Liberaltarian Failure

A writer at The League of Ordinary Gentlemen proposes the following Rawlsekian project:

The key thing about any Rawlsekian project is that it combines Rawls’s normative framework with Hayek’s understanding of economics. Combined with James Buchanan’s public choice theory of institutions and we have a powerful conceptual framework which provides, I think, the best justification for libertarianism.

Frankly, I would use the term “liberaltarian” instead “libertarian” to describe this “Rawlsekian framework.” This is in keeping with my preference for a consistent political taxonomy that restricts libertarianism to a classification of radical political thought that denies political authority. Hence, any framework prefaced with the libertarian adjective that actually is not radical should be re-classified under the “liberaltarian” category. This would not only include the “Rawls + Hayek” frameworks but the Cato/Reason/GMU(variants of Nozick and/or Hayek and/or Public Choice) frameworks as well. Of course, not everyone would agree with my taxonomy but it does eliminate, at least in my mind, much of the incoherence surrounding “libertarian apologetics.” I would concede the likelihood that if you concede the legitimacy of political authority, you are conceding the legitimacy of the violation of the libertarian principle.

The problem with “liberaltarianism,” which can be viewed as a modern revival of social contract theory, boils down to weaknesses of a normative case for unanimity regarding hypothetical justice principles.

Failure of the Rawlsekian framework

Rawlsian Justice is agnostic regarding what political economic framework is plugged into the “justice equation.” It could be Hayek; it could be Keynes; it could be whomever/whatever. With Rawls, Political Economy is not part of the “normative framework.” It’s an “empirical plugin” of sorts, related only to the max-min problem regarding income/wealth. If capitalism better maximizes the minimum, then it’s capitalism. If socialism empirically demonstrates a superior max-min solution, then it’s socialism.

Therefore, a consideration of Hayek, insofar as it relates to the merit of Rawls’ normative justice framework, is irrelevant. If Rawls’ normative justice framework has no merit, then Hayek is immaterial.

Now if you have been reading this blog, you will know that I have been persistent in making the case that Rawls normative justice framework fails. We should recall that Rawls uses the “Veil of Ignorance” construct to argue for a hypothetical unanimity regarding the distribution of primary goods(liberties and resources). The VOI is an instrument to demonstrate a normative universilization of certain principles of justice into a type of categorical imperative.

With Rawls, there are essentially two justice principles that the VOI universalizes. The first addresses the distribution of Political Liberty. Rawls would derive a bill of rights from the standpoint of the most adversely affected agents. For example, a “first amendment” follows because:

(i) No Government Religion: the most adversely affected agent=the Christian
(ii) Government Religion: the most adversely affected agent=the atheist

The atheist, the most adversely affected agent under scenario (ii), would be be much worse off under compulsory worship and/or taxation support of religious institutions than the Christian, the the most adversely affected agent under scenario (i), who had the freedom of worship but had to support religious institutions with it’s own money.

Therefore, under a VOI, where the agent does not know it’s own identity(whether it will be a Christian or an atheist, etc), it will select (i). In this likewise manner, Rawls is able to universalize a justice principle of Political Liberty as “an equal claim to a fully adequate scheme of equal basic rights and liberties, which scheme is compatible with the same scheme for all.”

Rawls’ second principle of justice addresses the socio-economic distribution of opportunity and outcome. This is essentially equality of opportunity and the max-min principle.

These two principles together then comprise a “justice as fairness” framework for the fair distribution of primary goods. Noting:

(a)The 2nd principle is agnostic regarding whether the socio-economic institutional structure is capitalist or socialist, or mixed.
(b)There is an preference order constraint on the principles. For example, maximize the minimum share but this can’t violate the equality of opportunity condition. And neither max-min nor EOE can violate the political liberties from the first principle.

While Rawlsian Justice, properly understood, may have some intuitive appeal, it nonetheless fails as a normative framework. There are a number of ways to document this failure.

(1) The Rawls vs Harsanyi debate over Maxmin vs Max(avg utility) under the VOI exposed the problems with VOI. The Rawls version, the Maxmin, was equivalent to infinite risk aversion. The Harsanyi version, utilitarian maximization, was equivalent to zero risk aversion. Both infinite risk aversion and zero risk aversion are not plausible. The VOI instrument now had to establish the appropriate level of risk aversion in the original position–an aversion to risk that falls somewhere between zero and infinity. Obviously, the VOI does not yield unique solutions and thus loses its normative power.

(2) Although today’s context loves to pit a libertarian backlash against Rawls, at the time, it was actually a communitarian backlash that would emerge against Rawls. On a practical level, it should be pointed out that Rawls’ risk aversion basis for justice stemmed from the assumption of a pluralistic society, one that included the presence of a plurality of irreconcilable moral and religious preferences. Rawls assumed a rational basis for a pluralistic liberalism. However, the intense communitarian backlash against Rawls would (i) reject any universal basis for making moral judgments, (ii) opt for moral subjectivism and (iii) subordinate the individual to the norms and values of whatever community.

Communitarianism was a direct attack against Rawls, particularly the political liberties of his first justice principle.

(3) By the time the liberal vs communitarian debate died down in the academic literature, there arose to prominence the new disciplines of experimental game theory,neural economics, etc., along with the increasing notability of the role of biology in economics. Psychology and biology were now regarded as highly influential factors in the formation of human preferences.

(1) is a failure of liberal rationalism, (3) is an attack against the very assumptions of liberal rationalism and (2) was a direct attack against “rational pluralism.”

Rawls, twenty years later, would amend his Theory of Justice with the book, “Political Liberalism.” Rawls’ Political Liberalism was a retreat from his earlier work, an admission that his Theory of Justice had been built over a house of cards. No longer was his Justice Theory a categorical imperative. Indeed Rawls came to the conclusion that any uniformity in fundamental moral and political beliefs–that had been outlined in his earlier Theory of Justice–could only be maintained by an oppressive state force. So there is a shift. The shift was from rational to “reasonable,” from justice as moral to justice as political. The government should stay neutral between competing moral conceptions, and it is the intersection of the different conceptions–the “overlapping consensus”–that forms the reasonable basis of a political justice, from which the Rawlsian principles would still be affirmed.

Rawls Political Liberalism, however, is no more normative than his VOI. Empirically, the cultural war, the drug war and the National Security State present significant problems for Rawls’ political liberalism. There are obligations attached to the distribution of primary goods, obligations that violate Rawls’ first principle. The “overlapping consensus” denies Rawls’ principles of justice.

Rawls’ constraints on the discourse of “Public Reason,” to maintain official bounds for a stable reasonable pluralism, would invoke the same kind of oppressive State force Rawls cited in abandoning justice as a categorical imperative. Political Liberalism was published at the dawn of the internet age and digital communications; enforcing a “duty for civility” and official organs for public discourse as means for maintaining stability and legitimacy in the internet age would work against the intended ends.

Before he died, Rawls published a third iteration of his Justice Theory, “Justice as Fairness: A Restatement.” In this book, Rawls looked at the injustices in the US and pointed a finger at Capitalist Political Economy. So the “Restatement” eliminates the agnosticism of the institutions of Political Economy articulated in the first book. Now the Political Economy must be socialist(although not State socialism; rather some variant of property-owning democracy or democratic socialism).

The amusing question is how many cracks does a guy get at coming up with a supposed “normative” theory of liberal social justice? Fairness cannot be rationally universalized; nor can “reasonable” political consensus be expected to spawn John Rawl’s moral preferences. So the next step is to necessarily constrain the Political Economy preference.

It should be apparent that there is no “normative Rawlsian framework.”

Public Choice Failure

The Rawlsekian project also incorporates Public Choice. However, as I’ve pointed out in The Matrix as Ruling Class and The Calculus of Dissent, there is catastrophic empirical failure in treating government as a market. Specifically, the economic rent transfers dwarf the competitive outlays for such economic rent. The rent-seeking industry is way too small.

The Public Choice failure is actually evidence of a ruling class and the ruling class invalidates the Public Choice rationale for the hypothetical unanimity of the constitutional political framework.

Matt Zwolinski at BHL identifies this Rawlsekian project to be in close affinity to “Bleeding Heart Libertarianism.” But, from the above, we can outline how the Rawlsekian project actually reinforces a conclusion more aligned with a “Radical Libertarian Project.”

  • Rawls rejects the moral foundational basis of Justice originally presented in “Theory of Justice” as untenable
  • Rawls’ Political Liberalism retreats to a political foundation of Justice, the “overlapping-consensus”
  • Rawls, before he died, emphasized the “Public Reason” foundation of this “overlapping-consensus” and the necessity of a certain type of Political economy to underlie institutions of Public Reason
  • Rawls’ rejects welfare state capitalism and advocates instead for the political economy of property-owning democracy. But the 1990s essentially moved in that direction, with welfare reform and a new political economy built over expanding home ownership
  • Meanwhile, by the 1990s, Public Choice Theorists like Tullock had begun to identify serious potential problems with treating government as a market–namely, the rent-seeking industry is way too small relative to the economic rent transfers. Tullock tried to explain this away with an “inefficient market hypothesis.”
  • The Bubble pop in the late 2000s of real estate prices and the credit derivatives to insure against the risk of default of the mortgage securities that financed the expansion of a “property-owning democracy” set the stage for the greatest economic rent transfer in human history(TARP), demolishing in the process, the Public choice rationale of inefficient markets in rent-seeking. The only rational alternative now left was “ruling class.” So, in no small part, due to the “justice” pursuit of “property-owning democracy,” the reality of a ruling class became undeniably exposed.
  • So, from this outline, one might see why I’m insistent on a taxonomy that differentiates between liberaltarianism and libertarianism, noting that much of what passes for libertarianism actually should be reclassified as “liberaltarianism.” In this instance, the spectacular failure of a “liberaltarian normative framework” perhaps does yield a “best justification for libertarianism.” Of course, this justification is not exactly in the sense originally intended by the author.

    2 thoughts on “Liberaltarian Failure

    1. Unrelated to the specifics of this post (which I’m still digesting), but very related to common topics on this blog, I wanted to let you know that on my blog I recently linked to a blog post from Walter Russell Mead on his thoughts on the end of the war on drugs: http://blogs.the-american-interest.com/wrm/2011/07/10/an-unhappy-ending-to-the-drug-war/

      I think his vision of tolerance but not acceptance of drug users, with legalization of drugs but drug testing of folks in a range of areas from employment (law, medicine) to college applications to recipients of government programs runs very close to the idea of a “pink police state” that you’ve brought up frequently.

      Jared Polis of Colorado, a Democrat who I think sort of fits into my old idea of libertarian Democrats, has suggested legalization and taxation of marijuana (and online gambling) as a way out of the fiscal crisis. There’s clearly a growing cultural movement of wider acceptance of drug use, at least with marijuana, and a growing elite consensus that some programs are too costly to the state to continue. But as I think you’d argue, the state isn’t about to reform itself in a way that actually diminishes its control. Mead’s predictions are a plausible but pessimistic scenario.

    2. Mead’s piece essentially argues that the Drug War Status Quo is intolerable. But he also argues that cultural libertarianism(“stoner utopia”) represents no popular, political reform movement to abolish the current legal, regulatory drug regime. Given this, any movement of “illegal narcotics” into the “legal framework” will be accompanied by increased “Drug-Verify” corporatism.

      He’s largely right: drug legalization runs smack up against the regulatory state. This is a point I addressed last summer in my post, Free the Weed, with regard to progressive entry into drug legalization activism. In short: to legally treat “illegal narcotics” like alcohol would essentially undermine the fabric of the US regulatory State.

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