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Sumner on Free Markets and Liberal Values

Scott Sumner is on my wavelength: 

So after 1980 “brute facts” about the weaknesses of statism pushed most of the world toward free markets.  But there was (as yet) not enough evidence to abandon the egalitarian systems of social insurance.  If I am right, then countries with more liberal values should have responded to this new information by becoming much more free market oriented, but not necessarily by reducing the size of government.  But how do we measure liberal values?

Then I ran across a paper by two French economists, Algan and Cahuc, which showed that countries with a high level of civic trust (such as the Nordic countries), tended to have generous unemployment compensation and fewer restrictions on firing workers, and countries with less generous benefits tended to have more rigid labor laws.  I realized that their measure of values (a survey question asking “would you accept government benefits to which you were not entitled?”) was perfect for my research.

They found Denmark to have the most civic honesty, but when I used a more complete sample of developed countries, Denmark was just edged out by Malta.  But I also had a nagging worry about self-reports on honesty (”You Maltese say you are honest, but . . . )  Thus I decided to average this self-described civic honesty metric with a more objective survey—the corruption index produced by Transparency International (which was topped by Denmark.)    When the two indices were averaged Denmark moved far ahead of the field—if its score was set at 100, the next three countries were tied way back at 86.  Because of this blog’s growing popularity, I won’t mention how far Malta slipped, as I wouldn’t want to embarrass any readers from that tiny island nation.

I decided to measure neoliberalism by using the (2008) Heritage Institute’s Index of Economic Freedom minus the two “size of government” components (taxes and spending.)  If one simply averaged the other eight components, Denmark edged ahead of Hong Kong as the surprising winner of “most free market economy on earth.”  I was pleasantly surprised by this finding (achieved without any data mining) as it beautifully fit my dialectical approach to neoliberalism.

Even better, I found this index of neoliberal (or free market) policies was strongly correlated with my index of “liberal” (or idealistic) values.  Indeed the correlation is even pretty strong for the unadjusted Heritage Index of Economic Freedom (despite the fact that that index is topped by a country, Hong Kong, with considerably less liberal values than Denmark.  You’re probably thinking, OK, but correlation doesn’t prove causation.  Lots of country characteristics are positively correlated.  And what my hypothesis actually requires is that a place like Denmark only became highly free market-oriented after the changing intellectual climate made liberals less enamored with statist policies.

To get data going back to 1980, I had to use the Fraser Institute’s Index of Economic Freedom, a (surprisingly fierce) competitor to the Heritage Index.  Here the results were even more gratifying.  My first regression showed that the more liberal a country’s values, the more rapidly it moved away from statism after 1980.  How about that, Naomi Klein? Between 1980 and 2005 only New Zealand moved toward free markets more rapidly than Denmark.  My interpretation is as follows.  Free market reforms threaten to erode rents earned by various special interest groups.  Thus after 1980 these reforms were more likely to occur in countries where the civic culture is more oriented toward the common good.  (In other words if you hear that culture is “tribal,” or that “family comes first,” it’s economy is likely to have statist economic policies.)

My initial reaction was that Deirdre McCloskey would love this finding.  I had just published a long-winded 27 page book review of her fascinating (but equally long-winded) The Bourgeois Virtues.  In that book she fires her shots in both directions at once.  She concedes the good intentions of those on the left, but scolds them for not being more open to what I called the economistic worldview.  Indeed many don’t even understand that such a worldview exists.  She thinks people on the right such as George Stigler were right about free markets, but wrong about values.  Stigler had argued that it is a waste of time for idealistic economic researchers to try to persuade policymakers, as the later group is motivated by self interest.  And rent seeking special interest groups are more able to satisfy those interests then are idealistic economic professors.  McCloskey countered that one cannot run a sound economic system on just self interest.

My findings suggest that Stigler is wrong, as the more idealistic a country’s values, the more rapidly they moved toward free markets when statism became discredited.  But to people like Paul Krugman, Joe Stiglitz, James Galbraith and Naomi Klein, the findings are equally inconvenient.  Far from being a right wing plot, the strong move toward freer markets and lower marginal tax rates that occurred in almost all developed countries after 1980 was actually driven by idealistic values, indeed I would argue by “liberal” values. 

Do read the whole thing.

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Big-Government Libertarianism vs. Limited-Government Liberalism

I’ve really been enjoying all the terrifically smart comments in the last two posts, which have been really helpful to me. 

Maybe one way to frame my argument is that I’m not arguing for “big-government libertarianism,” but for “limited-government liberalism.” (I see that this may confuse my prior attempts to distinguish “small” and “limited,” but bear with me as I circle and recircle looking to illuminate some things that have long nagged at me.)  My sense is that most people don’t see a difference and what I’ve been doing is groping for a way to make the distinction between the two plausible and clear.

One way to think of it is to consider where you’re starting from. I am, more or less, starting from a fairly typical liberal account of the state and it’s aims. I’m then arguing that those aims are best achieved through appropriately limited government. I believe this is a principled and coherent stance that stands or falls with the background arguments about the legitimacy and desirablity of liberal democracy. If you reject the basic argument for the liberal democratic state, then you’re not going to be impressed. But if you accept the desirability of liberal democracy, you have every reason to listen.  

On the other hand, if we start from traditional minimal-state libertarianism, we’re starting with a deep suspicion of the possibility of anything more than governance of very low quality; it’s just that the anarchist alternatives (which may be feasible and worse, or just infeasible) are worse. So, to this sort of libertarian, “big-government libertarianism” sounds like one of three things: (1) A libertarianism that can’t possibly work–a hopeless oxymoron. The argument for keeping the state strictly minimal is that a more-than-minimum state cannot be kept from bloating into a rights-stomping superstate. You’ve got to choose between almost nothing or almost everything, but big-government libertarianism tries to have it both ways. No dice.  (2) A strategy for getting liberals to trust libertarians enough to listen to libertarian policy arguments. Some libertarians seem to think this is worth trying (how could we do worse?) while others seem to think liberals are too hopelessly statist to be worth bothering with. But the real problem with (2) is that liberals will plausibly suspect libertarians of indifference to their conception of basic liberal values, and so  libertarian policy advice dressed in liberal language looks like insincere Trojan Horsing on behalf of the powerful. Why listen? (3) Libertarian non-ideal theory. One might think minimal state libertarianism is correct, as a matter of ideal theory, but see that it is politically infeasible, and so conclude that a  libertarianism that makes some concessions to welfare state liberalism is second-best, and steps in that direction are small movements toward the ideal. One problem here is: How do you tell the difference between someone who actually thinks mandatory retirement accounts, for example, are the best policy for limited-government liberalism (that’s me, on days when I’m convinced that means-tested alternative can’t work), and someone who argues for mandatory retirement accounts as a small step down the road to libertopia?

So, “limited-goverment liberalism” starts with liberalism and then argues that libertarianish policies and institutions will best secure liberal aims. “Big government libertarianism” starts with traditional minimal state libertarianism, but moderates it to make marginally more libertarian policy politically feasible.

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Small and/or Limited Government: Some Distinctions

I feel the liberaltarianism discussion is often muddled because of confusion over a number of different ideas. I’m going to try to clear my own head here. Maybe it will be useful to others.

I think it’s important to distinguish “small government” from “limited government,” and to distinguish between a couple different senses of “limited.”

Let’s say government is small when government spending as a percentage of national economic output is relatively low. Small government, in this sense, will tend to have relatively low taxes. But the overall tax take tells us little about how the tax burden is distributed. It doesn’t tell us what the money is spent on. And it doesn’t tell us much about economic liberty.

Which society is freer? One with a smaller government where the very rich pay all the taxes (90 percent of the population pays no taxes! 90 percent libertopia?) or one with a slightly larger government with a relatively low level of taxation spread more or less evenly over the whole population? (Should we do a poll on this?)

The fact that a government is small doesn’t rule out the possibility of egregious restrictions on non-economic liberties or of incredibly burdensome economic regulation. Suppose it takes two years to fill out all the paperwork, get all the licenses, etc. to start a small business, but once you do that, your profits aren’t taxed all. Suppose many forms of exchange are simply prohibited. You might have small government, low taxes, and very little economic freedom. Of course, a small government can ban abortion, prostitution, drugs, a free press, etc. just as well as a big one. Such a government may need to spend a lot of its modest budget on police and prisons instead of on genuine public goods. The size of the budget as as percentage of output doesn’t tell you anything about the composition of spending. This is a really important point. The United States spends a lot on prisons, the military, drug law enforcement, border patrol, etc. A lot of this is the opposite of rights-respecting, and a lot of it is downright wasteful. The composition of spending is important both as a matter or morality and a matter of economic growth (which I happen to think is also a matter of morality.)  Which is all to say, the fact that a government is small logically implies almost nothing about either liberty, justice or efficiency.

(Also, as a technical tangent, there may be economies of scale in the provision of certain public goods. So a smaller country whose government provides precisely the same goods as a bigger country may turn out to have a bigger government, simply because it costs them a little more to provide the goods. Slightly weaker economic performance relative to the bigger country may result, but a cutback in spending on those goods won’t improve performance if they are growth-enabling.)

Limited government is really what matters, but “limited” is also a bit ambiguous. The most important sense is “rights-respecting.” Bills of rights are meant to declare that legitimate (and legal) government is limited to activities that do not violate rights. Many disputes between classical and modern liberals turn on their theories of rights. For example, if the collective action problems inherent in the provision of certain public goods justifies taxation, then a state that collects taxes for this purpose does not violate property rights. If you think there is no such justification for taxation, you’ll tend to see the taxing state as violating rights and thus overstepping its proper limits. If you think there is such a justification for taxation, and believe there is an abundance of collective action problems that may be resolved only by government action, then you may think that a quite high level of taxation and government spending is perfectly consonant with limited, property-rights respecting government. 

Here’s an aside about libertarian theory that I think helps transition to another, related, idea of “limited.” Though most libertarians are not anarchists, the outsized influence of property-rights-focused anarchists within the broader libertarian community somehow seems to create a lot of confusion, when it ought to help clarify the issue. The so-called “minarchist” or “minimal government” view accepts the public goods justification of the state, while the anarchist rejects it. The anarchist argues either (1) that the protection of rights is an individual good and that individuals can successfully protect their rights by going to the market and contracting with private rights-protection agencies or (2) all public goods, including the protection of rights, can be successfully provided using markets and other forms of voluntary association. Anarchists often argue that if the public goods argument for state protection of rights (and the system of public finance it implies) is sound, then there is no principled basis for stopping at “minimal” government. The scope of legitimate government will be however wide the logic of the public goods or market failure argument happens to take you. There are a number of possible minarchist replies here (the specialness of the use of coercion in the rights protection business, etc.), but I basically think the anarchist critique is correct. If there is something especially unstable in private markets for rights protection, and that fact justifies public provision of that service, then there might be other kinds of market failures that justify the public provision of those markets’ services. 

I think this takes us to another sense of “limited government” as “limited to what non-government alternatives cannot do better.” An obvious implication of market failure arguments for state provision of certain services is that the state should not be in the business of providing services where markets or other voluntary mechanisms are superior. There’s no justification for the coercive tax-financing of state enterprises when those goods and services would be provided (usually with higher quality and a lower price) with no state coercion. Also, state enterprises will tend to crowd out private enterprises both by (a) absorbing capital and using it badly and (b) by virtue of its inherent advantages in securing anti-competitive subsidies and barriers to entry, which is all the more reason to limit government to the things we actually need it for.

Let me wrap it up. The “size” of government is not a good proxy for either economic or non-economic liberty or for economic performance. Advocates of “small government” need to worry more than they do about the moral and economic dimensions of the composition of spending, and they need to realize that they care more than they think they do about questions of “distributive justice,” which is pretty obviously manifest in enthusiasm for reforms, like the “flat” and “fair” tax.

I think our real concern ought to be limited government. But whether you think an ideally limited government is also small will depends on lots of things including your account of rights, your beliefs about the relative efficiency and reliability of state vs. market provision of various goods, your beliefs about the necessity of public spending to facilitate growth, and more. The claim behind my version of  “liberaltarianism” is that there is a principled position between classic night-watchman “minarchism” and full-on modern liberalism. If you’re not an anarchist or totalitarian, then you think that it’s possible for the state to do either too little or too much. Minarchist libertarians seem to be a bit embarrassed by the concessions they do make on the way to arguing for a state, and so stick as close as they can to their anarchists friends without going all the way stateless. But the anarchists are right that the minarchists have, in some sense already “given away the store,” and that it would be pretty surprising if the logic of the minarchist argument allowed them to stop where they do. On the other side of the equation, modern liberals need to get more credit from libertarians in desiring and defending limited government. The governments of the successful liberal democracies are in fact remarkably limited relative to the possibilities, both in terms of respect for rights and in refraining from crowding out the efficient private provision of goods and services–which explains their success. That said, it would be pretty surprising if either the modern liberal state or modern liberal theory (which often looks suspiciously like ad hoc apologetics for the modern liberal state) gets the limits of government right as either a matter of morality or efficiency.  

There’s lots of other stuff to talk about: the paternalism of modern liberalism as a failure of limited government; the consistency of social insurance and poverty-mitigating redistribution with a principled account of limited government; and other stuff–but those are separate posts.

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Now On the Liberaltarianism Channel: Reflections on Liberaltarianism

It’s sort of gratifying to be unable to keep up with all the people talking about your ideas. But I really can’t keep up. I promised Jonah another reply, but haven’t done it yet. We’re doing a Bloggingheads tomorrow, so maybe I can get some of it out then. Here’s another reply from Ross. Let me say something about this bit:

Yes, there’s a best-case scenario in which the dumbening of the American Right works out fine for libertarians, because the infusion of “liberaltarianism” suddenly makes the left-of-center much smarter and more freedom-friendly about issues of economic policy. But I think the more likely scenario is that the liberaltarians vanish into the center-left without much of a ripple, leaving a right-wing rump to battle eternally with a fat, lazy, none-too-libertarian left-liberalism. And in fact, that worst-case scenario already exists: It’s called the state of California.

I want to emphasize for all the conservatives who’ve come ’round these parts complaining about me calling them dumb that I swear it was Ross Douthat, the conservative Catholic Republican, who brought up the topic of “the dumbening of the American Right.” I admit that I leapt on the idea and indulged in some “jingoistic fagbasher” sort of rhetoric, which is a poor strategy for winning the affection of both those conservatives who do and do not fit the description. I assure you that many of my closest friends are Republicans, and those approving of gay sex on burning flags are closer still. To clarify further, Ross and I were not talking about the relative IQ scores of Democrats and Republicans. We were talking about “intellectuals,” an elusive species of social parasite paid to publish their worthless thoughts, and whatnot. I noticed that some among those who thought I was saying that they are dumb simply on account of their ardent belief in the Good Book seemed to be a bit hostile to the very idea of an “intellectual.” Because who the heck are intellectuals to think they’re so much smarter than the rest of us when they probably can’t even change the oil or gut an elk? It’s a good point. But there you have it.  

But that’s neither here nor there. Pardon me if my series of blog posts is not internally coherent, because I’m truly working things out in real time. But again I find myself wanting to stress that all this farseeing speculation about the relevance or irrelevance of liberaltarians is interesting to me, but decidely secondary. I’ve now spent well over a decade devoted to the study of philosophy and political economy and for what?! I have had many periods of doctrinal enthusiasm, but let me now congratulate myself by publicly admitting that my aim has always been to get it right. As a human, I’ve liked being on teams and have taken some real satisfaction in ideological partisanship. It seems I can’t help but listen to arguments against my side because I’m so aggressively partisan I mean to personally undo them all. Through dumb repetition, I eventually gained a distinct awareness of the singular subtle sensation of intellectual aggravation. Allow me to generalize here, so that this is not about me only.

The more one feels aggravated by a line of reasoning, the more one resolves to unravel it. Our methods for disposing of the obviously spurious vary, and we may become attached to our methods. But not all methods are equally useful for swift and total disposal. Those especially inefficient in this are prone to become intrigued by arguments whose indubitable spuriousness is deviously hidden. One may pick at the knot a while, but become distracted by, say, a beloved but dubious proposition simple to sadistically dissect. So certain problem thoughts are shunted off to obviously spurious storage. One assumes one will return, soon, better equipped to straigten things out. The day of reckoning will come. But then one night, while sniffing the hamper, one recalls with mild alarm earlier in the day deploying, with no trace of devil’s advocacy, an argument previously locked in obviously spurious storage. There may be a problem! Tiny spiders of self-suspicion canvass the web of belief. Heretofore unquestioned doctrines may be quietly accused of undetected spuriousness. In the end, one makes the minimum necessary adjustments. No, there is no problem at all, one is relieved to conclude. There is yet so much in common with the team. The best team!

These are not conversion experiences. These are periodic tune-ups. But how many periods until the boat you’ve rebuilt one plank at a time while sailing in it is a distinguishably different model? What if you like your boat, but you’re lonely on it? Oh what a team our regatta would be! This is liberaltarianism to me. If the question was what to do with my voter registration card, I’d make an origami cat.

Back to Ross’s passage. Regarding the state of California, I’m told the problems more than anything have to do with their ill-designed scheme of direct democracy. And the prison union.

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The Promise of Liberaltarianism

I very much liked this passage from Mark Thompson at The League of Ordinary Gentlemen:

[I]n order for libertarians to more consistently act as political free agents, or even to sign on to a coalition with the political Left, something else will need to happen to free libertarian philosophy from the predispositions that have resulted from such a lengthy alliance with the political Right.  

I would propose, then, that the “something” to which I refer is “liberaltarianism,” “soft Hayek” as Jim Henley calls it, or “actual Hayek” as I like to call it.  The promise of this derivation of modern libertarianism is not that it attempts to paint libertarianism in a light that is palatable to modern liberals/Progressives, which our friend Kip rightly fears; instead, its promise is that it can help to rescue the fundamental worldview of libertarianism from the prejudices instilled in it by such a lengthy alliance with the Right.

Simply put, the promise of liberaltarianism is that it can help to build a libertarianism that is more true to its classically liberal roots.  In so doing, it is possible that it will become a libertarianism that modern liberals are willing to take seriously, and even learn from.  To be sure, if this were to completely succeed, I find it likely that libertarianism would eventually become as corrupted by the Left as it has been by the Right, thus creating the need for the cycle to start anew.

Right-leaning libertarians and libertarian-leaning conservatives are naturally very displeased with the idea of the de-rightification or re-liberalization of classical liberalism. And most contemporary liberals are indifferent or suspicious. But that’s okay. Twitter once sounded like the stupidest thing I’d ever heard of, and now I, like millions, totally love Twitter. And they still don’t make a dime. But they will.

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Hey, I'm a Statist!

I’ll try to respond at length to Jonah tomorrow. But a couple thoughts. Again, I’m not the one who’s trying to talk about partisan coalition politics. Its not my main interest, and it’s not my comparative advantage. I’m trying to show how attractive classical liberalism can be once it is scoured of the conservative barnacles of the now irrelevant Cold War alliance and once it begins to take seriously (rather than just ignore) the powerful arguments of the best contemporary liberal thought.

I think maybe one of our main issues is that Jonah seems to think actually-existing-politically-relevant conservativism is in some sense “anti-statist,” and that’s why libertarians ought to like that kind of conservative. (Jonah: “If the right ever loses its anti-statism, we will have a race-to-the-bottom between two statist parties, one cosmopolitan and socialistic one nativistic and nationalistic.”) I have some questions about what the anti-statism of “the right” amounts to. But, hey, I’m not an anti-statist! I’m statist! Lots of libertarians are! So maybe statism isn’t ipso facto socialism? Like James Madison, for example, I want a state, I want its power constitutionally limited, and I want it democratically governed. I am a proponent of free-market liberal democracy — like Hayek, Friedman, Buchanan, and I’d guess a whole lot of market-loving economists. I accept the public goods justification for the state, more or less. I accept that regulations which correctly price negative externalities tend to make everyone better off, and are worth doing. I am morally and methodologically anti-nationalist–which is more unusual–but that’s not anti-statism. I don’t mind the fact of country-sized public goods jurisdictions, nor do I mind tax-financing of genuine public goods by more or less legitimate states. I just wish national jurisdictional boundaries should better respect basic liberties by being more porous. Nor do I mind the tax-financing of education or welfare programs that actually help members of a polity to develop the capacity and ability to meaningfully exercise their rights and liberties. I am a liberal! “Rawlsekianism” is a ridiculous word, but I actually think a certain fusion of the best of 20th Century classical/market liberalism and welfare liberalism is the best political philosophy. I also think it may be possible to persuade many other people of this, and that they will find it attractive. In my experience, the people open to this view are already relatively liberal, in the usual sense, and tend to favor Democrats. That’s fine by me. 

But I do have some admittedly amateur thoughts about partisan politics, and I think Jonah’s commitments may have led him a bit astray, so I’ll try to say something about that tomorrow.

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I'm No Diderot, but…

I loved Ross’s headline about my reply to his worries:

When The Last Pentecostal Is Strangled With the Entrails of the Last John Bircher …

Let me emphasize that I’m a committed liberal pluralist, and I think freedom of conscience and state neutrality are bedrock virtues of a just society. At the same time, I think that a politics that takes the fact of pluralism seriously is perfectly consistent with vigorous culture war. Indeed, I think pluralist democracies demand culture war (call it “public reason” if you want to be fanciful). I think crazy conservative talk radio is a healthy part of pluralist culture war, and I think the attempt to whittle away the cultural prestige of people with crazy religion-saturated politics is also a healthy part of healthy pluralist culture war. I will go to the mat to defend the freedom of Pentecostals and John Birchers to do their things. And I will go to the mat to defend the idea that ours would be a better society if individuals come to be so embarrassed by Pentecostalism and John Birchism — by the ideas — that these communities of belief die peaceful natural deaths. Cultures become what they are through a process of selection, and this is a process we help along by arguing with one another. The reason there are so many meta-arguments about what we are going to count as good arguments–as good reasons, as considerations worth taking seriously–is that once we come to a broad social consensus on standards, some factions in the culture wars are left defenseless and end up an impotent doomed remnant. One reason I’m not that interested in partisan politics is that I think it is a higher-order manifestation of factionalism at a deeper level of the culture. I’m interested in engaging at that level. I’d like to argue for reason, science, the utility of the extended liberal order, and the authority of the liberal moral sentiments. I sincerely do not know what practical politics or partisan alignments this implies. It’s fun to guess, but I know our guesses are very likely to be bad ones. As Doug North likes to say, we live in a “non-ergodic” world.

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The Hope and Horror of Liberaltarian Alignments

Tyler Cowen and Arnold Kling have both discussed some or all of this passage from Ross Douthat, in which he expresses concern for the possible damage of a possible flight of libertarian intellectuals toward the left. I’ll take it in two pieces. 

What could happen … is a bigger-tent liberalism – somewhat chastened, perhaps, by some big-government failures in the Obama era – that makes libertarian intellectuals feel welcome, engages them in conversations about smarter regulations and more efficient tax policy, and generally woos them away from their culturally-dissonant alliance with people who attend megachurches and Sarah Palin rallies. This would make for a smarter left-of-center in the short run, but I think in the long run it would be pernicious. It would further the Democratic Party’s transformation into a closed circle of brainy meritocrats, and push the Republican Party in a yet more anti-intellectual direction. And it would produce an elite consensus more impervious to structural critiques, and a right-wing populism more incapable of providing them. The Democratic Party would hold power more often, and become more sclerotic as a result; the GOP would take office less often, and behave more recklessly on those rare occasions when it did manage to seize the reins of state. 

First, I think Ross is right to see this as a game about the distribution of opinion elites. Second, I think he’s right to imply that a GOP with a weakened libertarian influence would become a more “right-wing populist” party. Which I think helps me make my point. Why would an intellectual libertarian want to keep company with a group of flag-waving moral reactionaries? Masochism? Now, if I interpret this as an argument aimed at people like me, it’s an exceedingly odd one. Ross seems to say that a more liberaltarian Democratic party would both produce better regulatory and tax policy and win more elections.

Why shouldn’t I, an incrementalist classical liberal, think that’s an awesome result? Because on the rare occasion the GOP manages to govern they’ll wreck the country? And so thinky libertarian types should remain the redheaded stepchild of old fusionism so that right-populists don’t actually indulge their terrifying instincts? I’m not sure that’s what Ross is saying, but that sort of sounds like what he’s saying.  

This is obviously a political gloss on what is essentially an intellectual project, and I know Will, like many libertarians I admire, prides himself on not thinking in terms of partisanship. But for anyone who cares about political outcomes, I think it’s important to consider the correlation of forces when you set out on ideological projects – especially in a country where the two-party structure has been as durable as it’s been in ours. I understand the impulse for smart, independent-minded libertarians to flee what seems like an increasingly anti-intellectual American Right and seek conversations and alliances with the friendlier parts of the left-of-center. But the vacuum on the Right also militates in favor of smart, idiosyncratic thinkers trying to fill it, instead of fighting for a seat at the crowded liberal table. That doesn’t mean registering as a Republican, attending CPAC, or casting a vote for McCain-Palin (or the next iteration thereof). But it means being open to the possibility that the old fusionism, battered and bruised as it is, may still hold as much promise for the advancement of libertarian policy goals as “liberaltarianism” ever will.

I’m glad that Ross sees that the American Right is increasingly anti-intellectual. But I don’t think that’s best combatted by sticking it out and raising the intellectual tone of an increasingly hostile group of egghead haters. As I think Ross agrees, the balance of elite opinion matters. And I think intellectual capital flight from the right really does threaten the GOPs future success. If Republicans keep bleeding young intellectual talent because increasingly socially liberal twenty-somethings simply can’t stand hanging around a bunch of superstitious fag-bashers, then the GOP powers-that-be might start to panic and realize that, once the last cohort of John Birchers die, they’ve got no choice but to move libertarian on social issues. Maybe. I like to imagine.

But Ross’s crystal ball is no better than mine. So I think my best bet is just to go ahead and try to come up with a more coherent and effective version of practical market-friendly liberalism. I’d like to think that would be attractive to the tens of millions of Americans who think conservatives are vile, that conventional liberals are too deep in the pocket of the Democratic Party to actually promote prosperity and opportunity, and that libertarians are dogmatic, weird, and irrelevant.

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Liberaltarian Reactions

There are a ton of smart responses to my exchange with Jonah on liberaltarianism. (Brink, maybe we need to write that book.) Here’s Andrew Sullivan. Here’s Matt Welch. Here’s Reihan Salam. Here’s Ross Douthat. And here’s Virginia Postrel, not responding to my post, but drawing on her experiences at a couple recent Brink-devised libertarian/liberal events to draw out what she thinks is the real impediment to a reunion of contemporary classical liberals and our much more numerous liberal cousins. 

When you get political theorists together, they assume the big divide is over the relative weights given to equality and liberty–the old Rawls vs. Nosick split. But given the right flavor of liberals and libertarians, that’s bridgeable. The real division, I believe, is over regulation. Contemporary liberals will say, as someone did at dinner in DC, that they are against stupid regulations like the controls on trucking abolished in the late 1970s. And I’m glad for that.

But finding liberals who oppose any new regulation is almost impossible–no matter what the perverse consequences. My particular bugaboo is housing.

But the CPSIA is another good example. John Holbo at Crooked Timber is wondering why the law’s defenders–his fellow liberals, in other words–aren’t addressing the criticisms head-on: “Maybe thrift store shopping for children should become a thing of the past, because it’s too hazardous to life and limb. But, to repeat, I haven’t actually seen anyone 1) argue that the law shouldn’t, as written, have these really very sweeping effects; 2) argue that, even if it does, on balance it’s still a good law.” The comments do not encourage optimism about a liberal-libertarian/dynamist coalition.

Unfortunately, once you are ideologically committed to the idea of regulation, you can’t say that a given regulation is bad–or, worse, that maybe doing nothing new would have been the best course.

Virginia’s right. Regulation has been a particular sticking point. But, the thing is, I don’t think there’s anything particularly intractable about this — as long as the problem is a genuine disagreement about the net benefit of a particular regulation. That can be hashed out. The problem is intractable when it reflects a deep enculturated distrust between classical liberals and contemporary liberals. The latter suspect that even moderate libertarian types reject the legitimacy of regulation altogether, and so are just being coy when pointing out the costs of regulation. Libertarians aren’t really interested in regulatory efficiency. They just hate regulation, period. They’re clever at the rhetoric of reaction, and all this talk of moral hazard or perverse unintended consequences is a front for what they really want: nothing. But, the thing is, Virginia and Ed Glaeser are simply right about housing regulation. The fact that most liberals won’t listen, due to distrust, is a problem not only for liberal/libertarian amity, but for the poor people hurt by bad regulation. From the classical liberal side, we become distrustful when liberals say they are perfectly willing actually to perform the cost-benefit analysis, but then somehow find that there is always a net benefit. That’s fishy! And so we come to suspect that this seemingly reasonable willingness to honestly and rigorously evaluate the effectiveness of regulation is a front for what they really want: everything.

But it remains that there are classical and contemporary liberals who really do share deep common values and common liberal aims. I don’t think you argue your way out of an impasse of contingent historical suspicion. I think you socialize your way out of it.