Learning From History

Salon.com recently opined about what libertarians should learn from history. This supposed lesson was in part gleaned from a New York Times book review of Jeffrey Miron’s latest book, Libertarianism, From A-Z.

From the New York Times:

Libertarianism rests on two bedrock beliefs: human freedom is a great good and the public sector tends to screw things up. The first belief is based more on faith than empirical result; the second derives from millennia of human experience.

Later, in the review we learn:

Libertarians are rarely anarchists. Almost all of them believe in some form of state power, at the very least the protection of private property and the enforcement of contracts. Many of them, including Milton Friedman, are quite comfortable with larger exercises of state power, including the redistribution of resources to those who have less.

The Salon writer, Andrew Leonard, remarked that there is a lesson to be conveyed by the experience of “the public sector tending to screw things up,” namely that government is nonetheless “an essential part of human civilization.” As he writes, “Humans organize themselves into governments in order to solve collective problems. Since the beginning of the historical record, it appears to be a feature of our species, not a bug.”

Leonard wasn’t the only Salon contributor to take a swipe at libertarianism. On the same day, Michael Lind, writing from a more partisan angle, wrote Why do conservatives want to European-ize America?, a piece, apparently, composed to counter the conservative claim that Barack Obama is trying to replace “American Free-Enterprise” with European Social Democracy. Libertarianism is is only a partial target in the piece, but Lind devotes some space to deconstruct it as an export from Europe:

The American right also includes a number of economists and economic journalists who call themselves “Austrians” and specialize in denouncing other libertarians for not understanding true libertarianism. Imagine what the right would say about a school of American liberals who went around proudly calling themselves “Germans” or “Hungarians.” The so-called Austrian School of economics was founded by Ludwig von Mises and Ludwig von Hayek. Imagine what the right would say about a school of American liberals who worshipped the Two Vons.(Note: Lind later corrected Hayek’s name).

Writing about Laissez-faire:

Let’s start with economics. Last time I checked, “laissez-faire” was French. In its application to economics, the phrase goes back to the late 17th century, when the French finance minister, Jean-Baptiste Colbert, asked a group of French businessmen how the government could help them and is supposed to have been told, “Laissez-nous faire” (“Leave us alone”). The “let-alone” theory was central to the 18th century economic school of the Physiocrats, led by Francois Quesnay and Anne-Robert-Jacques Turgot. Adam Smith popularized much of their thinking in “The Wealth of Nations,” which might as well have been written in French.

For Lind, to misname Hayek as “Ludwig von Hayek” is probably a good indicator that he doesn’t know much about “Austrian Economics,” or to expect him to correctly note that the historical school originates with Carl Menger, who along with the British economist William Jevons, developed the marginal theory of value. To conflate Smith’s “Wealth of Nations” with French “laissez-faire” is a common mistake, but historically ridiculous, nonetheless. If you want to give a history lesson, then it would best to properly differentiate between the British and French Liberal Schools. Smith’s Wealth of Nations was an attack on mercantilism, and the casting of the political economy as an end’s related device. French Laissez Faire, however, was rooted in a class of political economy(bureaucratic French state fed a revolutionary liberal tradition that was far more radical than the British schools) and replacement of the political economy with a catallaxy of sorts, the l’industrie, where a voluntary free market would replaced the interventionism of the state, ending the power of any group to impose its class domination on others. This is not Adam Smith.

Libertarianism, historically proper, emerged as a split between the French laissez faire classical economists and the anti-authoritarian socialism of the likes of Proudhon, with both schools united in their criticisms of the French government and any remedies of State Socialism, but not particularly united over matters of economics and property. In the United States, the original libertarian movement proper was the Benjamin Tucker synthesis of both elements of French libertarianism with the Jeffersonian ideal of self-government, formulating a movement known as “individualist anarchism.”

Libertarianism, then, in a very real sense, is a radical branch of liberalism that rejects the social contract, replacing such with the market contract or the voluntary contract. From the radical French liberal tradition, it is the supplanting of the political economy with the Catallaxy; the political economy is infested with class conflict.

To answer Andrew Leonard, it’s certainly an obvious lesson of history that institutional governance is vital to human civilization. Humans, however, have never gotten these “institutions” right ever since humans changed from hunter-gatherer to agricultural and territorial land. It is unfortunate that somehow libertarianism, in the 20th century, became to be associated with some ideal state of neoclassical perfect competition, which really implies an equilibrium state of zero dispute resolution. That’s nonsense. Libertarianism is not a denial of dispute resolution; rather it more or less represents divorcing dispute resolution from the political economy.

With respect to the so-called “State of Nature” problem, people tend to forget that Hobbes dismissed politics and any rule of law rooted in politics. The State of Nature problem required a “leviathan.” Human history of government is not a narrative of humans forming governments to solve collective action problems; rather it is a tale of conquering and plundering. Liberalism, under the Nation State, never has resolved the problem of class conflict. The alternative solutions of State Socialism and Marxism, which arose as a critique against liberal institutional failure, have proven to be worse than the disease. As the United States descends into the National Security State, “liberal empire” is once again writing it’s own obituary. Liberal institutional failure via a via the State is profound. That is the lesson of history, and it’s been a lesson that libertarianism, at the margins, have been grappling with for two centuries. In the end, liberalism is not an emergent property of politics.

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