The first job in that task, I would argue, is for the true liberal is to reassert the fundamental liberal nature of true liberal radicalism to both friends and critics.
Samuel Freedman published a subtle and sophisticated philosophical reflection on “Illiberal Libertarians” (2001), but his basic point was raised in a more popular treatment by Jeffrey Sachs in an essay titled “Libertarian Illusions” (2012). After reading Sachs’s understanding of libertarianism, there should be no doubt that extremely intelligent folks misrepresent the classical liberal and libertarian position all the time in our current intellectual climate of opinion.
Simply pointing out what is wrong with others who read our works is not very helpful.
Liberalism in the Modern World
Why would Sachs believe that “Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable – are all to take a back seat.” Did he read that in Adam Smith, in J. B. Say, in J. S. Mill, in F. A. Hayek, in Milton Friedman, in James Buchanan, or in Vernon Smith? Deirdre McCloskey perhaps more than another other contemporary scholar is really trying hard to set the record straight on these issues, but we need more voices to assert the firm commitment to liberal virtues in the classical liberal and modern libertarian project.
Sachs needs to read McCloskey if he hasn’t done so, and if he has read her to rethink what he thinks about the libertarian project, but those of us who share McCloskey’s commitments have to make it easy for folks like Jeff Sachs (or Samuel Freeman) to read our liberalism, rather than making it difficult. We too often make it difficult due to certain habits of thought that crept into the liberal project during the second half of the 20th century.
Simply pointing out what is wrong with others who read our works is not very helpful. We have to ask self-critically how can our position be so misconstrued. What failures in thought and communication could we possibly be committing? And, to ask the even deeper critical question, what in our classic texts lead to this conclusion?
Both Freeman and Sachs have more of a leg to stand on as they distinguish in their own ways between philosophical positions and practical positions on the one hand, and between classical liberalism and modern libertarianism on the other. What they are countering is in their mind a common fallacy which is to read modern libertarianism as a refinement and extension of classical liberalism.
Libertarian, to many of us, is just a term invented after WWII due to the corruption of the meaning of true liberalism by the progressive establishment in the first half of the 20th century – especially in the US. This is how we see it, so their reading is jarring at first. Many would see Nozick, for example, as a modern restatement of Lockean liberalism; Hayek as a modern restatement of the liberalism of Smith and Hume; and Buchanan as a modern restatement of social contract theory and the project of the US founding fathers in constructing a representative constitutional democracy (see Boettke 1993, 106-31).
Liberalism and Humanity
Liberalism is about basic human equality, of seeing each other as one another’s equal.
But not so fast, Freeman and Sachs contend. Liberalism is about basic human equality, of seeing each other as one another’s equal. And, of course, they are right. But as they see it, libertarians place liberty above all other social values, and they argue for the sanctity of contracts above all else.1
This could, and does in their reading, lead modern libertarians to hold rather illiberal positions. Rather than basic human equality and treating one another as equals, the commitment to property rights and freedom of contract can result in the exercising of dominion by some over others. Rather than breaking the bonds of oppression, libertarianism can strengthen those bonds, and in fact, be responsible for the introduction of new bonds of oppression.
And, we must admit that in the critique of the progressive establishment and its demands for encroachments on private property and the freedom of contract and freedom of association, libertarian writers have often taken a rhetorical stance that places priority of the sanctity of property and contract, and a defense of tradition and the parochial positions that many hold dear due to the accident of birth, family, conviction, and perhaps even considered reflection on personal experience.
But critical to our discussion, whatever reasons we hold parochial beliefs, to hold them at the level of the framework is to not only look inward to in-group mores and practices, and askance at out-group others and their beliefs and behaviors at the individual level, but to empower those in power to say NO for others. Whereas, if you limit parochialism to the level of the individual and group, the costs of saying NO is borne by them, and others remain free to decide for themselves whether to say NO or YES to possibilities for mutually beneficial relationships with others of social distance, whether small or great.2
Emphasizing the right to say NO results in a categorical manner has been deployed in some writings as a form of “litmus test” libertarian rhetoric which is particularly unhelpful for thinking about what rules of social interaction enable us to live better together than we ever could in isolation.
The intellectual exercise of demonstrating logically the most personally obnoxious position one could hold with respect to liberal virtues and sensibilities from the Non-Aggression Axiom, and then championing the “right” for people to hold that position as a libertarian is not the same project as figuring out the rules of just conduct in a world where our bumping into our neighbors compels us to bargain with them so we can live together and pursue productive specialization and peaceful social cooperation.3
The “litmus test” libertarian can take great pride in being a contrarian and shocking readers, but this “pride” is a result of misconstruing the art of controversy in political economy and social philosophy. It isn’t a matter of marketing to say, we don’t want to gratuitously “shock” readers, but instead want to “invite” them to an inquiry of mutual interest to us both. Inquiry implies you are thinking; still in the process of learning; finding joy in figuring things out, while shocking implies possession of truth and your joy is found in exposing errors and catching others engaged in presumed loose thinking.
Inquiry requires hard thinking that is still ongoing about issues that are complicated, shocking implies your thinking is over on this topic and you assert your privileged understanding over others. Inquiry is a conversation among adult learners – life-long learners, shocking is for children who are content with the simple and the silly. Those who shock could never be that comfortable with the liberal claim that out of the crooked timber of humanity nothing straight can ever be made.
Mises also argued that liberalism must be intolerant of intolerance.
Libertarians and Tolerance
There are a multiplicity of reasons why the liberal espouses virtues of openness, of acceptance, of above all else toleration.
As Mises wrote in Liberalism, “what impels liberalism to demand and accord toleration is not consideration for the content of the doctrine to be tolerated, but the knowledge that only tolerance can create and preserve the condition of social peace without which humanity must relapse into the barbarism and penury of centuries long past” ( 1985, 34).
Of course, Mises also argued that liberalism must be intolerant of intolerance. Those who seek to express their convictions through violence and disturbance of peace must be rebuked. The answer, however, is to be found in the Liberal principle of tolerance and the free flow of ideas and beliefs.
If the Liberal principle of toleration makes it impossible to coerce others into one's cause, it is also makes it impossible for other causes to coerce you. Even zealots, Mises reasons, must concede this point.
But, the rhetoric of “litmus test” libertarians celebrates not the liberal virtues but the right of the individual to be closed, to reject, and to be intolerant. Again, if this right is exercised only at the level of the individual, then they will pay the price for their choices, but if it is allowed to creep into the framework of the system, then others will be forced to pay the price despite it not being of their choosing. Rather than err in this rhetorical manner and waste intellectual effort in deriving a logical case for the right to be illiberal in their beliefs and practices with others, I would suggest that serious thinking by true liberal radicals must emphasize the positive aspects of human sociability, of cooperation with those of great social distance, and of the civilizing aspects of commerce.
The classical liberal political economists treat the individual not as atomistic, but as embedded within social settings.
The deux-commerce thesis from Voltaire, Montesquieu, and Smith needs modern advocates in addition to McCloskey that will address the questions of globalization, of immigration, of refugees, of the possibility for mutually beneficial exchange with those who think differently, who worship differently, who live differently than you, as well as the nuts and bolts issues that are tied up with world-wide commerce in monetary policy, fiscal policy, and international law.
Our modern understanding of the technical economics, the structural political economy, and deeper moral philosophy of Adam Smith is so flawed that such a basic common concern of the Scottish Philosophers as that of creating the institutional conditions for a civil and compassionate society is lost in the rendering. Hume’s focus on private property, the transference of property by consent, and the keeping of promises through contract are not rules that only benefit one segment of society at the expense of others, but instead form the general foundation for civil society and peaceful social cooperation.
Smith’s analysis of the wealth of nations is not ultimately measured in trinkets and gluttonous acts of consumption, but by a rising standard of living that is shared by more and more of the general population.
It is an empirical matter as to which set of institutions best achieves that task. But the concern with raising the living standards of the least advantaged in society is never far from view in any careful reading of liberal political economy from Adam Smith to Vernon Smith. Going back to Jeff Sachs caricature of libertarian economics, in other words, I am arguing he should know better. And so should others in philosophy, politics, and economics.
The atomistic model of man – the caricature of neoclassical economics — has nothing whatsoever to do with liberalism as understood by the classical political economist or the modern descendants of the mainline of political and economic thought who get lumped in with the modern libertarian camp, whose critics want to characterize by what I have called “litmus test” libertarianism.
Let me state this as clearly as possible, “litmus test” libertarianism does not represent libertarianism, it was a unique divergence at a moment in time. The respective efforts to build architectonic systems in applied ethics must be rejected as an error in thought.
Consider the most respected philosophical voice in libertarian thought, Robert Nozick. A careful reading of his classic Anarchy, State and Utopia will reveal a deep commitment to “invisible hand” theorizing, rather than the logical derivation of libertarian positions from “rights.” Of course, Nozick postulates “rights,” but his analysis in all three sections of his work is grounded in process thinking, the most developed of which is economics and the theory of contestability. He relies on “rights” style of arguments within his critique of Rawls and social justice, but that critique is also bolstered by the economist’s argument about the relationship between exchange, production and distribution, and the mechanisms associated with payment of the factors of production, and the lure of profit and the penalty of loss.4
The classical liberal political economists treat the individual not as atomistic, but as embedded within social settings – in families, in communities, in history. Yes, there is both the self-interest postulate and the invisible-hand theorem, but these are not understood as the conventional critic wants to present them.
The mainline of economic thought from Smith to Hayek has a rational choice analytical structure to the questions of the logic of choice, but it is rational choice for mortals, not robots. And there are invisible hand processes discussed throughout the various works, but they depend on an institutional context to provide the filter processes which dictates the equilibrating tendencies exhibited. In short, the mainline of political economy from Smith to Hayek is one that does rational choice as if the choosers are human, and institutional analysis as if history mattered. No atomistic, ego-centric, prudence only analysis is to be found in this work properly read.(Footnote 5)
Furthermore, this mainline of political economy approach while rejecting the moral claims to resource egalitarianism, is firmly grounded in analytical egalitarianism.
Anyone, who challenges the analytical egalitarian perspective is subject to scorn by Smith – e.g., his proposition that the only difference between the philosopher and the street porter is in the eyes of the philosopher, or his warning that I cited earlier about the statesman who attempts to out-guess the market would not only assume of level of responsibility he is incapable of judiciously exercising, but also would be nowhere as dangerous as in the hands of a man who thought himself up to the task.
Hume and Smith presented a structural argument in political economy; an argument intended to discover a set of institutions where bad men could do least harm if they were to assume positions of power.
As Hume put it, when we design institutions of governance we must presume that all men are knaves. And in a move that anticipated the modern political economy of both Hayek and Buchanan, Smith basically argued that our knavish behavior manifests itself in either arrogance or opportunism.
But the emphasis I have provided so far is on the restraints that classical liberals hoped to establish on the abuse of power by political elites. However, it is just as important to stress the emancipatory aspect of the doctrine as well.
As Hayek writes in his essay “Individualism: True and False,” Smith and other classical liberal political economists were concerned “not so much with what man might occasionally achieve when he was at his best but that he should have as little opportunity as possible to do harm when he was at his worst.”
Hayek continues: “It would scarcely be too much to claim that the main merit of the individualism which he and his contemporaries advocated is that it is a system under which bad men can do least harm. It is a social system which does not depend for its functioning on our finding good men for running it, or on all men becoming better than they now are, but which makes use of men in all their given variety and complexity, sometimes good and sometimes bad, sometimes intelligent and more often stupid.” And Hayek concludes, “Their aim was a system under which it should be possible to grant freedom to all, instead of restricting it, as their French contemporaries wished, to ‘the good and the wise’” (emphasis added).
The difference in judgment between Hayek and Sachs is not one of philosophical concern with the least advantage, but an empirical assessment of what system best provides “Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable.” The liberal vision has been throughout its history that sought to find a set of institutions that would produce a society of free and responsible individuals, who have the opportunity to participate and prosper in a market economy based on profit and loss, and who live in, and are actively engaged in, caring communities.
This ultimately is an empirical question. Empirical questions cannot be answered philosophically, but only through careful and thorough scholarship. And that means that we must push the conversation about compassion, justice, civic responsibility, honesty, decency, humility, respect, and a concern for the poor, the weak, and the vulnerable, beyond romantic poetry and to hard-headed institutional analysis.
Compassionate concern for the least advantaged must always be disciplined by the analysis of how the institutional environment within which we live together structures the incentives actors face in making decisions, and mobilizes the dispersed information throughout the social system that must be utilized in making decisions and learning from social interaction.
Liberalism constitutes an invitation to inquiry into the rules of governance that enable us as fallible but capable human beings to live better together; to realize the gains from social cooperation under the division of labor. True liberal radicalism exalts liberal virtues, and those liberal virtues undergird the institutions of liberal political economy.
- Hayek (1960, 29), though, argued that: “Liberty is essential in order to leave room for the unforeseeable and unpredictable; we want it because we have learned to expect from it the opportunity of realizing many of our aims. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.”
- On the importance of the distinction between the general framework and particularly practices within the framework see Nozick, Anarchy, State and Utopia (1974, 297-334). And within the framework the critical question is the viability of exit as discussed in Kukathus (2003).
- The bumping into neighbors metaphor is from Schmidtz’s brilliant The Elements of Justice, as is the essential issue of the right to say NO to offered terms of exchange. Schmidtz, though, in my opinion, does not come close to committing the “litmus test” rhetorical error in social philosophical discourse. His is an inquiry in the moral sciences, and not an effort to “shock” and “test” his readers. That error is to be found in many other libertarian writers such as Rothbard, Block, Hoppe, etc. Hoppe’s work on immigration, in particular, is a prime example of this error as well as blurring the line between the framework of society and individual behavior within a framework. This is why his work and this confusion between framework and individual action can inspire the odious Alt Right in Europe and the US. The inquiry into how to square individual autonomy with human sociability, and the working out of social rules of engagement to resolve conflicts and enable cooperation, is a significantly different intellectual endeavor than attempting to deduce a complete system of applied ethics from the Non-Aggression Axiom. This isn’t a marketing problem, it is a thinking problem – to pursue one precludes the doing of the other, and that choice has consequences for thinking in political economy and social philosophy. It is also, I’d add, an intellectual temperament issue and thus ultimately a reflection of the liberal mind-set or attitude. Illiberalism is consequence of styles of thought.
- Tyler Cowen’s “Stubborn Attachments” (2017) argues for a position of what he calls 2/3 a utilitarian, and 1/3 individual rights. This position of Cowen’s is, I would argue, also reflective of Nozick’s argumentative strategy and weight in his classic work. Furthermore, I think once one reads Cowen’s presentation and thinks about the liberal tradition in political economy, this is basically the position articulated from Smith onward. Individual freedom or Liberty, is both a primary value, and an instrument for achieving other values, there is a positive feedback loop built into the theory and in the historical narrative about the correlation between economic and political liberalism. In “The Liberty of Progress,” Rosolino Candela and I argue that there are increasing returns to the accumulation of liberties that have been overlooked or poorly understood in the discussions pertaining to the relationship between liberty and economic growth and development (see Boettke and Candela, forthcoming).
- See Boettke, Living Economics (2012); Boettke, Haeffele and Storr, eds., Mainline Economics: Six Nobel Lectures in the Tradition of Adam Smith (2016), and Mitchell and Boettke, Applied Mainline Economics: Bridging the Gap Between Theory and Public Policy (2017).
Excerpt from a paper prepared for the special meeting of the Mont Pelerin Society in Stockholm, Sweden, November 3-5, 2017.