I suppose the schizoid American psyche can be explained as a never-ending conflict between the personal and economic freedoms of libertarianism and the self-loathing of the (now secular) personally proscriptive Calvinism of the pioneers.

In my initial post, I stressed that libertarianism was less about maximising consumer utility (which is the focus of economic liberalism) and more about maximising individual freedom per se but that libertarians were as entitled to their values as anyone else.

In comment no 13 when specifically discussing cross-border labour mobility, I speculated that perhaps some of the advocates of freer entry of unskilled workers might be motivated by a desire to “hold down wages relative to profits”. I was not generalising about libertarian ideas in general.

In comment no. 15 I agreed with you that the motivation of many libertarians in supporting freer entry of unskilled workers was more likely to be to boost freedom per se.

It follows from the above that I do NOT believe libertarians as a group are “yes-men for big business”. Some may well be (as Nicholas points out) but I do not believe it is intrinsic to libertarianism. So why are we still debating this point?

They don

I can’t speak for Fred but in my case I note a lot of people who are very keen on liberty are keener on economic than on other kinds of liberty. They don’t say so, they just act like that is the case. Of course if you’re not like that then you have every reason to be offended, but there are plenty who are. Just as I could mount a similar argument that lots of people on the left who claim to ‘care’ don’t much. But those are the ideological clothes they feel more comfortable in. And truth be told we’re all at least just a little like that I think.

yes your ideological explanation of why libertarians favour open borders (i.e. to enhance liberty) is much more plausible than mine (profits).

So why the implied accusation that libertarians are yes men for big business?

The whole “explain libertarian agenda by profit motive” is not a fair assessment of libertarian philosophy. Liberty in itself is to be valued intrinsically, and from liberty wealth will be generated through the voluntary exchange of goods, services and ideas. Profit is merely one side of the equation that sees all the material and immaterial wealth that enhance our daily lives, and is not a libertarian end in itself.

Hard liberals who advocate the latter do so on ideological grounds (to hold down wages relative to profits) more than economic ones.

You seem to be interchanging “hard liberal” for “libertarian”, is this so?

If so, then I would argue that libertarians who favour open borders do so because freedom of movement for workers regardless of skill is an enhancement of liberty. Unfortunately, in the current welfare state paradigm, open borders would be suicidal for the nation state.

Corporate profits have absolutely nothing to do with it. Some libertarians are actually quite hostile to many corporations, primarily because they extract benefit out of the current political and regulatory system through rent seeking. Personally I even have some ideological problems with limited liability, but recognise its legitimacy from a utilitarian perspective.

I arrived at my conclusion by (a) reading the extensive literature (b) observing the growth performance of ‘middle freedom’ countries and comparing it with the performance of the USA (most liberated) and (c) by putting together a scatter diagram of all the countries listed by the Heritage Foundation.

I was planning to go and do some elaborate correlation coefficients of my own when, lo and behold I found someone who had already done it viz. Jim Caserta. Including the full range of countries covered by the Heritage Foundation he comes up with a correlation coefficient between labour freedom and per capita incomes of 0.23 compared with coefficients of property rights 0,75, financial freedom 0.48 and investment freedom of 0.54. (Caserta finds a negative correlation between per capita incomes and fiscal size of government).

The Heritage Foundation does not deny these results but refuses to weight some of its ten components of freedom differently from others. It argues that its freedom index is “not designed to explain per capita growth

BUT the correlation between per capita economic growth and either size of government or labour market deregulation disappears once a certain threshold is reached

What’s the evidence for this? Which countries are you referring to?

One of the arguments in favour of unskilled migration that I have heard is that it provides a supply of labour willing to undertake jobs that fewer and fewer people in develoing countries are willing to do. Both parties to this transaction benefit. The migrants get higher wages and a better standard of living than they otherwise would. The people who employ them get jobs done that may previously have been priced out of the market. Furthermore, the migrants countries of origin may benefit through money that the migrants send back to their families.

I believe that inter-state mobility within Australia is good for the economy and needs to be encouraged e.g. with relocation assistance

Not me. This is just another bit of rubbish corporate welfare. It does nothing to help the market to identify which industries are really competitive and should survive. Companies bleating about poor quality workforces in the wrong places but unwilling to invest in their employees need to be weeded out – Keating might have branded them spivs.

Labour mobility is a tricky issue for economists. I believe that inter-state mobility within Australia is good for the economy and needs to be encouraged e.g. with relocation assistance (although regional development policies are also needed at times). I also believe international immigration of skilled workers is good for the recipient country (Australia) and has no great effect on income inequality. However international migration of unskilled workers does little or nothing for our economy and is socially damaging as well – so I would discourage it. Hard liberals who advocate the latter do so on ideological grounds (to hold down wages relative to profits) more than economic ones.

All this is very judgmental of course. But there is a reasonable literature to back up these conclusions and one must be brave at times.

By the way, ‘hard liberalism’ is a term I invented in my 1998 book “Australia at the Crossroads”. It never took on but I still like it.

Whilst I have some sympathy for Fred’s rejection of the economic pretences of the libertarians, I reject the notion that economic theory can prove anything as grand as claimed here. Economic theory is in my book a reflection of the lessons of economics – a codification if you like of the rules of thumb about human behaviour that appear to hold in practise. The level of abstractions in economic theory is far too high however to say it has proven anything about the real world. It helps us think about the real world and is a check on the consistency of our arguments, but it does not prove the world is as we would like to see it.

I accept that labour market deregulation IS

Probably the lowest-hanging fruit in France is an appalling and egregiously ‘unfair’ indexing of jobless allowance to past wages! I really find that morally offensive, let alone the incentives.

I am familiar (by now!) with your position on the Nordics and small Europeans. However, whilst I am far from an expert here, my strong-ish impression is that they are all moving in ‘our’ direction.

Also, in Denmark, France, Belgium, Germany and Sweden in particular, my impressions is that the biggest issue with labour regulation is nothing to do with employment or the economy as such. Rather it is the social effects of employment and unemployment, and most of all the extreme rigidity that even mildly rigid laws can have on marginal classes, such as young men of Mahgrebin descent.

The second biggest is similarly little to do with employment per se, if everything to with the economy: pension liabilities. But we might be better to deal with that separately.

“decisions on what is to be produced and how it is to be produced are overwhelmingly left to private market participants and determined by the price mechanism;”

Where is the failure in freer labour markets that cannot be better addressed by transfer payments while avoiding creating employment barriers?

Also I believe this claim is NOT consistent with economic liberalism whether hard core or moderate:
“people are rewarded in the market place according to their skills and performance”

Markets can contain a degree of arbitrariness, it is a game of luck as well as skill. ‘Disproportionate’ rewards may flow to some but no one is in a position to set market prices better. The best solution is again transfer payments, not tampering with market forces.

With labour market deregulation, the story is more complex. One needs to disaggregate labour market freedom into its four components (see my paragraph in brackets) to draw any clear inferences.

The Nordics and smaller Europeans seem to suffer no sustained economic penalties from maintaining their levels of labour market regulation (which are lighter than in France and Germany but greater than in USA and Australia). Conversely, UK and NZ have in recent years increased the level of labour market regulation (moving further away from the USA) without suffering any economic ill-effects.

On the international evidence, I believe Australia will get little economic benefit from the onslaught against trade unions and on the quality of life of workers. Nor will the economy benefit from a further erosion in unemployment benefits relative to median earnings.

However I suspect countries like Germany and France would benefit economically if they reduced their regulation of hiring and firing and, in the case of France, lowered the minimum wage relative to median earnings. As well they might get some economic returns if they imposed tougher welfare conditions to encourage the transition to work as the Nordics have done.

Most developed nations (with the exception perhaps of a few continental and southern Europeans) reached this threshold a long time ago.

Do you mean: The developed Anglophone countries and Switzerland, except perhaps Canada, may have reached this threshold some time ago. – ?