Anti-libertarianism

Markets, philosophy and myth

Alan Haworth

• Publisher: Routledge
• Year: 2006
• Topic: Politics & International Relations
• eBook ISBN:
  9781134890712
• Subtopic: Philosophy History & Theory
• Index: Politics & International Relations

Free marketeers claim that theirs is the only economic mechanism which respects and furthers human freedom. Socialism, they say, has been thoroughly discredited. Most libertarians treat the state in anything other than its minimal, 'nightwatchman' form as a repressive embodiment of evil. Some reject the state altogether.
But is the 'free market idea' a rationally defensible belief? Or do its proponents fail to examine the philosophical roots of their so-called freedom? Anti-libertarianism takes a sceptical look at the conceptual tenets of free market politics. Alan Haworth argues that libertarianism is little more than an unfounded, quasi-religious statement of faith: a market romance. Moreover, libertarianism is exposed as profoundly antithetical to the very freedom which it purports to advance.
This controversial book is for anyone interested in the cultural and political impact of free market policies on the modern world. It will be invaluable to students and specialists of political and economic theory, social science and philosophy.

Part I

DOI: 10.4324/9780203003718-1

The struggle of man against power is the struggle of memory against forgetting.

Milan Kundera, The Book of Laughter and Forgetting

The work of the philosopher consists in assembling reminders for a particular purpose.

Ludwig Wittgenstein, Philosophical Investigations

Chapter 1 Libertarianism – anti-libertarianism

DOI: 10.4324/9780203003718-2

‘Libertarianism’ is a word with two meanings. In the earlier of the two it refers, exactly as one might expect, to any body of attitudes or ideas in which central importance is attached to freedom. In that sense of ‘libertarian’, the arguments of this book are libertarian. More recently, however, the word has come to refer to something altogether different and more specific, namely a certain assertively right-wing, pro-free market philosophy. This book’s subject is libertarianism in the second sense. Its aim is to outline that doctrine’s main arguments and to expose its shaky structure to public view. This book is thus — and in the latter sense of ‘libertarian’ — anti-libertarian.

Libertarians (of the second sort) maintain three central theses. First, as indicated, they maintain that the market (or ‘free’ market) is good. Indeed, libertarians of this sort make enornzous claims on behalf of the free market, the very least of these — and the most apparently pragmatic — being that the market is the distributive mechanism which ensures the satisfaction of needs and preferences most effectively. For most libertarians of this type, though, the market is more than that — much more. It is the nearest thing there is to the realisation of the perfect moral order on Earth. (I do not exaggerate.) Second, libertarians (of the sort who form the subject of this book) hold that the state — except in its minimal or ‘;nightwatchman’ form, if that — is evil. Third, as its chosen nom de guerre suggests, libertarian doctrine asserts that freedom is of supreme importance. It is this third thesis which acts as the crossbar, or strut, connecting the first with the second. Thus, the market is held to be good principally because, or so it is claimed, only the free market can supply the fertile soil in which the fragile flower of freedom can bloom. The state’s intrinsically evil character is correspondingly held to flow from the fact that any (other than minimal) state is necessarily freedom’s iron enemy.

The foregoing theses will be extremely familiar to most readers, including readers who weren’t previously aware that — within philosophy if not elsewhere — these ideas tend to be labelled ‘libertarian’. This very familiarity ought to be sufficient in itself to demonstrate the extent to which libertarian ideas have recently come to supply the small coin for a certain debased ideological currency. I would put it even more strongly. Libertarianism may not be the most subtle philosophical doctrine extant, but, with socialism temporarily out of fashion, it is — at least arguably — the political philosophy which has brought the most influence to bear on practical affairs over recent years. I should like to think that this gives the arguments I present here some point.

Introductory chapters should be short, and only four more remarks are necessary here. First, I treat libertarianism thematically; that is, I have tried to give it the best run for its money I can through an analysis of the best arguments I know for its three central theses. This means that I have, of necessity, concentrated on certain writers rather than others. I haven’t even tried to give a full synoptic account of the available literature.¹ I am sure that, as a consequence, some self-styled libertarians — for example, the acolytes of the various think-tanks, alliances, institutes and foundations so fashionable these days — will object that I have missed the point, that some of the writers I discuss are insufficiently libertarian to be counted amongst the truly elect. But objections along these lines would themselves be beside the point because the purpose of political philosophy is to explore the logical and argumentative structures which underlie the positions people take up, not to categorise or itemise who takes them.

Second, it is possible that some readers will be surprised to learn that the underlying arguments exist; that is, that libertarianism has a ‘serious’ side at all. Libertarian catch-phrases have become so much the stock in trade of a certain style of propaganda that readers may be forgiven for having gained the impression that libertarianism is just that branch of the rag-trade which caters for those members of the pin-striped classes who wish to appear intellectually respectably dressed. (Familiar sloganised false dichotomies, ‘the state should not provide, but enable’ or ‘privatisation not coercion is the answer’, are examples of such catchphrases.)² But it does have a serious side. Libertarianism has some powerful exponents and can claim, with at least some justification, a distinguished ancestry in the work of John Locke and Adam Smith among others. I concentrate on this, although it would have been interesting — very interesting — to explore the way libertarian theory is processed by the propaganda machine. Sadly, one can only do so much in a given space, but, by way of compensation, I have made do by awarding Sir Keith Joseph a small walk-on part in the earlier sections of this narrative.³

Third, just in case anyone is in danger of getting the wrong impression, let me itemise some claims I am not about to make. For a start, (1) I am not an envious sort of person, nor am I greatly enamoured of envy as a motive. Therefore, I am not about to base an argument on that motive. (2) Unlike Procrustes (who seems to be a favourite bogeyman of the Right),⁴ I do not get my kicks from the amputation of other people’s limbs or from stretching my victims on racks, nor do I recommend such activities as exemplary. (If I do have a Greek hero it is not Procrustes, but Ulysses, who liberated his comrades by blinding the giant cyclops which was holding them captive.)⁵ (3) I am not a political aesthete, and I do not look forward to the realisation of some totalitarian nightmare on earth, a world in which a well-ordered ‘collectivist’ machine authoritatively orders every human movement. (4) I do not believe that freedom is equivalent to rational self-mastery, nor that true freedom is a question of acting in accordance with the desires or dictates of some rational, ‘higher’ self. (5) I do not believe that all values are logically compatible or that in some harmonious order they can (will) all be perfectly realised. In fact, I am strongly persuaded of the reverse. In short, I am not open to the accusations routinely levelled by the philosophical Right at their critics; so routinely that many readers will have already assumed that I am about to make the very claims I have just denied.

Such readers should take warning and — my fourth point — they should take particular warning that I am absolutely not against freedom. On the contrary, I am for it. Libertarians (in the second sense of the word) think they are for freedom but they don’t know what freedom is. In reality, their doctrine is so contrary to freedom that it ought to be entitled ‘anti-libertarianism’. The thief comes in innocent disguise, but the beautiful garment is stolen. (The Right are good at that sort of thing.) So, if you want to make your copy of this book read more accurately, you should delete ‘libertarian’ and ‘libertarianism’ throughout, substituting ‘anti-libertarian’ and ‘anti-libertarianism’ as you go. For ‘anti-libertarianism’, etc., you should substitute ‘anti-anti-libertarianism’. Unfortunately, this would make the book cumbersome to read, so I haven’t followed the advice myself except in my choice of title, where my subject is named according to its true nature.

Chapter 2 Market Romances I

Nuts and bolts

DOI: 10.4324/9780203003718-3

As for the general conclusion to which the arguments I present here tend, it’s a fairly safe bet that Adam Smith’s two most quoted remarks are these:

He [every individual] generally, indeed, neither intends to promote the publick interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.

(1976: 477-8)

and;

All systems either of preference or restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord.

(1976: 208)

If it is a characteristic of religion to invoke awe at the magical properties with which some supposed immanent order is allegedly imbued, then these statements — with their exhortation to seek grace through surrender to the hand of a higher law — qualify as religious. All will be well, and all will be well — if only. It turns out on analysis that much libertarian theory is little more than this; an unfounded quasi-religious statement of faith. It is, as I should like to put it, a market romance. (More sceptical readers will have suspected as much all along, of course.)

However — and naturally enough — libertarianism claims to be more. It claims to be a body of truth founded upon an appeal to reason and firm evidence. Specifically, many libertarians hold (1) that the market exchange is a paradigmatic exemplar of freedom, as it is of want-satisfaction also. They hold (2) that a pure free market (or ‘capitalist’) economy is ‘simply’, or ‘nothing more than’ the sum or aggregate of all the market exchanges which actually take place between individuals within a given set. (I shall call this ‘the reducibility thesis’.) For such libertarians both the freedom thesis and the invisible hand thesis (so named after Smith’s remark quoted above) are closely logically related to, if not directly entailed by (1) and (2) taken together.

To begin at the beginning we should consider this relationship. Of course, I am not saying that all libertarians hold exactly the same view — and in the later sections of this book I shall discuss more sophisticated variants — but there is, nevertheless, a core position, a sort of ‘standard’ version of the doctrine. We should take this first and consider the discrete components, the nuts and bolts which — according to libertarians — hold the market structure together. These are bilateral market exchanges between individuals.

1 THE MARKET EXCHANGE

So, what is a market exchange? Well, suppose that I have more of some thing, A, than I want and that you, likewise, have more of some other thing, B, than you want. You would like some of my A, and I would like some of your B. It should be obvious that the solution to our problem is to swap or exchange; my spare A for your extra B. So, we swap.

The notion seems simple and unmysterious enough, but for some it comes laden with high moral import. For libertarians the two most salient features of this type of case are, first, that the exchange is free, second, that it is mutually beneficial. To take the former point, it should be clear enough that — other things being equal — the exchange will not take place unless we both agree to participate, and that it therefore involves consent; that, since we ‘could have chosen’ not to participate, the exchange is ‘voluntary’; that we participate ‘of our own free will’; that no one ‘coerces’ us into exchanging. The exchange is a ‘free exchange’ in these respects at least. To take the latter point, the exchange is mutually beneficial in the sense that, after it has taken place, each of us now has something he or she previously wanted but lacked. We are both, in a phrase, ‘better off’ than we were immediately before.

The literature of libertarianism is packed with such stories, each designed to illustrate the above points. Let me give a few well-known examples, beginning with Milton Friedman’s invitation — early on in Capitalism and Freedom —to consider:

a number of independent households — a collection of Robinson Crusoes, as it were. Each household uses the resources it controls to produce goods and services that it exchanges for goods and services produced by other households, on terms mutually acceptable to the two parties to the bargain… . Since the household always has the alternative of producing directly for itself, it need not enter into any exchange unless it benefits from it. Hence, no exchange will take place unless both parties do benefit from it.

(1962: 13)

Friedman draws from this the moral that, ‘co-operation is thereby achieved without coercion’. Consider, too, Murray Rothbard on the subject of buying a newspaper for a dime:

I transfer my ownership of the dime to the news dealer and he transfers ownership of the paper to me. We do this because, under the division of labor, I calculate that the paper is worth more to me than the dime, while the news dealer prefers the dime to keeping the paper.

(1973: 41-2)

Rothbard describes this as a ‘mutually beneficial two-person exchange’, as he would no doubt also describe the exchanges between Wilt Chamberlain, the famous basketball player, and each of his fans in Robert Nozick’s example. In Nozick’s story, Chamberlain signs a contract which states that, for each home game, ‘twenty-five cents from the price of each ticket of admission goes to him’.

The season starts, and people cheerfully attend his team’s games; they buy their tickets, each time dropping a separate twenty-five cents of their admission price into a special box with Chamberlain’s name on it. They are excited about seeing him play; it is worth the total admission price to them… in one season, one million persons attend his home games, and Wilt Chamberlain winds up with $250,000.

(Nozick 1974: 161)

So, the exchanges are mutually beneficial — Chamberlain gets a fortune and the fans are entertained — and also, as Nozick stresses, ‘Each of these persons chose to give twenty-five cents of their money to Chamberlain’. All this echoes another of Adam Smith’s well-known remarks, that ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest’, which occurs in the context of a discussion of bargaining. As Smith says:

Give me that which I want, and you shall have this which you want, is the meaning of every such offer, and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.

(1976: 18)

2 COMPLICATIONS

It is noticeable that problems arise even here, even though this narrative has hardly begun; for things in this simple world of brewers, bakers, newsvendors and basketball jocks, with its folksy, Saturday Evening Post aura, are less innocent than they initially appear. Let us pause to note a few complications.

For example, note that there is a difference between my own example and these others. In my example — as I was careful to put it — I have some spare A and you have some extra B; whereas, in the others, it is assumed, if not stated, both that the parties are the rightful owners of the things (objects or services) they exchange and that they own those things as private property (which, for libertarians, comes to the same thing of course). The point here is that although ‘having’ includes rightfully owning it is wider than the latter. To have a thing, in my sense, one need only be in a position to exert control over it. I have an object if I have just stolen it from you and am now refusing to give it back. I have it if I have just stumbled across it in the street (some money), or in the wilderness (a water supply), and am now denying you access. This means that the simple ‘newsvendor-style examples cannot fulfil the theoretical function libertarianism requires of them — or at least not just by themselves....

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Preface and acknowledgements
• Part I
• Part II
• Part III
• Notes
• Bibliography
• Index