Power & Market

Last summer, I had the pleasure of meeting Dr. Jozef Martiniak at the 2018 Mises University. Dr. Martiniak came to Auburn all the way from Slovakia and he had many great stories to tell about his experience growing up in a Cold War era Czechoslovakia. My conversations with Dr. Martiniak not only revealed an interesting story from the perspective of someone who experienced socialism firsthand, but it also sparked my interest in the politics of Slovakia. He mentioned that there was a libertarian oriented party in Slovakia, and so in this article, I endeavor to examine the movement in Slovakia, analyzing its scope, significance, and authenticity.

The main vessel of Slovak libertarianism nowadays is the political party “Freedom and Solidarity” (SaS). Economist Richard Sulík founded the party in 2009, himself being the mastermind of the Slovakian flat tax. In February of that year, the 10,000 required signatures for the establishment of the party were collected. Sulík was elected chairman.

According to their website, the party claims to run on a platform free of the typical populist propaganda loaded with catchy slogans. It also claims to be run by experts from various different fields, rather than “ideologists”.

The party is also centered around offering specific solutions in which the amount of money required to fund proposed programs is laid out, rather than putting out “unrealistic promises”. It also asserts that the armed forces must have clearly defined objectives. This sort of reform effort in pursuit of creating a government that has clearly defined objectives puts too much trust in the state, something that is inherently very tough to reform.

Though SaS never explicitly claims to be anchored in the chief tenets of libertarianism, the non-aggression principle and property rights, it puts heavy emphasis on the free will and individualism. The party draws a connection between individual freedom and the individual’s happiness. From this, the party asserts that it is against economic intervention.

The party emphasizes a more consequentialist argument regarding the effects of freedom on the collective population.

One interesting thing I learned through my conversations with Dr. Martiniak was that the “passion” that is present in many libertarians in America was not present in Slovakia. Rather the form of libertarianism in SaS is more so “contra the state” instead of a true moral, Rothbardian form.

SaS lists the promotion of “basic solidarity” as one of its keys tenets in Article II of its charter. This sort of concept is manifested in the “euro-realist” stance of the party. The party sees the European Union as an idea with great potential, but also one that demands significant reform as of now. The party also asserts however, that is seeks to curb the bureaucracy and regulations enforced by the EU. Its perception of the EU however, is one that is flawed. SaS believes that the EU should be kept for its promotion of the ideas of free trade and free movement of people, but in regards to this, a classic Bob Murphy argument comes into play.

In his article “But Wouldn't Warlords Take Over?”, Murphy comes to the conclusion that if a society based on small government can be set up and maintained peacefully, these same peace seeking individuals should be able to live together peacefully without a government. In the same way, if member countries of the EU really want free trade and movement, why would there be the need for a political union such as the EU? Even if the EU were to be reformed, it would gradually centralize power over time due to its inherent nature to do so.

In an article published by The Telegraph, Louise Armitstead describes the sentiment of party founded Richard Sulík. Sulík is often criticized by others for being a nationalist, but Armitstead articulates that he is rather “the hero of all discontented Europeans”. This certainly demonstrates the growing resentment in Europe for government. It underscores the borderless nature of freedom, its universal application. It is not something that remains contained within a single country, but spreads. It is not tied to nationalism.

In my humble opinion, the efforts of SaS do not effectively line up with libertarianism in the way that I see it. Sure, the party is pro-market, anti-centralization, pro-civil liberties, etc., but at the same time, due to the fact that it is not grounded in property rights and the NAP, its attempts become blurred. This is why it is so important that any attempt at libertarianism be grounded in these axioms, otherwise the message strays from being genuine. SaS embodies the more “pragmatic libertarianism” present in those such as Gary Johnson, rather than genuine Misesian or Rothbardian aesthetic.

This month’s Liberty Matters forum is a discussion of the American economist Frank Fetter. Though he is neglected today, Fetter made vital contributions to Austrian economics and was a major force in spreading the ideas of the early Austrians in the United States (see here and here). In my contributions to the discussion, I explain why Fetter’ work is important and how it can continue to provide fresh insights to contemporary economists. So far, the focus of the essays has been on key elements of economics, especially foundational concepts like price, market, equilibrium, capital, and rent. I’m joined in the conversation by Joseph Salerno, Peter Lewin, and Geoffrey Hodgson.

The first essays and responses in the discussion have now been published, and the forum will remain open for the rest of the month for short rejoinders by all the participants. I hope you’ll take a few minutes to read through some of the contributions. Here is the abstract for the discussion:

Matthew McCaffrey, assistant professor of enterprise at the University of Manchester, explores the economic and political work of the “forgotten giant” of economics, the Indiana-born Frank Fetter. At the height of his career in the early 20th century, Fetter was one of the most respected, cited, and debated economists in the United States. He taught for over 40 years at prestigious universities, including Stanford, Cornell, and Princeton, and his research appeared in practically every major publication in economics and political science. Yet today he is virtually forgotten outside a small group of Austrian economists. In his opening essay, McCaffrey explores two aspects of his thought in particular: his contributions to theoretical economics and their relationship to Austrian ideas, and his political views as they relate to the philosophy of classical liberalism. He is joined in the discussion by Geoffrey M. Hodgson, Research Professor of Business Studies in the University of Hertfordshire, Peter Lewin is Clinical Professor in the Jindal School of Management, University of Texas, Dallas, and Joseph T. Salerno, professor of economics in the Finance and Graduate Economics Department in the Lubin School of Business of Pace University in New York.

Why does support for socialism persist?

The short answer may be simple human nature, our natural tendency toward dissatisfaction with the present and unease about the future. Even in the midst of almost unimaginable material comforts made possible only by markets and entrepreneurs—both derided by socialists—we cannot manage to conclusively defeat the tired but deadly old arguments for collective ownership of capital. We're so rich that socialists imagine the material wealth all around us will continue to organize itself magically, regardless of incentives.

It's a vexing problem, and not an academic one. Millions of young people across America and the West consider socialism a viable and even noble approach to organizing society, literally unaware of the piles of bodies various socialist governments produced in the 20th century. The fast-growing Democratic Socialists of America, led by media darlings Rashida Tlaib and Alexandria Ocasio-Cortez, now enjoy cool kid status. Open socialist Bernie Sanders very nearly won the Democratic Party's 2016 nominee for president before being kneecapped by the Clinton machine. New York City mayor Bill de Blasio helpfully announces "there is plenty of money in this city, it's just in the wrong hands." He freely and enthusiastically champions confiscation and redistribution of wealth without injury to his political popularity.  

Rand Paul and Thomas Massie are outliers on the Right. Ocasio-Cortez and de Blasio are not outliers on the Left.   

How is this possible, even as markets and semi-capitalism lift millions out of poverty? Why does socialism keep cropping up, and why do many well-intentioned (and ill-intentioned) people keep falling for something so patently evil and unworkable? Why do some battles have to be fought over and over?

The Soviet Union collapsed and the Berlin War fell decades ago. The Eastern Bloc discovered western consumerism, and liked it. Bill Clinton declared the era of Big Government over, and Francis Fukuyama absurdly pronounced that Western ideology had forever won the day. Even China and Cuba eventually succumbed to pressure for greater economic freedoms, not because of any ideological shift but because it became impossible to hide the reality of capitalist wealth abroad.

Yet economic freedom and property rights are under assault today in the very Western nations that became rich because of them.

Today's socialists insist their model society would look like Sweden or Denmark; not the USSR or Nazi Germany or Venezuela. They merely want fairness and equality, free healthcare and schooling, an end to "hoarded" wealth, and so forth. And they don't always advocate for or even know the textbook definition of socialism, as professors Benjamin Powell and Robert Lawson learned by attending socialist conferences (see their new book Socialism Sucks: Two Economists Drink Their Way Through the Unfree World). In many cases young people think socialism simply means a happy world where people are taken care of. 

Never mind the Scandinavian countries in question insist they are not socialist, never mind the atrocities of Stalin or Mao or Pol Pot, and never mind the overwhelming case made by Ludwig von Mises and others against central economic planning. Without private owners, without capital at risk, without prices, and especially without profit and loss signals, economies quickly become corrupted and serve only the political class. Nicolás Maduro feasts while poor Venezuelans eat dogs, but of course this isn't "real" socialism.

History and theory don't matter to socialists because they imagine society can be engineered. The old arguments and historical examples simply don't apply: even human nature is malleable, and whenever our stubborn tendencies don't comport with socialism's grand plans a "social construct" is to blame.

These most recent spasms of support for the deadly ideology of socialism remind us that progressives aren't kidding. They may not fully understand what socialism means, but they fully intend to bring it about. Single-payer health care, "free" education, wealth redistribution schemes, highly progressive income taxes, wealth taxes, gun bans, and radical curbs on fossil fuels are all on the immediate agenda. They will do this quickly if possible, incrementally if they have to (see, again, the 20th century). They will do it with or without popular support, using legislatures, courts and judges, supranational agencies,university indoctrination, friendly media, or whatever political, economic, or social tools it takes (including de-platforming and hate speech laws). This is not paranoia; all of this is openly discussed. And say what you will about progressivism, it does have a central if false ethos: egalitarianism.

Conservatives, by contrast, are not serious. They have no animating spirit. They don't much talk about liberty or property or markets or opportunity. They don't mean what they say about the Constitution, they won't do a thing to limit government, they won't touch entitlements or defense spending, they won't abolish the Department of Education or a single federal agency, they won't touch abortion laws, and they sure won't give up their own socialist impulses. Trumpism, though not conservative and thoroughly non-intellectual, drove a final stake through the barely beating heart of Right intellectualism, from the Weekly Standard to National Review. Conservatism today is incoherent, both ideologically and tactically incapable of countering the rising tide of socialism.

Generals always fight the last war, and politics is no different. We all tend to see the current political climate in terms of old and familiar divisions, long-faded alliances, and obsolete rhetoric. We all cling to the comfortable ideology and influences that help us make sense of a chaotic world. As one commenter recently put it, liberal Baby Boomers still think it's 1968 and conservative Baby Boomers still think it's 1985. Generation X and Millennials will exhibit the same blinders. It may be disheartening to keep fighting what should be a long-settled battle against socialism, but today we have no other choice.