Thursday, January 19, 2017

Ass-Backward Libertarians

By Robert Wenzel

The great Austrian school economist Ludwig von Mises once wrote:
The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments. (Planning for Freedom pp. 32-33)
This extremely important insight appears to be lost on many current day students of Austrian school economics and also libertarians.

The interventionist state is an inherently unstable state. Because interventionism is a rigid system of government dictates that can not adjust quickly to changing circumstances and because some undesirable consequences of state dictates are not foreseen, the interventionist state creates negative logjams and other problems which the central planner believes calls for even more government dictates.

And thus, we can see how the Mises observation plays itself out.

However, it is not only central planners who advocate policies that lead to socialism on the installment plan. It is also many libertarians, who I call, crude as it may sound, ass-backward libertarians.

I consider an ABL to be any libertarian, who upon recognizing a distorting intervention by government in free markets and a free society, calls for another installment in the direction of socialism.  They are not aware that they are advocating another step toward socialism. They believe that their call for interventionism is the only sound policy move that can be made, never once recognizing they are calling for more bricks to be laid on the ever more stifling socialist wall that prevents us from entering a land of pure freedom.

Consider: The current public school system provides a horrific education for many. The correct free market position would be to get government out of the education business and to allow competing educational systems to emerge.

For ABLs, however, they have been mesmerized by government technocrats who have come up with the voucher scheme for education. To ABLs, this installment step in socialism is an "improvement" over the current education system. Thus, failing to see that he who controls the money names the textbooks.

Somehow, ABLs have failed to grasp that the disaster that is now passed off as college "education" is the result of government financing of much of college education and that there is no way that greater government involvement through a voucher system would not do the same at the grammar school level.

Jacob Hornberger is correct when he calls the voucher system thought control. It is exactly that.

Another area where we see ABL thinking in operation is when it comes to tariffs. Many ABLs argue that because tariffs and other restrictions are put on the sale of US goods by other countries, the US should respond by placing tariffs on goods from those countries. But tariffs are always another installment step on the way to full socialism. Tariffs do nothing but limit choices for consumers and businessmen in the country that has erected the tariffs.

In healthcare, ABLs may support "healthcare savings accounts" but this is just more government interventionism. How can it not distort the amount of money that goes into the healthcare sector? Further, by necessity these types of programs lead to a system of government only approved healthcare. That is another installment toward socialism.

Recently, the extremes of ABL policy advocacy struck me, when an ABLer told me that he supported Federal troops being sent into Chicago to police the "animals in the streets." Of course, the urban primitives that roam Chicago are the result of poor quality government education, minimum wage laws and severe prison time for drug dealers. The correct libertarian policy position should be abolishment of government education, minimum wage laws and drug laws. The installment step that puts Federal troops on the streets of a major city is not a move away from less government. It is an alarming step in the direction of iron fist government.

And so, it is easy to see how "libertarians" may attempt to solve an immediate government problem with a tiny bit more government. They fail to recognize, however, that this policy perspective is leading toward more government interventionism---as Mises put it, on the installment plan.

ABLs for want of ending some government interventionist distortions in the economy, and society at large, end up advocating intervention after intervention which is putting us at a greater distance from pure freedom.

With this type thinking and policymaking, we will all one day look up and find that the voucher system has absorbed all grammar schools with the government designating which courses are taught so that the schools can get their vouchers. Government created healthcare accounts designated to be used only with government approved healthcare providers. Trade war tariffs that have resulted in less availability of products, production distortions, and higher prices. Federal troops once used to police the urban primitives of Chicago on streets throughout America enforcing all kinds of new statists rules.

This is the ultimate result of Ass-Backward Libertarianism.

There is no edge for the libertarian to advocate more installments on the road to socialism. The libertarian edge is in always advocating for the shrinkage of government and more liberty.  If libertarians adopt an ass-backward policy stance, not only will it be anti-productive on a policy level but it will be much harder for others to learn about pure libertarian thinking.

The more the pure libertarian message is heard the more the chance that important advocates will pick up the torch and smash through the state. Libertarian miracles can happen.

In Germany, perhaps the greatest economic policymaker ever, Ludwig Erhard, although not a complete anti-interventionist, ignored ass-backward libertarian-type thinking and removed across-the-board price controls in West Germany in one declaration that created the Great German Economic Miracle.



I hasten to add that my discussion here is not to call for a sectarian perspective where we must always settle only for a full libertarian solution. It is, however, important to embrace an approach that always moves us toward shrinking government and not moving government along the socialist route via the installment plan.

The great libertarian Murray Rothbard understood this important distinction. In a private memo for the Volker Fund, he wrote:
The sectarian strategists (e.g., the current Trotskyite sects) arethose who pass out leaflets on street corners, state their full ideologicalposition at all times, and consider any collaboration in halfwaymeasures as “opportunist,” “selling out the cause,” etc. They areundoubtedly noble, but almost always ineffective...
The sectarian strategists (e.g., the current Trotskyite sects) arethose who pass out leaflets on street corners, state their full ideologicalposition at all times, and consider any collaboration in halfwaymeasures as “opportunist,” “selling out the cause,” etc. They areundoubtedly noble, but almost always ineffective...
The hardcore man is working for his idea on two levels:
in a “popular” or “united” front for limited libertarian goals, and to
try to influence his colleagues as well as the masses in the direction
of the total system. (This is the essence of the much-misunderstood
Leninist theory of “infiltration.”)
The effective centrist avoids the pitfalls of “opportunism” by
keeping the objective firmly in view, and, in particular, by never
acting in a manner, or speaking in a manner, inconsistent with the full
libertarian position.
 To be inconsistent in the name of “practicality” is
to betray the libertarian position itself, and is worthy of the utmost
condemnation...
[T]he hardcore man, the “militant” libertarian, works to advance not only the total system, but all steps toward that system. In this way, we achieve “unity of theory and practice,” we spurn the pitfalls of base opportunism, while making ourselves much more effective than our brothers, the sectarians. Let us turn to a hypothetical example (purely hypothetical). Suppose one or two hardcore libertarians join some Organization for Repeal of the Income Tax. In working for OFRIT, what does the hardcore libertarian accomplish? 
(1) In the very act of agitating for repeal of the income tax, he is pushing people in the direction of repeal and perhaps eventually bringing about repeal—which, in itself, is a worthy, if limited, libertarian objective. In short, he is advancing the cause of libertarianism in the very act of advancing the cause of income tax repeal. Thus, everything he does for OFRIT, being consistent with the ultimate libertarian objective helps advance that objective, and does not betray it. (2) In the course of this work, the hardcore libertarian should try to advance the knowledge of both the masses and his fellow OFRIT members, toward fuller libertarian ideals. In short, to “push” his colleagues and others toward the direction of hardcore libertarian thought itself. (In Communist-Leninist terms, this is called “recruiting for the Party,” or pushing colleagues at least some way along this road.) The hardcore man is working for his idea on two levels: in a “popular” or “united” front for limited libertarian goals, and to try to influence his colleagues as well as the masses in the direction of the total system. (This is the essence of the much-misunderstood Leninist theory of “infiltration.”) 
The effective centrist avoids the pitfalls of “opportunism” by keeping the objective firmly in view, and, in particular, by never acting in a manner, or speaking in a manner, inconsistent with the full libertarian position. To be inconsistent in the name of “practicality” is to betray the libertarian position itself, and is worthy of the utmost condemnation...
In the name of practicality, the opportunist not only loses any chance of advancing others toward the ultimate goal, but he himself gradually loses sight of that goal—as happens with any “sellout” of principle. Thus, suppose that one is writing about taxation. It is not incumbent on the libertarian to always proclaim his full “anarchist” position in whatever he writes; but it is incumbent upon him in no way to praise taxation or condone it; he should simply leave this perhaps glaring vacuum, and wait for the eager reader to begin to question and perhaps come to you for further enlightenment. But if the libertarian says, “Of course, some taxes must be levied,” or something of the sort, he has betrayed the cause. 
 Robert Wenzel is Editor & Publisher of  EconomicPolicyJournal.com and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics and on LinkedIn.

Also see: A Fan Letter From Walter Block Concerning Ass-Backward Libertarians

8 comments:

  1. Great article---a keeper for sure. Could benefit from some proofreading before posting, as you repeated yourself in a few places...but very good nevertheless.

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  2. This is pure nonsense that ignores the reality of government.

    Unless government agrees to drop responsibility for education, then vouchers are better than no vouchers. The vouchers should be a local or state program. The voucher system breaks up the Big City Failing Public School monopoly.

    It also allows people to see how less government interference and more government decentralization is better. A single mother can see her child explode with growth after moving her kids from a failing, dangerous school to a well-regarded Catholic school.

    The voucher system is not perfect. But it is definitely better than the status quo. Government should not be involved in education. However, it is. Libertarians can cheer when government power shrinks.

    Even if you think vouchers are just "thought control" (prima facie absurd), the voucher system is a TAX CUT everywhere it is implemented. The funds that are diverted to the voucher schools are not $1:$1 because voucher school teachers do not earn TAXPAYER guaranteed pensions or medical benefits.

    If nothing else, the voucher system is a multi-generational tax cut. Libertarians should support tax cuts everywhere and always.

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    1. I agree it is better than nothing. I don't really know if it's a tax cut, considering it doesn't lower any taxes collected, but it does give the recipients of those taxes more choice (even though there are often stipulations). Also, I saw that there is a Hayek quote on the wikipedia article about voucher systems. He seems to be favorable, at least compared to the status quo at the time he was writing, but it would be interesting to find the source of this quote to read his entire discussion on the issue.

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    2. The voucher program slows the growth of education spending. Each state has different formulas for local education budgets, but in general local education budget growth slows wherever the Monopoly Public School loses students to voucher schools.

      Part of the tax levied by or on behalf of school districts pays for teacher pension and other post-employment retirement benefits. If the Monopoly schools lose teachers to the voucher schools, then fewer pension and other benefits paid by the taxpayer.

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  3. Regarding vouchers: Wouldn't making elementary schools more like colleges be a massive improvement?

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  4. ABLs also advocate partial removal of government interventions just because it is removing something and not thinking it through. That is tweaking the net intervention. This half-assed approach or maybe that's a better name for this sub-group, half-assed libertarians, don't restore a free market but change the government inputs. The new condition often causes some unforeseen problem or even disaster which is then blamed on libertarians not allowing the government to regulate or the free market or freedom in general.

    For instance things are often blamed on 'deregulation' when all that happened were a few pieces of regulation were removed or relaxed (often in trade for some added) and the remaining/resulting regulation caused a disastrous distortion. It wasn't freedom or lack of regulation that caused the problem but rather a change in the regulatory condition, but guess what takes the blame? Libertarians are made scapegoats this way time and time again. The blame for regulatory failure is successfully transferred to freedom.

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    1. How can libertarians be made scapegoats? There are nearly none in office or with any sway over public opinion.

      Agree to disagree with you and RW here. Libertarians can support Right-to-Work over compulsory unionism but still prefer non-intervention in labor markets.

      Would you and RW prefer living under the compulsory union state regime to the Right-to-Work state regime?

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    2. Do you ever engage in discussion with people who aren't libertarian? They blame the free market and libertarians for all sorts of ills. The fact there are no libertarians in power and no free market does not stop them. It took a couple seconds and this essay on bill moyers' website appears: billmoyers.com/2015/02/27/libertarian-delusion/ I just skimmed it about half way it already had hit several of the usual bits of nonsense. See it wasn't Nixon closing the gold window and money creation and other government interventions that decoupled wages from productivity, it was those evil libertarians and the "free market". It looks like a classic of libertarian blaming for the policies of statists.

      Right to work and forced unionism? I don't see how that relates to the argument I put forth. That's very cut and dry. Right to work doesn't dismantle a fraction of regulation resulting in some new unbalanced system, it rips union control off the supply of labor in one big yank. It's not half-assed.

      For something of that high order that is half-assed consider open borders. Many libertarians would jump on board open borders even if there was no provision to roll back the welfare state, the socialized costs of numerous things, and much more. They would do so because it is a step towards individual liberty without thinking of the disaster it would bring with all the other statist interventions still in place. As a result many people would be more deeply enslaved than ever to pay for welfare, roads, schools, water systems, medical care, and so on for many if not nearly all the new arrivals.



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