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Is Libertarianism Defunct?

September 13, 2001

Molly Ivins

Since September 11, many commentators have declared libertarian thinking to be outmoded on grounds that we live in a world with massive security threats. Even libertarian writers have rushed to declare their old infatuation with limited-government thinking to be mistaken or inapplicable. In this, they join a parade that had already begun before the attacks.

For example, in her article, "The Fatal Weakness of Libertarian Thinking," Molly Ivins had castigated libertarians for their "eternal tendency to apply simple solutions to complex problems." She mocks them for their mantra, "Tax cuts good, regulation bad; tax cuts good, regulation bad."

In one sense, Ivins is perfectly correct. Libertarians do have a simple answer to political issues: You can't steal, and you can't kill to get your way. These two prohibitions alone disqualify virtually every proposal discussed by our media's talking heads, whether the no-spinning Bill O'Reilly, Rush Limbaugh with his talent on loan from God, or even that player of hardball, Chris Matthews.

Libertarians can't help it if the vast majority of people still acquiesce in the theft of taxation or the murder caused by our federal government through its wars on drugs, guns, and foreign peoples. Yes, we too would like to move on to deeper issues, but the government and its cheerleaders won't let us. Would Ivins object to the civil-rights hustlers for their mantra, "Equality good, racism bad; equality good, racism bad"?

After accusing libertarians of being simpletons, Ivins then lists ostensible failures of libertarian prescriptions. Of the savings and loan bailout, she says, "$500 billion charged to the taxpayers. Enough said."

It's unfortunate that Ivins-champion of deep thoughts-has dismissed this episode so flippantly. Most obviously, it is a bit ironic to first mock libertarians for always supporting tax cuts, and then come right back and accuse them of charging taxpayers billions of dollars. 

Needless to say, libertarians do not support government guarantees to bankers, which only encourage reckless lending; why be cautious when you'll be bailed out if you go bankrupt? In the particular case of the S&Ls, Ivins fails to mention the disastrous effects of the 1986 tax "reform" that slashed real estate deductions, ruining previously solid portfolios. 

Ivins offers a similarly curt judgment on the deregulation of utilities: "So far, no good." However, as George Reisman has argued in California's Energy Meltdown, California's energy problems are due to lingering government interference. One is reminded of Murray Rothbard's comments on the corruption in post-Soviet Russia. He said the "reform" of the Communists would be akin to allowing the U.S. Post Office to charge whatever it wanted for delivery while still maintaining its monopoly on first-class mail.

Next, Ivins turns to the telecommunications, airline, and trucking industries. She acknowledges improvements in some respects (e.g., number of airline passengers), while pointing out shortcomings with these apparent trials in deregulation. Ivins and her ilk argue that these are cases of deregulation gone too far, while libertarians would say that the lingering problems prove that the deregulation has not gone far enough.

Libertarian thinkers have done many studies in each of these areas, and in every one, the government has been found to cause whatever problems persist. Ivins quotes with approval James Arnt Aune, who blasts libertarianism's "avoidance of empirical investigation." This is simply incredible, as it is Ivins and Aune who ignore centuries of literature explaining the benefits of freedom, not to mention the abysmal empirical record of all government interventions in the twentieth century alone.

Perhaps wishing to appear empirical herself, Ivins notes that in many cases, the demands for regulation in the first place often come from a given industry itself. Presumably we are to conclude that the government really is needed, if even the greedy businessmen involved acknowledge this.

But this is a silly argument. Large firms send their corporate lobbyists to Washington, where they virtually write the legislation that will govern them. This allows the big firms to solidify their dominant position by regulating all newcomers to death. Far from demonstrating the necessity of such regulation, this cozy relationship between big business and big government merely underscores its corruption.

Ivins is certainly correct to be wary of politicians who propose "deregulation." These bills are as phony as "free trade" agreements. When people like Ronald Reagan and George Bush pay lip service to laissez-faire, but then compromise and implement statist policies, this discredits the move for true reform. Only when deregulation is pushed to its logical conclusion-when industries are completely privatized and taken out of the government's grasping mitts altogether-will we see the full blessings of the free market.

Just as assaults on libertarian theory predate the attacks, they have continued after the attacks. The opponents of liberty are always ready to shift their ground, no matter how often they are refuted with evidence and argument--a fact which makes the task of showing their errors no less necessary.

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Robert P. Murphy, a Rowley Fellow of the Mises Institute, is an economics graduate student at New York University. See his Mises.org Archive or send him MAIL


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