will, it’s well worth reading.

As I said, it’s a long piece and it would be somewhat tedious and certainly time-consuming for me to go through it bit by bit; so I’m going to turn instead to a few sections I found particularly interesting. Let’s look at this chunk, from early in the piece, for example:

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.

The question I want to ask about this, here, is whether or not Hayek and Friedman’s being so dependent upon wealthy benefactors is relevant. I think it is, but I don’t think it’s quite as obviously so as Metcalf implies (to be fair, he probably simply needed to trim the fat on an already substantial piece). In its essence, this criticism is the same that has been, as of late, volleyed towards Reason and other organs of libertarian thought that gain their financial sustenance in whole or in part from the brothers Koch and other robber baron boogiemen of the left. What’s the point at which we no longer separate the content of ideas themselves from the political context of their making? Must your argument appeal to those without a self-interest — or with a contrary interest — towards believing them? I know what I think; you probably know what you think; this is why God made comment threads.

Next, I’d like to focus your attention towards this graph, in which Metcalf responds to what he imagines would be the libertarian response (I know, I know — stick with me, here) to his critique of Nozick’s famous “Wilt Chamberlain” argument:

To my critique of the Chamberlain example, a libertarian might respond: Given frictionless markets, rational self-maximizers, and perfect information, the market price for Wilt’s services could not stay separable from the market price to see Wilt play. (Visionary entrepreneurs would create start-up leagues, competing leagues would bid up prices for the best players.) In a free-market paradise, capital will flow to talent, until rewards commensurate perfectly with utility. Maybe; and maybe in a socialist paradise, no one will catch the common cold. The essence of any utopianism is: Conjure an ideal that makes an impossible demand on reality, then announce that, until the demand is met in full, your ideal can’t be fairly evaluated. Attribute any incidental successes to the halfway meeting of the demand, any failure to the halfway still to go.

What say you — little more than a gussied-up “na-na-na,” an unfair depiction of libertarian thought, the fundamental argument for “pragmatism” as the best political lodestar, or none/all of the above?

There’s a bunch more in here that I’d like to talk about, but I’m going to leave it after this one last section which, if its argument is accepted (at least for the sake of discussion), possibly gets at some unsettling questions about human nature and why we seem to make the same mistakes over and over and over again:

Even in 1975, it took a pretty narrow view of history to think all capital is human capital, and that philosophy professors, even the especially bright ones, would thrive in the free market. 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.

I read this section and my mind immediately jumps to the image of a senior citizen in a tri-corner hat baying the slogan slapped on their sign in big red letters: “Keep Your Government Hands Off Of My Medicare!” But I recognize that in a fundamental way, this is a condescending vision of Americans and our behavior as a polity as of late. Of course, that’s not to say that that makes it wrong, but it is perhaps an uncomfortable place for an ostensible democratic humanist to reside. (I wouldn’t be the first.)

P.S. OK, one last last thought: I found the parts of the essay that concerned Nozick’s obvious identification with Chamberlain to perhaps be the most insightful. Without intending to make any broad judgments upon those of you who consider yourselves libertarian, I’ll just say that, in my experience, those who buy the Chamberlain argument tend to possess a deep-seated self-confidence that I’ve always lacked.