A Freed Society Would Not Be Problem-Free


Sheldon Richman

In 1970 country singer Lynn Anderson had a hit recording of a Joe South song that opened with the line:

I beg your pardon. I never promised you a rose garden.

I often think of that song in connection with the libertarian philosophy. You may be asking: for heaven’s sake, why?

Because it’s what I want to say to people who seem annoyed that freedom would neither cure all existing social ills immediately nor prevent new ones from arising. It’s a strange demand to make on a political philosophy — that it instantly fix everything that the opposing philosophy has broken. Moreover, I’m concerned that some libertarians, in their justifiable enthusiasm for “the market,” inadvertently lead nonlibertarians to think that this unrealistic expectation is part of their philosophy. Of course, that is not good because nonlibertarians won’t believe that the market would make all things right overnight, and so they’ll write off all libertarians as dogmatists.

Libertarians of all people should understand that decades — indeed, centuries — of government intervention have distorted society and the economy considerably. It’s safe to say that both would look different had that intervention not occurred. To pick one American example, the creation of an integrated continent-wide national market in the United States was in large part consciously planned by government officials (most prominently Abraham Lincoln, who embraced Henry Clay’s corporatist American System) and their corporate cronies, especially but hardly exclusively through transportation subsidies. (This is not to say they were able to dictate developments in detail; moreover, zones of entrepreneurial freedom existed, constrained though they were.) This system is American capitalism, which is to be distinguished from the spontaneous, decentralized free market.

Wouldn’t the market have tended toward greater integration if left free? I believe so, but the differences would have been substantial. In a freed market, costs are internalized. Expanding trade across a continent would require private risky investment in the means of transportation — canals, roads, railroads, etc. No government land grants or other subsidies would be available. If a firm wanted to ship its products cross-country, it initially would have to bear the shipping costs, which would be reflected in consumer prices. Consumers, choosing in a competitive marketplace, would then be free to decide if the products were worth the price asked compared to those of more-locally produced products, whose manufacturers did not have high transportation costs to recoup. (They may have disadvantages due to their small size, but diseconomies of scale, as well as economies of scale, exist.) Consumers might be happy to pay the higher prices, but it’s up to them. “National” firms would not have the advantage that government intervention has afforded them historically. (Today, repairs to the taxpayer-financed interstate highways is disproportionately paid for by private automobile operators. Owners of big rigs don’t pay their share of the upkeep.)

The whole point of a government-led effort to create a national market was to impose costs on taxpayers, who had no choice in the matter, rather than have businesses charge consumers, who would have had a choice, at the checkout counter. Since national firms’ retail prices don’t have to reflect the full cost of production, consumption is distorted and smaller firms are harmed. We cannot say exactly how things would look had the government not instituted this corporatist policy, but we can say that things would be different. To claim otherwise is to suggest that government interference with economic activity is inert. Libertarians should know better.
While some people have benefited unjustly from this “nationalization” policy, others have been unjustly harmed, at least relative to what their position would have been in a freed market. There’s no way to put things as they would have been had the policy not be adopted — bygones are bygones. Radically freeing the market wouldn’t immediately remove the lingering injustice of past policy; it wouldn’t repeal what Kevin Carson calls “the subsidy of history.”

The upshot is that the cleanup, to the extent that it can take place, would take time. “I beg your pardon. I never promised you a rose garden.” Libertarians promise freedom and the prospect of improving one’s lot in life, but not instant rectification of past injustices.

As I say, some libertarians strangely seem to want to downplay the deep distorting effects of government intervention and act as though the free market would make things right almost instantaneously. So, for example, when they talk about abolishing welfare-state programs, they imply that a seamless transition to a fully voluntary “safety net” would follow. But for decades the welfare state has made people (low- and middle-income) dependent on the government for, say, retirement benefits and medical care, and it has accustomed others to believe that the government will take care of people who can’t look after themselves. While I have no doubt that some voluntary help would kick in quickly were welfare programs canceled abruptly, we can’t be confident that it would be enough or soon enough. Transitions take time because they consist in human action, and people don’t always respond to other people in trouble immediately. For one thing, the free-rider phenomenon exists; an individual can easily believe that enough others will help and that his or her contribution would be too small to make much difference anyway. (However, the response after a natural disaster is typically quick and impressive. Perhaps the dramatic nature of a natural disaster helps to override the free-rider problem. Would the abolition of the welfare state have the same attention-getting drama?)

We see a similar downplaying of distortions whenever a government shutdown looms during a budget battle. It’s one thing to applaud an impending shutdown (except that the worst parts of the state never shut down), but it’s quite another to imply that no hardship will result. Since government creates dependency, a libertarian can’t consistently claim that no one will be harmed even in the short term when government offices close. For one thing, since everyone knows those offices will reopen before long, we can’t reasonably expect a constellation of alternative voluntary organizations to fully take up the slack. Some hardship will occur.
I don’t offer this as an argument against abolishing “entitlement” programs or closing down the government. I’m simply cautioning libertarians against suggesting that should this happen, no innocent person would be at a disadvantage.

Similarly, a freed society and freed market don’t guarantee that nothing bad would ever occur. Nonlibertarians often ask libertarians what would happen with neglected and abused children or mistreated animals — the list of possible abhorrent acts is endless. Our interlocutors are unfazed by the fact that all societies have such problems, even those with the most activist governments. It’s always possible for unfortunate people to fall into the cracks, so it is no blemish on the libertarian philosophy that it can’t offer an ironclad guarantee against such things. All it can assure is that wrongdoing won’t be paid for by taxpayers (because no one will be a taxpayer). We anarchists can also assure that, for obvious reasons, no abuse will be committed by government officials.

Libertarians can be confident that voluntary organizations will exist (as they do to some extent today) to minimize such wrongdoing and to act appropriately when it occurs. Let us not underestimate the ability of free people to respond to problems when left to their own devices. Social cooperation is potent, and a freed society would contain the seeds of the solutions to problems, thanks both to the lure of entrepreneurial profit and to what Adam Smith called “fellow-feeling.”
But while we tout the virtues of freedom, let us not overestimate how quickly such an environment of mutual aid and charity would succeed the old order. Things take time.

Unlike other political philosophies, libertarianism does not promise that a New Person will emerge when society is freed. For good and ill, people will still be people. However, we can be comforted that without the state, a major encouragement to the worst in people will be gone.

Sheldon Richman keeps the blog “Free Association” and is a senior fellow and chair of the trustees of the Center for a Stateless Society.

2 comments

  • There was a national market in the United States long before President Lincoln or Henry Clay.

    If the Federal government was involved it was a mainly a matter of preventing State governments putting up barriers (taxes and regulations) to goods from other States. It was real fear at the time the Constitution was written that State government would do this.

    Transportation subsidies (when the existed at all) were a minor matter (I doubt they amounted to even 1% of GDP during the 19th century) – not a major one. I do not see why a political philosophy, such as libertarianism, has to trot out this false history – surely trotting out false history undermines (rather than reinforces) the appeal of the political philosophy. After all people are going to find out that there were private roads and private railways (without government subsidy) eventually – and they are likely to be annoyed at libertarians trotting out false history and, MISTAKENLY, think that the false history discredits libertarianism. Of course Kevin Carson (who is mentioned in this post) comes out not just with false history, but false economics as well – any citing of Kevin (other than to condemn what he says and writes) discredits the libertarian cause.

    Although, I admit, citing Kevin is not as bad as citing as citing G. Kolko (the socialist “historian” whose writings about early 20th century American history are so bad as to be almost the opposite of the truth), and citing Harry Elmer Barnes (the holocaust denier and the person known for pretending that Germany was not responsible for its aggression upon France in 1914, the war of aggression against France and so on being “justified” by a German Declaration of War that has the French bombing Bavaria and so on) – both of whom were favourably cited by the late Murray Rothbard.

    Citing (favourably) Harry Elmer Barnes was really the action that put Rothbard beyond the pale as a historian – Barnes was an habitual liar, whose wildly dishonest accounts of the First World War attracted the financial support of the German government, and were used as the basis for German school textbooks. Barnes then tried to deny the holocaust even after World War II, and continued to be an enemy of the United States and Britain (and the West generally) opposing such things as the Berlin Airlift and the Korean War. Unsurprising Barnes was employed at the University of Columbia associated New School for Social Research – the main centre for the death-to-America crowd in the early 20th century (these days this sort of person is know as “Critical Theory” type).

    If someone can not see the clear and justified conflict between good and evil (right and wrong) that the Korean War represented (and the basic need to CONTAIN Marxism till economic factors had done their work – the economic factor that socialism just does-not-work over the long term), then they are morally bankrupt – but then, as already mentioned, Barnes was a holocaust denier, so saying it was morally bankrupt over other matters (such as his lie fest account of the First World War or his work on the Cold War) is a bit redundant.

    Why Rothbard (and Rothbardians) favourably cite socialist “historians” such as Kolko or Barnes (sorry “Progressive” in the case of Barnes) is another question – but one I will not tackle here (although I do have ideas about why they did it).

    Still the general point that Sheldon Richman makes is actually valid – when looks away from the false history.

    The institutions of civil society have withered – such things Churches and secular “Friendly Societies” (Fraternities) are a shadow of what they once were.

    It is just no good to say “Civil Society would step in” if the Welfare State was
    abolished or collapses – as Civil Society is in a dreadful state.

    It takes many years to create cultural institutions (such as the family) and once these cultural institutions have been undermined it is foolish (in the extreme) to expect them to reappear over night.

    So “what is to be done” (as on old enemy once said).

    Well “I would not start from here” (the Irish answer) is a glib response – although I am tempted to give it.

    I suppose all one can really do is to work for the gradual rolling back of the state (“entitlement reform” as it is called in the United States – as the vast majority of government spending is on the Welfare State which was NOT created to serve the interests of the “capitalists” or as a response to problems created by “capitalism” – after all when the “War On Poverty” was launched in 1964 poverty had never been lower and was falling fast), but there is little evidence of any such reform, roll back of the state, taking place in any major Western country.

    And if collapse does take place, one has to hope that voluntary action by what is left of the voluntary institutions of Civil Society will mitigate some of the horrific suffering of the old the sick and the poor.

    In such circumstances I would rather (for example) be in Utah (although I am most certainly not a Mormon) than I would be in New York State.

    Cultural institutions (such as Churches and the family) have declined almost everywhere – but in some places more than others.

  • It should also be pointed out that the Confederacy followed a more collectivist economic policy than the United States (even if one overlooks the “little” matter of slavery) on such things as the graduate (“Progressive”) income tax, fiat money inflation and the regulation (indeed direct control) of transportation and production.

    And that, in spite of the Civil War, the Federal government soon shrank down to a very small size – about 2% (two per cent) of the economy within a few years of the end of the Civil War.

    Indeed even as late as 1928 the Federal government was only 3% of the American economy and the major effect of its regulations was the insane effort at “Prohibition” in the 1920s (hardly something the hard drinking Henry Clay would have been in favour of).

    Claims that the Federal government created the American economy in the 19th century or the early 20th century are false.

    Even the total size of government in the United States was quite limited – Federal State and local combined.

    Less that 10% of the economy before the First World War – and only 12% even as late as 1928.

    Indeed the total size of the American government, Federal, State and local, was still under a quarter of the economy even as late as 1950.

    The massive deregulation of the economy and the getting rid of many “New Deal” schemes (sadly not all of them) in the late 1940s should be remembered.

    They started to creep back later – for example “Food Stamps” reappears in 1961.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s