Jim Henley: Just a Smack at Liberaltarianism

Unqualified Offerings writes:

Just a Smack at Liberaltarianism § Unqualified Offerings: I said at the time that the practical problem with Brink’s program is that there’s no serious constituency within the Democratic Party for the sort of entitlement restructuring that Brink made the linchpin of his original article. More generally, not just the Democratic Party but the country as a whole is trending “left” on economics, and has been since 2000. The southpaw candidates - Gore and Nader - pulled a majority of the popular vote that year, and while I would never argue that Nader’s votes “belonged” to Gore, the aggregate percentage shows where the country’s head was at economically. Were it not for a very famous incident involving airplanes I suspect we’d have seen Democratic pickups in 2002. If not for the fallacy of sunk costs, I suspect George W. Bush would have been a one-termer.

As it is, the Democrats can trace the moment of their revival as a viable political party to their uncompromising opposition to the President’s social-security proposals of 2005. That was their first political victory of the 21st Century and the fifty-millionth time the Donks have profited politically from “defending social security.” I say this not to pick on Brink, but just to clarify why libertarians can’t ground their hopes for liberal-libertarian concord in “entitlement reform.”

We’re entering an era where the public, according to all the polls, is looking for populist economic measures and the Democratic Party is going to give them some. Libertarians have the usual few unsatisfactory options. The first is to return to the bosom of the GOP and encourage them to thwart as much of the Democrats’ economic agenda as possible. In ordinary times I’d be all for this - sweet, sweet obstructionism. These are not ordinary times. Libertarians can’t in good conscience further the fortunes of the Banana Republican Party. Note that while Milton Friedman did meet briefly with Augusto Pinochet, he didn’t participate in Pinochet’s coup. The Caudillo Party needs to lose its fatally campy attraction to “swagger” before it can be trusted with so much as a seat on the student council in a rural middle school.

The second option is to continue to think long term, and continue to concentrate on saying the things we think are true, regardless of their present salability. (Gene Healy said this somewhere, I am certain, in response to Tyler Cowen back in March. I’m damned if I can find the right entry, though.) This is an entirely honorable course, and at least some libertarians ought to make it their main focus.

The third option is to try to coax the least damaging version of the populist measures coming down the pike, while trying to get “the left to be good on issues the left is supposed to be good on,” as Jesse Walker put it last year. That is, peace and civil liberties. I realize that the Democratic Party as a whole has done fvck-all for peace and civil liberties, but it contains constituencies that would like it to do more, and libertarians can swell that chorus. This means singing harmony with “dirty fucking hippies,” which will be hard for libertarians who are more anti-left than anti-state. But the hips, more than the self-styled contrarians who cluster around the New Republic and the Democratic Leadership Council, are the ones who really oppose preventive war, the unitary executive and the domestic security state.

As to the economic populism, the short answer is to prefer the simple to the complex. Treat safety-net measures with the least in social-engineering provisions as less bad than the alternatives. From and anarcho-capitalist perspective it’s all theft and coercion, and I’d never want anarcho-capitalists to stop making that point. But even anarcho-capitalists may decide that, given one’s choice of thievery, that some are less damaging than others. Now, the last aspect of this approach may be the most challenging, and call for the biggest break with habits of thought from the days when many libertarians thought of themselves as “small government conservatives.”

Every safety net entails moral hazard by lowering the price of imprudence. Welfare and unemployment insurance encourage a certain level of irresponsibility at the margins of the working world. Government pensions marginally discourage private retirement savings. National health insurance will breed incremental insouciance about diet and other personal habits. Plus, all social insurance eventually gets paid in taxes, either now or in eventual debt service, and ceteris paribus people would rather pay less in taxes than more. Politicians often try to control moral hazard by legislating against the “problem” behavior. Drug prohibition, twinkie taxes, workfare provisions, forced savings - all have been enacted or proposed to limit moral hazards stemming from safety-net programs, and not just by liberals. During the 1990s I got the impression that, having given up on eliminating welfare, Republicans had decided to settle for making it really annoying to be on welfare, based on the kinds of proposals they were submitting. Just within the last month we’ve seen calls for trans fat bans and other food prohibitions based on the logic that the health costs of such foods come out of the public treasury.

Traditionally the libertarian instinct, faced with an entitlement or social insurance program, has been to limit it somehow. And of course the libertarian instinct is also to reduce spending as much as possible, which moral hazard regulation does. I submit, though, that “social insurance plus moral hazard regulation” is the worst of both worlds from a libertarian perspective. The social insurance makes large claims on the public purse while the hazard regulation fills daily life with niggling restrictions. Therefore I think we libertarians should prefer more subsidized vice to more enforced virtue. The thing is, that will cost money. It will even in many cases be annoying. But a state that spends massive piles of money on social insurance is a less intrusive state than one that spends massive piles of money on social insurance while using that spending as an excuse to keep anyone from having fun.

The preceding is almost completely useless to Brink at the Obama vs. Hillary vs. Edwards vs. Richardson level. I’m a big picture guy! (For the duration of this already lengthy blog item anyway.) Nor does it offer libertarians much of a positive program for the pending populist moment. I’ll see what I can whip up for next time. BUT! I suspect Hillary Clinton is easily the worst of the Dem candidates by almost every criterion discussed above, little better than a Republican. Personally, I’m still hoping Richardson vaults into the first tier and believe he has time to do so.