Freer markets and bigger government

Libertarianism is in crisis because it refuses to accept big government, says Tyler Cowen. As governments turn away from central planning and embrace free markets, their societies grow wealthier. And wealthier societies can afford bigger governments. According to Cowen, it’s a package deal libertarians need to learn to live with:

Libertarian ideas… have improved the quality of government. Few American politicians advocate central planning or an economy built around collective bargaining. Marxism has retreated in intellectual disgrace.

Those developments have brought us much greater wealth and much greater liberty, at least in the positive sense of greater life opportunities. They’ve also brought much bigger government. The more wealth we have, the more government we can afford. Furthermore, the better government operates, the more government people will demand. That is the fundamental paradox of libertarianism. Many initial victories bring later defeats.

I am not so worried about this paradox of libertarianism. Overall libertarians should embrace these developments. We should embrace a world with growing wealth, growing positive liberty, and yes, growing government. We don’t have to favor the growth in government per se, but we do need to recognize that sometimes it is a package deal.

The important thing for libertarians is freedom. And when Cowen thinks about freedom he’s thinking "what can I do with my life?" rather than "how many regulations are imposed on me?" That’s why he writes blog posts with titles like ‘Why I love Sweden.’

Cowen’s post is part of series in response to Brian Doherty’s lead essay ‘Libertarianism: Past and Prospects.’ (Doherty has recently published a book on the subject — Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement.) In another post, Cato’s Brink Lindsey again floats an idea he raised at The New Republic — a liberal-libertarian fusionism on the left to replace the old traditionalist-libertarian fusionism on the right.

At Catallaxy, Jason Soon links to another post in the series by Virginia Postrel. Like Lindsey, Postrel wonders whether it’s time for libertarians to ditch their alliance with traditionalist conservatives:

Brink Lindsey’s call for a liberal-libertarian coalition may sound crazy when you look at the Democratic Congress, the 2008 presidential field, or the Democrats’ reflexive demonization of pharmaceutical companies. But if you want to defend cosmopolitan individualism, including commercial freedom, creating such an alliance could prove essential.

Lindsey argues for an fusion of the right wing liberalism of Friedrich Hayek and the left wing liberalism of John Rawls. It’s an argument his colleague Will Wilkinson has also been promoting. It might sound crazy, but Lindsey and Wilkinson have a point. Hayek himself argued that the differences between he and Rawls "seemed more verbal than substantial". In a recent essay for the Evatt Foundation, I argue that Hayek was right.

It’s difficult to know whether any of this has any relevance for Australia. I suspect you can count the number of serious Hayekian liberals in Australia on your fingers and toes (on second thoughts, you probably won’t need to take off your shoes). That’s a shame because many of the Australian left seems to be headed for a fusion with conservatism which will leave Rawlsian liberals out in the cold. After decades of fighting for what Postrel calls ‘cosmopolitan individualism’, leftist thinkers like David McKnight and Clive Hamilton are reaching out to nostalgic conservatives who worry that the market is undermining traditional morality and the family.

Are there any liberals out there?

This entry was posted in Economics and public policy, Politics - international. Bookmark the permalink.

39 Responses to Freer markets and bigger government

  1. C.L. says:

    Libertarians – hey, I respect many of them more than I used to – they have problems in the real-world arena of politics and the aquisition of political power because, inter alia, they are too easy to depicted as Ken Parish once depicted them: as “I’m-alright-jack-and-everyone-else-can-go-and-get-stuffed-ians”. Also worth pondering, in connection to the themes raised here are the “Two Fallacies That Cause Excessive Libertarian Despair“.

  2. C.L. says:

    Should have read “…they are too easy to depict as Ken Parish once depicted them…”

  3. Nabakov says:

    I think the biggest problem libertarians face is that the economic freedoms and consumer joys they harken unto so much are now being delivered by a global system of corporate monoliths and oligarchies with no room for individualistic ideologies and quite happy to support statist regimes to keep the spice flowing.

    And of course there is that other problem, which is that most self-confessed libertarians tend to be graceless nerds (of all ages), very much lacking social skills like charm and empathy, organisational nous, the ability to wheel and deal and all those other attributes needed to create and deliver an effective change movement.

    Not to say though that libertarian ideals like keeping the State’s nose out of our private lives haven’t and shouldn’t gain widespread traction.

    But really they are their own worst enemy. And y’know, I kinda suspect that’s how many of them want it. ‘cos if they ever gained any power, what could they possibly do with it ‘cept give it away?

    Libertarism – the other Worm Ourobus meet.

  4. Link says:

    And of course there is that other problem, which is that most self-confessed libertarians tend to be graceless nerds (of all ages), very much lacking social skills like charm and empathy, organisational nous, the ability to wheel and deal and all those other attributes needed to create and deliver an effective change movement.

    Dear Naba, dis is why I love you darlink. x

    It is the ‘conservative’ part of libertarians, which makes them go into lockdown on the status quo, tightening the screws, etc. Resent grows as contingent in their plan, is the unspoken understanding that not all can, or should, let be allowed to live like they.

    It is not in their nature (unless they have of the above qualities, so eloquently put by Nabakov), to be agents of change or reform, unless it is to secure more stuff or an ideology for themselves to buy more spice. Plus give away power. Are you kidding?

  5. Rafe says:

    Ken Parish is too glib in his criticism of libertarians, lefties have trouble coming to grips with the idea that people can care about the poor and the weak without thinking that the welfare state is the best solution to their problems.

    Similarly it is possible to be a critic of global warming hysteria without being anti-science (see Missing Link for Ken’s repetition of that no brainer).

  6. Ken Parish says:

    “Similarly it is possible to be a critic of global warming hysteria without being anti-science (see Missing Link for Ken

  7. James Farrell says:

    If a libertarian is a person who likes big government, and big government means robust public health and public education, a generous welfare state, regulation to correct market failures, and a role for organised labour to offeset the power of big corporatyions, then I’m a libertarian. Hooray! Can someone send me a membership application form?

  8. Jacques Chester says:

    As for libertarians, if its blogosphere advocates are typical, they appear (judging by what they mostly choose to write about) to have marginal interest in broader civil and political freedoms, and to be obsessed by tax rates and property rights. When you consider that property rights aren

  9. Fred Argy says:

    Thanks for that post Don. I agree wholeheartedly with Tyler Cowan.

    Economic freedom is desirable if (a) it meets the cultural priorities and values of the majority of Australians (without hurting the minority); and if (b) it enhances economic growth.

    Measures which lead to freer and more competitive product and financial markets generally meet both conditions.

    But once economic freedom embraces small government per se and labour market deregulation, it misses out on both criteria. First, there is no widespread support in Australia for smaller government and labour deregulation per se. Sure, Australians believe in individual responsibility, self-help and self-reliance and freedom of choice and action – but only if it is associated with a level playing field. You cannot get a level playing field without government intervention because even in the most competitive markets there are many barriers to income mobility. And Australians generally understand this well.

    Secondly, smaller government and labour market deregulation offers no net economic benefit. While more open product and financial markets correlate with higher per capita growth and, there is no such correlation as far as small government and labour deretgulation is concerned (at least beyond a certain minimum freedom threshold – one met already by most developed economies). The reason is simple: if optimal methods of fiscal intervention are used and the opportunity-equalising programs are well chosen, the effects on the economy are benign even if they involve higher taxes.

  10. Paul Frijters says:

    Reading the above, I feel a rant coming up.
    The trouble with this kind of debate is that the concepts used are fuzzy beyond belief. Take the notion of ‘economic freedoms’ talked about so much above. What in earths name does this mean? I defy the reader to find a period in our history in which we were less regulated in our personal and economic actions than we are now. Indeed, the supposed ‘deregulation’ of the labour market of recent years was basically another huge piece of legislation everyone has to conform to and should more aptly be named ‘re-regulation’. Even just the income tax law in our ‘free economy’ consists of something like 2 dozen books that no-one quite understands but nevertheless has to comply with. Furthermore, within our supposedly ‘free market’ organisations there are swathes of regulation about when and whether you can smoke; your superannuation; where you can piss and where you cant; what you can and cant say in emails; whether you can or cant say what you really mean; whether you should go to ‘training’, PPRs, etc. From the perspective of a ‘free’ hunter gatherer 10,000 years ago, modern humans in any Western country must appear like the most drilled, controlled, self-repressed, unfree animals he’s ever laid eyes on. And within our super-regulated herd people slap each on the shoulder for being oh-so-free? What on earth are they talking about? Do they mean free to be rich whilst others are not or do they mean something more elevating? Its rather like someone chained to the wall of a prison saying he is free because he can choose when to piss and when not to. If this mythical economic freedom is all the freedom a modern libertarian needs to feel free, then I’d venture that there is no such person as a libertarian.

  11. Sacha says:

    Furthermore, within our supposedly

  12. Patrick says:

    Paul, I believe you meant:

    I defy the reader to find a period in our history in which we were less more regulated in our personal and economic actions than we are now.

    I also believe that this is exactly Tyler Cowen’s point. All that, and yet, from the substantive power to act perspective I am sure you endorse, we are ‘freer’ than ever before. Ie your cave-man couldn’t travel more than 60km in a day, let alone 6,000, etc.

    But I think your comment degenerates:

    Its rather like someone chained to the wall of a prison saying he is free because he can choose when to piss and when not to.

    Well, if this is prison, and 3500 BC the outside world, you can throw away the key as far as I care. If that makes me a socialist or a conservative then I think you need English lessons. (I am a conservative, but for other reasons).

  13. Paul Frijters says:

    you are right. I meant more, not less. Indeed, a conservative in principle makes no pretence that we live in freedom, nor would a conservative necessarily expect anything good from freedom so none of this is directed at you or other conservatives.

    The notion that ‘our’ ability to fly 6000 miles constitutes great freedom though is something I really find utterly strange. For one, you can only fly 6000 miles if you’ve got a stack of money big enough. If you haven’t got that, no ‘freedom’ for you. Hence its a privilidged few who have the ‘freedom’ to enjoy what is denied to others.
    More importantly, consider the unfreedom involved in air travel. First you ‘have to’ arrive at the airport 2 hours beforehand, where you ‘have to’ fill in a zillion forms in order to go through customs, queus and what-have-you. Making simple jokes is enough to set a legal procedure in motion. Then you have to line up at the check-in when your rows are called, after which you enter a flying prison where you have to buckle up most of the time. Yuo cant lie on the floor or go the toilet when you want to, but have to obey instructinos and be quiet basically the entire trip. The waitresses promise you can ask them for anything, but real prison awaits those silly enough to take such a remark seriously. All kinds of limitations on luggage, the use of machines, and other enjoyment items applies. And then of course there’s the bootcamp waiting at arrival, where another rigmarole of form-filling, queuing, and excessive politeness awaits. And whobegone anyone who violates pretty strict standards of behaviour and dress during any of this. To call such experiences ‘freedom’ is a mockery of that word. Its the freedom of a lab rat to do what a master allows it to do, not the freedom to think, feel, express, and do as you please. I repeat: if celebrating such regimented acts available to the rich as the pinnacle of freedom is what modern libertarianism has degenerated into, then libertarianism is dead.

  14. Jacques,

    I don’t think your explanation holds water – though of course it makes a small contribution. The CIS and IPA are broadly Hayekian institutions aren’t they? Where are they agitating on basic civil liberties, habeas corpus, extra-ordinary rendition etc etc?

    I’ve tackled Andrew Norton on this and he says it’s about coalition building. These bodies don’t go in to bat (for instance) for gay law reform because that is bad for the coalitions they’re building. Well that’s OK, but let’s not get too highfalutin then about defending fundamental principles.

    Samuelson (cue for Rafe to remind us that Samuelson said some nice – and wrong – things about the Soviet Union) observed the same thing. When Joe McCarthy was at the height of his witch-hunt where were all those economic liberals who’d spoken so eloquently about basic freedoms? As Samuelson said – with some noble exceptions (I think he was thinking of Fritz Machlup and perhaps Milton Freidman) they were no-where to be seen. Come to think of it Hayek wasn’t exactly at the top of the list . . .

  15. Patrick says:

    Paul, I think you are too hung up on prices.

    I suspect you are forgetting that everything gets cheaper all the time, whilst just about everyone gets richer all the time. So Somali refugees fly to Europe and Australia (whilst some smuggle themselves into containers, still a greater scope of action than their ancestors of a few hundred years let alone thousand). One of the nasty consequences of economic growth is what one might call economic emancipation – the privileges of the upper classes are progressively made available to all.

    At a more fundamental level, you are categorically rejecting what I think is about as close to a consensus as this site has – that the positive ability to achieve something far outweighs the negative ability to achieve it undisturbed by government/others.

    Situation A) you can’t fly to America
    Situation B) you can, but you have to take a plane (and can’t teleport, which is presumably your ‘free’ means of travel) and have to observe the same restrictions you oblige everyone else to observe in your mutual desire to arrive alive. What is worse, it takes nearly a day.

    Are you freer in A or B? If you persist in answering A, I am going to post the definition of the word ‘free’.

  16. Paul Frijters says:


    As an economist I celebrate the greater wealth of many of this worlds poor as loudly as I can and, indeed, never grow tired of saying that the continued economic growth of China and India is the biggest economic event of the last 50 years.
    I disagree with you that “the privileges of the upper classes are progressively made available to all.”
    The private property of the upper classes are off-bounds to the others and hence the freedom to enjoy their land and houses reflects the unfreedom of others denied access to those things. Indeed, just go to a couple of beaches on the coast to see what mean: more and more of the damned things are only available to people staying at this or that hotel or are completely owned by one person. I dont call that ‘making privileges available to all’. Sure, some things are becoming within reach of more people (though it is good to remind the reader here that the wages of the bottom 10% have hardly risen in the last 35 years in Oz and in US its arguable that the poorest havent become poorer) but greater inequality has meant this expansion is not for everyone and what is gained at one end is eroded at the other end.

    Of course an expansion of the opportunity set is in anybody’s book ‘more freedom’. I would however say that air travel was a lot ‘freer’ 15 years ago than it is now and hence I’m not convinced we’ve in reality wittnessed an expansion of freedom in air travel rather than a reduction of it. The degree to which supposed libertarians shrug their shoulders at the regimentation of nearly all aspects of life and simply count the number of goods the rich have access to (and are thus able to deny others access to) as ‘freedom’ is worrisome. If it is not our ability to express, discuss, interact, and do as we please that is counted as freedom then your dictionary has a different entry at the word ‘freedom’ than mine.

  17. Sacha says:

    The notion that

  18. Sacha says:

    …because freedom has all sorts of connotations attached to it.

  19. Patrick says:

    Thank you Paul, I was surprised at my understanding of your earlier comments.

    I still disagree but I think that I can engage with that – I will try tomorrow.

  20. David Rubie says:

    Nicholas Gruen wrote:

    I don

  21. Paul Frijters says:

    good. I look forward to tomorrow. And whilst we’re at it, some more observations on the erosion of ‘freedom’, this time speaking from personal experience:

    Freedom of personal space at work? Cookoo! You cant even open a window without the fire police fining you, if indeed you are lucky enough to have a window that could even be opened. The same goes for bikes in the office. There are security passes after 6; and nothing personal on the homepage unless may be some isolated places or universities without central IT. All this is in the last 2 years.

    Academic freedom to research what you want to research? Ha! Ethical committees in quite a few Australian committees in recent years have begun to stop you from rewarding subjects who play a game well, meaning economic experiments are effectively forbidden because they violate the politically correct notion that icnentives dont matter. Any sensitive question in surveys now has to jump ethical committees, ARC guidelines on the matter, privacy legislation, and often direct political approval. Anything to do with sex, religion, or ethnicity is thus now treated with kids gloves and off-bounds.

    Academic freedom to say what you have discovered or have come to believe? You must be joking. The majority of my colleagues walk 10 miles around touchy subjects, such as Aborigines or the relation between sexual urges and work. Privately all kinds of interesting research observations are made, but the fear of being branded a left-wing or a right-wing lunatic has lead to widespread self-censorship. And if you dont believe the pressure to conform to a particular political view is rife, just google ‘sorry week’ at UQ.

    Academic freedom to choose what and how you lecture perhaps? Dont make me laugh! Whereas in my first stint as lecturer I would have been allowed to set my own exam and fail students who didnt meet a fixed academic standard, I was taken into a bureaucrat’s office 5 years ago and told in no uncertain terms that I was not to fail more than 6% of the student because that would not ‘conform’ with the ‘expected pass distribution’. Since then things have only gotten worse. You now have to start your lectures with a ‘safety video’ and, depending on where you are, with an acknowledgement of the traditional owners.

  22. Brendan Halfweeg says:


    Your concept of freedom is strange, especially within the framework of property rights that libertarians pose them. Freedom doesn’t mean free access to resources, it means freedom to hold on to and use your property as you see fit. There is a difference between regulation imposed by the state on other people’s property and regulations imposed by the property owner. Libertarians are against state regulation, not private regulation.

    So given that airlines dislike having their planes blown up by terrorists, some sort of security screening would occur before you were able to board their aircraft even in the absence of state regulations. The same with fire regulations in buildings.

    However, libertarians are not going to fight the fight for you to be on your employer’s premises outside of business hours without their permission or without following their rules. It is their building and you agreed to obey by their rules when you joined the company and entered their building.

    The whole concept of property rights is immersed in the idea of voluntary transactions, contracts between individuals and organisations. Thus you trade something of yours for something of theirs, such as free time, labour and agree to certain rules, for wages and other employment benefits. You’ve freely agreed to work for them and they’ve freely agreed to employ and pay you.

    As these individual contracts become more complex, more has to be traded for the benefits. So people who complain of being slaves to their jobs are really saying that they are questioning how much they have to give up in order to receive the benefits of work. When people complain about state run schools, but yet replace their car every other year rather than put their children through private education, they are voluntarily putting more value on their choice of car than their children’s education.

    Freedom enables voluntary complexity, and complexity gives the veneer of restricting freedom. It is involuntary regulation that I rail against, not the complexities of modern life. Claiming that 3000BC man was more free because their life was less complex than 21st century man is a chimera. Their freedom can be measured using the same criteria of how free they are able to hold on to and use their property without impinging on other’s freedom.

    For example, in order to protect 3000BC man’s territory, they would have had to intimidate with violence their neighbour into submission or agreement to leave each other’s territory alone. 21st century man merely takes out some simple precautions such as installing security locks, reasonably safe in the knowledge that his neighbour is not going to move into his house while he is at work. No violence or threats of violence are required directly by him, although he does contract out the forceful protection of his property to the police or security company. So which one is more free to use his home, the caveman that can’t stray too far for fear of his neighbour invading his cave, or 21st century man who can go on holiday across the world and leave his house unattended for months with little fear? The caveman has a simpler life, the 21st century man a more complex one. The 21st century man is more free.

  23. Paul Frijters says:

    you make a good well-structured argument, but I beg to differ. Many of the rules of and regulations recently imposed are not as you desribe, i.e. consciously drawn up by some well-thinking principal who then enters into trade with others. Many of the rules come creeping up without anyone ever voting for them or without any principal ever thinking them through. Take the case of universities: who owns them in the first place? They are supposed to be run for the benefit of the community without a profit motive. There is thus no for-profit motive at universities to keep regulations and their implementers within bounds. Central administrative departments more or less autonomously think up additional rules which they manage to enforce upon the whole organisation by virtue of the fact that they are the experts on an item on which the rest of the organisation has become dependent. To depict that situation as if an owner sets rules and engages in a trade is simply far removed from reality. Its more apt to describe a university as a collectino of competing and interlocking interests, many of which have the capacity to make life difficult for each other and where regulation is a tool to gain de facto control over an organisation that legally does not belong to any person or group within that university.
    Similar considerations go for ethical committees, building site rules, and indeed a lot of the regulation poured out by government bureaucracies: these are not the product of politicians thinking them up and consciously deciding upon them, but are more akin to the autonomous decisions thought up by risk-minimising administrations mainly obsessed with minimising real or imagined dangers, rubber stamped by politicians who havent got the time to thinki them through. The creeping ‘unfreedom’ emanating from such structures is not a reflection of the voluntary trades that come from a ‘complexity of life’, but arises from the lack of accountability for new rules because of design faults in the organisations that breed them. Workers and voters not only can, but should rail against these. There’s always some rationale for taking away your freedom and we should not be gullible in believing that these rules indeed are ‘all for the best’.
    And you are right, of course I can choose to work elsewhere so it cant be all bad. It isnt all bad, but unless the gradual erosion of academic freedom stops, there will pretty soon be precious little difference between being in a Kafka novel and being at university and bright minds will spurn academia.

  24. Paul Frijters says:

    Oh, and Brendan,
    the property rights argument you use is a real fudge. If someone has nothing to trade then by your logic, that’s fine because they are still free to trade if only they had something to trade! Yet the person with nothing to trade still cant go where he or she wants to because that would be tresspassing on private property. And they cant say what they want to because that would be defamation, plagiarism, and all the other excuses for limiting free speech. To say that they can always choose to go elsewhere and have hence chosen for their unfreedom is like saying to the passengers on a ship in the middle of the ocean that they are free to leave anytime they want!
    Hence you can only use the property rights argument if you think the initial allocation reflects freedom. And please tell me libertarianism has not degenerated into a mere apologia for the current distribution of property, talent, and resources? That would the mother of all ironies: the proud and long tradition of libertarians speaking up for people’s freedoms in many dimension becoming a fig-leaf for the current powers-that-be. Please tell me there is life in the corpse yet.

  25. Sacha says:

    Just on the idea of “freedom to travel 6000 kilometres”. Nowadays, it is physically possible for people to travel 6000 kilometres in a day. No-one could do that thousands of years ago.

    The outer bound of distance travelled has increased, which says nothing about whether a particular person is able to travel any particular distance. Perhaps “freedom to travel 6000 km” is not such a great way of expressing this.

  26. Paul,

    Your comment on rule making scaring people away from academia is true to some extent for me. I recall negotiating with one uni bureaucrat after another about doing extremely minor things that shouldn’t have had to bother anyone – like deferring for a year or whatever. These guys had a battalion of rules made up on the assumption that I was costing them money. I wasn’t costing them a dime to defer. I wasn’t on a scholarship. Had I been on a scholarship, which I wasn’t mainly out of pride there were other rules that would have made life easier for me.

    I kept thinking to myself – these people aspire to be the model of thinking persons and they have nothing better to do than make hundreds of rules up that don’t have to be made at all! Partly for that reason I stayed away. The petty mindedness of it was very demoralising.

  27. Bring Back CL's blog says:

    the idea of calling either the IPA or the CIS social conservatives is laughable however I am sure it wasn’t made in a serious vein!

    Hayek is simialr to Marx. Interesting on economics but very bad on politics.

    I am glad Nick brought up the Joe McCarthy era and the litany of silence by some.

  28. Patrick says:

    Paul, I didn’t realise at which point you were hung up on Academic and University freedoms (distinguishable, I would argue).

    I was more worried about ordinary people’s freedoms, especially those in the lower income quintile. In that light I did want to take issue with your comment about salaries – in PPI terms these guys have benefited from the last 15 years, as well as from the last 100.

    Discrete issues
    I also think you should have left the airtravel issue alone – I remember air travel 15 years ago, and it is enormously better now. To the point that I would rather be economy now (in a non-European airline) than business (class) then.

    As for the academic side, well I remember trying to defer. I sent them a form by email and they approved it. I extended by two years, by email, and they approved it. They then charged me a late fee for not re-enrolling in time, I reminded them that I had extended my LoA and they retracted the fee. I thought it was pretty painless. Maybe it is just testimony to how much younger I am than all of you.

    Similarly, the majority of administrative procedures do seem to me to be getting easier – even Centrelink is not so much of a hassle, most of the time – medicare has gotten easier to deal with. Dealing with public hospitals is almost laughably easy now, as are births and registrations of foreign births. When we needed a passport within the month for our son we went to the nearest embassy and we received it two days later. We were lucky that is was a major embassy but even so it wouldn’t have been much longer.

    Tax is largely an exception – it only gets more complicated – but one that I don’t think is too bad. As the Commissioner said last year in a speech, complexity is the price of fairness. I don’t think the current system is perfect and I do think it is too complicated in some areas. But I think it is pretty good, especially comparatively (administratively and substantively).

    Before moving on, plagiarism is not commonly concieved of as a limit on free speech. Defamation certainly can be, but an appropriate balance recognises what some people call fundamental human rights. I don’t think many troppodillians argue that property is so archifundamental that it should not be limited by some ability to sue for defamation.

    More seriously
    On the deeper issue, there is more to the property side than your latest comment gave credit to. After all, as I have (kind of) been saying all along, freedom is partly ‘freedom to act’: the actual value of your property is partly determined by your ‘freedom’ to deal with it. In simple terms land subject to a covenant is worth less than unencumbered land, and freedom to write about approved topics is worth less than freedom to write, full stop.

    So a system that recognises, respects and enforces property rights by default is one that increases the freedom of property owners, which is the vast majority of us. An issue, which you have picked up on, then arises about non-property owners. This is a discrete issue and irrelevant to the first one except in an evaluatory sense.

    Your second-last comment reads almost like an argument for unregulated private universities. A lot of that admittedly crappy administrivia and bureacracy stems from our (your!) concern to regulate for fairness and equality and all that (see above re tax). In many ways your fantasy world would, in practice, probably be more like these University bureacracies you seem to hate so much, just everywhere.

    Of course I agree that regulation often has unintended consequences and costs and should be avoided wherever possible.


    Hence you can only use the property rights argument if you think the initial allocation reflects freedom

    I disagree. I think that the initial allocation and the subsequent mode of (re)allocation are fairly discrete issues. Property rights is an example of something that can input into both, as is equality. But they aren’t necessarily related.

  29. Paul Frijters says:


    thanks for the detailed response. Let me give some detailed responses back, but before that make it clear that I make a sharp distinction between freedom and welfare. Hence I do not claim that the brutal, nasty, and short life of a hunter-gatherer was better than life today. I would say it is freer though.
    To take some of your points:

    - my memory of air travel 20 years ago was one of far greater freedom than now. Much less hassle with luggage, one could arive far closer to departure, one could sleep on the floor, and one could say a lot more. Sure, today’s airtravel is faster and the food is better, but freer? Only if you dont count being a caged rat.

    - whether or not the bottom 10% has gotten better depends a lot on your time-frame. In both the examples you mention (15 years and 100 years) you are undoubtedly right. 35 years is trickier because that period includes the big wage reduction of the 70s. Hence what I was saying there does not contradict what you’re saying.

    - your depiction of the immense expansion of regulation in academia as resulting from ‘our’ concern with equity and fairness belongs to a fairytale in which deep logic is applied to the implementation of every new rule. Why would you for instance be able to run a simple economic experiment 10 years ago and not today? That was not an express goal of the setting up of ethical committees, but rather I’d say it was the unintended outcome of giving a bunch of people the power the stop things without accountability. Similar reasoning applies to many additional regulations. The view of universities or societies as places where in all reasonableness and concensus new rules appear is just a myth. Society is not that rational and encroaching unfreedom must be actively resisted if it is not to stifle us.

    - the property rights thing keeps befuddling me. Take your quote:
    “So a system that recognises, respects and enforces property rights by default is one that increases the freedom of property owners, which is the vast majority of us. An issue, which you have picked up on, then arises about non-property owners. This is a discrete issue and irrelevant to the first one except in an evaluatory sense.”

    In the context of discussing freedom, there are several things here I take issue with. For one, virtually everyone owns something if only the clothes they wear. To nevertheless say that enforcing property rights increases the freedom of property owners is hence misleading. What you mean is that for each individual piece owned, it gives the owner of that little piece more freedom to enjoy that little piece. Yet at the same time, your freedom to deny all others access is creating an nufreedom for all others, even if those others own something else. To say that the non-property right owners dont matter when discussing freedom is very strange. It strongly smells of not wanting to see that one man’s property is another man’s restriction.
    Furthermore, if one sees property rights and initial distributions as unrelated in terms of freedoms, then the logical corrollary of that is to say that if a dictator grabs everything, then for the sake of freedom that person’s new property rights should be respected. Hence you say by implication that the freedom of one person can outweigh the unfreedom of all others. That needs a pretty bizarre weighing scheme.

  30. Paul Norton says:

    Back to the original post, would it be drawing too long a bow to suggest that Tyler Cowan is implying that the time has come for libertarianism to morph into a new social liberalism a la T. H. Green, L. T. Hobhouse and J. I. Hobson? And could we characterise Cowan as a “positive libertarian” counterposed to “negative libertarians” for whom opposing government power is a higher priority than positively enabling individuals?

  31. Brendan Halfweeg says:

    Many of the rules of and regulations recently imposed are not as you desribe, i.e. consciously drawn up by some well-thinking principal who then enters into trade with others.


    I agree. State regulation is bad because it doesn’t weigh up the costs and benefits of said regulation as thoroughly as a private property owner would. I think I even said that here:

    Libertarians are against state regulation, not private regulation.

    and here:

    It is involuntary regulation that I rail against, not the complexities of modern life.

    Your example of university regulations gone haywire is an example of the above. If universities were private property, then the university owner would have an incentive to balance the costs and benefits of regulation more closely. It is little wonder that privately funded US universities are ranked higher than publicly funded Australian ones in terms of the research performed and the education they provide.

    these are not the product of politicians thinking them up and consciously deciding upon them, but are more akin to the autonomous decisions thought up by risk-minimising administrations mainly obsessed with minimising real or imagined dangers, rubber stamped by politicians who havent got the time to thinki them through.

    Another reason to minimise the state. Bureaucrats will always be risk averse because they face greater consequences from failure than they do reward for success. This is an argument against state regulation, which I agree with.

    If someone has nothing to trade then by your logic, that

  32. James Farrell says:

    Yes, well said. It exemplifies the inept logic and lazy self-justification of the right wing libertarian magnificently.

    Judicious redistribution is not about righting past wrongs, and all about freeing people. ‘The talented’ don’t become talented without education; and in any case not everyone is talented. In a decent society, gifted people have the freedom to develop talents, and non-gifted people have freedom from toothache. Why else would they support the state that enforces the libertarian’s precious property rights?

  33. Patrick says:

    That, of course, is pretty much the question that Tyler Cowen answered. He went one further and added that the libertarian should also support that booming government, not because it provides legitimacy for his property rights, but because it actually makes him and everyone freer.

    At which stage, I believe, Paul and I recommence arguing.

  34. Paul Frijters says:

    we’re agreeing on some things (like the idea that universities should be allowed to be for profit) but are miles away on others. At core my main gripe with your argument (and Patricks) is that while you pay lipservice to the idea that regulations can have unintended consequences, you keep resurrecting the myth of full rationality and full choice after which you essentially say ‘everyone chose to be where they are now so they are free’. Take the boat example:

    PF: To say that they can always choose to go elsewhere and have hence chosen for their unfreedom is like saying to the passengers on a ship in the middle of the ocean that they are free to leave anytime they want!

    BH: This is a non sequitur. They were free to not get on the ship in the first place before it left port. If they were misled by the ship owner into believing the ship wouldn

  35. Brendan Halfweeg says:

    Now, I was using the word boat as a metaphore for a country, which like boats float a long way from other countries and are hard to abandon. Do people chose the country they are born in? No. Do people know all the millions of regulations and rules before they migrate to a country? No. Are all the new ones introduced all the time subject to full scrutiny and rational decisino making? No. Can you simply say to people

  36. Brendan Halfweeg says:

    Judicious redistribution is not about righting past wrongs, and all about freeing people.

  37. If you want to read something about learned people with time on their hands not being able to resist making up completely silly rules, have a look at this link about the recent idiocy about whether Pluto was a planet.

  38. vee says:

    I have finally gotten around to reading this essay.

    Rawlsekianism? How about Neofusionism? That is along the same lines as neoliberalism.

    So the alleged libertarian/liberal think tanks only defend liberal economics and not civil liberties because they’re trying to build coalitions? Am I the only one that thinks that is illogical.

    It seems that libertarian/liberal proponents prefer it more for economic freedom than social freedom which would make them more Conservative than Liberal. In my experience I have found proponents of Liberalism “are less interested in liberalism and more interested in promoting the interests of business, bashing unions and promoting capitalism in the developing world”.

    What I really took from the essay was:

    And while social democrats might want to increase spending in order to provide better services, there are other options. Freeing up markets and curb corporate welfare could also provide more resources for policies like early childhood education, support for low paid workers. And for both groups the bottom line should be better opportunities for the least advantaged.

    So the question for me then becomes how do we curb corporate welfare? How do we begin?

    Also I would like to thank Don for explaining how the two incongruent philosophies of Liberalism and Conservatism somehow live in fusion. It has always been a contradiction to me. I still think it is but I have a better understanding now.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Notify me of followup comments via e-mail. You can also subscribe without commenting.