Liberaltarianism: Back the Future

by Will Wilkinson on May 30, 2008

Here are the sort of political/economic thinkers whose substantive views I find most congenial: Friedrich Hayek, Milton Friedman, James M. Buchanan. If I tell most highly-educated people that these are the thinkers whose views of desirable institutions are most like mine, they might infer that I am some kind of rabid libertarian ideologue. But when I actually defend something like the arguments for an economic safety net each of these giants of libertarian thought actually set forth, lots of libertarians accuse me of not really being libertarian at all. And many liberals act surprised, as if I’m being saucily iconoclastic by wandering so far off the reservation. I can tell them that Hayek was actually in favor of a guaranteed minimum income and that Friedman basically invented the idea behind the EITC, but they’ll still think I’m some kind of congenial squish. But what I am is a market liberal just like Hayek, Friedman, and Buchanan — the same intellectual role models who make me a rabid libertarian ideologue. So, which is it?

Frankly, “liberaltarianism” and “progressive fusionism” don’t really amount to much beyond what Hayek, Friedman, and Buchanan thought anyway. So the fusionism here isn’t really a fusion of anything. It’s just seeing our way back to a pre-existing economically literate political liberalism.

Here’s my conjecture about why this now looks more like an attractive position than it might have a few years back.

The 20th century libertarian-conservative alliance was based on anti-communism/socialism. The reasonable, sophisticated consequentialist pragmatism of the great 20th century market liberals seemed an insufficient bulwark against the slippery slope from the liberal, capitalist welfare state to full-on illiberal, totalitarian socialism. (Indeed, Hayek himself made the slippery slope argument powerfully, though unsoundly.) So there was a good deal of motivation for radical anti-socialists to coordinate around strongly categorical prohibitions against state coercion.

Misean economics, disinfected of the open-minded empirical consequentialism of Mises’ Liberalism, and filtered through Ayn Rand and Murray Rothbard’s peculiar views of rights and coercion delivers a powerfully moralized brief for capitalism that calls into question even taxation for the purpose of financing genuine public goods. That Rothbardians and Randians have wasted so much time fighting with each other on the question of the minimal state versus anarcho-capitalism obscures their unity on a rights-based bulwark against the slide from the welfare state to socialism. Sadly, “libertarianism” has become identified rather strongly with this ideology — an ideology some of the thinkers most strongly identified with libertarianism, like Hayek and Friedman, never shared.

The death of socialism as a viable competitor to the liberal-capitalist welfare state makes continued slippery-slope-to-socialism thinking look densely anachronistic. Other liberal welfare states, like the UK, Sweden, Denmark, Australia, New Zealand, etc., have moved in a rather more market-liberal direction, becoming rather less of a soft-socialist middle-ground between the American model and full-on economic socialism. The question these days is whether the U.S. will have the good sense to adopt more rational market-based old-age pension policies, like Sweden or Australia, or lower corporate tax rates to a level more in line with the rest of the wealthy world. Slightly higher personal tax rates and slightly more redistribution is a possibility, but a slide into socialism just isn’t on the table. In this context, the negative income tax looks much less like a dangerous concession to the world-historical forces of evil.

Meanwhile, with the obsolescence of the anti-communist alliance with conservatives, many libertarians have sloughed off much of their previously tactically useful sympathy for socially conservative initiatives. Freed to be full-on social liberals, many libertarians are left sensing a much deeper cultural affinity for the left than the right. And this leads naturally to seeing more clearly their ideological affinities with welfare liberals. And then you read thinkers like Hayek, Friedman, and Buchanan, and you think: Oh, yes. This is extremely sensible. And now that the welfare-liberal elite has become rather more economically literate and is no longer sighing over five year plans, there is no reason to think they cannot find this sensible, too.

So that’s where I’m at. An old-fashioned market liberal who thinks Hayek, Friedman, and Buchanan get it right, and who thinks Rawlsian welfare liberals should be able to recognize themselves in these thinkers.

Viewing 96 Comments

    • ^
    • v
    And when I need to say who I'm like, I often say:

    Kinda like that Will Wilkinson from Cato and Fly Bottle and Blogging Heads with splash of Bryan Caplan and Megan McArdle.

    hehehe

    ;)

    Good post.
    • ^
    • v
    I think you overestimate the possibilities here...perhaps because you tend to share company with more economically literate and thoughtful liberals in the DC think-tank/journalist community....and even that can be a stretch. After all, if you read a lot of Ezra Klein, you seriously wonder about his economic literacy. Others like Matthew Yglesias seem to have to a little more of a clue, however.

    Moreover, it doesn't help that the genuinely economically literate liberals....like Left of Center economists...tend to misrepresent the libertarian positions inspired by Hayek and Friedman on many, many levels.

    In short, I think there's a bigger disconnect there than you give credit. Whether it's through sheer ignorance of the true views of these great thinkers is another matter.
    • ^
    • v
    So when is your book on liberaltarianism coming out?
    • ^
    • v
    Are you interesting?
    • ^
    • v
    I like this analysis. I'd just add that what you say about the weird transmogrification of Hayek, Friedman and Buchanan is arguably even more true of Adam Smith.
    • ^
    • v
    Please name one influential liberal thinker who is in favor of free trade, against the panoply of federal regulations, much lower and flatter tax rates, and privatized or vastly reduced entitlement spending. Name one liberal thinker, period, who thinks that. The gulf is yawning.

    Liberal: This proposal to slightly slow the growth of Medicare is an outrage!

    Libertarian: Medicare shouldn't exist!

    Where is the middle ground there, I'm curious. I really, really would like to meet the liberal intelligentsia that wants to limit the welfare state's to helping the truly poor (no Medicare for Bill Gates, thank you) while otherwise letting the market work and forgoing soak-the-rich rhetoric. I could talk to those people. Where are they?
    • ^
    • v
    Kevin,

    I think the middle ground is in ends...not necessarily means.

    While I do agree as was posted above that Will is perhaps being a little too optimistic, it must be said that there is a common ground in trying to improve the human condition and that many of the thinkers like Hayek and Friedman did concern themselves greatly with trying to help the poor and defending individual freedom and choice at the same time...even though liberals refuse to see it that way.

    But since they conceptualize the problem differently and understand economic laws and forces differently (meaning one does and one less so...or at least doesn't care about them) the prescriptions come out differently.

    On your health care example, Liberals think market-based ideas failed (even though we aren't really using them correctly) and think Medicare is the only way to help the elderly with Health Care. Libertarians think market-based ideas are the answer and are afraid of seeing more bad consequences from government meddling in the system.

    Both see a problem and want it fixed to help others but both perceive the problem differently.

    Of course, it doesn't help us libertarians that we understand the liberal position better than they understand ours.
    • ^
    • v
    From The Beacon.

    Very pertinent to this topic.
    • ^
    • v
    Anonomous, I understand why liberals believe their ideas on economics, regulation, health care, entitlements are better. I'm not suggesting they aren't well-intended. But just as conservatives need to be persuaded on immigration and homosexuality, so do liberals need to be persuaded on these other issues. But that's where we are, back to square one trying to convince other people we've got the best ideas. I don't see the makings of a fusionism there.
    • ^
    • v
    "Please name one influential liberal thinker who is in favor of free trade"

    Paul Krugman.
    • ^
    • v
    Renato,

    It's "favor" not "favorED" hehehehe

    But seriously, his free trade position seems to weaken with every new liberal fan he gains.

    Besides, liberal economists like to obscure their support of free trade by dwelling each and every little possible things that can possibly go wrong along the way...and they so to the point that they don't mind seeing other liberals use their arguments as an excuse for the protectionism and mercantilism that they in fact seek.
    • ^
    • v
    There are plenty of liberals who support free trade, from bloggers to economists to politicians.
    • ^
    • v
    The reasonable, sophisticated consequentialist pragmatism of the great 20th century market liberals seemed an insufficient bulwark against the slippery slope from the liberal, capitalist welfare state to full-on illiberal, totalitarian socialism. (Indeed, Hayek himself made the slippery slope argument powerfully, though unsoundly.)

    Did he? My reading of The Road to Serfdom was that the welfare state and the mixed economy were hunky dory, and that Hayek was making the narrow point that full-on central planning was incompatible with democracy. Hayek is commonly credited with the "slippery slope" argument that food stamps are the first step to the gulag, but I don't think he ever actually said it.
    • ^
    • v
    I think Will is right about this. What 'liberaltarians' hope for isn't so much a fusion as a reunion.

    Philosophical liberals are split across the political spectrum. Neither the left or the right are philosophically coherent groups. At the retail end, politics is ruthlessly pragmatic. People form alliances based on policy. They accept some policies they don't like in return for support for those that they do. Log rolling rules.

    A lot people involved in retail politics don't really care about why they support the policies they do. Some are tribalists with a strict 'my party right or wrong' approach while others are passionate single-issue advocates.

    But for philosophical liberals, party-loyalties and specific policy platforms are less important than a broader set of principles and objectives. Rawlsian liberals, for example, will always ask whether a policy will improve opportunities for the least advantaged.

    And I think Will and Brink are right. There are a lot of policies that Democrat-voting liberals traditionally support that don't really do a good job of helping people at the bottom end.

    Agricultural subsidies were meant to help struggling family farms. But they probably don't. Tariff protection for manufacturing was meant to help low skilled workers support their families. It probably doesn't. And Social Security was meant to prevent poverty in old age. But it's probably not the most efficient way to help economically vulnerable seniors.

    Whatever help these kinds of programs offer to economically vulnerable people, they only do so by wasting vast resources on people who aren't vulnerable at all.

    It ought to be possible to have more generous supports for individuals and families who are economically vulnerable AND take an ax to spending and regulation that's distorting the market and holding back the economy.
    • ^
    • v
    Interesting article, I really appreciate your deep reading! You might like my free audiobook 'Everyday Anarchy,' it's on my web site. :)
    • ^
    • v
    I think it's interesting to compare your attempt to achieve fusion with liberals with someone like Kevin Carson and his goal. (Though he'd probably prefer the term "leftist", as liberal lends itself too easily to "corporate liberal" or "neoliberal".)

    I've been following both you and him, and I can with all confidence say that your citing Milton Friedman very much undermines his effort to build bridges. And probably vice versa, as his vigilant anti-statism and respect for Rothbard undermines your effort to downplay Rothbard's influence. Indeed, the importance of Rothbard for some one like Carson or the more hardcore libertarian is that he was staunchly anti-imperialist and refused to yield to the big government, commie-bashing right of mid-century. It's precisely this kind of thing that potentially garners respect for libertarians from certain liberal corners (cobwebbed corners, no doubt, from those in the "real world"), and aids in the effort to achieve a different, more radical kind of fusionism.

    Of course you're influential, being at Cato and all, and thinking of ways to find agreement with others of a more establishment persuasion. The kinds of liberals that you meet are not of the sort that a market anarchist might meet. It's Ezra Klein and Will Wilkinson vs. Karl Hess and Murray Bookchin.

    Ok, so the point of all this is to note that the virtue of "meeting a liberal halfway" very much depends on which kind of liberal. There's another alliance going on. The one discussed here is far from the final word on the matter. (Not that you said it was, of course.)

    But I suppose I've gone so far down the rabbit hole that the dominant political discourse looks almost weird to me.
    • ^
    • v
    Nice post but some of the "libertarians" here can not have read Hayek. They are still scoffing. They still hold firmly to a mis-represented view of these classic liberals and the modern liberal could quote Hayek and be scoffed at for being "socialist".


    " Nor is there any reason why the state should not assist the individuals in providing for the common hazards of life....Where, as in the case of sickness and accident,.....- the case for the state's helping to organize a comprehensive system of social insurance is very strong."

    F. A. Hayek
    • ^
    • v
    "Freed to be full-on social liberals, many libertarians are left sensing a much deeper cultural affinity for the left than the right."

    Yeah, I've always sensed a much deeper cultural affinity for the left. I'd rather live around lefties than cultural conservatives, and I do.

    But...the left has given up on socialism, I think, only tactically and pragmatically, not philosophically. They think capitalism is, at best, a necessary evil (and would like to see the day that it's no longer necessary). They dislike free trade and hate corporations (well, except for Apple Computer, of course). They think free-enterprises has uniformly noxious effects on the media and politics, and culture.

    They believe that wealthy people spend their money mostly on status and 'positional goods' and would, therefore, be just as happy if confiscatory tax levels forced them to compete for status at half their current incomes.

    In short--Liberals make fine neighbors, but I sure wouldn't want to see them in control of our economic future.
    • ^
    • v
    Slocum,

    Liberals have been in control of our economic future in the past and they arguably did better then when conservatives/libertarians were in charge.

    Most of us believe in markets and capitalism but we understand that Marx, while wrong in solution, was dead on in description of the evils of unbridled capitalism. Free trade is a misnomer and in fact most developing country's grew strong under a degree of protectionism as did our own country. Ricardo had three requirements for comparative advantage to be bilaterally advantageous none of which are observed in current trade arrangements loosely called free trade.

    Hate corporations. Not the principle but the current practice that allows them basically to undermine democracy in favor of their cleptocratic tendencies. Corporations hate corporations. Corporations hate free markets and competition. They love government programs and handouts. Corporations need much oversight and need to realize they exist as a privilege of the state not a right.

    Corporate media is the worst form of capitalism of all. It is at once full of conflict with regard to reporting story's accurately or at all and with its corporate charter of making profits especially when the companies that own the media have larger holding in Entertainment (Disneyland/ABC) or Defense contract ( NBC and GE).
    In almost no other area is a publicly run enterprise (CPB/NPR) far superior then a private one then in the media. Military and law enforcement being the others.

    We are successful animals because we think and organize. The idea that a market, an economy or a society is better left to its own then planned and regulated by intelligent beings is sheer hoccum with not an ounce of factual support.

    Bottom line is it's either anarchy or some degree of planning. No evidence suggest greater and greater returns with continued decreases in degree of planning. Much, the current economy, suggest the opposite.
    • ^
    • v
    (1)Protectionism is illiberal and not conducive to economic growth. The fact that countries grew was despite protectionism, not because of it. I'd agree that we do not have free trade today.

    (2)NPR is superior to an independent, privately run radio station? I doubt that. The coverage on NPR is rather milquetoast compared to, say, KOOP in Austin Texas. Ah, "public" (state) radio. "With sheckles come shackles". The politicization of public radio, and the inevitable "accountablity" placed upon it has made it rather bland on the one hand and increasingly "professionalized" (read: less grassroots) on the other.

    (3)The military and law enforcement are increasingly one and the same. The wanton destruction heaped upon innocents abroad by the military due to its ability to externalize costs upon hapless taxpayers is a massive strike against it as some kind of organizaiton superior to a private defense force. (It's difficult to compare, of course.) But as it stands, the wealthy and powerful can take advantage of a state military force, paid for by the citizenry, to do their bidding. The fact that it is "publicly funded" (coercively funded) makes it worse in this regard - as an auxilliary to private interests - than it would be otherwise, if these private interests had to pay for it themselves.

    They love government programs and handouts.

    Yep. See above.

    William Graham Sumner once said that there will one day be either socialists or anarchists. It's rather amazing to think that most liberals are quite conservative in this respect.
    • ^
    • v
    Liberals have been in control of our economic future in the past and they arguably did better then when conservatives/libertarians were in charge.

    If you mean Bill Clinton, I'll agree his administration did a fine job with the economy (and I voted for him twice). But Bill was a dedicated free-trader who pushed through NAFTA with the support of most Republicans and over the objection of most Democrats. He also pushed through welfare reform with similar overwhelming support from Republicans and strong opposition from Democrats. Despite the economic success of the Clinton administration, the free-traders are gone (or at least gone from the leadership of the Democratic Party).

    Free trade is a misnomer and in fact most developing country’s grew strong under a degree of protectionism as did our own country. Ricardo had three requirements for comparative advantage to be bilaterally advantageous none of which are observed in current trade arrangements loosely called free trade.
    Hate corporations. Not the principle but the current practice that allows them basically to undermine democracy in favor of their cleptocratic tendencies.

    I'm not going to argue with your take on free-trade and corporations -- I doubt it'd do much good. But I will point out that while you