Beware the Libertarian Seduction

It’s easy to see the appeal of the Libertarian Party: maximum freedom; minimal government.

It's a time when Republican conservatism suffers under the 50-year-long capture by the business class. Democratic liberalism struggles to balance good governance with excessive regulation and expenditures on social goods. The life-time-member rolls of the two national parties wane each cycle; and the political middle grows, but lacks leadership. Such dissatisfaction breeds opportunism for a third party.

Enter the Libertarian.

Libertarianism casts itself as an innovative middle ground between the Democratic and Republican parties. It blends major platform tenets of each, but in a way strictly obedient to a central principle: government is not the greatest defender of individual freedom, it is the greatest threat to it.  In promoting its platform, it invokes our shared American mythology more than the other two parties ever have. It's hard not to buy in with a brand painted in liberty, equality, rights, security, privacy, free expression, and free markets.

Not just freedom, but maximum freedom. In general, Libertarians have no issue with gay marriage, recreational marijuana use, or unbridled gun rights. They defend individual rights and equality, and abhor taxation and civil forfeiture as theft by government.

Not just small government, but minimal government. Reminiscent of Norquist’s bathtub metaphor, Libertarians would shutter most federal government programs, end major entitlements, and revoke nearly all regulations.

Many Libertarian principles are positive, reasonable ideas that echo the spirit of the Constitution and Declaration of Independence: freer elections, the end of partisan gerrymandering, and the reduction of unnecessary foreign interventions and domestic surveillance. Yet they also play off popular negative perceptions of an over-sized government that over-regulates, over-taxes, and over-favors special interests.

At first glance, the Libertarian Party is an intriguing alternative to the two political juggernauts. But we need to look at the core of the libertarian movement to understand why it’s not the solution it purports to be.

Before there was the Libertarian Party, there was the libertarian political philosophy. It is derived from the same egalitarian philosophies that inform the modern Republican and Democratic parties. But libertarianism gives particular deference to the free agency of man to enter into contracts.  The only individual sovereignty a libertarian is willing to give up is to a small government whose main role is to protect individuals from harm, to adjudicate contracts, and to secure the borders.  In practice, this amounts to police, judges, and a military.  Public goods only come from individuals entering into a contract to pool resources and labor.

This theme permeates all their platform issues—healthcare, marriage, education, drug enforcement, labor, trade, and taxation. 

With any contract, however, the key is leverage; and the devil is always in the details.

Let’s say I have land that earns me $50,000 annual income from agriculture, and you have a lake that earns you $50,000 annually from a fishery. We each want goods the other has, and we each have a comparative advantage for our respective good. There are at least three options available to us: one, we barter with our respective goods. Two, we use our incomes to purchase goods from each other. Or three, we enter into business sharing the goods and selling them to other customers who want to purchase them. We must both agree to the terms, and we have the option to walk away from the deal.

This is a classic free market example whereby two sovereign individuals enter into a contract for mutual benefit, and into which Libertarians want zero government involvement. They don’t want government regulating the goods or the transaction, nor taking a share of the transaction value through a tax.

Unfortunately, this example isn’t representative of the 350 million Americans who typically lack a comparative advantage.

A more realistic transaction is one where I operate a business worth a couple million dollars, and you’re a young laborer without wealth. I have the income to buy what I need, but you don’t.  I’m in need of labor, and you have labor to offer. The negotiation of this contract will go very differently.  I’ll offer you the lowest possible salary for the labor I need.  If you don’t accept the terms, I can either offer you more salary, or seek out another laborer willing to accept the offer. The problem for you—and the good thing for me—is that I have the leverage, and there are a lot of other people with labor to offer.

If you play this out across the entire economy, you get the expected race to the bottom for the price of labor. And since individual labor is not a great comparative advantage—everyone has some labor to offer—individuals cannot leverage their labor for better salaries or working conditions.  This is why unions started in the first place.

Libertarian principles state that “employment and compensation agreements between private employers and employees are outside the scope of government”. So if we layer in the other Libertarian conditions—the abolition of the minimum wage, full-time hour limits, workplace safety requirements, sick time, and other benefits—you get the same environment ripe for worker exploitation that the United States witnessed over 100 years ago.

It easy to be skeptical that we’d return to such times. Yet, you don’t have to go far to see the modern Chinese factories where workers live, work, and recreate in the same complex. A complex where they deploy suicide nets for workers who would rather kill themselves than find another job. Ask yourself who has the leverage in that employer-employee relationship.

"In the end, the Libertarian model erodes the collective leverage that government provides workers, families, and consumers who do not have it otherwise."

In a libertarian world, the quality of life is determined by the contracts you negotiate. Applying for a job, getting an education, renting an apartment, or buying food and goods. The argument is that individuals would be free from unnecessary government restrictions that make transactions more expensive or impossible, but this would also remove the protections put into place over the past century.

Nothing would prevent monopolies or predatory lending. Nothing stops discrimination against minorities for jobs, wages, or apartments, or the return of exploitative share-cropping. Expand that model to manufacturing or sales, and it could remove the concept of wages altogether.

Public education would revert to homeschooling and community school-houses. Imagine high-quality education accessible only through private institutions to families who can afford them.

The lack of food, drug, and product safety would transport us back to the days of Upton Sinclair’s Jungle.

Without environmental regulation, pollution on private land would be off limits to government. The Tragedy of the Commons would bred the same degradation that faced the nation before the landmark regulations of the 20th century. 

For a party founded on equality, Libertarianism ignores the fact that we don’t come into this world equal, at least not in terms of physical ability, opportunity, and wealth. Such disparities shift leverage to those born with preexisting wealth and power. The concept of “willing individuals entering contracts" becomes highly subjective when individuals have no leverage to demand better terms to the contract.  In the end, the Libertarian model erodes the collective leverage that government provides workers, families, and consumers who do not have it otherwise. The inevitable concentration of wealth and power permits an aristocracy to establish and enforce these libertarian rules. Overcoming that would be herculean; our past knows.

There are legitimate arguments that American governance is captured and broken.

But make no mistake, Libertarianism is not a viable alternative.

We cannot forget the long history during which citizens fought for their right to pursue happiness free from exploitation. It’s a false dichotomy that we either have small, effective government or big, ineffective government.  There is a reasonable middle. Attaining it requires a new conversation about how.  It’s a conversation that pushes us beyond the over-simplified conceptions of American mythology and focuses on the pursuit of good, collective self-government.

Libertarians truly want to protect individual freedom and promote the success of families. The outcomes mentioned here are not what they have in mind for America. But these are the inevitable outcomes of an economic system founded on Libertarian principles.

Do not be seduced.