Liberty and economics

Here is some of my input, from a recent discussion on alt.politics.economics; where I'm trying to define some of the basics of the libertarian argument. Since a lot of people don't understand the libertarian argument, I think it's worth going through it. The discussion here was initially a response to a comment that "the libertarian ideology of a small government is wrong."

There is a difference between "less government" and "no government". Right now, I'd like a little less. Going to the extreme of no government at all is an opinion some libertarians have, but not all. The government rightly has the functions of preserving the people's rights, including life and liberty, and that part shouldn't be diminished.

[replying to "If you take away to much power from government that power it is going to be hijacked by other entities.... power is like gravity. The biggest object attracts the smaller one and becomes bigger...]:

Repression by any other name is still repression.
This is a strong argument for keeping power diffuse, and trying to make sure nobody gains too much of it. That is, giving liberty to everybody, instead of concentrating it.

Or, to quote Acton, "Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men"

The heart of libertarian ideology is not greed; it's liberty. The theory is that people are the best judges of what they want, and what's good for them, and they should be given freedom to pursue it. The astonishing observation of Adam Smith was that, when you give people liberty, what they tend to do is create wealth; not just for themselves, but for everybody around them.

Moral codes are good. An important point, though, is that people don't become more moral when they act in large collective groups; in fact, I think that there could be a fair argument that large groups become less moral.

If you argue that libertarianism-- which is to say, giving people choice-- will destroy overall wealth due to selfishness, I argue that the loaded word "selfishness" shows the bias of your argument. The hidden assumption here is that when people are given freedom, they will use their freedom to be selfish. I don't necessarily agree with this assumption. People want different things; people will do different things.

Even if you take the position that people will be selfish, again, I will argue that they don't become any less selfish in large groups. If you give people the collective power to take money away from somebody and give it to themselves, they will tend to do it and think of it as being utterly right and fair-- even when, on their own, they'd never think about robbing their neighbor. And then other interest groups go in and say, hey, if these people are getting free money, we deserve free money too! Then, of course, you have to add the fact that, since you're assuming that people in general act selfishly, the people elected to government themselves will be acting selfishly.

So I will argue that you may in fact see less selfish behavior if you give people freedom, and that giving governments more power increases, not decreases, the overall selfish behavior. If people act "selfishly," and that's bad, why in the world would you advocate giving these people a coercive government that they can use as a tool to enhance their "selfish" wealth?

(Even so, the word "selfish" is a loaded term. Does "selfish" mean "I have the knowledge and power to make decisions for myself; I can decide what I want myself, and I'm not qualified to make decisions for other people?" If so, why is this bad?)

You may argue that too little regulation by government allows corporation to go wild, but here we more often have the opposite problem; government regulation is used by corporations to cheat and steal in ways that, if people were free, they wouldn't accept. We have the situation where corporations use the power of governments to create and enforce monopolies, to keep competitors out of business, to vote subsidies to keep them in business despite selling shoddy goods at too-high prices, and to put up trade barriers with the dual effect of raising prices in one place, and keeping people in another place from raising themselves out of poverty.

Adam Smith wrote a lot of things; he was not a one-note demagogue. The main question he asked was, why are some nations wealthy and others poor, and his main answer was, when people are allowed to profit from their labor, and decide what to do and what not to do, this creates wealth. His primary goal was what we could call a liberal one: how do we reduce poverty?

I suppose that the solution of government regulation may, on rare occasions, actually work to the benefit of consumers, but far more often it works the opposite way. Governments don't have an invisible tap to goodness and truth. Letting the consumers have free choice and pick what they think benefits them is a much better solution in the long run. The government "solution" can be far worse than the problem.

A claim was made that "in most cases" people don't use choice wisely. This is the kind of thinking that gives me chills. You're saying other people don't use their freedom wisely, so it's better to take it away from them and have somebody wiser (who? You?) decide things for them.

The argument was made that we've become a nation with lots of "antisocial" people. Some are, some aren't. I'd rather give freedom to all the people, paying the price of also giving freedom to the "antisocial" people, rather than take freedom away from everybody in the foolish belief that if people are antisocial that somehow it's better if their decisions are made collectively.

In extreme emergencies-- lifeboats, wars, natural disasters-- people often accept being organized into authoritarian power structures to deal with the emergency. I don't accept that this is the best paradigm for non-emergency situations, and I am very wary of the fact that politicians always somehow find or create an emergency as an excuse to take away people's freedom.