THE core error in libertarian thinking is contained in the idea that markets are an alternative to politics. They are not because markets always and under any circumstances co-evolve with politics, government, the state. Markets involve issues and interests that cannot be addressed by markets. For more see the links below.
The composite of markets, politics, and the state may produce better outcomes or worse ones, but it cannot be transcended, it cannot be decommissioned or bypassed. Making things better is not a matter of replacing that nexus with spheres cleansed of politics and government, it is always a matter of achieving a better quality of that nexus.
The habit of disregarding the inseparable link between markets and politics tempts the libertarian to practice overkill with his anti-government vigilance, adopting a perspective too black-and-white to do justice to reality and the nature of feasible freedom. An intolerable loss of realism tarnishes this world-view, while vigilance turns into a negative fetish, an indiscriminately dismissive attitude, a political psychology of despair and depression or a hedonistic pastime for the misanthropic.
First Critical Contribution - Addressing The Coyote
This is the background to my criticism of The Coyote writing about the retreat of poverty worldwide, which occurred
"because governments, at least to some extent, got out of the way and didn't stop it."
Citing post-Mao China, of all places, as an instance of poverty reduction largely explicable in terms of political abstinence by a non-interventionist state only goes to show the extent of self-deceit among libertarians, who choose to be by definition incapable of explaining the contribution of the state to historically manifest progress. Their dogmatic formula is this: the state is bad, lesser poverty is good, hence: the state can have nothing to do with it.
But since Mao's death and to this day, China continues to be ruled by a heavily invasive, strongly interventionist Communist party. In countless ways does the state contribute to the change in question, on the highest level of politics - e.g. by ordaining greater economic freedom - and on lower levels of enforcement - e.g. by altering the law to promote private property, by carrying out administrative reforms to support commercial practices and so. Insight into this has nothing to do with state adulation, it is simply a matter of understanding the full picture of the conditions and the stage of development of liberty in China.
So I replied:
Politics and Government played a huge role in this welcome development, and continues to be vital for civil society, i.e. the world in which personal freedom takes place.
"It happened because governments, at least to some extent, got out of the way and didn't stop it." This is a blatant misrepresentation.
The author should know better, after all he correctly writes: "There were social and political changes that greatly increased the number of people capable of entrepreneurship."
To equate Maoism that "killed a few tens of millions of people in the process" with "the approaches likely favored by the Vox staff" disqualifies the proponent.
This is cheap propaganda which I regret all the more as Warren is one of my top favourite bloggers, one of the brightest and most instructive libertarians to read.
It is this kind of blatantly false black-and-white stuff that makes me drift farther and farther away from my libertarian home port.
Being critical of government and its deficits is of the essence. That should be a matter-of-course to those conscious of freedom, but we also should be capable of viewing the full picture of the role of government in free societies.
We do not have a choice between a world with and one without government. Fighting for freedom requires fighting for it within a political order and its institutions, which in our countries have been built to support freedom in vital ways.
The majority of people the world over suffer far more than would be the case if only they had government as it exists in our countries. Unlike us, they do not have enough government of the right kind.
Hernando de Soto argues this case impressively in his "The Mystery of Capital," where he presents an important chapter in American political history - the emergence of the Homesteading Act - for more read here:
The discussion advanced with a lot of invective hurled at me, and finally I wrote in summary:
Over the past 65 years, the government in China has not ceased to interfere with society and the economy at all. The improvements are not correlated with a disappearance (or an enormous reduction) of state participation in society and the economy; but with changes in the targets, tools, and contents of state involvement.
In a modern economy, the libertarian dream of less and less (some sort of absolute reduction of) government is not attainable. Liberty cannot be had without extensive state involvement. What matters is the nature of that involvement. To assume responsibility for freedom requires comprehension of this, so that one is able to discern good from bad government policies, and become politically active in support of good policies.
Look at the reality of the Chinese entrepreneur, study his everyday life and probe into the details of running a firm, and you will be overwhelmed by the number of state-induced and government-enforced rules and regulations.
Hernando de Soto has looked at these details in countries the world over; consult his findings to appreciate that what most of the Third World needs is more, far more of the right kind of government to get out of poverty, rather than to have the state stand off.
Second Critical Contribution - Addressing Arnold Kling
In a comment to this post by Arnold Kling, I argued that it is misleading to insinuate that markets could ever develop without political involvement. Thus, I wrote,
“markets evolve more rapidly than government”
Show me a market that does not co-evolve with government, or whose evolution is void of extra-market political determinations.
On top of that, perhaps politics and government have a lot of (necessary and naturally ambiguous) tasks to take care of that markets cannot fulfil.
Having worked in a market that is heavily self-regulated, I have seen no less “regime uncertainty” and other evils purportedly specific to government and absent in (the fiction of politics-free) markets.
The biggest advances in economic theory happen when scholars take account of the thoroughly political nature of markets. There surely is bad (as well as good) politics, but there is no such thing as a market without politics.
He who is in favour of markets ought to accept responsibility for their political nature and face up to the natural imperfection of the politico-economic nexus, rather than advertising the figment of a clear division between the two spheres.
Perhaps he will even condescend to talk about the many successful results of that nexus.
“I still like the idea of re-chartering regulatory agencies every three years.”
In how far does this take politics/government out of the issue?
To which Arnold Kling replied:
the idea is to put politics into the issue. The objective is to put a check on the benevolent despotism of regulatory agencies
To which I replied:
I read your reply as a confirmation of my main point: no markets without politics.
Better conditions for markets are no less dependent on politics than are worse ones.
What does not work is the libertarian formula: replace politics by markets.
There is far more politics behind markets than meets the eye. In this brief comment, I cannot go deeper into this assertion, but I will touch on it by pointing out that politics means government involvement, as the latter organises and protects the political playing field in which the input for governmental enforcement is being fought out.
That is: inviting politics, as you do, realistically, is inviting government.
The libertarian illusion of autonomous spheres of freedom or free market activities is conjured up by a selective choice of the level of abstraction on which the argument is pegged–in economic theory, for instance, the level of abstraction is high enough to make politics disappear, for good reasons.
By lowering the level of abstraction, i.e. by admitting more concrete details, every market, appearing free on higher levels of abstraction, will reveal its indispensable twinning with politics and the state.
Whether frequent re-chartering will have the desired effect, I do not know; it certainly will introduce a lot of politics into market regulation, the proposal reminding me a bit of Hayek’s curious expectation that the bicameral legislature proposed by him – to politically guarantee a free society as conceived by him – will be in the hands of people who think exactly as he does. Politics makes sure it does not.