Unfortunately, Economic Libertarianism’s Time Has Passed

An ideology based on what some might call extreme freedom has established a renewed foothold in American political thought.  Libertarianism, which can be defined as a policy of no laws except those preventing force, fraud, or coercion, has ebbed and flowed throughout the decades.  The philosophy generally supports Democrats on social issues and Republicans on economic ones; true libertarians want both lower taxes and legal drugs, and oppose both school prayer and inflationary money policies.  They differ from populists by advocating freedom for businesses as well as people, but both dislike excessive government power.  The Libertarian Party has attracted people as diverse as hippies, motorcycle-gang members (who also don’t want mandatory helmet laws), and economists advocating a return to the gold standard.  In a sense, libertarianism is the archetypal political scheme for the freest governed country in the world, with a main strength that is clear – if people can choose to do what they want, limited only by the inherent rights of others, they will find their own niches and be happier and more successful.    

My libertarian roots are deep.  I voted for Ed Clark, the first and maybe still most high-profile Libertarian Party presidential candidate, in 1980.  I also chose Harry Browne from the same in 2000, and heavily supported Ron Paul in the 2008 primaries.  I still may be closer to a libertarian than to a consistent conservative or liberal.  Yet, because of changes we have seen, the ideology now has a fatal flaw which makes it unsuitable as a whole.  What is that?

Central to libertarian thinking is the value of free markets.  In them, people provide resources and obtain others in return.  The United States has had a long, fine run with relatively free markets, during which exchanged assets or experiences have often ended up with the people valuing them the most.  When you buy bread, you want it more than Wonder or Winn-Dixie does, and so you pay more than their costs.  If you sell old postcards at a flea market, you are saying you value the money they bring more than the cards themselves, opposite to your customers.  Paid workers in any job trade their expendable time for pay and benefits they want more. 

Unfortunately, an increasing share of people cannot participate in these deals on their own.  Work’s New Age Principle #13 holds that in order for markets to work, people must have money to spend.  Many Americans, over the centuries, have had only one real source for their money, selling their labor, so if people are not working, large numbers of them will not have anything to offer.  Although they may choose to raise money through other of their resources, such as selling things on eBay or renting out rooms in their homes through Airbnb, their tangible goods will run out, and those needing to raise money the most tend to have the least.  Accordingly, even a temporary jobs crisis, which in effect happened in Ireland’s Potato Famine in the 1840s, can ruin a free market system, and the jobs crisis we now face is permanent.

What happens, then, to markets?  The result must be a permanent market crisis.  It is now alleviated through safety-net programs such as welfare, food stamps, and unemployment benefits, none of which, though, true libertarians would support.  With the number of employment opportunities in relation to the population dropping, the need will only get greater, with more and more people in the position hunter-gatherers would have if their animals and plants disappeared. 

Ayn Rand, the patron saint of libertarianism, allegedly said that she would not rescue a drowning person she didn’t care about, even if it would be easy.  That is a choice we can make about our countrymen, when, in addition to their labor becoming worthless, they sell all of their possessions of value and can no longer keep houses with spare rooms to rent out.  Yet what might result for a country with more and more people without possessions, jobs, or social services, such as a new feudalism with the masses beholden to the 1% for their survival, or a Somalia-like or even Mad Max-style milieu with the security industry having the best growth prospects, are not pleasant to think about. 

The libertarian influence, progressive in the right ways, has been tremendously positive.  It is hard to imagine, to name only two things, the recent legalizations of gay marriage and marijuana without it.  Once, libertarianism promised great prosperity to go with its freedom.  From here on out, though, it will not be enough, economically, for the federal government just to leave people alone.  For too many, that kind of freedom would be only an indication that they had, as Kris Kristofferson put it, nothing left to lose.  That is not what we want for the greatest country in the world.