A couple of months ago I wrote a post for the Technology Liberation Front offering a qualified defense Tim Wu’s book, The Master Switch. My erstwhile colleagues at TLF had taken turns lambasting the book for what they regarded as its retrograde big-government liberalism. I suggested that they were focusing too much on the rather tentative policy recommendations at the end of the book, and ignoring the excellent history and economic analysis that accounted for the first 200 pages or so of the book. And I thought that my libertarian friends were too dismissive of Wu’s central thesis: that excessive concentrations of corporate power, often with the active assistance of government, posed a real danger to individual liberty.
This conversation came to mind yesterday as I was reading F. A. Hayek’s classic essay “‘Free’ Enterprise and Competitive Order.” The essay, written for the 1947 Mont Pélerin meeting, was Hayek’s attempt to sketch out a postwar intellectual program for a liberal movement that was at that time tiny and deeply unpopular among the intellectual elite. (I’ll follow Hayek in using the term “liberal” throughout this post, but he was of course addressing classical liberals)
Hayek’s argument was that by framing their political program primarily in negative terms—as a list of things the state ought not to do—the liberals of his time had ceded major swathes of intellectual territory to their ideological opponents. He writes:
Where the traditional discussion becomes so unsatisfactory is where it is suggested that with recognition of the principles of private property and freedom of contract, which indeed every liberal must recognize, all the issues were settled, as if the law of property and contract were gien once and for all in its final and most appropriate form.
He then offers the following examples, among others, of issues that liberals ought to care about:
- Urban planning: Hayek writes that “there can be no doubt that a good many, at least, of the problems with which the modern town planner is concerned are genuine problems with which governments or local authorities are bound to concern themselves. Unless we can provide some guidance in fields like this about what are legitimate or necessary government activities and what are its limits, we must not complain if our views are not taken seriously when we oppose other kinds of less justified ‘planning.'”
- Patents: Hayek argues that “a slavish application of the concept of property as it has been developed for material things has done a great deal to foster the growth of monopoly and that here drastic reforms may be required if competition is to be made to work.”
- Corporate law: Hayek doesn’t think there’s much doubt that “the particular form legislation has taken in [the field of limited liability for corporations] has greatly assisted the growth of monopoly.” He goes on to argue that “the freedom of the individual by no means need be extended to give all these freedoms to organized groups of individuals, and even that it may on occasion be the duty of government to protect the individual against organized groups.”
- Taxation: Hayek decries the confiscatory tax rates that were in effect at the time. But he also writes that “inheritance taxes could, of course, be made an instrument toward greater social mobility and greater dispersion of property and, consequently, may have to be regarded as important tools of a truly liberal policy which ought not to stand condemned by the abuse which has been made of it.”
I don’t think it’s much of a stretch to say that “‘Free’ Enterprise and Competitive Order” was a liberaltarian manifesto written almost 60 years before Brink Lindsey coined the term. Of coure, back in 1947 there was no need to coin a term because people understood what Hayek meant when he used the word “liberal.”
One of the more pernicious influences of Rand and Rothbard on the libertarian movement was their tendency to treat every policy problem as almost reducible to a logical syllogism. Too many libertarians act as though they don’t need to know very much about the details of any given policy issue because they can deduce the right answer directly from libertarian principles. The practical result is often to shut down internal debate and discourage libertarians from thinking carefully about cases where libertarian principles may have more than one plausible application. Hayek seems to have written “‘Free’ Enterprise and Competitive Order” with the explicit purpose to combat that kind of dogmatism. He thought it “highly desirable that liberals shall strongly disagree on these topics, the more the better.”
And one way to do this is to be more ready to treat modern liberals with bottom-up instincts as potential allies rather than ideological opponents. Regular readers of the blog may notice that all four of the issues listed above are topics I’ve focused on here on the blog. And there’s a substantial overlap between these issues and the program Matt Yglesias articulated a couple of weeks ago. And of course the second and third items on this list—the use of patents and the corporate form to entrench private monopolies—were at the heart of The Master Switch. Wu and Yglesias, in short, are engaged in precisely the kind of liberal intellectual project Hayek is calling for.
Unless we can provide some guidance in fields like this about what are legitimate or necessary government activities and what are its limits, we must not complain if our views are not taken seriously when we oppose other kinds of less justified ‘planning.’”
That’s a great point. Absolutists marginalize themselves. If libertarians react with a dismissive wave of the hand any time issues like, say, urban planning are brought up, they write themselves out of the discussion. Taking part in the game and directing the outcome as much as possible does a whole lot more to advance libertarian goals than standing on the sidelines complaining that the game shouldn’t exist in the first place.
That’s not to say that every issue should be reduced to political pragmatism, but I do think it’s an important point.
I think they were being too hard on Wu. He went out of his way during the history part of his book to show that government was often a two-edged sword, sometimes freeing up a marketplace from dominance and monopoly (like in the film industry), and sometimes creating it (like AT & T and the television networks).
I think readers who digested The Master Switch in the context of Wu’s overall work don’t believe that his are “rather tentative policy recommendations.” He is a leader in a movement promoting public-utility-style government regulation of Internet service—regulation that you oppose, Tim.
If he hid his policy recommendations from readers of the book, it’s not because he’s tentative about them. What I read of it sounded like the book a politician puts out before running for president: gauzy and commonsensical, masking an agenda that wouldn’t sell if laid out in specifics.
Wu did a singularly bad job of answering criticisms put forth on TLF, which is what got me to react negatively to him. If you want a good history of telecommunications regulation, who knows why you’d go to a law professor. Gerald Brock’s “The Second Information Revolution” is good. Brock is a professor of telecommunication and of public policy and administration, with a B.A. in applied mathematics and a Ph.D. in economics. That background is much better qualification for writing about public policies around telecommunications than Wu’s B.Sc. and law degree.
Wu did a singularly bad job of answering criticisms put forth on TLF.
Can you say more about this? I remember you didn’t agree with his TLF guest post, but then that we wouldn’t have expected anything else, right? I thought his response did a reasonably good job of engaging libertarian arguments even if he didn’t reach exactly the conclusions I would have.
This is a very insightful point and I think it hits the nail right on the head. I think that in general libertarians love non-complex principles (it’s probably not a coincidence that a disproportionate number of scientists and engineers are libertarians), and things like the Zero Aggression Principle provide an elegant solution to the messy world of humanity. The obvious problems with this are (1) humans are not robots, and therefore (2) trying to reduce everything to one simple principle doesn’t resonate with most people.
Libertarian candidates will often say stuff like ‘here’s my policy on this issue’ and hold up a blank piece of paper (or something to that effect). Libertarians perceive this as “ahhh, this guy understands that government needn’t be involved in issue XYZ,” whereas everyone else perceives this as “this heartless jerk doesn’t care about issue XYZ!” As Hayek points out, by simply giving issues the respect they deserve and outlining a policy (even if the policy is ultimately one of limited government) on those issues, libertarians can go a long way in bridging the communication gap with modern day bottom-up liberals.
Yeah, in this post, he declined to respond to arguments about his book and instead attempted to redefine libertarianism. I found it pathetic, especially his sorry kidnapper/wrongful arrest comparison, which suggested that mainstream libertarians are blasé about the former and fixated on the latter.
Frankly, it’s annoying to read it again. Libertarianism is a “theory of villainization” and a “theology of blame.” Libertarians have “a deep hate for all ‘law’ or ‘regulation.'” Come off it.
As I said in the comments on that post, he thinks he’s on to some new theory of libertarianism where some really intelligent exercises of coercion (really—things won’t go wrong this time!) are okay because they can maximize his ambiguously defined sense of “freedom” (which is probably just a politically defined system of entitlements).
Wrong about what libertarians stand for—indeed, insulting to the people who have thought this stuff through—and non-responsive to the criticisms of his book. That’s . . . doin’ a bad job!
Hayek’s argument was that by framing their political program primarily in negative terms—as a list of things the state ought not to do—the liberals of his time had ceded major swathes of intellectual territory to their ideological opponents.
I think that’s right as far as it goes, but there’s something else important going on there. Hayek’s focus on patents and the corporate form actually strike me as playing to a slightly different concern. These are areas where he actually is offering a negative programme: the government has been passing legislation that interferes with competition, and it needs to stop.
It’s actually a very nice point to highlight, because what puts many smart liberals off libertarianism is the feeling that libertarian principles are only selectively enforced. Mike Konczal provides a really good example here:
http://rortybomb.wordpress.com/2010/11/22/for-respecting-contracts-and-not-respecting-contracts-in-the-foreclosure-fraud-crisis/
The argument is that some sorts of government intervention need to be minimised, but when those who have more than enough want to ride rough-shod over the law of property and contract, libertarians are often strangely silent. Whether or not it’s fair, that’s the perception, and pointing out cases where libertarians do make stands against big business (eminent domain is an obvious one) helps to combat it.
By way of warning, I’m basically a Randian libertarian.
I had some trouble with your list of “issues” that libertarians should be concerned about. You’ve provided a mixture of non-interventionist and blatantly interventionist policies – what I believe Rand would term an “intelletual package deal.”
First the legitimate items on your list: You mention corporate law as something that we could debate, and I agree. For instance, the courts could establish a different body of corporate law that redefined the contractual relationships between shareholders and executives and employees – that’s a legitimate “issue” that we libertarians could debate. (I tend to think it should be left to the courts, which have been fine-tuning corporate law for centuries in the English-speaking countries, but that’s just me.) You also identify patent law. Does a patent expire after 40 years or 50 years? Should it only be 10 years? That’s a legitimate area for debate and experiment. We could be all practical and experimental and open-minded and warm & fuzzy and try different setups. We could also debate exactly what regime of property rights, inheritance, contract law, tort law, etc., would work best in a free society. Should a surviving spouse inherit all property or only half (with remainder to any offspring)? Those are all areas of civil law that govern the contractual relationships between individuals. I don’t think Rand would in any way oppose libertarians holding differing opinions on those issues – and those basic issues of law are complicated and plentiful and could provide for plenty of rich debate. In fact, in her writings Rand noted that in a free society fine tuning such laws would be what the legislature worked on (when it convened every few years). Even the issue of whether we should have a legislature or whether all law could be made through a common law court system would be a legitimate area where libertarians could hold different positions.
But then you suddenly throw in this bit about inheritance taxes – as if how much money the state should be able to loot is just another “issue” we libertarians could debate and take different approaches toward. Whether the state should be able to confiscate 10 percent of your income or 30 percent of your income should not be a legitimate area of debate for libertarians. At that point, we stop being libertarians and start beeing lukewarm conservatives.
There are issues that are debatable because there are different ways to apply libertarian principles – then there are issues that are not debatable because the issue itself is premised on a violation of basic libertarian principles.
And if what you’re saying is that we should compromise our principles in order to gain a larger audience or gain favor with the leftist elites, I would say that we’ve been down this road before. This country was founded as a libertarian-lite society; and those few loopholes and compromises in the original Constitution were all it took to give the statists a foothold – which slowly snowballed into the current mess of pressure groups fighting to see how much loot they can get before the next election. I would say that we should advocate less compromise with the statist belief systems.
Finally, if it’s about gaining more followers, I would ask who has brought more people into the libertarian movement – Rand or Hayek?
Alano, I’d say that your use of words like “loot,” “statists,” and “leftist elites” illustrate an absolutist point of view. Why should anyone ever try to find common ground with looter leftists? This is how many people become entrenched – by using loaded terms that can’t brook any compromise. And when you’re entrenched you’re not merely unpersuaded by an opposing point of view. You’re unpersuadable.
Does a patent expire after 40 years or 50 years?
No.
Finally, if it’s about gaining more followers, I would ask who has brought more people into the libertarian movement – Rand or Hayek?
Well that clears that up. Because I did read Jim’s link to Tim Wu’s post and thought about how crass it was that Wu was accusing libertarians of subscribing to a theory of villainisation. Saying libertarians were only interested in pinning the blame on parties they’d already concluded were at fault – how did he get there? Does he not get that there are a lot of libertarians out there who share many of his normative goals but are sceptical about the ability of government to achieve them? But, as you say, odds are pretty good that most of the libertarians Wu’s met are culture warriors who aren’t actually that interested in policy.
So libertarians go wrong because they don’t want to compromise with the gun in the room using violence and coercion to get their way?