The problem with libertarianism in a nutshell

I‘ve previously written about how I’ve gone from being draw to the “libertarian” label to being comfortable calling myself a liberal. But lately, I think I’ve been putting together some pieces about what, exactly, is wrong with libertarianism.

The basic problem, as I’ve come to see it, is that we have a lot more options when it comes to government policy than “yay regulation!” and “boo regulation!” and when libertarians see things in those terms, they end up spending a lot of time sparring with non-existent opponents.

Or, to be more concrete, shredding beneficial environmental regulations does nothing whatsoever to solve the problem of incumbent businesses lobbying for regulation to keep out competitors.

I think I may have first noticed this reading Scott’s Non-Libertarian FAQ and Sarah’s reply. Early in his FAQ, Scott writes:

1.2: Are you a statist?


Vikings believe the universe is dominated by the great cosmic battle between the Gods and the Frost Giants, and naturally place their support behind the Gods. I don’t follow Thor or Odin, but it would be unfair to describe me as pro-Frost Giant. I simply reject the Gods vs. Frost Giants dichotomy as one around which I want to shape my life.

Likewise, libertarians believe in the great cosmic battle between the State and the Individual, and naturally place their support behind the Individual. I don’t think this philosophy makes sense, but not because I’m hoping the cosmic battle is won by the State. I just think there are more important dichotomies to deal with.

To which Sarah replies:

You can make anything sound silly by calling it a great cosmic battle.

If you’re an open-source programmer, are you engaged in a great cosmic battle against Microsoft? Of course not. You might have friends who work at Microsoft. You might have seen a PowerPoint presentation you liked somewhere. But you think there are systematic reasons why software tends to be worse when it’s not subject to constant tinkering and improvement by the public.

Okay, sounds fair enough. But now look what happens when Scott deals with the claim that we don’t need environmental regulations and the possible bad effects from not having them would never actually happen because, “individuals and corporations, free from government regulation, would come to an enlightened, mutually beneficial solution.” Scott replies:

You lose. Fishing Atlantic cod used to be a highly profitable industry. Despite decades of warnings from scientists and environmental groups, fishing companies overfished the cod, stocks collapsed, and the industry no longer exists.

If not for knee-jerk resistance to government regulation, the American and Canadian governments could have set strict fishing quotas, and companies could still be profitably fishing the area today. Other fisheries that do have government-imposed quotas are much more successful.

Here is the entirety of Sarah’s response:

Yeah, true. You don’t always win in absolutely every way with the free market. Life’s not that convenient. See Even when a policy is good on the whole, there will usually be some cases where its consequences hurt people. We have to choose between imperfect options, and find the least imperfect one.

…which gave me a “WTF moment.” The problem is that no actual drawbacks to regulating cod fishing are given. It’s just lumped in to the broader category of “government regulation,” and because lots of government regulations are bad, this is given as a reason to reject regulation of cod fishing. This kind of “reasoning” from libertarians (and conservatives) is distressingly common.

Granted, sometimes putting broad restrictions on government power makes sense. For example, the US Constitution’s First Amendment seems like a good idea, and not just for the sake of preventing hypothetical tyranny, but also for preventing some of the actual difficulties you see in countries like the UK with respect to libel law and copyright law. But the First Amendment is a much narrower restriction than, “no regulation ever,” and even though it’s fairly sweeping in the areas it covers, the courts have still interpreted it with some nuance.

Once I noticed the basic pattern, I started seeing it everywhere. A couple months ago, liberal blogger Matt Yglesias wote a post about what a pain it is to get a license to start a small business in Washington DC, and a bunch of conservatives who obviously had never read Yglesias before decided this was some kind of victory. Yglesias’ response was brilliant:

The way I would put this is that the American economy is simultaneously overregulated and underregulated. It is much too difficult to get business and occupational licenses; there are excessive restrictions on the wholesaling and retailing of alcoholic beverages; exclusionary zoning codes cripple the economy; and I’m sure there are more problems than I’m even aware of.

At the same time, it continues to be the case that even if you ignore climate change, there are huge problematic environmental externalities involved in the energy production and industrial sectors of the economy. And you shouldn’t ignore climate change! We are much too lax about what firms are allowed to dump into the air. On the financial side, too, it’s become clear that there are really big problems with bank supervision. The existence of bad rent-seeking rules around who’s allowed to cut hair is not a good justification for the absence of rules around banks’ ability to issue no-doc liar’s loans. The fact that it’s too much of a pain in the ass to get a building permit is not a good justification for making it easier to poison children’s brains with mercury. Now obviously all these rules are incredibly annoying. I am really glad, personally, that I don’t need to take any time or effort to comply with the Environmental Protection Agency’s new mercury emissions rules. But at the same time, it ought to be a pain in the ass to put extra mercury into the air. We don’t want too much mercury! We don’t want too much bank leverage!

Business licensing is different. “This city has too many restaurants to choose from” is not a real public policy problem—it’s only a problem for incumbent restaurateurs who don’t want to face competition. But in other fields of endeavor—telecommunications, say—theabsence of regulations can lead to an uncompetitive outcome. Partisan politics is pretty simple, since there are only two parties to choose from. But the underlying structure of reality is quite complicated, and it’s worth your time to try to understand the issues.

Also involving Yglesias was this exchange in Twitter, which I found telling. But perhaps the most-emblematic example of this point that I can think of occurred to me while I was in the process of re-reading some of Eliezer Yudkowsky’s old blog posts, particularly Blue or Green on Regulation? which begins:

In recent posts, I have predicted that, if not otherwise prevented from doing so, some people will behave stupidly and suffer the consequences:  “If people have a right to be stupid, the market will respond by supplying all the stupidity that can be sold.”  People misinterpret this as indicating that I take a policy stance in favor of regulation.  It indicates no such thing.  It is meant purely as guess about empirical consequences – a testable prediction on a question of simple fact.

Perhaps I would be less misinterpreted if I also told “the other side of the story” – inveighed at length about the reasons why bureaucrats are not perfect rationalists guarding our net best interests.  But ideally, I shouldn’t have to go to such lengths.  Ideally, I could make a prediction about a strictly factual question without this being interpreted as a policy stance, or as a stance on logically distinct factual questions.

Yet it would appear that there are two and only two sides to the issue – pro-regulation and anti-regulation.  All arguments are either allied soldiers or enemy soldiers; they fight on one side or the other.  Any allied soldier can be deployed to fight any enemy soldier and vice versa.  Whatever argument pushes one side up, pushes the other side down.

Eliezer concludes the post by saying:

So am I Blue or Green on regulation, then? I consider myself neither. Imagine, for a moment, that much of what the Greens said about the downside of the Blue policy was true – that, left to the mercy of the free market, many people would be crushed by powers far beyond their understanding, nor would they deserve it. And imagine that most of what the Blues said about the downside of the Green policy was also true – that regulators were fallible humans with poor incentives, whacking on delicately balanced forces with a sledgehammer.

Close your eyes and imagine it. Extrapolate the result. If that were true, then… then you’d have a big problem and no easy way to fix it, that’s what you’d have. Does this universe look familiar?

In the context of Eliezer’s other writings, this ending takes on a distinctly utopian flavor: since the universe we live in presents us with such big problems and no easy solutions, we need to radically change the universe.

But until we achieve that utopia, we need to avoid being Blue or Green in a different way, that is, by accepting that complicated problems require complicated solutions, solutions that can’t be boiled down to “pro regulation” and “anti regulation,” solutions that recognize that sometimes the problems with regulation mean we shouldn’t regulate, but that also recognize that sometimes regulation is needed and we should therefore try to give regulators better incentives and finer tools.

And the thing is, I think there are very few US liberals who don’t grasp that on some level, whose entire position could be boiled down to “regulation is great.” This leaves libertarians as regulatory Blues who think they’re fighting against regulatory Greens when the regulatory Greens don’t actually exist.

Another way to look at this is that libertarianism has a superficial ideological coherence: “conservatives don’t want the government interfering in the economy, but want it interfering in our personal lives, liberals are the other way around, but only libertarians are consistent about opposing government interference!” I’m embarrassed to say that there was probably a time in my life where I heard such an argument for a libertarian and nodded along in a way that felt wise.

But wanting the same solution to every problem is actually a pretty strange kind of “consistency” to demand. It’s not like there’s anything logically inconsistent about sometimes regulating and sometimes not. It makes much more sense to have a consistent goal–like making the world a better place–and adopting complex means to achieve that goal when reality demands it.

What Are Your Thoughts?leave a comment