Conscious Choice: Why I'm Not a Libertarian

April 1999

Why I'm Not a Libertarian

by Travis Stansel

"Take the World’s Smallest Political Quiz!" shout the literature and web sites of the Libertarian Party. "Do you believe laws regarding consensual sex between adults should be repealed?" Yeah, obviously. "Do you believe government should not control the press?" Well, yeah, but what about public broadcasting?... (don’t ask). Do you think drug laws do more harm than good? Yeah...

At this point, congratulations, you’re a Libertarian. But read on. "Minimum wage laws cause unemployment. Repeal them." "End taxes. Replace with user fees." And here’s where it gets good: Libertarians leave every single decision up to the nebulous demi-god called the market. If the market calls for $2 an hour labor, so be it. If the market allows racial segregation, well, that’s the market.

By some accounts everyone should be a Libertarian. The modern American government provides too little and takes too much; taxes eat away at the average person’s paycheck; many so-called attempts to regulate business are often measures taken at the behest of powerful interests looking to be protected from smaller start-ups. But while I and many others have civil, small-L libertarian tendencies, the big-L Libertarians, as evidenced by the Cato Institute and Reason magazine, confuse the interests of human freedom and liberty with those of big business. It is common sense to concede that the interests of big business, oops, "the market," and the populace do not always dovetail, that they often are at odds with one another.

Libertarians observe that the left and the right both need authorities to guide them, while the market operates on its own principles, the "invisible hand." So when a bank merges with another bank and fires workers or cancels their retirement plans, the CEO is a free-market hero. But what market is at work here? I see the work of a small group such as a board of directors all out to increase their own wealth. The invisible hand theory, when Adam Smith said it could be justified, was done so because it had a beneficial effect on society. Yet it is hard to see just what social gains are made from this type of deal.

In fact, Smith’s "invisible hand" theory was but one part of his book The Wealth of Nations. Much of this book actually argued against free trade for the reason that it promotes poverty among domestic workers. But Libertarians pick and choose what they see as flowers among weeds. Smith railed against textile merchants, whose imports undercut the price of domestic fabrics, hurting "poor people, women commonly, scattered about in all different parts of the country, without support or protection."

The 2500-year-old Tao Te Ching is another text from which Libertarians draw inspiration. But it is hard to imagine Lao-Tzu’s mountain hermit reincarnated as a management consultant. "When taxes are too high, people go hungry," says Lao-Tzu. He continues, "When government is too intrusive, people lose their spirit." There’s a lesson to be learned here for sure, but it’s not only about government, it’s about all forms of power.

Today the government shares power with corporations, corporations which, according to the United States Supreme Court, have the same rights (though not the same obligations) as human beings. The daily life of most people is affected more by the corporations they work for than the government, which, while it can raise taxes, has no power to forcibly lower wages for the same work.

When mailroom workers are fired and replaced by subcontractors (often in fact the same workers) with lower wages and skeletal benefits, does this not have the same effect as a raise in taxes or a governmental intrusion? When the freedom of many is curtailed for the gain of few, then it is time, as Adam Smith opined, for the government to step in. Smith wrote, "Those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments."

Libertarians confuse "the people" with "the market," as if every whim of the populace is reflected with a shift in buying habits. If this were the case advertising would merely amplify the goods and services for sale that people already wanted. Advertising would not need to stoop to the level of manipulative ads that create false personalities for products and provide solutions for problems that the advertisers themselves create.

Crude it may be, but advertising is based on the creation of insecurities, preying on fears and obscuring rational thought. As retailer B. Earl Puckett put it in the 1950s, "it is our job to make women unhappy with what they have." It is naive to claim that advertising has no effect on the psyche of the receiver or that the market merely responds to the populace and makes no attempt to shape their thoughts. Advertising creates insecurities "about such matter-of-course things as enlarged nose pores and bad breath," in the words of one ad executive.

Libertarians draw an odd distinction between people gathered into government and people gathered into a corporation. A Libertarian writer on the internet put it this way: "People are too evil to be trusted with the power of government." Libertarians "believe people will oppress and tyrannize each other if the tools (of government) are in their hands. Even wise and kind people usually do more harm than good using the violent power of government." Why is it that people cannot be trusted with the "power of government" but they can be with the power of a corporation? And what happens when corporations grow more powerful than governments, as in the proposed Multi-Lateral Agreement on Investments, which would allows corporations to sue a government if regulation hinders profits? The corporate search for profit in this case takes on the power of law, a power unhindered by democratic process.

Without laws regarding clean water or pesticide use, a consumer would need to know everything about every company that produced every item purchased in order to make a wise decision. Of course this is impossible, so price is the deciding factor. Yet price alone does not indicate the total costs of a product.The Libertarian answer is that big government stagnation stands in the way of corporate innovation. Yet a recent thesis put forth by free-trade and social safety-net advocate Dani Rodrik of Harvard University is that big government is the price of free trade, that the "social welfare state has been the flip side of the open economy" of diminished tariffs and liberalized trade laws.

Rodrik writes that those countries most reliant on trade have the most generous social welfare policies. As trade has grown, so has social spending. He writes that "the small, highly open European economies... have large governments in part as a result of their attempts to minimize the social impact of openness to the international economy." Business and free trade beget big government, not the other way around. But the present trend of liberalizing trade while reducing social spending has caused "tax rates on capital...to decrease" while "tax rates on labor have continued generally to increase." The result is in the last 30 years, the corporate share of American tax revenue has fallen from 20 percent to 12.5 percent.

Libertarians call for government to return to the size and scope it had in the late 19th century, but Rodrik notes that a hundred years ago "governments were not yet expected to perform social-welfare functions" that were "a key component of the implicit postwar social bargain...of social insurance and safety nets at home...in exchange for the adoption of freer trade policies."

Law and social policy read like a nightmare combination of the worst proclivities of right and left, taking trade policies from neo-liberalism and Darwinian social policies from the right. For example, American tax policies punish individuals and let corporations off the hook. One in 500 IRS audits is performed on a corporation. Yet a full one-half of all tax money received through audits is from corporations. As a percentage of money received from audits, individuals are responsible for far less cheating and yet are suspected of more.

Barbara Ehrenreich wrote in an essay called "Confessions of a Recovering Statist," that the "rural right-wingers" are surprised to learn that she "share(s) their outrage over random drug searches and similar intrusions...." She adds that the United States government today is "a government that offers far too little to its average citizens [and] does not provide the kinds of services that, in other nations, have helped create a mass constituency for government activism — things like universal health insurance, child care, college tuition, paid parental leave and a reliable safety net.... Hence the vicious cycle that has been powering the rightward march of U.S. politics: The less the government does for us, the easier it is to believe the right’s antigovernment propaganda; and the more we believe it, the less likely we are to vote for anyone who might use government to actually improve our lives.

And would the Libertarian-ideal private government perform any better, even economically? The evidence so far suggests that it would not. The Holy Grail of economic efficiency is undermined when corporations turn to running government services. Experiments in the privatization of prisons and other services have yielded little, if any savings. A 1996 General Accounting Office study found that a privately-run Tennessee prison saved one percent compared to the cost of state-run prisons. Lockheed-Martin, the defense contractor which last year went after a lucrative contract to manage the Texas welfare system, is notorious for its $600 toilet seats and billion-dollar cost overruns on military aircraft. General Electric, the defense contractor, media owner and financial services giant, was convicted for defrauding the defense department in 1990, and pled guilty of "fraud and money laundering and corrupt business practices" in connection with a 1992 sale of military jets to Israel.

The move toward private prisons underlines a true Libertarian paradox — the discrepancy between the profit motive and freedom. Writer Eric Bates points out in The Nation that while private prison companies see their stock rising as the trend toward privatization continues, "private prisons have the financial incentive...to lobby lawmakers for harsher prison sentences and other‘get tough’ measures. In the prison industry, after all, locking people up is good for business." An Ohio prison run by Corrections Corporation of America, the largest private prison company, faced closure in June after the escape of inmates, charges of excessive force used by guards, two violent deaths, and 13 stabbings, according to the New York Times.

I’m not a Libertarian, because I still believe that there is a public to which we all belong and in which we all should have an equal voice. I am a civil libertarian, in that I see the rights of individuals as paramount but still believe in democratic control of the government. While I don’t believe the government should wield a sword of arbitrary regulation over business, it should be ready and willing to step in when the freedom of a corporation impinges on an individual’s pursuit of happiness.

Libertarianism is positioned as the sane middle ground between socialism and conservatism, yet Libertarian free-market dogma offers not a problem-solving pragmatism, but instead a fervor that borders religion. It is based on the capitalist system with roots in Adam Smith, yet ignores the market’s moral shortcomings for which Smith prescribed government action. It espouses unlimited free trade while ignoring the social contracts and government infrastructure that offers protection for both business and individuals. Lao-Tzu answers the Libertarian privatization dogma with this: "Own no interest, and the people cooperate with each other."

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