The “progressive” case for libertarianism always held that private charity and voluntary mutuality could and should replace (what passes for) the Welfare State in succoring the needy, halt and lame. And the State as an institution is an engine of such evil that one (me) wants that to work out. Still! But the road from Here (the actual existing American mixed economy) to There (minarchism, say) seems to run through very resentful country.
In other words, “sub-humanization” of the poor would be an integral part of any cultural mechanics necessary to end the “welfare state.” This cultural change, necessary to precipitate any political change, would thus mitigate the very cultural basis of spontaneous emergence of voluntary aid institutions supposed to serve as a replacement. Henley also links to this post at Crooked Timber that attempts to explain why there is no “libertopia,” why there is no “Going Galt.” You see, it’s the network effects of the State that make even it’s inefficient provision of public goods a far more preferable thing to the prospect of private or community provision of such. Libertarians have a far better deal by simply “free-riding” in suburbia.
My rejoinder to Henley is that any “sub-humanization” of the poor is a type of cultural devolution and such things result in more deplorable statism, not less. The problem here, to some extent, is that Henley is projecting the “conservative sense” of the welfare state, which is often focused on things like food stamps, medicaid, public housing, income streams to the poor, etc. The libertarian, however, will analyze the welfare state more in terms of the flow of economic rents resulting from monopolies in such things as money,land,tarrifs, and patents. These economic rents are certainly “welfare” and from public choice we know that this rent-seeking reduces overall welfare. It wouldn’t be inaccurate, as a generalization, to think as these “rents” as a form of moral hazard. And that seeking these rents creates institutional moral hazard. In this sense then, I don’t think, culturally speaking, that “habits of mind required to thrive in a society ‘without a net’,” when the “safety net” refers to institutional shielding of players/agents from the consequences and responsibilities of their actions, is something to be dreaded if it were to magically happen. The thing to dread culturally is the “habit of mind” required to thrive in a society built on moral hazard.
So what is cultural devolution? Cultural devolution is characterized by an embedded culture of “scapegoats.” The poor, immigrants, “muslims,” whatever. Cultural devolution is a by-product of institutional moral hazard. You can almost classify the degree of institutional moral hazard in a society by the extent of it’s slums. Social Democrats love to talk about the benefits of official society in Europe, but they tend to gloss over the problems of urban slums(disproportionately populated by immigrants). This is the result of a heavily subsidized official sphere; if you are outside this sphere, then you have no chance. Often, using simplistic game theory analysis, the State is “explained” because of a public goods “prisoner’s dilemma.” Whether you think this is a compelling argument or not, there is another undeniable reality that the State “free-rides” off informal cooperation in the many embedded cultures that make up “the culture.” If “formal law” was efficiently enforced, everyone would be a criminal, a felon. In this sense, relative peaceful cooperation of society is explained in large part by informal cooperation. Cooperation based on formal law suffers from it’s own prisoner’s dilemma, indeed, one that is aptly characterized by the very name of this dilemma. Where all players are criminals, individual players are incentivized to be “informers.” Consequently, undermining informal cultural cooperation is the gateway to a despicable statism, because then players are truly caught up in a prisoner’s dilemma of the formal “Rule of Law.” In a partial cultural devolution, you will find stark contrasts between “official society” and the slums. In a full blown devolution of culture, you find the emergence of totalitarian Stasi police states, and in the very worst of these, such as Nazi Regime, you will see outright, systematic extermination of those in the slums.
To summarize, my answer to Henley is that if “Going Galt” refers to the likes of Pame Gellar or Leonard Piekoff, or the ignorant rantings of “constitutional conservatives” or tea partiers, I would say that we should prefer to not go Galt.
Turning to the post at Crooked Timber, I will point out the author appears to suffer from a particularly bad case of confirmation bias. Throw in a dash of the “public goods problem,” “economies of scale,” and “network effects,” and voila, now we know why there can be no libertopia. Of course, the author leaves out the “knowledge problem” that arises in centralized hierarchies, the public choice problem of how these centralized hierarchies will redirect resources, and ignores the fact that “network effects” are only resilient under postive and negative feedback loops operating in de-centralized networks. I would also be remiss not to point out that in Rand’s “Atlas Shrugged,’ Galt’s Gultch operated as a type of georgist government. That is, the government was financed through “ground rents.” One could ask a more narrow question, putting the more general question “libertopia” aside, of why Georgism hasn’t taken hold. As this paper by Fred Foldvary elucidates, Georgism, from a liberal and public economics standpoint, efficiently resolves the “public goods problem” from an institutuional standpoint. Georgism is not crank economics, these ideas go back to the classical economists. Henry George popularized these ideas in the United States in the latter half of the 19th century as a way to explain inequality in political economy. Henry George became one of the most famous persons in America, and indeed, in the world. His fame was comparable to a Benjamin Franklin or an Albert Einstein. But today he is hardly known. What happened?
My answer is that it doesn’t make for good politics. And for liberalism, politics is the lifeblood of legitimacy for the ruling class. We can go back to why the Constitution superceded the Articles of Conferation. The latter was a weak federal government financed by ground rents. This was not sufficent for the nationalist expansion envsioned by the likes of Hamiltonian. For Henry George’s time, “Georgism” would, in the end, prove diffcult to implement politically, and the 19th century Robber Barons would use their great wealth to institutionally finance the “progressive era,” which was the capturing of reform and directing it toward a permanent monopoly fusionism between the political classes and the capitalist classes. Liberalism became “Corporate Liberalism.”
The problem with liberalism is that politics has always gotten in the way of liberal ideals. And we are not stumbling on a path, however slowly, toward a liberal ideal. Corporate liberalism, progressivism has given us massive carnage of wars between Corporate States in the 20th century. And now, in the 21st century, we are presented with the inexorable instutitional reality of an unaccountable permanent war State. We are descending into the Orwellian vision, although in a modified way. This is catastrophic failure from a liberal perspective. Do you think the posters at Crooked Timber give a shit. Well, I should say they give a shit if it’s the Republicans in control. If it’s the Dems, not so much. What they advocate for is a one party state. In the end, that’s Ingsoc.