Neoclassical Liberalism: How I’m Not a Libertarian

Jason,

I have recently become quite interested in assessing the libertarian project, yet I have not read terribly widely in that literature. Also I don’t have a good feel for the classical liberal position or the neo-classical liberalism you advocate. In short, I have energy but not knowledge about these topics, and I fear that could end up being annoying. But I was hoping you could spell out the contrast you (and others) have in mind between libertarianism as you explain it above (which I feel like I understand even if I disagree with it) and the (neo) classical liberal a bit more. One possible picture is that what unites the (neo) classical liberals is not an argumentative strategy or a shared bedrock moral commitment such as a commitment to full self ownership, but rather a shared set of conclusions, somewhat regardless of how one finds one’s way to them. On such a picture the relevant conclusions might be something like limited government, broad scope for the free market, and anti-paternalism regardless of whether one gets to these conclusions in the manner of Mill or Locke. Is that your take or would you build in more content into how one arrives at the conclusions into what it is to be a (neo) classical liberal?

So in thinking about whether Rawls counts as a neoclassical liberal, it seems clear that he passes the first and third test you offer in the first paragraph above, but I need help thinking about how he fares with respect to the second test (i.e. that one must think that a broad set of economic liberties form part of the set of basic liberties and that these economic liberties are more or less on a par with other liberties). I take it one need not think that such economic liberties are morally basic–they could presumably be justified via a consequentialist moral theory plus empirical facts about humans and still count as “basic liberties” in your sense. But does Rawls’ commitment to maxi-min or the lexical priority he attaches to some not obviously economic liberties count against his satisfying the second test? Maybe this is just a way of asking to hear a bit more about the second test.

Good, that is helpful. I wonder if there are similar sorts of issues for non-consequentialists too. If Rawls thought that in fact economic liberties were necessary, given local conditions, for justice, then in one sense he agrees with the neo-classical liberal’s conclusions but for perhaps too contingent of a reason. Or that is how I interpret your remarks about it hurting Rawls’ status as a neo that economic rights are second tier. It begins to sound as if the grounds or robustness of certain conclusions, even conclusions about ideal theory (given contingent facts about humans), matters to whether one counts.

My apologies. It looks the answer is unfolding in the comments above me. Shame on me for not reading first.

You’re missing the point.

In accordance with Lesvic’s First Law of Economics, that, for every action against the market, there is an opposite and more than equal reaction, taking from the rich to give to the poor cannot reduce but only increase income inequality and “social injustice.”

The libertarian/Classical Liberal conflict is not a question of sentiments or ends. It is a question of MEANS.

The propertarian research program is an attempt to solve the problem of the natural corruption of extra-market political bureaucracy through privatization so that economic calculation and individual incentives are constructed.

That the Jewish wing of liberalism has appropriated the austrian school for it’s rather silly anti-social purposes is something that most libertarians understand as an attempt at obtaining security of trade routes at a discount. That the christian wing of liberalism has adopted propertarianism as a class-defense is well understood as well. That these positions are held by the common advocates of each wing of libertarianism among the middle class as a political philosophy is separate from how the thought leadership among libertarians pursues these ideas.

There is no argument among libertarians that if socialism COULD work, that we SHOULD implement it. The problem is that it CANNOT work, because of the problems of economic calculation and incentives, as well as the natural corruption of all political bureaucracies, and the tendency of all people to privatize opportunities in an effort to escape participation in the market, and because innovation would be stifled and costs immediately begin to climb relative to more innovative societies.

So I am not sure that your program is anything new. Among most libertarians we feel that we should combine austrianism with new institutional economics and attempt to find a solution whereby we privatize as much as possible, and have the most limited government, with the greatest number of services while remaining pareto-efficient in provisioning those services.

To accomplish this end, we would have to adopt changes to our political order, and legal system that are sufficiently risky that it is doubtful such a program can be enacted, even incrementally.

I’m glad you are trying to wet your feet in this debate, but really, there are any number of us that have been working on it for decades, and we cannot find a solution that is incrementally implementable. Why? Because the power structure would be so significantly altered the membership would fight it, and because the government is such a large portion of the economy now that the disruptions would be unpredictable. Under democracy, there is no stomach for change just as there is no stomach for war. Democracy is a form of entertainment, easily swayed by changes in real effects of one’s sentimental attachment to voting.

So basically I support you but I think you have a long way to go in understanding the problem.

I think the argument (assumption) some libertarians would make is that social needs are met due to general prosperity. This of course is highly subjective.

And to comment on some of the points other people made here about the negative impacts of wealth distribution and who apply a very simplistic rule / law to it. It’s more much complicated than that, because it depends how you view human beings within a society. Are they resources? If so what kind? How much do the wealthy reinvest in people to prop up a middle class in order to buy more goods which go back into the pockets of business owners, while at the same time promoting a smarter and more creative society? There is a selfish argument for educating the poor and stabilizing the middle class, because it creates a safe environment for business to flourish while allowing new people into the market place. There simply isn’t textbook way to manage such a dynamic socially stable yet competitive market driven country within a larger global economy.

So do we want to reinvest (tax) more then 50% of wealth in order to gain and keep social stability? Also it seems to me, taxing too little (sub 30) would start to create a social noise that ends up being a drag human growth which in turn will have a drag on business growth long term.

Great start on a new blog!

There is another division of rights that seems to me not quite surfaced in the various distinctions above. Many libertarians seem to have a peculiar blindness with regard to how government gets done. So long as what it does fits their minimalist conception of the state, they seem not to care so much whether the decisions are made by a dictator or through liberal processes. Related to this is the sometimes libertarian claim that the government has no legitimacy beyond any other institution or individual in what it does.

Liberals, in contrast, have quite strong notions of what kinds of procedures legitimize a government. And that distinguishes certain kinds of rights, that are part and parcel of what makes those procedures important, or necessary to individual participation in them. So in the liberal conception, the various rights related to speech, thought, association, travel, and seeking redress, to jury trial and criminal justice, to voting and holding office, are in some sense prior to other rights. Not more important. But how other rights are maintained, as a practical matter.

First of all, great blog. I’m very glad to see people like Will Wilkinson and you developing this view.

In my view, the most philosophically interesting move in “neoclassical liberalism” is the view that the economic liberties are basic. I tend to agree with the spirit of this view, but I wonder if this could be clarified a bit more.

In particular: what does it mean to say that these liberties are “basic”? Just that they are really important? How do we tell which liberties count as basic in whatever sense you mean?

http://bhl.typepad.com/bleeding-heart-libertaria/2011/03/neoclassical-liberalism-how-im-not-a-libertarian.html#more

Hey Anon,

I can see where you’re coming from, but you’re making a basic kind of mistake. I’m not strawmanning libertarianism or attacking markets. I am instead drawing out libertarianism’s moral commitments.

Let me give you a parallel example. Suppose you offer me a moral theory. Call this moral theory “hedonistic act utilitarianism”. According to this theory, you should always do whatever produces the maximum net amount of aggregate pleasure for all beings.

This theory seems to get the right answer in a lot of cases. But it also has bizarre consequences. For instance, suppose there were a “utility monster”, a sadistic creature with an unlimited capacity for feeling pleasure, and which took twice as much pleasure as the pain it inflicted on others. Hedonistic act utilitarianism implies, wrongly, that we should all sacrifice ourselves to the monster. So, here’s an argument against hedonistic act utilitarianism (HAU):

1. If HAU were true, then we would be obligated to sacrifice ourselves to the utility monster.
2. We are not obligated to sacrifice ourselves to the utility monster.
3. Therefore, HAU is not true.

Obvious, there is not utility monster. But HAU is defective as a moral theory because it has a false implication.

Now do the same with orthodox, social-justice rejecting libertarianism.

1. If libertarianism were true, then if it turned out that respecting property rights caused 20% of people to starve (even though things could be arranged to prevent them from starving), allowing them to starve would be just.
2. It would be unjust to allow 20% of people to starve under those conditions.
3. Therefore, libertarianism is not true.

Now, I’d need to specify premise 1 better, and might need an argument for premise 2. But the fact that the situation described in premise 1 is unrealistic doesn’t matter–libertarianism is still to that extent a defective theory.

How would you classify Hayek, Mises and Friedman? Most mainstream people who self-identify as “libertarians” tend to be followers of these three fathers of neoliberalism.

“In contrast, classical liberals, libertarians, and neoclassical liberals think that the basic liberties also include strong rights to freedom of contract, freedom to own and use productive property, freedom to buy and sell on voluntary terms, and so on. They regard these rights as on par with civil liberties, while high liberals regard them as lesser rights, or in some cases, not rights at all. High liberals tend to interpret the civil liberties broadly.”

This seems to me to be too general a statement. Which economic rights are on par with which civil liberties? If that argument is saying that there isn’t a formal categorial difference between the freedom of contract and a freedom of speech, such that every right in the “civil liberties” category is superior to every right in the “economic liberties” category, then I agree with that argument. But nevertheless, if you do take seriously the idea that rights are of varying levels of importance (which I think is clearly true) then I think most ways of scaling the rights are going to put the economic rights *generally* below those of more fundamental social and political rights.

The measuring stick, it seems to me, between different categories of rights is based on the degree to which the right emanates from something fundamentally personal, internal, within individual consciousness, versus something external, social, governing the way you interact with the broader world. Freedom of speech and religion, for example, both of which go to the core of free ideas, are close to the central ideas of what it means to be a rational being. That form of freedom is manifestly more important than the right to engage in a civil contract in which the state will enforce a promise that I make to someone else. I’m not really convinced that there is a right to contract at all in the sense of natural rights, to be honest, but it seems to me clearly that it’s a right that is far diminished. Nevertheless, even that relationship isn’t absolute. The fundamental freedom of contract is clearly more important than, say, a tiny subset of the freedom of speech, like the right to protest within 200 yards of a funeral.

This article was very interesting. I’m hard time figuring out how neoclassical libertarianism doesn’t just collapse into high liberalism once you accept that rights are not of equal importance. Or, I suppose, it feels like the difference becomes one of slight degrees and semantics rather than a true categorical change.

To me, there is only liberalism, it’s definition is to be rational in the way you approach political and moral problems, to respond to evidence and to the force of the better argument, and to accept no principle without question. Libertarians, in my view, are a category of liberals (and I would prefer they reclaim the word!) although I think that in many cases they violate the principle of honest and authentic self-examination by committing themselves to rigid and dogmatic principles which are to be defended rather than examined. I think a new libertarianism that breaks down the rigidity of libertarian thinking, while also challenging traditional liberalism on the inherent problems of excess government intervention, would be a very useful project.

Jason,

As I said in my own blog post, this blog is a very positive development. Also there is a ground-swell of renewed interest in PPE as you know and your blog stands to be at the forefront of that conversation in the blogosphere.

The point you make about ‘motivation’ and ideal theory is of course the same strategy that Mises and Hayrk took in their engagement with respective models of socialism. And it was why they focused on the calculation/knowledge argument … Socialism would have to forego the “division of knowledge” in society by institutional design. This argument would be true even if only the saintly were in control.

So I am intrigued to learn about the issue of ‘force’ that you bring up concerning public choice and also the calculation problem.

Finally, one of the things I have found difficult in interdisciplinary discourse is to get non-economists to make a distinction between incentives and motivation on the one hand, and knowledge and information on the other, let alone the distinction between theoretical tracing of tendencies and direction, and empirical magnitudes.

But again let me stress, this is a very welcomed development in the blogosphere and I hope the conversation stays at the level you set the standard for.

Reposted for truth:

“Libertarians hold that justice requires that we respect property rights, period, even if that means a large percentage of people will starve, lead poor and desperate lives, or have no stake in their society. If that’s libertarianism, count me out.”

In a theoretical world where there exists a trade-off between property rights and people starving, that sentence might be relevant. However, in this one it’s just a horrible Krugmenesque straw man argument. Anarcho-capitalism + open borders is almost certainly going to be better for the world’s poor and starving than any of the nationalist redistributive alternatives.

I have always believed that people should be able to chose to do as they please but they may not impose those choices upon another. That is every human has a right to personal autonomy and no shall encroach on another’s right to autonomy. But having worked in behavioral health I have seen people at their lowest. I have seen people who really truly needed and deserved a helping hand. I have spent the last decade reconciling these two beliefs and attempting to develop ideas for programs by which both ideals can be maintained. Now I have found a place where others are engaged in this endeavor. For so long I thought I was alone in this quest and to simply know there are others that seek the same answers brings me comfort.