Libertarianism: A Luxury for Citizens of Developed Countries

© Josh Sager – March 2013

Personally, I have nothing against libertarians, as people, even though I often find myself thinking that their ideology is utopic and unrealistic. I think that most libertarians genuinely mean well and simply believe that society’s needs can be better met through the market than through government programs (ex. eliminating the FDA in favor or private vetting bodies). In issues of non-economic policy, I often find myself agreeing with many libertarian ideas (ex. legalizing less-dangerous drugs), and can honestly say that the libertarian ideology is one that has some very valid points.

Unfortunately, there are a few key flaws in libertarian economic thinking that makes the ideology unrealistic and non-functioning in many areas of policy-making. Primary among these flaws is a fundamental lack of understanding of how a society’s infrastructure develops and is maintained.

 teapartydouches

 

Libertarianism only Exists Once Society is Built by the Government

As far as I can tell, libertarian movements only form in societies which have already developed a national infrastructure; the existing government has already levied taxes on the population in order to build a system of roads and bridges, and public services. Whether in Europe, the Americas, or Asia, there is no recorded instance of a libertarian society developing on its own, outside of a society that set down its national infrastructure through democratic legislation, a monarchy or even an autocracy.

The fact that libertarian movements only develop after the state infrastructure has formed suggests that libertarian economic policy only occurs to people who live in developed countries and is not conducive to the initial formation of a state infrastructure. The huge free-rider problem inherent to the creation of a national infrastructure functions as a seemingly insurmountable hurdle for the creation of a purely libertarian country.

In societies that lack a national infrastructure because their government hasn’t built it yet (ex. underdeveloped countries and some developing countries), the idea that private enterprise can create said infrastructure is absurd to people. They are currently living in a society where the government is leaving things up to the private market, yet the market is simply not working out.

Once the government in these societies eventually builds the national infrastructure, some people forget that the private market failed them in the past and begin to believe that the way to make things more efficient is to let the private sector provide for society’s needs—it is these people who become libertarians.

Put plainly, an economic libertarian is simply somebody who takes the infrastructure of their society for granted once things are built up enough that they can function—the roads are built, regulations are in place, and basic public services are functioning. These people are wholly ignorant of what society actually looks like without government, so they create an idealized vision of this “small-government” society to cling and aspire to.

Here is a practical example of this effect: If you live in a society that is being ravaged by food-borne illness, yet no private-sector solution is developing on its own, then you are likely to support a public-sector regulatory body. The libertarian argument that the private sector can take care of food safety better than a government agency is demonstrably untrue, as they are currently living in a situation where the private sector is NOT taking care of their health. Eventually, once the government forms a regulatory body and people stop dying in large numbers due to food-borne illness, many people forget what life was like before the government got involved, and only see the costs of the regulatory agency. These people are the libertarians who will argue to everybody else that government food-regulation is oppressive and expensive, thus everybody would be better off if food safety were left up to the private market.

If society listens to these libertarians, food safety will almost-certainly become a problem again—when the public-regulatory infrastructure decays—and the government will likely have to step back in as the death toll mounts.

 

Why Don’t Libertarians Just Create their Own Societies in “Small-Government Paradises?

As most libertarians see the state as an oppressive and stifling force, it would make logical sense that they would flourish in areas without an existing national infrastructure and strong government establishment. Undeveloped countries in Africa, Eastern Europe and Asia—which lack a powerful government—would appear to be much better locations for libertarians then countries with more powerful governments. After all, it would be much easier for libertarians to simply move to small-government states then to force big-government states to change their entrenched policies (ex. rather than fight in American politics to reduce taxes/regulation to Somali levels, why not simply move to Somalia and save yourself the trouble).

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If the libertarian economic ideology is to be believed, areas without large amounts of existing government would be the perfect places to exist as a libertarian: a lack of regulations on products would breed market competition, rather than centrally planned economic outcomes; a lack of a government-printed paper currency would give people the ability to deal in precious materials in economic activity (the gold standard); a lack of taxes on the population and producers would allow them to take home more of their profits, thus no money would be removed from the private sector by the government. In short, these “small-government” locations would seem to be a much better place for a libertarian then any “big-government” state like the USA.

Unfortunately for libertarians, these small-government areas do lack something that “big-government” countries tend to have: an existing national infrastructure. The societies in these countries have already put in the money to build the national infrastructure that allows business to function (through the “repression and theft” of taxation).

If libertarians were simply to move to small-government societies, they would have to pay for the creation of their own infrastructure (ex. private roads and railroads), and would not be able to utilize the already finished, publically-funded, infrastructure of the developed countries. In this, the libertarians are trying to have things both ways—they want to keep the infrastructure that was created by the “oppressive big-government taxation” on which to base their new libertarian paradise.

As the libertarian system cannot create the initial infrastructure necessary for a functioning society, libertarians simply cannot move to one of these “small-government” societies and develop it in their own image. Such societies don’t yet have the roads, laws, civil protections, and national defenses that make commerce stable and profitable, for the simple reason that government is too small. Without this infrastructure to support private profits, libertarianism falls apart and the private sector has no incentive to create the infrastructure in the first place (of course, once the government grows and builds the infrastructure, libertarians will happily move in, start complaining about taxation, and pushing to abolish the state).

 

 

Libertarians: You grew up in a society that had its infrastructure built up over centuries through the accumulated taxes/labor of previous generations. Your attempts to disassemble the government that made this infrastructure possible to the point where it can no longer function and then label the resulting society as libertarian is insulting to your ideology. If libertarian policies can most efficiently allocate resources and create utopic societies, then you should simply organize and prove it without having to rely on the crutch of our existing infrastructure—go to a small-government developing country, build your libertarian society and prove all of us disbelievers wrong. On the other hand, if you need to rely on our country’s existing infrastructure in order for your ideals to function properly (ex. using existing roads to get goods to stores because nobody is willing to pay for new ones), then I would ask that you take a good long look at your beliefs’ central tenants.

20 thoughts on “Libertarianism: A Luxury for Citizens of Developed Countries

  1. Yet another moron blathering about “libertarianism=Somalia” without the slightest idea what you are talking about.

    I had to stop reading seriously after you said that government “created society”. It’s possibly worth a medal for the most childish statement I’ve read anywhere on WordPress. As far as infrastructure is concerned, it was the innovation of many generations of relatively free individuals – not of the state – that built the “society” off of which you leech.

    Either you support liberty or you’re evil.

    I have a feeling I know which camp you fall in.

    In love of liberty.
    tiffany267

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    • Congratulations for proving my point.

      You fundamentally lack the understanding that it was the government that paid for the roads, railways, internet hardware, and all of the other things that make modern commerce possible. Unless you are claiming that our national infrastructure was built by private investment (in which case I will ridicule your ignorance), not government projects, then you must concede this. You are correct that it was “generations of relatively free individuals” who built society–that is, the government used the tax revenue from these individuals to build society.

      Again, I challenge you to live by your ideals and voluntarily go to an area where you can live free of government “tyranny” and the infrastructure that was built with such compelled funds. Go see if you can set down an infrastructure through voluntary associations between free individuals where there is no government compulsion.

      I suggest that you re-read the portions of the article detailing how libertarians lack an understanding as to how society’s infrastructure forms and how they always want to build their libertarian system on the base of an existing society.

      I support liberty, but I also understand that there are things that need to be left up to the government because there is no way for the private sector to provide them equitably (national defense, education, healthcare, civil defense, regulation, currency, etc.).

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      • You do not support liberty, then. And you already knew that, so don’t bother trying to lie.

        Your ilk is precisely the disgusting, anti-human evil force in this world causing the problems from which we now suffer.

        I don’t need your stupid suggestions to read your horribly amateur rant. In your first paragraph you couldn’t even distinguish between “than” and “then.”

        Here’s a reading recommendation – Why don’t you pick up a book on economics sometime? Or perhaps anything written by Murray Rothbard? Then, try and write something of substance – oh wait, there’s nothing of substance to say in opposition to freedom. That’s why our leaders sound like idiots.

        I would like nothing better than to live by my ideals, in precisely the “infrastructure through voluntary associations between free individuals where there is no government compulsion” that you so openly detest. When the parasitic thugs of this world give up their demands to control those who create value, those who innovate, those illustrate the brilliant capacity of humankind, THEN we will finally reach liberty.

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      • Tiffany,

        First of all, raging at me will do nothing to cover up the gaping hole in your ideology. I like libertarians on some issues (ex. drugs/drones/gay marriage/abortion), but this doesn’t change the fact that libertarians cannot fix the free-rider problem that prevents your ideas from becoming reality. Simple game theory dictates that rational actors will always want their opposition to pay the costs for things that benefit everybody, as it acts as a de-facto subsidy to everybody else–this is why the government exists in order to force everybody to contribute into the upkeep of society.

        Secondly, I have read about economics, from multiple different schools of thought–this was required of me when I got my degree. I suggest that you reread Adam Smith’s work a little before you start universally deriding the government’s contribution to society’s creation.

        Thirdly, you should really look at when innovation tends to dramatically increase in society. Such leaps occur after the national infrastructure is built and a significant portion of the population becomes better educated. Without the public schools, such innovation would be less likely to happen

        Please look at this rationally: just as socialism cannot work due to its stifling of innovation and lack of risk/reward systems, libertarianism cannot work due to its regression towards an under-developed state. What I propose is a mixed system, where everybody pays into the government in order to ensure that society remains functional enough that our economic markets can be left alone.

        What you see as liberty is simply anarchy and requires a level of purism that makes any resulting society likely to fall into feudalism (without the democratically elected government to ensure order, power becomes centralized with those who have the means of production and the weapons).

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      • Well gosh, why aren’y you living in a country with plenty of government control and shuck off those freedoms you don’t use anyways… North Korea’s supposed to be pretty cool, but if you insist the discussion is about African nations, there’s always Congo.

        Understand this: Every bit of that argument works for “other people’s freedoms” just as well. Say: Slavery.
        “Libertarianism only Exists Once Society is Built by the Government” …’Abolition only exists once society is built by government’ Except you don’t really GET your own paradigm: Society isn’t built by government. Nor is community. Those things are just people. All this nonsense about who will build the roads ignores that private road-building companies are the ONLY ONES building the roads, right now. Today.

        It sounds like the argument boils down to “Government has to make us interact, because if they didn’t, we wouldn’t know how to do it correctly”. Which sounds like a disingenuous claim that government either isn’t human, or isn’t representative of its people. The only difference between people and their government is that their government pays no penalty for being wrong with the people’s money.

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      • You have clearly read a few of my other articles, so you should already know how against government abuses and oppression I am–that said, this hasn’t prevented you from making this assertion.

        The government is necessary to provide many services and the rightful owner of the land that Bundy is illegally using. This is a simple matter of property rights, where one entity is taking the property of another without permission, and I find it amazing that somebody who purports to support capitalistic markets supports Bundy in this.

        I suggest that you read this article: http://theprogressivecynic.com/2012/10/21/why-not-to-run-government-like-a-business/

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      • “You have clearly read a few of my other articles”
        I never have, but I’ve apparently guessed well, from having this discussion innumerable times with similarly minded people.

        “so you should already know how against government abuses and oppression I am–that said, this hasn’t prevented you from making this assertion.”

        Not having read your other articles, nothing ‘prevents’ me from making an observation that your actions counter your claims. My point is simply this: You cannot have government do ANYTHING to protect its citizens, such as defending them against force, or theft, without first claiming the power to initiate force, and theft. As such, government IS a failure, and only exists due to an illusion of legitimacy. Without that illusion, but every other aspect fundamentally the same, such an organization is also called a ‘mafia’, or a ‘warlord’. An organization with that ability to defend one’s ‘citizens’, or ‘customers’ against force and fraud, and legitimacy, WITHOUT the ability to utilize it on them is never called a government.

        “The government is necessary to provide many services and the rightful owner of the land that Bundy is illegally using. This is a simple matter of property rights, where one entity is taking the property of another without permission, and I find it amazing that somebody who purports to support capitalistic markets supports Bundy in this.”

        Government has no ‘rightful’ claim to the land Bundy is using. No other person or group of people can circle a section of a map and say “we own this”, without a better basis for that claim. Government not only DID that, but then left it abandoned like a car, broken down by the side of the road. Government’s OWN rules say that abandoned property is no longer owned by the original owner, and despite Bundy’s family having achieved ownership in the traditional manner: Homesteading, people are still taking government’s claim at face-value, without ever asking how THEY acquired title to it. Government, despite your claims, is not necessary to provide ANY services, ever. Any services it does, it took the market from others, by law, and as such, “by force”. I suppose Lysander Spooner came by his anarchism honestly, when the government legislated his attempt at a postal service into outlawdom.

        “I suggest that you read this article: http://theprogressivecynic.com/2012/10/21/why-not-to-run-government-like-a-business/

        “The purpose of a vast majority of corporations is to make a profit for its investors.” …No mention in your analysis of how that’s done. Economics 101 should not be thrown out just because one thinks they’ve moved past it… Supply and demand requires a demand. If a thing is wanted, that means people are willing to pay for it. If a thing is NOT wanted, who are you to force it on them, undemocratically? What do you call a company who does things that people don’t want? You don’t – It’s out of business.
        What do you call a government that does things that people don’t want? Government.

        All I advocate is this: You deserve to be FREE. Safety is an illusion, convenience can be provided by the private sector, but freedom can only be achieved through REMOVING government. At this point, I usually get objections about societies with no rules, but anarchism isn’t ABOUT ‘no rules’: it’s about no RULERS. Nobody ABOVE rules. And if you think we have rule of law today, check to see what happens when a cop breaks the laws. It’s not what happens when you do.

        To mention the profit-motive of a private prison system is to ignore that the same motive exists for the PUBLIC prison system. Jailors, guards, construction, prosecutors, parole officers, these people all vote. The private prisons don’t even have room to exist if, for example, you got rid of the prohibitionary laws with no victim.

        To claim that the poor will be plowed under in a private society with no government is to be ignorant of what prevents people from working, and what motivates them to start. Minimum wages mean that if what I produce isn’t worth, say, $10.00/hr, it’s not worth hiring me, as long as he’s threatened with prison, if he hires me for less. But if what I produce is worth $6.00/hr, and there’s no government, you could at least pay him $5.00/hr, and then he’d be employed, and you’d get some chore or another done for you. All the rhetoric about the rich running things ignores that the rich need things made for them too, and the guy in the Lamborghini plant has a family to feed, too. To presume that only government standards keep companies producing good and safe products is to ignore that, given the existence of Hyundai, people still purchase BMWs for 3 times as much, and BMW isn’t driven out of business.
        But understand: If BMW fundamentally miscalculates what people WANT to receive, THAT will drive them out of business. Government will simply pass the cost along to you, if they’re wrong… and they’re wrong quite often. For those businesses who DESERVE to go out of business? Somehow THOSE are the ones government is protecting. You may need to review why this happens, and what message it sends to them.

        Remember such things as “Governments exist for the sole purpose to serve their citizens’ interests.” when you try and explain wars. It’s not RIGHTFUL to murder other people because it’s in these people’s “interests”.

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    • This article raises what seems to me a point that I haven’t often seen addressed by those who advocate adopting Libertarianism on a national scale. How exactly do Libertarians see this conversion (or reversion, as they would probably say) playing out? For example, it’s an easy matter to say “all roads should be private” and list all the reasons why this might be a good thing. But seriously, how do Libertarians see this working in the case of the already-built interstate highway system? If the goal is to minimize/eliminate government, who exactly would preside over this sale? And once that issue is resolved, how exactly would the profits of this sale be distributed? Not to the government surely, since the whole point of Libertarian privatization is to eliminate the government’s role entirely. So who would receive the profits from this sale? All citizens? How would these profits be distributed? And if distributing profits from the sale of a public asset is indeed the solution, I have to say that it sounds awfully redistributionist to me. And isn’t redistribution of wealth one of the things that Libertarianism seeks to avoid?

      Libertarians usually have ready answers for most questions about government, so I’m looking forward to reading your thoughts on this matter Tiff!

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      • Er, a sentence got left out by mistake. Since there doesn’t seem to be an edit function, please insert the following:

        Should the existing interstate system be privatized?

        (the above sentence should go right before: “If the goal is to minimize/eliminate government, who exactly would preside over this sale?”)

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      • As a simple answer to your question: Libertarians DON’T broach this subject and naturally assume that entities in the private sector will find a way to buy the roads and turn them into a competitive venture.

        Libertarians want to eliminate government, but they really don’t care who gets what and how things are run in the immediate aftermath–their ideology compels them to believe that the “invisible hand” will result in things becoming more efficient and cheaper over time. Basically, they think that the state should simply hold a fire-sale of public services where bidders essentially hold an auction for public utilities; once this auction is over, market competition will (theoretically) allow the best owners to cannibalize their fellows.

        While I wholly disagree with this progression, this is roughly what Libertarians theorize as the natural extension of their policy trajectory:

        Deregulate -> Privatize -> Darwinian competition between companies -> Libertarian free market makes everybody happy -> Explosive economic growth

        Here is what really happens:

        Deregulate -> Privatize -> Monopolies form -> Private interests begin milking the consumer -> Corporate feudalism begins to take power -> Economic collapses start as demand plummets

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  2. I agree that libertarianism is a ridiculous, spoiled child philosophy – “anarchy for everyone but me”. However, I had to stop reading after the second or third English error. With such a poor grasp of the English language I am unable to begin supporting what you are saying. Even if you have good ideas, stating them in such a poor manner undermines your argument before you even get to make it.

    e.g.:

    “society’s needs can be better met through the market then through government programs”

    THAN should be used here. “Then” means that something follows something else.

    “I often find myself agreeing to many libertarian ideas”

    Agreeing WITH. If you agree TO something, it is followed by an action – I agree to do something. I don’t agree to your ideas, I agree WITH your ideas.

    “Once the government in these societies eventually build the national infrastructure”

    eventually BUILDS. government (single) builds. governments (plural) build.

    I would go on, but it hurts my brain to read your “writing”.

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      • The answer to your question is: you

        In wanting to build your libertarian paradise in an already developed country–you know, one where a national infrastructure is already in place due to those horrible taxes–you are wanting to use tax revenue while remaining ideologically “pure.” Your libertarian ideals can’t build anything from scratch, thus you are forced to convert an existing country to fit you unrealistic ideals.

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  3. If you’d bother to read/research, you’d know that 100% of income tax goes to pay a small fraction of the interest on the nation’s “debt” to the thieves over at the “Federal” Reserve.

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  4. I take issue with a few claims made in this article.

    There seems to be a general sense that libertarians somehow believe that liberty is the only factor determining the wealth of a country. Of course that isn’t true. If you look at how impoverish Somalia was before its central government collapse, you probably aren’t surprised at the state it is in now. (Also see http://mises.org/daily/5418 ) Freedom doesn’t instantly provide wealth. And freedom isn’t the only factor that determines the rate of economic growth. Lots of other factors matter, such as cultural values, natural resources, opportunities for division of labor and trade (both domestic and foreign), etc. Somalia actually did fairly well without a central government, if you compare it to similar African nations.

    I think the reason a lot of Libertarians don’t just move to Somalia is that they would rather live under “tyranny” than take a huge cut in their standard of living. Peter Thiel believes it is more expensive to build new infrastructure than to reform existing countries: https://www.youtube.com/watch?v=KgH7Lv2gQdk (it’s near the end in with the questions). A lot of people don’t have skills that earn much money in Somalia. I’ve also heard it is very difficult to buy land there, mostly because the locals rarely sell; but I’m not sure about that.

    I also don’t think it is accurate to describe a lot of places as “small-government.” While the governments are less powerful than the USA, they are still usually powerful enough to coerce individuals. There are many countries with lower taxes, but in these countries it is often not possible to adequately protect property rights. The governments (like they usually do) insist on a monopoly of force, and so one cannot even simply hire his own security to protect his property. The ability to protect one’s private property is essential. Without it, there will not be economic growth. In short, even though the total government is smaller in many places, USA governments do a comparatively good job of protecting property; that counts for a lot when it comes to economic growth. I think the various “freedom indexes” that exist represent this fact.

    In addition, many places with “small-government” do not have good mechanisms for influencing the governments toward adopting pro-freedom policies.

    I believe this statement is completely wrong: “Primary among these flaws is a fundamental lack of understanding of how a society’s infrastructure develops and is maintained.” Libertarians do understand very well how most infrastructure was developed and maintain in 1st-world countries. They know that it was either built by the government, or built by industries highly regulated, subsided, taxed, etc. by the government. In fact, most libertarians I know understand this a whole lot more than the average person. What I think you really meant to say is probably something like, “Primary among these flaws is a fundamental lack of understanding of how impossible it is for a society’s infrastructure to be developed and maintained in a purely free market.” That’s a fair criticism; the statement from your article is not.

    “…libertarian movements only develop after the state infrastructure has formed…” This isn’t really true. There has been a libertarian movement in the USA since before it was formed. It didn’t really have much infrastructure to speak of at that time.

    Ultimately, I think the article is a little more negative than it should be. Let’s do the 95% of things that we agree on, then we can fight about the last 5%. Based on what you’ve said, you probably agree with libertarians’ moral argument against government-funded infrastructure. You are simply claiming that the free-market can’t build infrastructure, and the utilitarian thing to do is to have the government do it. Thus, I’m guessing that if somehow a person could “prove” to you that the free-market can build infrastructure, you’d be happy to support the libertarian position on this issue. I can certainly understand and relate to that position.

    But since you brought up the topic, I will make a brief attempt to argue that free markets can in fact handle infrastructure. First, I should note that it isn’t really realistic to expect libertarians to be able to point to modern examples. Markets today are highly regulated. Governments provide so many roads “for free” that it pretty much impossible to build a road profitably. Governments regulate energy so much that it isn’t possible to build a “free-market” oil pipeline or electricity grid.

    One of the best historical examples is Great Northern Railway: http://en.wikipedia.org/wiki/Great_Northern_Railway_(U.S.) It was one of the (if not the) most successful railroads of its time, and it was the only one built without government funding. It covered a huge area. It defies most of the logical arguments that claim that building private transportation isn’t possible.

    I would also recommend you take a quick look through this article: http://mises.org/daily/5266/
    While it doesn’t directly address your claim that the free market wouldn’t build infrastructure, it does provide examples of relatively unregulated companies building infrastructure.

    In conclusion, I think it is quite fair for you to have doubts that a society without government would develop infrastructure. After all, we don’t have any really good examples of it happening. But I think you are writing off the possibility too quickly. We do have lots of examples of infrastructure being built without direct government involvement. I think that warrants you admitting that it at least might be theoretically possible.

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  5. Josh, although you make several valid arguments concerning what you call “libertarians”, I think it is important to at least mention the fact that the libertarian philosophy includes a rather diverse set of thoughts and ideas, i.e., libertarian socialism, left libertarians, right libertarians, anarcho-capitalists, anarcho-syndicalists, minarchists, market anarchism, etc. I would suggest that the current predominant libertarian ideology is either Minarchist or Anarcho-Capitalist in which case minarchists favor a limited government. The message of liberty and the non-aggression principle are the foundation of libertarian philosophy. I don’t think anyone can argue against maximizing liberty or opposing the initiation of force. Do you?

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    • I wrote this article with the mainstream American libertarian movement in mind (as you mention, a mixture of miniarchism and anarcho-capitalism).

      As to the non-aggression principle and the idea of liberty: these are wonderful concepts in theory, but they break down in practice.

      The non-aggression principle would work if everybody were moral, but this is not the case. As there are immoral actors in society, some monopoly of force is necessary to enforce order and ensure that these elements don’t act in a predatory manner towards others; this, in itself, would be force, thus the non-aggression principle would not be implemented.

      Liberty is a wonderful ideal, but it lacks a unified definition–in addition to this, negative liberties and positive liberties almost always conflict and create a situation where society must prioritize. I go into this further in the following article: http://theprogressivecynic.com/2013/05/10/the-differing-definitions-of-liberty/

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