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Saturday, December 09, 2006

Liberaltarians? Really?

The Cato Institute's Brink Lindsey has caused a stir by proposing, in a New Republic article, an alliance between libertarians and "liberal" Democrats. (The article is here at the Cato site.) The blogosphere has been busy dissecting his thesis, wondering if either libertarians or Democrats really have anything to gain by such an alliance. I'm not sure what a formal alliance would look like, but I am in favor of ad hoc partnerships on particular issues of common interest. I can see joint efforts to beat back Republican proposals to illegalize abortion and gay marriage, to step up the "drug" war, to extend the Empire, etc. Whether liberal Democrats are really with us on these issues is not exactly clear, but they should be given a chance to prove their bona fides.

I'm bothered, however, by other things Lindsey says. For example:
The basic outlines of a viable compromise are clear enough. On the one hand, restrictions on competition and burdens on private initiative would be lifted to encourage vigorous economic growth and development. At the same time, some of the resulting wealth-creation would be used to improve safety-net policies that help those at the bottom and ameliorate the hardships inflicted by economic change. [Emphasis added.]
This really misses the bus. Libertarians need to be investing their energies in demonstrating that the hardships inflicted by economic change would be ameliorated by full economic freedom. In other words, libertarians must emphasize that the current corporate state is shot through with anti-competitive privileges (subsidies, trade restrictions, regulations, and taxes) that raise the cost of starting businesses and in turn limit the opportunities -- including self-employment opportunities -- of average workers, who otherwise are stuck with too few options. Republicans and Democrats tend not to care about such privileges. Democrats who say they bleed for the downtrodden are particularly culpable. They whine about the minimum wage being too low, but they won't lift a finger to do what is really necessary to enable the most vulnerable to advance. These include wholesale elimination of licensing and permitting, and all the other devices that by nature favor incumbent firms over start-ups.

Lindsey writes that "progressives remain stubbornly resistant to embracing capitalism, their great natural ally." Assuming he's referring to genuinely good-faith "progressives" and not Democratic pols, there's no mystery to be solved here. Good-faith progressives shun capitalism because historically capitalism has been associated with not laissez faire but state privileges for capitalists. Why shouldn't they resist it? The great nineteenth-century libertarians, such as Benjamin Tucker, called themselves socialists for this very reason. They wanted nothing to do with capitalism.

Until libertarians emphasize their opposition to all corporate welfare kings at least as much as they emphasize their opposition to inner-city welfare queens, they will continue to alienate genuine progressives.

To his credit, Lindsey mentions corporate welfare, specifically farm and energy subsidies. But analysis of the corporate state must go deeper than that. Privilege pervades the economic system. Any regulation or tax is a lighter burden on a large established firm than it is on a small company or not-yet-started company. The system is one big privilege. The government's land holdings and land-use restrictions are part of that system. We have to say it often and say it loud. Laissez faire is anti-privilege in all forms.

I should also mention that so-called government safety nets have historically been used to control the poor. Rather than become a member of a "strengthen the safety net" coalition, libertarians should be talking about mutual aid, both the theory and the rich history. (Here's a good place to start: David Beito's From Mutual Aid to the Welfare State.)

Lindsey writes:
Shift taxes away from things we want more of and onto things we want less of. Specifically, cut taxes on savings and investment, cut payroll taxes on labor, and make up the shortfall with increased taxation of consumption. Go ahead, tax the rich, but don't do it when they're being productive. Tax them instead when they're splurging--by capping the deductibility of home-mortgage interest and tax incentives for purchasing health insurance. And tax everybody's energy consumption.
This isn't a compromise with "liberals." It's a wholesale embrace of social engineering. It's not just that taxation is theft; it's that Lindsey accepts the tax system as an engine of behavioral modification. Why the puritan notion of taxing consumption? What's wrong with consumption? That's why we produce, dammit! As an aside, the first President Bush tried taxing luxury goods, but the Democrats repealed the tax when they realized it hurt workers who build yachts and the like.

What gets taxed is less important that the total take, but on this issue, Lindsey throws in the towel.
With millions already dependent on the current programs, and with baby boomers beginning to retire in just a couple of years, libertarians' dreams of dramatically shrinking federal spending are flatly unrealizable for many years to come.
If libertarians merely forge an alliance to shape the existing level of spending, that dream will never be realizable. The time to talk about slashing spending and taxation is now.

Finally, I note for the record that anti-imperialism is not part of Lindsey's coalition program. He does list "extremist assertions of executive power under cover of fighting terrorism; and . . . an atrociously bungled war in Iraq"in his indictment of the Republicans, but that falls short of opposition to Empire. Didn't he favor the Iraq war? Yes, he did.


BillG said...

what makes the most sense is the carbon tax as proposed by Peter Barnes in Capitalism 3.0.

restrict the use of the sky as a carbon sink to the sustainable yield by requiring titles to pollute via government granted privilege with an obligation to return the money directly and equally to thsoe one excludes.

thus getting rid of negative externalities and socializing what should be owned in common and privatizing what today is socialized.

jomama said...

There is no political solution,

jomama said...