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What Social Animals Owe to Each Other

Friday, July 10, 2015

TGIF: Libertarian Strategy and Incremental Change

My first job in the libertarian movement, beginning in 1979, was as research director for the long-gone Council for a Competitive Economy (CCE). It was an organization of business owners who opposed the sorts of government interventions that business owners typically favor: tariffs, import quotas, eminent domain on behalf of corporations (and anyone else, really), and bailouts. In other words, it was to be a principled -- pure -- pro-free-market presence in Washington, D.C, financed by business people. (In case you are wondering: yes, it was an early Koch-backed organization, and no, business people did not rush to join.)

One of CCE’s first causes was opposition to the Chrysler bailout, $1.5 billion in government loan guarantees to keep the corporation from going out of business. Congress passed the bill, and President Jimmy Carter signed it in December 1979 -- in other words, we lost that one.

Later, CCE joined Ralph Nader in opposing Michigan’s use of eminent domain to help GM build a Cadillac factory on what was then the old ethnic working-class Detroit neighborhood called Poletown. I fondly recall going to Detroit with CCE president Richard W. Wilcke to announce our opposition at a news conference; the defiant residents were so grateful. Unfortunately we lost that battle too. No one thought CCE's mission would be easy to accomplish.

One of the first projects I worked on personally was deregulation of the trucking industry. The period 1976-1980 was remarkable for deregulation. Remember Carter became president in 1977, and the powerful Sen. Edward M. Kennedy championed deregulation on grounds that it would be good for consumers. Ronald Reagan, who didn't take office until 1981, may have a reputation for having been a champion of the free market, but as Reagan economic adviser William Niskanen, later chairman of the Cato Institute, wrote, "Deregulation was clearly the lowest priority among the major elements of the Reagan economic program." (Niskanen acknowledged the areas in which Reagan championed deregulation.)

In 1978, however, thanks to the efforts of a diverse coalition spanning the political spectrum, the airline industry was significantly deregulated: routes, fares, and entry were no longer under government control. As a result, the Civil Aeronautics Board (CAB) was abolished. Abolished! Can you imagine it?

Before deregulation, the government determined which airline could fly where and how much it could charge. If an airline wanted to fly a route already flown by other airlines, they could object before the CAB, arguing that no new carrier was needed. They usually prevailed. This squelching of competition obviously harmed consumers. Airline deregulation put an end to all that: airfares plummeted; budget airlines emerged; and flying suddenly was open to the rest of us. It is hard to overstate the change in lifestyles this ushered in for ordinary people.

The success in airline deregulation (and the earlier success at deregulating aspects of the railroads) boosted the cause of trucking deregulation. As with the airlines, a government bureau -- the Interstate Commerce Commission -- regulated entry, routes, and prices, with the predictable consequences: stifled competition, high rates, and inefficiency. Again, a diverse coalition assembled to lobby for deregulation. It included Naderites, shippers, Capitol Hill staffers (Kennedy again led the way in the Senate), and members of the broad pro-market community.

I attended many meetings in 1979-80, mostly to keep tabs on the coalition’s progress and to give CCE a presence. (Otherwise my role was insignificant.) At these meetings Hill staffers updated us on what was going on in the congressional subcommittees and we suggested ways to make the emerging legislation better.

What impressed me was how all those folks, despite their many differences, worked together. Most of the time I might have been the only libertarian there.

As a result of the coalition’s work, Congress passed the Motor Carrier Act of 1980 and Carter signed it on July 1 of that year. The benefits of competition soon kicked in. By January 1996, the iconic ICC -- America's oldest national regulatory agency (established in 1887) -- was no more.

Were these perfectly libertarian reforms? Not by a long shot. The CAB is gone, but the government remains in control of airline safety through the Federation Aviation Administration, and governments at some level still operate airports. The ICC is gone, but many functions were transferred to the Surface Transportation Board within the Department of Transportation or the Federal Motor Carrier Safety Administration. Moreover, governments still operate roads and interstate highways.

So these were hardly pure libertarian measures. By market anarchist standards they were even further from the mark.

But that doesn't mean they were worthless reforms, much less counterproductive. Loosening the government's grip on those industries -- abolishing privileges for well-connected incumbent firms -- made ordinary people's lives better. Further, they provided lessons that libertarians could use to push for competitive free markets in the future.

Did a libertarian group compromise its philosophy by supporting and even contributing to partial that deregulation? I cannot see how. Compromise would have consisted in passing up the chance to win radical deregulation in order to achieve partial deregulation. Or it would have meant being satisfied with partial deregulation and giving up the radical free-market cause. But no libertarian organization that I'm aware of did either of those things. CCE certainly did not. Rather, we took the advice of radical libertarian Murray Rothbard, not known as a compromiser, who used to say, "Take what you can get," then press for more.

In 1980 libertarians were in no position to abolish all trucking regulation, which would require divestiture of the interstate highways and other roads. That being the case, should libertarians have been silent about partial deregulation -- or even opposed it -- on the preposterous grounds that supporting it constituted an endorsement of the remaining regulation? Some might think so. But that "strategy" would not have been an act of uncompromising purity. It would not have been a blow for radical libertarianism. It would have been mere posturing and ideological self-gratification.

Imagining an effective strategy aimed at social transformation is an intrinsically complex matter, and no single method will succeed. A viable strategic mix must include, among other things, efforts to roll back the size and scope of the state incrementally. Government is unlikely to vanish all at once, so it is illegitimate to object that incremental changes can be reversed. (Of course they can -- eternal vigilance, you know.)

This doesn't mean that everything billed as step in the right direction is actually such a step; that must be judged case by case. This is an art not a science. But it is not the case that because some proposals don't really serve the cause of freedom, no proposals can do so.

Sheldon Richman keeps the blog "Free Association" and is a senior fellow and chair of the trustees of the Center for a Stateless Society. Become a patron today!


Anonymous said...

Well written article

Sheldon Richman said...


James said...

Brought to mind this post by BroadSnark.

Sheldon Richman said...

Good post! I've said something similar in private conversations.

N. Joseph Potts said...

I very much subscribe to this philosophy, for all that I NEVER forget what my true goals are. Yes, just about EVERY good event in the real world falls short of what I want.

But, just as Richman says, on a case by case basis, I evaluate whether it is moving things in the "right" direction, and if so, I support it, with greater or lesser vigor.

This is like hand grenades; close counts. Or it's like happiness: a journey, not any sort of final attainment.