Libertarianism and the Tea Party

  JoinOrDieThe Tea Party Movement . . . That Wasn’t. In 2010, the prospect of libertarian governance in America seemed realistic—maybe even inevitable. After Obama’s two major legislative initiatives, a billion-dollar stimulus and the Affordable Care Act, anti-government libertarianism seemed primed to go mainstream. The Tea Party had scored major victories. On the heels of Ron Paul’s better-than-expected 2008 presidential campaign, Rand Paul was elected to the Senate. It seemed that the Tea Party would soon take control of the Republican Party—and maybe Congress or the presidency. The Ron Paul Revolution, as it was known, seemed plausible.

But the insurgent, pugnacious Ron Paul campaign of 2008 devolved into the lackluster Ron Paul campaign of 2012, and is now the intellectually dishonest Rand Paul campaign of 2016. In 2012, Ron Paul was unable to gain traction against the likes of Herman Cain, Newt Gingrich and Rick Santorum, all of whom made appearances as frontrunners in the Republican primary. With the enthusiasm of the Tea Party and Obama’s supposed “big government” policies, and despite several successful state elections, libertarians failed to gain traction on a national level.

The question is: why did the anti-government libertarian revolution fizzle at the exact moment when it seemed poised for victory? The answer is that libertarian governance is an oxymoron. “The government which governs best is the government which governs least” . . . the Tea Party has taken literally, and what they have found out is that Americans have proven reluctant to elect officials to positions in government who have vowed to dismantle that same government.

Limitations of Libertarianism In 2010, Harvard economics Professor Edward Glasser argued that libertarians could do more than throw bombs; they could actually govern. It is worth considering—with the benefit of hindsight—why that prediction, which seemed reasonable at the time, didn’t happen.

Glasser saw two forms of libertarianism: “pure libertarianism” and “pragmatic libertarianism.” The problem with Glasser’s reasoning—and this is ultimately the problem with the libertarian movement—is that pragmatism and libertarianism (as he uses the term) are irreconcilable.

Pure libertarianism is a synonym for anarchy; pragmatic libertarianism is an oxymoron; it doesn’t exist in the real world. What is amazing about Glasser’s argument for libertarianism is that just three months later he penned an article on the same blog deftly describing the limits of libertarian purity:

Consider the purely hypothetical case [sic; this was right after the BP Deep Water Horizon oil spill] of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But what if the leak is so vast that the driller doesn’t have the resources to pay? The libertarian would respond that the driller should have been forced to post a bond or pay for sufficient insurance to cover any conceivable spill. Perhaps, but then the government needs to regulate the insurance contract and the resources of the insurer.

That acknowledgment of the limits of libertarianism, while accurate, understates the problem with the theory it describes. The bigger problem in the case of environmental catastrophe is not whether or how companies should be forced to carry insurance, but how to calculate damages on a massive scale.

Consider the questions facing a court deciding tort claims for an entire region, such as the Gulf of Mexico. How should business owners be affected? Should people who are indirectly affected be entitled to any recovery? Should fishermen be entitled to recovery if sea life in the Gulf is destroyed? What about fish retailers? Seafood restaurants? Should businesses be entitled to lost profits? Assuming we could calculate lost profits, then how much compensation should be awarded to businesses?

And even if the massive torts could be remedied so as to make everyone whole—calculations of which are impossible—there remains the issue of harm to the public. In other words, even if BP could adequately compensate every individual for the harm done to him or her, what about the harm to the environment? Should BP be required to pay compensatory damages to the government if oil washes up on public beaches? If so, who should the government disperse that money to?  Who should BP compensate if they kill endangered species?

What about loses to other countries? It’s called the Gulf of Mexico after all . . . does anyone even know (or care?) if BP has compensated our neighbors to the south? If so, how far beyond Mexico does it extend? What about the Caribbean? If Cubans suffered substantial loses would BP be liable, or would they be immune because of the hostile relationship between the governments of the U.S./Great Britain and Cuba?

Practical issues aside, an insurance requirement is itself government regulation that libertarians claim to abhor. Libertarians loath “Obamacare” precisely because of the requirement that every individual be required to carry insurance. In the context of the private market for health insurance, it is socialism. But in the context of massive oil spills, where any calculation of damages would be impossible, insurance is the market-based solution to all problems.

Many Libertarians will happily tell you the immutable basis of their beliefs: that private industry is better than government. And they can point to examples where government intervention has caused harm. For example, basic economics tells us that rent control has further constrained supply and driven up rents for many in New York City. And, of course, the biggest failure in recent times was when the government’s response to the market crash of 2008 was to reward those who made bad bets with interest-free loans, ushering in “Too Big to Fail” where investment bank profits are privatized and loses are socialized.

Government failures are real. But there are other examples of instances, both significant and not, where government triumphed. Indeed, the examples of our government’s success are uncountable: the Revolutionary War, the American Civil War, and World War II. There are also the “everyday” government successes we take for granted: the clean water which comes through our pipes; the roads which allow us to travel, and the police and fire departments which serve us quickly and without hesitation. Our government has also sponsored manned missions to the moon and blanketed the continent with train tracks and highways.

But libertarians would concede—to varying degrees—that some government services are necessary. Some libertarians would say, for example, that national defense is the only legitimate government function. Other libertarians might concede that investment infrastructure, or certain tax incentives, fit within the proper role of government.

However, there is a perceived injustice that occurs because libertarians are forced to pay for government services and policies which they do not approve. It is virtually impossible to calculate the individual benefit of many government services. As a result, regardless of what level of government intervention a libertarian may be willing to accept, the reality is that the average per-person benefit from government services, in the minds of most libertarians, will always be less than the per capita government expenditures. Just like everyone can’t be better than everyone else, everyone can’t pay more than everyone else.

But there are many things, like national defense, infrastructure, police and fire, that the government provides but which people receive no easily quantifiable benefit. The argument that government is not good at providing services is almost always made by people who are willfully blind to the benefits they are receiving.   Sometimes the arguments are taken to extremes, with some contending that providing government services borders on being immoral or unpatriotic.

Libertarianism in the Constitution Ironically, American libertarianism derives its anti-government fevor in part from the U.S Constitution. But the Constitution contains no limiting principles that apply to the states. In fact, the Tenth Amendment reserves all rights not given to the federal government “to the states, respectively, or to the people.”

However, in their anti-government fervor, modern libertarians have gone astray from American constitutionalism, and its roots in federalism, states’ rights, and liberalism.

The genius of the Constitution is its purposeful silence on public policy, especially economic policy. Our federal constitution takes no position as to whether a particular economic decision is good or bad—and it certainly does not make any economic program illegal. Taxation of wealth transfers; “entitlement” spending; regulations on the health care industry—including mandates for health insurance—are all great, if people want them. (Spoiler alert: people will want them; Even Senator “let’s-shut-down-the-government-to-make-a-point-about-healthcare” Ted Cruz agrees.)

The Two Tenets of Libertarianism. At its best, Libertarianism represents the under-appreciated truth that markets work. In this sense, libertarianism—like the Constitution—is ambivalent towards individual policies. Libertarianism is a bit like Darwinism—the best policies will be adopted by the marketplace of ideas, whether or not any individual person supports them. And markets work for both economic and non-economic issues.

If a higher minimum wage is better economic policy, then individuals will eventually force the state to adopt it. If the public supports gay marriage, then the states that permit gays to get married have a competitive advantage over those that do not. The result is that states with better policies, regardless of the nature of those policies, will do better. Economic pressure then forces all states to adopt the best policy; in other words, the market place of ideas ultimately produces the best polices.

At its worst, Libertarianism is essentially an economic philosophy which holds that taxes reduce wealth. This theory, in addition to having little or no theoretical or empirical support, cannot be reconciled with the first tenet of libertarianism which is to let the marketplace of ideas decide. Choosing the best policy cannot be reconciled with best policy always being the one which results in the least taxes or government spending. If you believe that taxes and government are always the problem, then the theory which encapsulates your view is anarchism, not libertarianism.

So we have libertarianism’s two tenets:

  • Tenet One: Allowing people to choose policies, and choose between those policies (by “voting with their feet”), will result in the adoption of the best policy
  • Tenet Two: Taxes reduce wealth, and private industry is always more efficient than government

Liberalism is not in conflict the Tenet One. Liberals argue, for example, that gay marriage is a right. As public opinion begins to reflect that opinion, states will (and are) moving to legalize gay marriage. Libertarians say let liberal states legalize gay marriage and conservative states pass anti-gay marriage amendments, and then let public opinion determine which policy is better.

In both instances, if public opinion, over time, tends toward allowing gay marriage, then allowing states to create their own decision on whether to discriminate against same-sex marriages will result in the best policy. The difference between liberalism and libertarianism, is not what the desired outcome is; it is the path taken towards achieving the outcome. Modern libertarianism—through a literal interruption of the saying that “the government which governs best is the government which governs least,”—has embraced Tenet Two.

Libertarianism and Anti-Governmentism

An article appeared in The Wall Street Journal, by Daniel Hannan, describing how Americans and their British cousins view themselves as unique. The article is a superb explication of “Anglophone” exceptionalism. Indeed, it was Britain and America who stood up, and defeated, fascism. Thomas Paine moved the ball forward on many of John Locke’s ideas. The American Revolution cemented those ideas, including the rights to free association, to own property, and the rights of the criminally accused.

The failing point of Hannan’s article is trying to link American libertarianism with opposition to Obamacare:

Power is shifting from the 50 states to Washington, D.C., from elected representatives to federal bureaucrats, from citizens to the government. As the U.S. moves toward European-style health care, day care, college education, carbon taxes, foreign policy and spending levels, so it becomes less prosperous, less confident and less free.

But the Constitution takes no position on economic policy. Justice Oliver Wendell Holmes famously said that the Constitution “does not enact Mr. Herbert Spencer’s Social Statics. Freedom does not change with Obama’s health care law any more than it did with Alexander Hamilton’s national bank. So long as individual rights are respected, and representative republican government remains intact, the core principles of the Constitution are preserved.

Individual rights, including economic rights, are founding principles in the Declaration of Independence and the Constitution. The right to vote, to personal property, and freedom of contract, lay at the heart of major conflicts throughout our history including the Civil War, the abolition of slavery, and the Civil Rights Movement. Indeed, most conflicts in U.S. history—both large and small—were fought for individual liberty in one form or another.

Where modern American libertarianism, and its foot soldiers in the Tea Party, diverges from prior social movements, is that it is motivated not by an infringement of rights, but by a belief that giving economic rights, including (gasp!) free healthcare, to others infringes their liberty.

The Affordable Care Act has been derided by many self-described libertarians. It was enacted on the federal level, with a bare majority of Congress, and with votes from only one political party. But “Obamacare” is consistent with American libertarianism. An identical law in all relevant respects, Romneycare, was enacted at the state level, in Massachusetts. People in that state liked it, and later Barack Obama—a presidential candidate who campaigned extensively on establishing universal healthcare—was elected (and then re-elected).

American libertarianism is different from anti-government libertarianism—more nuanced, and, above all, more inclusive and practical. American libertarianism does not leave each person to his own devices; it does not assert the rights of one group take precedence over the rights of another. It leaves smaller groups to their collective device to pick policy locally and at the state level. And it leaves the states to choose among policies, based in part on observations of whether policies succeed or fail in sister states.

Freedom of choice is a wonderful cushion built into our federalist system: if states make the wrong choice, citizens the right to move from one state to the other. When constitutionally permissible, the federal government can also provide services to people, for national defense, for healthcare for the poor and elderly (or for all Americans if that’s the policy Congress decides is best), and for transportation.

Thomas Paine, a substantial (and under-appreciated) intellectual force in the American Revolution—who also happens to be a libertarian hero—advocated for an “old-age pension,” largely credited as the pre-cursor to Social Security. Paine’s ideal economic program also included payments to children when they reached adulthood.

If Thomas Paine was a libertarian, then Ted Cruz is not (and visa versa). Either one can use term libertarian (who cares about labels?) but not both. I would suggest that Revolutionary War figures who founded our system of government should get the mantle, since they were there first. Ted Cruz and the Tea Party, by contrast, should not be able to hide behind history, linking themselves to figures who created our federal system of government which they effectively seek to undermine.

We can call it constitutionalism, libertarianism, liberalism . . . it does not matter, the point is that Americans, for better or worse, are rugged individualists. But Americans don’t do it alone. From the Pilgrims, to the abolition of slavery, to Obamacare, the American experience has been a shared one. Cooperation between the government and private individuals has resulted in every success the United States of America has seen, including the achievements the American empire will be remembered for, such as defeating totalitarian regimes in Europe, and landing a man on the moon.

It could be that the premise of modern libertarianism, that private industry always “does it better” than the government, could be right. At some point in the future, it would be possible for the government to shrink to whatever shell libertarians fantasizes about. Of course, that will never happen because in the marketplace of ideas—where it matters most—anti-government libertarianism has already lost.

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