Book Announcement: Libertarianism: What Everyone Needs to Know

I am pleased to announce that my third book, Libertarianism: What Everyone Needs to Knowis now available from Amazon a few weeks ahead of schedule. This book is part of Oxford University Press’s acclaimed “What Everyone Needs to Know” series. Over the next few weeks, I’ll be blogging about topics in the book.

Here’s an (uncorrected) excerpt from the introduction.

Libertarians are sometimes thought to have excess enthusiasm for the free market. Sure, critics say, markets tend to work pretty well, and markets tend to deliver the goods. But, critics add, markets also fail or make mistakes. When they fail, this calls for government intervention.

Libertarians say, yes, of course markets can fail. And, they add, so too can governments. It’s one thing to argue that in principle, a fully informed and well-motivated government could correct a market failure. It’s another thing to argue that a real-life government will actually correct a market failure. When introductory economics textbooks call for government intervention, they stipulate that the governments in question know how to correct the market failure and will use their power to do so. In the real world, we don’t get to stipulate governments are like that. That makes all the difference in what we want real-life governments to do.

We might say that dumb libertarians advocate market solutions without taking into account market failures. Dumb interventionists advocate government solutions without taking into account government failures. If I had to summarize economic libertarianism in one lesson, it would this: When assessing different policies, consider both market and government failures. Any person who fails to do so arrives at her political beliefs in an irresponsible way.

The Noble-laureate economist Gary Becker argues that once we take into account both market and government failures, we will rarely advocate government intervention into the market. Just because an ideal government could correct the mistakes of a market doesn’t mean that a real government will. Governments make things worse more often than they make things better, Becker says. Now, perhaps Becker is wrong. Perhaps a proper assessment of market and government failures calls for massive government intervention, or even socialism. We could debate that. However, if we’re having that debate, we are at least debating politics in an intellectually responsible way. That’s an improvement.

As I stress, though, libertarianism is not primarily about economics. In fact, I don’t focus on economic issues until chapter 6.


  • DrK

    Will there be an ebook/Kindle version?

  • Brad

    I think I just ordered the last one Amazon has in stock! Hopefully this means good sales for you!

  • Fallon

    It is terribly misleading to present “market failure” as an unquestioned economic concept among libertarians. Many libertarians get their ideas from the Austrian School now, not Becker’s utilitarian, mathematical Chicago School. You know this, so what gives? Jeez, you have Horwitz and Boettke on the BHL blog roster. Though I cannot speak for Horwitz and Boettke, the Mises Institute guys generally reject arguments from presumed efficiency and perfect competition.
    Is it too late to correct this mistake in the book?

    • Fallon

      I don’t speak for LvMI either.

    • Fallon

      Actually, it is likely that Horwitz and Boettke lean towards Hayekian conceptions– which would be interpreted as “market failure”. It would show once again how Hayek was not a mainline Austrian. Further, it would not mean that they are on the same page as Becker. More questions than answers…

    • Sure, a lot of libertarians get their ideas from the Austrian School. But just as many–if not more–get their ideas from the Chicago School, or simple desire for smaller government and free markets. Yes yes, I understand the perception Jason gives off, but there are some libertarians out there who think markets are, in fact, not totally perfect. He’s trying to cover all the bases there.

      • Fallon

        Austrian school types, at least the Mises variety, think in terms of perfect or perfectable markets only as useful imaginary constructions. So who, name somebody please, believes in “totally perfect”? What exactly is it supposed to mean, anyway? It looks like the believers in market failure saddle their theories with too much work and excuses for statism.
        Gosh, I hope more people are turning to more Paul, Rothbard, Mises econ than Chicago. I wonder what the demographics really are today.

    • The Mises Institute guys have a highly aprioristic method. The result is that they aren’t talking about real markets, but about hypothetical constructs.

      • Fallon

        Aprioristic derivation of theory in econ is not based on hypotheticals– but deducing what necessarily happens in markets. Application to real events becomes the practice of economic history. At any rate– the market is a word that covers human action using social technology– like prices– to achieve ends. Why would an economist ever apply ‘perfect’ as a real standard? It is like these economists are chastising the makers of fire for not being the sun.

    • Sean II

      Fallon –

      It’s too bad your comment got sidelined by a back-and-forth about the Austrian method, because you were absolutely right to point out that the concept of market failure is WAY more contentious than one would think from that excerpt.

      First of all, people who believe in voluntary exchange as a matter of principle don’t base their claims on efficiency and wouldn’t consent to discuss market failure at all. Since that group includes Randians, it’s not exactly a small faction.

      Likewise libertarian anarchists, who believe the state is a total failure, and who therefore certainly cannot apply any balancing test to determine when it should or should not intervene. They’re maybe not as numerous as the Randians, but why count them out?

      Then you’ve got the Austrians who, despite their a priori methods, still count as libertarians. The claim that they don’t deal with real markets is contentious by itself, and therefore not much help in resolving the original point. (I mean, does anyone here actually think the Chicago guys DO deal with real markets? Does anyone really think they are doing something more than playing at empiricism, from platform of strongly held a priori beliefs?)

      Finally you’ve got me, who simply wonders what the hell “market failure” even means, and who gets to decide such a thing. Was it a failure that the market neglected to undertake a manned lunar expedition in 1969? Since the state had already monopsonized the rocket business, how would we ever know that?

      What about 1869? The market wasn’t even trying to put a man on the moon back then? Surely that was a failure of historic proportions. Surely one of Becker’s disciples should do a thesis working out exactly in what year the market should have begun investing in space travel, what it should have spent, when it should have reached certain milestones, how many utils moonstruck earthlings would have gained from a successful landing, and finally why the market had to be crowded out by the formation of NASA, etc.

      Except…why would I ever care? I’m still not convinced Apollo 11 was really worth its costs and its risks. I’m not convinced because I don’t know how best to spend confiscated money, nor how to value un-priced goods, nor how to decide what is or is not in the “public interest”, etc.

      So it is with every claim of market failure. Someone decides something is worth having, and then proceeds to show why the market didn’t or couldn’t provide it. The first part is where the controversy lives, because some of us think that the market IS the place whereby people decide what’s worth having, and not some mere instrument for pursuing values selected elsewhere.

      • Fallon

        Well, it’s good to know that somebody thought I said something of substance. Nice expansion of the issue too.
        I would quibble that Austrian econ reasoning, all that a priori stuff, is necessarily the way theory is derived. The alternative attempts tend to make sense only when they reason in similar fashion– even if the economist doesn’t admit it or hides it in a tsunami of data.
        Interesting that BHLs, except for Prof. Long, feel the need to bash Mises. He does symbolize the private property basis of freed markets (though not perfectly, of course). The limited welfarists, neo-Rawlsians, Hayekians, hermeneuticists, and Public Reasoners too, I am now learning, have to attack rationality and private property in order to get away with what they want to achieve. This was all foreseen by Mises, btw.

        • Sean II

          After seeing BHL in an open browser window however many times, my girlfriend asked me “what exactly is a bleeding heart libertarian anyway”?

          I said: “it’s a libertarian who treads lightly to avoid offending his tenure committee.” Immediately I felt guilty for saying that, so I was quick to tell her how great BHL actually is, with its excellent line-up, content, discussion.

          In any movement, there are always these internal hygiene debates, in the form of “we can’t afford to be seen with Mr. X” or “we must take pains to incorporate the critique of Mrs. Y” or “it’s damn fool theories like Z that have kept us from being more influential.”

          Me, I cringe whenever a libertarian newbie starts making historical claims about the alleged post-civil war market utopia. I quick look around to make sure there aren’t any blacks, gays, or women in earshot who might shame me for being party to such stupid remarks. (Naturally, since it’s one libertarian talking to another libertarian, there are almost never any blacks, gays, or women around…which I think rather proves my point.)

          Maybe Brennan’s thing is, he can’t stand people who think “under the free market, there will be no poverty, no unchanged lightbulbs, and no awkward first dates.”

          • Fallon

            Ha! My sister happens to be black and gay and thinks Michelle Obama is super wonderful. I got into trouble when she caught me telling her young sons about how evil presidents have become. Tolerance for libertarians might be harder to come by than tolerance for gays. Oh well…
            Yeah, there is no utopia. Never was or will be. Even under a highly developed social division of labor that includes post classic-liberal definitions of property– open enough to include communes, cooperatives, tribes, traditional heirarchies, and stateless labor unions…
            The post Civil War boom was astounding, says Rothbard, in spite of the railroad cartels, Jim Crow, loosened now semi-gold standard. I think the stats back him up.

      • martinbrock

        Apollo 11 was really worth its costs and its risks to various statesmen peddling myths attractive to their subjects. “Libertarian” protests that “the free market” would have delivered a better Buck Rogers boondoggle sooner and more efficiently are laughably ridiculous, but these protests betray the sympathy of these “libertarians” for grand, statutory designs.

        Any statutory monosopy of space is exaggerated. An entrepreneur could seek financing for a manned mission to the moon in principle. Even if the case for a profitable mission is unpersuasive, an entrepreneur could argue for resulting public goods. Charitable contributions by Americans far exceed NASA’s budget.

        In reality, when it comes to their own dimes, people are not so interested in the alleged public goods, and they’d rather pay Ron Howard for a movie about an Apollo mission than pay a hundred times as much for another mission. The former satisfies the hunger for mythology as well, if not better.

        • Sean II

          I’m glad you brought up Ron Howard, because that takes us right back to Brennan’s original point. I remember when “Apollo 13” came out, some critics and commentators praised it for taking on the dirty cynicism of people who doubt government’s unique power as a problem-solving tool. And sure enough the film did provide us an absolutely cartoonish view of the state rocket bureau at work, as just one big beautiful machine running on raw courage and pristine earnestness. It even managed somehow to make NASA seem frugal and under-funded.

          If you want to know what neo-cons have in mind when they propose a new drug war task force (or even just a new war), or if you want to know what progressives are daydreaming when they launch a new program or unleash a team of regulators, just look at the cooperation between Ed Harris, Gary Sinise, and Tom Hanks in that movie. That’s really how they think shit’s gonna go down, with a magic formula of: good intentions + good people + all the money and power they need – any criticism from pesky skeptics = win!

          Brennan quotes Gary Becker to the effect that if everyone took account of government failure they would tend against intervention almost all the time. Okay…but the question is why don’t they? Why are libertarians the only ones who seem able to apply that thought consistently…meanwhile everyone else is getting misty-eyed over the mythology of “Apollo 13”?

    • liberty

      Isn’t it an Austrian credo: “Markets fail, use markets!”? In other words, Austrians don’t deny “market fail” (although the define it a bit differently than neoclassical economists do), they just also believe that government failure is worse and more dangerous, and the benefits of market outweigh the failures..

  • 2 points:

    1) Surprised and pleased that it doesn’t cost a fortune. Usually I see “Oxford University Press” and expect it to be in the seven digits. Well, three before the decimal, at any rate.

    2) Please tell me you didn’t say that all libertarians are anarchists.

  • The problem is that history has never actually recorded an example of a market failure. What we have seen is markets who have through connivance of government gotten away from sound lending practices and turned natural business cycles into bubbles and busts. The root of every speculative bubble in history is funny money and easy credit.

    Left to themselves markets do have a natural up and down cycle but that is only small highs and short corrections. Government is needed to create sound currency and enforce sound lending practices. But history shows that Government, not markets can never be trusted.

    • Jay_Z

      Bull. Government had nothing to do with the rampant speculation in the baseball card and comic book markets in the late 1980s and early 1990s.

      • So is that your definition of market failure? Speculation? well I would say that a lot of baby boomers going into middle age at that time had a lot of spare money and access to easy credit, and that fueled the boom. So my point still stands.

  • Just added it to the Top Libertarian Book rankings and it already comes in at #16.

  • jeffmoriarty

    Only your third book? Geez. Get to work already. 🙂

  • J D

    My copy arrived today, Jason. After paging through the index I wondered whether anyone here has written about Jan Lester’s reformulation of liberty as the minimization of imposed costs. I find it remarkably clarifying.

  • martinbrock

    What we call “market failure” often is a property failure, a consequence of systematic, forcible propriety rather than systematic specialization and trade among proprietors. The “failure” involves how propriety is established and the authority that propriety entails rather than an agreeable division among proprietors.

    Nominal “libertarians” often are proprietarians, less concerned with freedom from any coercive force than with the imposition of particular, coercive forces. As such, they are blind to “property failure” and will not react to incoherent attacks on “the market” that essentially attack particular standards of forcible propriety rather than trade, who is entitled to trade and what they are entitled to trade and how they are entitled to trade it.

  • TracyW