Wednesday, March 11, 2015

A New Argument Against Libertarianism?

Henry Farrell has an new essay out, Dark Leviathan. David Henderson took note of the essay in a blog post, Illegal Means Illegal and Scott Sumner noticed the essay via Henderson and has commented under a post titled, A new argument against libertarianism.

Sumner then trots out Paul Krugman
on the Farrell piece:
Paul Krugman agrees: 
a truly brilliant essay . . . an awesome read. 
OK everyone, take a deep breath.  Let’s keep the comment section civil.  Krugman is a distinguished Nobel Prize winner.  This is the world we are condemned to live in.
And Sumner adds:
  I think Deirdre McCloskey best expressed my frustration.
I don’t care how one defines capitalism, as long as it’s not defined as evil incarnate.
Unfortunately, everyone from the Pope to Paul Krugman increasingly seem to prefer exactly that definition.
In other words, Sumner is purposely being outrageous with his headline. He knows full well that Farrell's attack on libertarianism  via an analysis of Silk Road does not hold.

The short critique of Farrell's piece is delivered by Henderson:

My problem is Farrell's conclusion, or, more exactly, the third line in the last paragraph of his conclusion. Here's the last paragraph:
Ulbricht's carelessness brought about the early demise of Silk Road. But if he hadn't been stupid, the marketplace would have soon collapsed under its own weight, or become the creature of larger organisations with a far greater capacity for violence. The libertarian dream of free online drug markets that can magically and peacefully regulate themselves is just that: a dream. Playing at pirates is only fun as long as the other players are kids too. The trouble is, once adults with real swords appear, it may be too late to wake up.

You can't have the "libertarian dream of free online drug markets" unless drug markets are, in fact, free. But, as Farrell well knows, they're illegal. As I put it in my 1991 article "A Humane Economist's Case for Drug Legalization" (UC Davis Law Review, Spring 1991, Vol. 24, No. 3, p. 664):
[D]rug laws make it difficult for drug producers and sellers to establish reputations for supplying high-quality, reliable drugs.

So Farrell's whole discussion, while it is a well-needed (again, assuming his facts are true) tonic for people who think that online markets in illegal drugs won't have big problems, tells us precisely nothing about how free markets would work. In short, "illegal" means "illegal."
Indeed, linking libertarianism with underground markets is an incorrect step. Underground markets, in fact, are a kind of work around, when government regulation becomes extreme in a sector. They are an indication of an oppressive government, not of freedom. An underground market is  not the type of market that would emerge in a truly libertarian society, In a libertarian society, you would be able to walk into a pharmacy and buy cocaine, heroin etc, the way you can now buy gum and aspirin.

Of course, given government regulation and coercion in a sector, a libertarian has no objection to the emergence of black markets, but these markets are more tracheotomies for a sick, coerced society than the breath of fresh air that one could experience in a libertarian society.

Murray Rothbard was correct, there is no connection between libertarians and the running of black market operations. Advancing libertarianism is about education, study and policy concerns, not about being the local (or online) black market drug dealer.

 Robert Wenzel is Editor & Publisher of and  Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics


  1. Is it not the ultimate gunvernment regulation to declare a voluntary market illegal? Off the top of my head I can't think of what a civilization based on the NAP woiuld need black markets for.

    Alex Z.

  2. Tom Cotton of the Letter to Iran, writing at Harvard as a sophomore, explains how the NAP destroys “the community”:

    Libertarianism both flows from and into extreme individualism. It denies that the community (which acts through government) has any right, obligation or duty to infringe upon the individual, unless the individual's actions manifestly harm another. It gives government only the minimal means of providing for society. These means are limited to the police and military force, the criminal justice system and pure public goods such as the infrastructure and water systems. To replace all other roles which government plays, it relies solely on personal responsibility both for one's actions and one's fate…….

    To reject all rights of the community, one must reject all influence of the community. To do this implies a very specific, a very Hobbesian, view of human nature. One must think that men are naturally isolated, individual spirits frolicking only with their families and closest friends; we only assent to government to seek peace and stability of life. This outlook considers human society and sociability as purely conventional creations based on utility.

    1. Funny, his "critique" is not really a critique at all, but an ideal condition that libertarians work for. My word, self-sufficient, stable, cooperative people must positively terrify this mutant. Then again, look at what filth this crooked mind has spawned...

      And then he completely goes off the rail, because he equates "the state (government)" with "the community." Bob, as you are so often fond of saying, in a Rothbardian/Hoppean society, the community would have A LOT of say in how people behaved. Plus, for good measure, a nice dollop of Randian utilitarianism for good measure.

      These kinds of people, the empty-headed, thinly-read, and shallow-thinking pseudo-intellectuals, are really, REALLY dangerous.

    2. I was thinking....Isn't someone obsessed with "the community" a Communist?

      Of course if you are gay or black or in a mixed race relationship in the Old South, the community has rights it must be allowed to enforce against you, right?

      If you are Christian and you don't want to bake a cake for the gay wedding, the community has rights it must be allowed to enforce against you, right?

      Tom Cotton. What a brilliant mind.

    3. Sheesh. One non sequitur after another. The Scarecrow was right. Lots of people without brains do an awful lot of talking.

  3. --" Indeed, linking libertarianism with underground markets is an incorrect step. Underground markets, in fact, are a kind of work around "--

    Except that this fact is self-evident: If it is an "underground" market is because there is a restriction imposed by government, under threat of bodily harm or death. How is this supposed to be the evidence against libertarianism? It obviously represents evidence of the oppressive and arbitrary nature of government. Why is it that computer and computer component markets, which are much freer, have NONE of the pitfalls of underground markets?

    But this is the childish nature of anti-liberty arguments: they're nothing more than clumsy strawmen. There is no difference between that argument and one particular meme where a guy says "I'm a libertarian!" and another guy answers with "Oh, so you must hate roads!" Such is the level of discourse.

  4. Illegal is Illegal.....someone needs to check out Bastiat's "The Law."

    Real eye opener for me as i used to be a Republican who always asked, "is this action legal," rather than the correct, "is this action moral."