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The Two Flaws Of Libertarian Economics (zedshaw.com)
64 points by bdfh42 on Jan 8, 2009 | hide | past | favorite | 161 comments



For impatient types like myself:

Proposed flaw #1:

That is basically the first flaw of libertarianism: If you shrink the government down to nothing and have corporations in control then you won’t have a rule of law.

Proposed flaw #2:

That leads me to the second flaw of libertarian economics: efficiency. ... economists use the term “efficiency” differently than programmers.

You see, most libertarians think of efficiency as “Fast! FAST FAST FAST!” They think it means lean and trim companies all working to gain the maximum profit with the least effort necessary.

---

Of course, at no point does Mr. Shaw prove that libertarians think this way, but that would put a stick in his spokes, I suppose, and boy, is he riding quickly down the hill of psuedo-political invective.

And as for flaw #1, libertarianism is not in any way, shape, or form, anarchy. Rather, libertarianism preaches that the government should be as small as practical.


You're right. Zed is confused.

Libertarianism is NOT Anarcho-Capitalism. Libertarianism advocates that the government should be reduced to the minimum which is necessary to protect the citizens' rights. Anarcho-Capitalism advocates that corporations should replace government.


No, anarcho-capitalism does not say that corporations should replace government. Anarcho-capitalism merely says that government should go away.

90% of everything that government does wouldn't get done at all in a free society, and the other 10% would be done by multiple competing firms.


But that can quickly devolve into arguments as to what counts as a 'right': the most obvious examples being food, water, shelter, healthcare and education. That 'minimum' is an arbitrary line.


> what counts as a 'right'

Freedom from coercion, baby. Simple as that.

For a more thorough discussion, see http://en.wikipedia.org/wiki/Negative_and_positive_rights


That's not "simple" at all. Coercion has always been part of human relations. People have conflicting interests, and when these rise to the level of open conflict, there needs to be some sort of coercive solution.

What libertarians propose is that all coercion be in defense of property ownership. This seems "fair" until you realize that "property ownership" is itself a complex historical object. The feudal system is named after a form of property ownership - the feodum or fief. The colonial system created property for Europeans by appropriating it from natives. The system of slavery was also based on a certain kind of property definition.

Saying "don't use coercion except to defend legitimate property rights" is like saying "don't use military force except to defend against legitimate threats." It seems like common sense, but all the complexity of politics is swept under the rug in these phrases "property rights" or "threats". In my view, no one is born with a "right" to property, property is just a concrete representation of the political equilibrium that exists at a certain time.


The problem of property ownership is inherent in any society that (obviously) permits ownership of property.

Most property in the world can be traced back to an original owner, from whom it was stolen (war, colonization and similar events). That original owner might have stolen it from someone else.

But that is a completely different point, that really has nothing to do with libertarianism, or any reasonably capitalist society, where property ownership is permitted. It's my impression that a symptom of a mature capitalist society is that historical property disputes are settled in a sense that can be considered fair. That someone might not accept property rights is an interesting discussion, and it certainly rules out any form of capitalist system, but it doesn't really apply in this discussion.

Nobody is born with a right TO anything, but rather a right to NOT be coerced. The consequence of this is that you have the right to do whatever you want with your property (which includes your body and anything you do with that, i.e. work), as long as you don't interfere with other peoples right to do the same - i.e. coerce them.

One important distinction between libertarianism and anarcho-capitalism is how to resolve conflicts that will inevitably be over property. A-C doesn't accept any state-like structures like police and courts, but libertarianism does, and the only people that get to coerce other people physically are the police, answering to the courts.


I think you've missed the central points, which were:

a) Property rights are a form of coercion.

b) 'Property rights' is a wide umbrella under which almost any form of coercion could be justified.


OK. In that case someone needs to explain to me the central points, because I do not understand them at all.


a) Property rights are a form of coercion because all law enforcement is coercion.

b) If the enforcement of property rights justifies coercion, then almost any kind of coercion can be justified if the prevailing property system is chosen correctly. For example, if a totalitarian state were to have a system where everything belongs to the state, including the citizens, then it would have the right to do whatever it wants with its property, and any assertion of personal freedoms would be theft.


a) No, law enforcement is necessary to maintain property rights, and is only applied when that right isn't respected (otherwise there is hardly rule of law) - but a society with no property rights can still have a very brutal police force. I don't see the connection here.

b) If someone is free too coerce anyone he owns, and he can arbitrarily choose who he owns, then he is free to coerce everybody. It's a tautology, but not a very useful one.


a) "law enforcement is necessary to maintain property rights". I couldn't have said it better myself. Enforcement is required to maintain property rights, and enforcement is a form of coercion, therefore coercion is required to maintain property rights, therefore the enforcement of property rights is a form of coercion.

b) The point is that the concept of property rights is mostly vacuous unless you specify which system of property rights you are speaking of. cia_plant was pointing out that what one person considers oppression, another might consider fair use of property. Therefore any state can be considered libertarian unless you specify restrictions on what counts as a valid system of property.


The forces that prevent you from keeping someone else in slavery is coercion. So is the rule that says you're not allowed to walk out into the street and just have your way with someone without their consent. With such loose language, any type of society settlement in which people are born into a system that has rules that apply to them involves a type of coercion.

Since all people need to be cared for until a certain age, all people who survive past the first few days of their lives are born into coercion under a strict meaning of the word. Some would escape by living as hermits in desert land or remote islands that nobody cared to enforce law on. Hell - if you're going to be a pedant why restrict it to human coercion? The weather itself is a form of coercian. As are the laws of physics themselves.

Although in a strict sense you're right, I think you're wasting time. However, I have a morbid curiosity for some things and would be genuinely interested to learn what axe you're grinding.


I'm not grinding any axe. mseebach said that he didn't see how property rights were a form of coercion. You have explained precisely why they are. You are agreeing with me against him. I am not right in a 'strict sense', but in an absolutely correct sense. What could be a better example of coercion than enforcing a law?


> What could be a better example of coercion than enforcing a law?

Well - gravity.

I mistook your motive. I've read the thread a few more times and see you've been quite specific in your responses.


"Coerce" is defined in the OED as "persuade (an unwilling person) to do something by using force or threats", so I don't think gravity really falls under that definition, except perhaps metaphorically.


[Everybody] is born with ... a right to NOT be coerced.

I was born with a right to not be coerced by gravity?

http://en.wikipedia.org/wiki/Gravity

What entity is charged with enforcing my right to non-coersion-by-gravity?


You made a very good point. I don't know what to answer. Defining what a "right" is and what it is not would lead to endless discussion.

In any case, I would say that instead of discussing in rather vague terms whether more government is better / worse than less government, it would be sensible to think of what kind of government.

By principle, I believe that goverment bureaucracy and interference should be kept to a minimum. However, I would rather live under a Scandinavian-like government (even though it's big government) than in a Somalia-like anarchy. We all agree on the goals: freedom, prosperity, etc. Sometimes we disagree on how to get there. I vote for pragmatism over ideology.


> However, I would rather live under a Scandinavian-like government [...] We all agree on the goals: [...] prosperity, etc.

Yes, I've totally cut up your point, and I'll take this over Somalia any day. But Scandinavian government (Denmark in this case) couldn't care less about prosperity. Right out of college, you're in the top tax bracket, paying 63% on everything above $64.000 annual income (and just under 50% on everything below). Buying a car? 180% registration tax, and slap 25% sales tax on top of that.

But yeah, we've got worse schools than Portugal and free mediocre healthcare, but most importantly: we have high economic equality.

So no, unfortunately we don't agree on the goals.


With all due respect, compared to 90% of the world's population, Danes are pretty prosperous IMHO.


Absolutely, we are. But Denmark is, along with the rest of "old Europe" going to wake up pretty soon and realize that the half bln. Chinese and Indian citizens that are moving into the middle class these years, are going to send their kid to college, and the white collar jobs are going to go the same way the blue collar jobs did over the past 20 years.

Without a strong focus on wealth creation, instead of the constant preaching to the mediocre and the "good enough", we're not going to have much to show once the Chinese and Indians get started.

In short: Prosperity is not a goal to attain, it's a continuous effort, and we just stopped trying.


A few years ago I spent a Summer in Copenhagen, so I know a tiny bit of Denmark. I remember talking to Danish friends on how ridiculously high the taxes were. Yes, I was amazed that you guys pay 180% tax on cars.

On the necessity of wealth creation, I fully agree with you. I think the Germans, Danes, Swedes (etc) will soon find out that they will have to work a whole lot more than their parents to enjoy the same standard of living their parents could enjoy. It's not a pleasant thought, but then, the prosperity that Old Europe has enjoyed over the last few decades is pretty much an historical anomaly.

I could not agree more that prosperity is a continuous effort. I suppose the old Europeans are just a bit blasé and refuse to look at the facts. The world has changed.


I remember talking to Danish friends on how ridiculously high the taxes were. Yes, I was amazed that you guys pay 180% tax on cars.

http://www.skovgaard.org/europe/denmark.htm

The Danes believe Denmark is the best country in the world, that Danish beer is the best in the world, and that anything they do is better than anywhere else in the world. But however contradictory it may seem, between them, they don't like to see others being successful. Thus, they do everything they can to bring down the brightest amongst them. The communist tax system that has brought the highest overall taxation level in the world is an effective way of doing so.


That article is a bit on the edge, it should be said. But, by and large, his points are valid.

Most importantly, most parties aren't communist, they are "social democratic", definitely very left leaning compared to anything. There is a general (far from thorough) respect for private property, something you wouldn't expect from communists.


That is one scary article. I knew Denmark was pretty communist, but I had no idea it was perverted to this point. An eye-opener, for sure.


More than 50% of people in working age in Denmark work for the government or make their living through some sort of welfare program. This means more than half the population of Denmark is prosperous exclusively because of income taken from the productive part of population.

Denmark and most of the rest of Scandinavia used to have a very classically liberal (~libertarian) mind set. It is the work ethic that has maintained much of the prosperity. Many of Denmarks large successful export businesses come out of this period.

As I like to say. Denmark is prosperous despite their welfare state and not because of it.


Somalia is not an anarcho-capitalist society. In Denmark there is less violation of property rights, so you could say Denmark is more libertarian than Somalia.

The Seasteading project might result in some anarcho-capitalist societies: http://www.seasteading.org/


If we agree on the goals we can try Social Policy Bonds (http://socialgoals.com/).


libertarians only acknowledge negative rights; you can't do X to me. There is no such thing as a positive right; you must give X to me.


Some (such as myself) also believe it legitimate for the government to provide public goods: goods which are nonrivalrous and nonexcludible.

Protection from contagious disease falls into this category, for instance.


That's where I stand. I want a small government, and I think it's crazy that a government as hulking as ours doesn't provide something as essential as healthcare. On the other hand, I'm against social security and think that a general welfare system will do fine to take care of poor people, young or old.


It's unfortunate that the desire for an efficient government has been tied into the desire for "small government" and libertarianism.

An efficient government is a laudable thing that everyone should want, and so cutting away the fat is a natural thing to do in any sort of political light.

I don't know why libertarians at large seem to claim ownership of this notion.


The revolution of Public Choice economics was to examine the incentives faced by actors in the public sector, instead of viewing public policy as exogenous to the economy as previous models have done.

In the past, if economists discovered an inefficiency in the market, they would say "and the government should correct this inefficiency with policy X". Public choice economists don't ask if governments should do X, but rather will they do X.

It turns out the incentives facing government actors aren't very good. They have much fewer incentives to act efficiently than market actors. It is possible to have competent officials at the head of a small bureaucracy produce good results. However, I doubt this is possible for the United States, which owns the largest bureaucracy in the world.

So, there are real reasons for limiting the scope of government.


A part of the reason may be that lots of people make their living off this "fat."


Hence, we need to change up our notion of government as fixed institution to government as agile organization.


And other nations would be licking their chops.


Not sure what you mean by this? I wasn't advocating anarchism. I'm simply saying we need to think of (and implement) government as an agile entity, one that dynamically allocates resources as necessary rather than suffers from "institution creep".


Then I think what you are looking for is very small government -- as in everyone is at least an acquaintance of their leader(s). When everyone knows everyone else in a system, they are able to provide for one another because they personally know what everyone needs and can react quickly without going through seven layers of bureaucracy. When the government's reach grows so large that they don't know their citizens, then they have to rely on formalized metrics and laws to determine how resources should be allocated, and it is that sort of overhead which causes the inefficiency that you speak of. This effect is similar to companies: When they first start out, they are agile and able to outpace their competitors in the market, but once they get too big, they cease to innovate and have a hard time meeting the demands of changes in the market.


Good point, although I think G2C tech can substantially improve communications between citizens and government leaders. This is assuming there's a strong initiative to adopt such tech across the board, and that it's competently designed.

There are plenty of good people working in the civic media area, so there's a good talent pool to draw from.


Food is pretty essential. Why don't you get the government to provide that too? And water? What about work? People need work - it's a human right! Why stop there? Head on up Maslows. Why shouldn't all people reach the top of Maslow's hierarchy. And if they should - well then surely it's the role of their fellow man to facilitate it through the efficient, modest and even-handed institution of government!


Food is pretty essential. Why don't you get the government to provide that too?

Done.

http://en.wikipedia.org/wiki/Agricultural_subsidy#United_Sta...

The subsidy programs give farmers extra money for their crops, as well as guarantee a price floor. For instance in the 2002 Farm Bill, for every bushel of wheat sold farmers were paid an extra 52 cents and guaranteed a price of 3.86 from 2002–03 and 3.92 from 2004–2007.[2] That is, if the price of wheat in 2002 was 3.80 farmers would get an extra 58 cents per bushel (52 cents plus the $0.06 price difference).

.

Also, please see:

http://en.wikipedia.org/wiki/WIC_Program

http://en.wikipedia.org/wiki/Food_and_Nutrition_Service

http://en.wikipedia.org/wiki/Food_Stamp


And that's being known as a "practical libertarian"


No, it's known as being a socialist.

//not that there's anything wrong with that.


This is probably the first time since adulthood that I've ever been called a socialist (I was a socialist for a short time during my teenage years).


I'd actually like to define it as extreme moderatism.


Actually it's being known as "having taken econ 101".


Or, you could argue that the government should be limited to market failures.

Roads, defense, control, vaccines... all have significant effects outside of the markets, and thus their price does not reflect the benefit to society.


>Roads, defense, control, vaccines...

Where do you stop? Surely you'd have to include financial companies? A financial company that makes up 10% of the financial market will calculate a phony 90% discount on any systemic risk it creates: after all, if the system fails, only 10% of that failure will be realized as a loss.


Huh? How do initial property rights get started then?


The classic answers are that a government should protect its citizens from attack (the military, the police) and should act as a neutral ajudicator in contractual disputes (the courts) and that's it.

What about "the poor"? The classic answer is "you will not be prevented from helping them".


It's those 'classic answers' that are the important part of Libertarianism. If you get rid of them then Libertarianism just becomes 'The government should be the size required to do whatever it should do, and be neither bigger nor smaller', which would be completely vacuous.


>"Libertarianism is NOT Anarcho-Capitalism."

Anarcho-capitalists would consider themselves libertarian, and many famous ones are also leading lights of the libertarian movement. Murray Rothbard is clearly a libertarian, and Lysander Spooner belongs to the classical liberal tradition that the libertarians adopt as their forefathers.

The problem is that "libertarianism" is a medium-sized tent. So when you criticize "libertarians" for position X, well some hold that position and some don't.


Also by definition we are at liberty to believe whatever we want. Kind of by definition we don't have any leaders to define what we think, even though many of us read lots of stuff by Rothbard, Mises, Hayek, Rand etc.

Me I am definitely a libertarian, classical liberal, randian, anarcho-capitalist and several other labels that I might invent.

But in reality we all have our different ideas of whats important and what isn't. And we do laugh at ourselves about this.

Check out Peter Bagge's great comic about what happen when Libertarians gather...

http://www.reason.com/news/show/28655.html


Maybe his point is that the amount of government required to protect rights is actually quite large. There's a general assumption in Libertarianism that it would be small, and he's disputing this.


This argument is actually interesting, but I didn't get the slightest hint that it was what Zed was really talking about.


It's probably not, but it would make sense of why he describes libertarians as "corporatist". He's driving a wedge between small government and the defence of natural rights, and assuming that libertarians would choose the former over the latter.


My thoughts: Most scientists (myself included) tend to prefer models that accurately predict the future: http://www.youtube.com/watch?v=LfascZSTU4o

What Zed describes is in no way libertarianism. What the following to understand exactly what it is (HINT: It's the opposite of Libertarianism.) http://www.youtube.com/watch?v=ticytEUvVhQ


Funny, Peter Schiff was totally wrong about the Euro. Dean Baker also predicted the housing meltdown, you're falling into the trap of anecdotalism.


If you need proof that Anarcho-Capitalism doesn't work, just play Eve-Online for a year in 0.0 security space.


I too kill people and do a lot of very nasty stuff in video games. But for some mysterious reason, I don't do them in real life.


You completely missed my point. At the time I played Eve, success for organizations in 0.0 space in Eve depended on the establishment of a logistical infrastructure. It's economics. I've witnessed groups of players hobbling their own economies and logistics by making short-sighted decisions. I've also seen all manner of scams and Ponzi schemes. From what I've seen in that particular simulation, you really do need the rule of law for capitalism to work well.

Killing people and blowing up ships is completely irrelevant. The game could be about planting trees and picking flowers, and the same principles would apply.


I've also seen real-world governments ruin their own economies by making short-sighted (or just plain stupid) decisions. And I've seen Ponzi schemes in a lot of government plans as well.


In those cases, too, the rule of law is not quite working. The letter of the law is often being obeyed (and there is some debate about even that concerning things like the establishment of the Fed) but the system is being gamed.

What it comes down to is this: is the general populace comfortable enough to engage in open economic activity?

You can see that there is a lot less confidence in the US and the rest of the world, in large part due to various stupid decisions. But this doesn't prove that anarcho-capitalism works. It just shows that corrupt capitalism doesn't work well either.


But for some mysterious reason people does that in real life.


There is a hypocrisy in libertarianism à la Mises. When you read his hyper-logical texts (wich should be appealing to the HN crowd btw), he claims that we should remove any sort of ideology from our political and economical systems. Reason and logic only should govern our lives, and it is the duty of economics to aim at this goal.

Sure, sounds attractive !

But there is a big assumption here, and it is that libertarianism is special and different, it's not an ideology like marxism or catholicism. It's THE way. It is the only path to reason and logic and science, because when we reduce the role of the state, we reduce the part of ideology in society. Therefore it must be the less ideological system of all, the most logical, and thus the the right one.

Of course, liberatarians turn out to be just like any other political sensibility. They agree on broad things that makes them look like unite only because they are a tiny minority in the political landscape. But like any other sensibility, you reach a point in the debate where their own camp is split up in two and they will fight each other, etc. It wouldn't be the case if it wasn't an ideology, and they would all agree on core issues like the private/public fire stations, or even health wich should be considered like any other good for some, but not for some others (I can tell because I have some libertarians friends). The above comments about the protection from plagues are very interesting. It leads to the very interesting history of sewers.

Mises is the reflect of his century when we were too optimistic about science, we believed it would soon answer all the questions even in fields that looked like non-scientific, like human organization. It turned out science is indeed good for changing our lives in an indirect way, but unfortunatly not so good outside real scientific fields. It doesn't answer philosophical questions (if such a science existed, then it would be the right one to follow for organizing human societies).


You cite a single author as a representation of a vast political ideology and quickly drop in some fluff that guides the rest of your comment:

But there is a big assumption here, and it is that libertarianism is special and different...

Libertarianism is a slightly more detailed political idea than convervatism. It represents the desire for smaller government that only acts when necessary. Another core tenet is that you're free to do as you please until your actions infringe upon the rights of others.


>Another core tenet is that you're free to do as you please until your actions infringe upon the rights of others.

That's totally vacuous without defining those rights. A major one for most libertarians is property, but the distribution of property is based on historic things like taking lands from native populations. Who decides who owns what? How far back do we have to unwind things? Why should heredity determine what property you "start out" with? How does a Lockean ideal of "mixing your labor with the soil" to create "property" somehow mean that because some bean farmer on plot of land X farmed beans for 10 years there, him and his descendants now own all the oil under that land that was only discovered later, and not by them?


I like Zed, but this is full of bullshit. Every economist worth the name (fuck that Krugman/keynesian bullshit, read some Tyler Cowen, Peter Boettke, Steve Horwitz) knows that the Fed is to blame for the current episode of the business cycle. They printed too much money, it causes inflation and, even worse, disastrous malinvestments. In short: printing money fucks up the structure of production.

Moreover, the Fed isn't even a libertarian institution. He tries to discredit libertarianism by proclaiming that an airhead like Greenspan is a libertarian. He's not. He might once have said he was one, his actions have proven otherwise. The Fed is a government monopoly on money. And that's a bad thing.


> fuck that Krugman/keynesian bullshit, read some Tyler Cowen

Well, there's a clear, cogent, and knowledgeable rebuttal of his points. Even for someone such as myself who is not a libertarian, Shaw's arguments are weak, and yet the best you could do is sling around a bunch of four letter words?

By the way, I do read Tyler Cowen, who is, by the way, much better at elucidating his point of view without resorting to profanity, and most likely has a lot more respect for smart people like Krugman and Keynes, even where he disagrees, and he is certainly not pinning blame on "The Fed":

http://www.marginalrevolution.com/marginalrevolution/2008/10...


Usually I agree with you on profanity. But in this case, I think its irony (in light of Zed's recent history) is amusing and actually has a point. In fact I the thought of writing a profanity-laced blog post as a rebuttal to this article actually crossed my mind.


Yes, usually I find Zed to be better able to back what he is saying. I don't know what happened this time.


The Fed doesn't print money. It does affect the size of the money supply, but it does this with interest rates, securities, and the reserve rate (or can do this). The reserve rate is generally not touched (it causes shocks in the money supply). The last two generally affect lending and saving rather heavily (make the interest rate high enough, it's not worth it to invest; low enough, not worth it to save).

The fact that the dollar is fiat has little to do with the problems we ran into (printed money is only a tiny fraction of the money supply).


"Printing money" is only a euphemism for "expanding the money supply." I thought that would be obvious. I know the Fed doesn't actually print the currency or mint coins.


But printing money and expanding the money supply have different effects on the economy. Printing money necessarily causes inflation; expanding the money supply does not ( it depends on where AD and AS are relative to each other).


I suppose a counter-argument to this is that the Fed has been coerced into doing this because the people who run it are best chums (or motivated in other ways) with the banks and lending houses that allowed this problem to spiral out of control.


There's nothing like attacking something you are oblivious to.

I think I have a new maxim for the internet: Never have so many people said so much about that which they knew so little about.

(And yes, I count myself in that)


> There's nothing like attacking something you are oblivious to.

This is why, when it comes to rejecting a particular ideology, I believe you need to have adopted that ideology to the point that you genuinely grok it. If you can't replicate the mental operations that allow a subscriber to make sense of the world, what its problems are and how to solve them, and the ways they derive comfort and validation from those operations, then you're guilty of being uncharitable to their worldview. And if you're uncharitable, you're unlikely to develop an argument that demonstrates how an ideology is flawed given its own values and assumptions, or how that ideology actually conflicts with one's pre-ideological values and assumptions.

The ideologies that survive are always more resourceful at countering counterarguments than a non-grokker will expect. Which is as good a reason as any to actually try it out, first.


I agree as well. Too many people in the US use the term "liberal" or "socialist" without really understanding what that means. The same seems to be very much true at the moment about libertarians. Zed who I have a world of respect for doesn't seem to have the faintest idea what a libertarian is. What he describes is a centrist Republican.

I grew up a Socialist in a Socialist house hold. I spent much of my teenage years in all kinds of "important" positions in a socialist party in Denmark.

Then I became an entrepreneur and my whole world view changed. I didn't read Ayn Rand or any libertarian literature until 15 years later, but my world view changed completely during a year and I became what I later realized was a Libertarian. Most of my opinions are based on observation.

This also frustrates me sometimes with other libertarians (and in particular Republican's) is that they don't understand where socialists come from, so they often have difficulties communicating with them.

I understand all the arguments socialists make because I used to make them. But I also understand that their reasoning is based on absolutely flawed understandings of economics and human behavior.

I would recommend anyone reads Marx's Communist Manifesto http://en.wikipedia.org/wiki/Communist_Manifesto as it expresses the basic ideas behind not just Communism, but socialism as a whole and to a somewhat smaller extent the more left wing parts of the Democratic party in the US.

It would also be useful if Republicans, "liberals" and socialist had a quick read of Adam Smith's truly profound Wealth of Nations as this is kind of the libertarian equivalent of Marx's writings. So they would actually have a clue what we believe. PJ O'Rourke wrote a pretty good cliff notes edition of it:

http://www.npr.org/templates/story/story.php?storyId=6743689


That's pretty fascinating. My own ideological path went from

- Republican conservatism (raised in a Republican household) to

- pseudo-communism (some crazy idea I had in high school without reading Marx) to

- Objectivism (a friend gave me The Fountainhead while in college, picked up Atlas Shrugged shortly after, then Capitalism: The Unknown Ideal and Peikoff's book on Objectivism) to

- utilitarian liberal (introduced to Mill in a course on political philosophy (along with Nozick, who is unconvincing), studied more utilitarianism in other courses)

Note that I'm a utilitarian first, and liberal by implication of (my) utilitarian logic. I'm also aware of the bevy of criticisms that have been leveled at utilitarianism, some of which are persuasive (the Greatest Happiness Principle does not adequately address the complexity of moral psychology), while others are simply demanding a precision of calculation that's not attainable. In practice, one can successfully apply utilitarian reasoning in a great many situations.

The problem that I have with libertarianism is that I don't buy the "negative rights only" stance (at all), and believe that social interventions backed by force of law are necessary to overcome historically and sociologically entrenched inequalities of opportunity (positive feedback loops of discrimination and decay). That we haven't done it as effectively or efficiently as we would like doesn't mean that it shouldn't be attempted at all. There's room for experimentation, and we're getting better at experimenting. Many of the recently developed entrepreneurial practices (fail early) can be fruitfully applied in this area.


Also, collective action problems. I haven't yet seen a libertarian who can convincingly address them. Either they simply haven't taken them into account (which is the danger of relying too heavily on old texts like Smith, or even more recent stuff like Rand and Nozick), or they take a hard line stance on negative rights that suggests they care more about protecting their ideological commitments than addressing the problem.


Absolutely agree. Which is why the goal of any net conversation should not be to persuade, but to understand how the other ideology deals with arguments against it. That can sometimes sound like bickering, but the real goal should be understanding, not to "win" or "lose".


Yes, exactly. As a recent fortune cookie fortune put it:

"The purpose of argument, should not be victory, but progress."


To reject an ideology, you need ONLY to know that it is an ideology. Rhetorical fever: the communicable mental illness of humanity.


One of the problems with that viewpoint is reality is harsh. Pollution is a classic cases of the tragedy of the commons and all successful forms of government need to deal with this and thousands of other issues. Maximizing prosperity is something with many local minimums over the short and long term. IMO saying X is correct when you are wrong should lead to ridicule lest others assume it's a reasonable argument.

PS: Read http://en.wikipedia.org/wiki/The_Selfish_Gene works as an analogy for ideologies. They don't need to help their followers as ideology only needs to propagate faster than it's killed off.


> IMO saying X is correct when you are wrong should lead to ridicule lest others assume it's a reasonable argument.

I think ridicule is a bad idea, because it invariably activates one's ego defense mechanisms. When that happens, your chances of convincing someone that they're wrong (assuming that they're wrong) drop to zero, while the level of polarization goes up. Granted, some people are so hardened in their beliefs that only widespread ridicule may be able to put a crack in their shell (albeit at high psychological cost).


I am not trying to convince the person I am talking with to my side of the argument rather it's the audience. When people sit back and say your wrong because of X, Y and Z others see this as a demonstration of conflict so both sides could be right. But, when people say "the world is 6,000 years old" and you respond with "Did the talking snake tell you that?" it works on a different level.

Take global worming there is a manufactured debate on the issue and few people are willing to say, "Ok, smart guy how should we rewrite the laws of physics?" Or, letting people say "Clean Coal" like there is such a thing when they can say, "Ok, I agree that Clean Coal is great let's mandate zero CO2 emissions from coal in 5 years." so they need to say, "Well we don't have the ability to do that."


Since this reaction is so strong, wouldn't the logical move be to exploit it? I think successful salesmen often figure out how to reinforce people's ego defense mechanisms. They play to their audience's fears and offer some sort of relief.


Not if you want to live in a reason-based society.

Exploitation as an effective maneuver is dependent on a society unpracticed and unconditioned in the use of reason. It may be a practical move in the short run, but invariably has terrible consequences in the long. A society that remains vulnerable to such exploits will be swayed by the best exploiters rather than the best arguments (which is how it is now).

In the long run, our best strategy is to cultivate cool, calm, collected, and charitable discourse.


"cool, calm, collected, and charitable discourse" will always only exist in the right environments. At no time in history has there been a society that was completely rational. It's just not human nature.


There was a time in human history when it did not exist, period. There are no demonstrated limits as to how pervasive it can be.

The ability to engage in charitable discourse is simply a skill that can be taught like any other. Parents could be teaching it to their children, but socially and culturally we haven't yet made it a priority. We should.


I agree with all of your points. But the truth is, is that it is just one current in human affairs. No nation has ever been free of irrational delusion or demagoguery and entirely driven by rationality. This includes regimes like the Soviet Union, which supposedly had rationalist materialist philosophical underpinnings.

True, rationality can be pervasive, and it can be taught, but it can never be totally dominant. Our primitive substrate keeps coming out, and that is every bit as pervasive as rationality.


I agree that we'll never be completely free of irrationality, or that rationality will be totally dominant. It takes self-restraint to keep our primitive substrate, as you put it, at bay, and that's impossible to do every time. But I nevertheless think there's considerable room for improvement, and it starts with efforts like, say, PG's essay on disagreement.

Someone suggested turning that hierarchy of disagreement into tags that people could assign to comments on a debate site, and filter accordingly. I built something of precisely this sort for my master's project, and believe the idea should be implemented for nearly all online communications. It's doable, and an effective way to impress a great many people with the value of rational discourse, to which they simply may not have had enough exposure to appreciate.

And there is, I think, potentially a tipping point or critical mass where a culture of charitable discourse enters a positive feedback loop and makes gains even faster than before.

Whatever the case, I think there are definitely plausible means for improvement. They deserve to be tested.


You remind me when I figured out Libertarianism can't work (at least anywhere near as efficient as it should). Under Libertarianism, government must compensate for market failures/extranalities, example one being pollution.

So who decides what is pollution?

Once someone says CO2 is pollution, government now controls nearly all of your life.

(This isn't a failure of Libertarianism, it's a human failure -- greed.)


I think the most reasonable solution is to replace pollution controwls with a tax that is send to every american.

AKA CO2 costs 3$ per 1000lb. Every billion pounds you collect 3 million and every American get's their pollution check for 1c. This can still be corrupted but because the government is not spending the money it's more balanced.

PS: IMO the secret is for markets to price the correct information not for some group to tell them what to do.


Wouldn't a pollution charge work better if it were assessed individually, instead of collectively?


Thank you, Zed, for debunking internet-forum libertarianism. To the non-naive libertarians among us, however, you have provided no new information.

If you have the time, you should pick up some Friedman or Hayek. Friedman's "Free to Choose" is a mass market book on libertarian economic policy. Hayek's "The Use of Information in Society" is a beautiful exposition on the function of a decentralized market. But there are plenty others.

You might also benefit from a well-reasoned, economic critique of regulation. "Regulatory capture" is a real phenomenon, as is self-serving bureaucracy. If hundreds of thousands of pages of rules and a multi-trillion dollar budget weren't enough to fix the market, there is probably something wrong with the process. "More rules and money" probably isn't going to fix things.

I can find such writing for you if you don't have the time. Drop me an email.

However, you will find that writings by competent libertarian economists are not so easy to "debunk" when compared to forum posts written by 16-year-olds. Or Misesians. Those guys are crazy.


Or Misesians. Those guys are crazy.

How so?


I would like to see a social news aggregation site, such as Reddit and Hacker News, focused on quality debate. Users would tag each submission with its label in Paul Graham's disagreement hierarchy (http://www.paulgraham.com/disagree.html).

This submission, for example, would probably be tagged "Level 4: Counter-argument". And, probably, also with "Strawman".

You could filter out all submissions rated lower than Level 5 or 6 or whatever your threshold is.


I actually think this sort of functionality should be present throughout all forms of online communication. If that happened, the same standards of discourse might leak into offline communication as well.


And we could call it "The Argument Clinic" (Tagline: "The right room for an argument")


That would be fantastic.


I would just like to point out that Enron pushed for deregulation and always blamed government regulation of the market for the huge price rise that followed the deregulation, even though it was made on purpose by their corporation. Check out this documentary Enron: The Smartest Guys in the Room: http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the..., it's nice to learn from history. I agree that government regulation can be as dangerous as out of control police force, but libertarians (similar to communists) are completely oblivious (sometimes on purpose) of how absurd their idealistic word is and lack basic understanding of human nature. It's better to have an open, accountable, public police force than nothing at all.


The thing for me is, I don't just distrust the government, I distrust large organizations in general (government, fortune 500 companies, religions), I find that they are fairly inefficient. I am not interested in replacing one inefficient system (government) with another inefficient system (corporations). I don't want a corporatist society at all, I do want a strong rule of law.

I would welcome a world where we have an efficient market, not only of companies but of governments. There is a market for governments now, but it has very high transaction costs (moving to another country is expensive and dificult, often requiring years of residency to establish yourself as a citizen). One way to make for a more efficient market for government in america would be to have a less powerful federal government, note I didn't say "and more powerful state governments", at the state level you can break it down to counties and then cities. Ideally you could have (and actually do now) a world where people choose the government they want (not so much by voting but by moving). Voting by moving sends a much more powerful message than voting at a booth.

Here's the thing, if we had a small government, there would be no point in lobbying (rent seeking) because having the government's favor wouldn't get you much. Campaign finance reform attacks the wrong side of the problem, like using insecticide around your garbage can instead of taking out trash to get rid of flies.

Notice also that zed asked for a strong rule of law. We don't have that. The result of a bank becoming insolvent is not known, sometimes they will get a bailout, sometimes they won't. Many of the regulations for financial industries wouldn't be necessary if the companies thought they would be held accountable for their actions, they didn't think they would be held accountable, and they weren't, so given that set of rules they played the game properly.

Zed alludes to a couple of concepts. I think the efficiency that he is referring to is better thought of as maximizing utility.

No one can be made better off without making someone else worse off.

A state where the above is true is known as a pareto optimal state. http://en.wikipedia.org/wiki/Pareto_efficiency

Sorry if this was rambling, just my thoughts.


The EU (or more specifically the Schengen agreement) eases migration in Europe --- making voting by moving easier. Unfortunately they also tune down the competition between regimes by making the differences smaller.


What most people do not see is that libertarianism is against big corporations as well as big govrnment. In fact bigcos can not exist without government support. Reducing government and allowing the market to work should result in smaller, not larger organizations, a dinosaurs to mammals transition.


Bravo, right on.

Historically big cos use government to keep smaller competitors out.

Just look at internet businesses. They are fairly unregulated and while there are short term market leaders, these are constantly being challenged and eventually replaced by smaller more innovative competitors (90's .com vs. Google vs. yc)

Look at regulated businesses such as banking, auto and telecoms. These are examples where the bigcos itself has lobbied in most of the regulation. They have grown bigger and bigger and are now so big that "they can't fail" even though they actually did.

A truly free market (as libertarians believe we should have) in banking, auto and telecoms would have killed off citibank, gm and att years ago just as Excite, Netscape, AltaVista and others were in our business.


"In fact bigcos can not exist without government support"

That is a mighty big claim which flies in the face of practical experience.


Some ways in which the government helps large corporations:

Subsidies, government contracts, regulations designed to increase barrier to entry, a legal system which favors those with more resources, beneficial legislation which can be bought through legalized bribery (lobbying and campaign contributions)


alexandros might be referring to the argument was made by Roderick Long in Cato's lead essay in November: http://www.cato-unbound.org/2008/11/10/roderick-long/corpora...

He points out that government funding of highways acts as a de facto subsidy of Walmart and similar chains by partly socializing the costs of shipping, making it easier to compete with local businesses; and that regulations (which large companies can more easily understand and comply with than smaller companies) provide barriers of entry to industries.

He concludes: "In a free market, firms would be smaller and less hierarchical, more local and more numerous"

(I don't have a strong opinion on this. It sounds plausible but it's a bit anecdotal for my taste.)


I'm sympathetic to this, but at the same time, most local sellers (outside of those who exclusively sell locally-produced goods) rely on the same transportation system.


I would argue they don't rely on it so much as make use of it. As cities grow then they need to truck supplies in from elsewhere, but for suburbs and rural areas they can survive on the local economy.


Maybe. It depends where you live, though--not every area is capable of sustaining its own food supply(1). And, even those that are still import some goods.

But I think we're shifting the discussion a bit to a "Long Emergency" scenario.

As a bit of localist, I'm more troubled by local governments who bend over backward to bring large retailers into an area. I think these more localized benefits (tax breaks, development dollars, etc) are far more beneficial to, say, Wal-Mart, than the highway system.

(1) And many that can have transformed that land into housing and strip malls.

EDIT: Fixed formatting.


GM? Ford? I know IBM, HP, etc. get government contracts or at least did and those count as government support. Don't forget Microsoft which was supposed to be broken up but wasn't. Also, Bell and Rogers (in Canada) who are basically allowed to have monopolies over the phone and cable lines.

Lockheed Martin and Boeing couldn't be as huge as they are without defense contracts either.


I am sorry, I had very little time to post and did not hedge my claim appropriately. I am glad that others have stepped in and filed the gap.

The issue is that the government increases complexity and barriers to entry and therefore raising the Coase ceiling of how large an enterprise can become before being less efficient than a coalition of smaller rivals.


And, perhaps someone has pointed this out, but once gov't begins to regulate economic activity, the existing corporate players inevitably start to game the system. Who was it who said that truly free trade is great because it's the only ways to keep the capitalists in check?


Not that I necessarily disagree, but you could argue that in the time there have been corporations, there was also government support.


Why? Intuitively I would think that this would lead to bigger corporations.


Zed's point 3 is fascism not libertarianism.

Fascism the the standard straw man to throw at libertarians.

And because I can't bare to go through this again, let me just say:

Hitler was a vegetarian, and if you're a vegetarian you're a nazi.

Good day and Goodwin!


I stopped reading when he misstated everything about Libertarianism: " 1. Corporations are more “efficient” than the government because of the “natural selection” of our capitalist system. 2. Corporations are therefore better than the government at everything. 3. Corporations should be the government, or at least in control of it."

This guy obviously not only misunderstands what Libertarism is, or Austrian economics. But also grossly misunderstands the cause of our economic collapse. I tend to trust the scientists that have models that can accurately predict the future: http://www.youtube.com/watch?v=LfascZSTU4o


He also misunderstands evolution; That's a greater offense.


This sort of thing always happens when people who know a bit about computers stray outside their area of expertise.


this sort of thing is known as argument ad hominem.


It's quite obvious that the guy has no idea what he's talking about (e.g. "Money was very quickly given to corporations with no government oversight. Exactly how libertarians would want it.")


Actually, it fits a pattern that's been around since the Usenet days. We computer guys are masters of our digital domains. We often think that we can instantly understand anything that's well documented. The result is that the Physics, Chemistry, Biology, and Economics guys are often annoyed at the stuff we post.


Dude has just made up his own definition of a word in order to have something to rant about. What would you call it?


This is called a straw man fallacy. If you had originally said this, instead of resorting to another logical fallacy, you might have been taken more seriously.


But you are still attacking the person, rather than his argument.


Okay, then, Zed's argument fits the pattern of something formulated by someone outside of their area of expertise.

Zed has exhibited difficulty with the precise use of terminology before. In the recent talk that was posted, you hear him saying for people not to come up and correct him on his use of terms like "Turing Complete."

http://blog.cusec.net/2009/01/05/zed-shaw-the-acl-is-dead-cu...

There are other terms that he unintentionally abuses in the talk. (left as exercise) Still, I think it's a great talk and agree with a lot of what he says. He reminds me of a coworker of mine. This coworker is hazy on things like the laws of Thermodynamics and some aspects of Object Oriented Programming, but he seems to get things done, and I'd have to say he's a good programmer.


I shudder to think what Zed's code is like. Did I say rm? I meant cp...



Zed's essay is actually pretty good after applying the following transformation:

sed 's/libertarian/republican/'

Without that transformation, the essay is positively enraging.

I should note that republican here refers to the republican party who at times has espoused libertarian ideas. Don't throw the baby out with the bath water.


Excellent point. There has been nothing remotely libertarian about the Bush administration.


His article made me angry enough to write a rebuttal post. It can be found at http://justlikejesse.com/2009/01/08/re-the-two-flaws-of-libe... for all two of you that may be interested


Good point about gov't encouraging home ownership. It is extremely frustrating to hear all the rhetoric about the failure of capitalism and free markets when the markets are anything but free due to government subsidies designed to encourage home ownership.


In case you were wondering what this guy is describing. It's basically our current system of corporatism (where corporations control government) - which is not only the very opposite of Libertarianism, it approaches Fascism. More info: http://www.youtube.com/watch?v=ticytEUvVhQ


The best solution I've heard proposed was Socially Responsible Libertarianism. Which means the public is held responsible (not the government).

So basically when pollution problems arise, for example, it is the obligation of the general public to boycott or pressure the corporation to change (instead of the government fining the corporation, which ultimately may pay for the people in office to carry out the litigation in the first place). Another downside is that the government can easily be inflated with lobbyists to carry out a corporation's dirty work.

Libertarianism by itself is flawed because many corporations will establish monopolies or duopolies, stop innovating, raise prices, and call it a day.


> Libertarianism by itself is flawed because many corporations will establish monopolies or duopolies, stop innovating, raise prices, and call it a day.

Whereas with big government, they'll never ever hire lobbyists to ask for bailouts, subsidies and protectionist legislation...


This is where you attempt the defense that such activity is "initiation of force." The ability to make many varieties of libertarian philosophies practical hinges on how broadly you can handle interpreting initiation of force and the government's responsibility to stop that. Monopolistic behavior could be considered initiation of force in the sense that it unfairly and aggressively limits someone else's success or freedom for gains without right.

Then, of course, you get to decide whether drunk driving is initiation of force, whether very noisy neighbors late at night are initiating force, and so on and so forth.

This is not a critique of libertarian philosophies. Pretty much every philosophy is made practical through interpretation and compromise because life is more complicated than policy (and even poetry).


I think Zed should stick to Ruby rants.


>First off, the unstated goal of most libertarian doctrine is basically the following: > > 1. Corporations are more “efficient” than the government because of the > “natural selection” of our capitalist system. > 2. Corporations are therefore better than the government at everything. > 3. Corporations should be the government, or at least in control of it. >

and >> But that means that the only way to get government out of business is to get business into government.

>> There's already a lot of money in Libertarian think tanks; it comes from business. The explosion of dedicated Libertarian volunteerism necessary to transform the United States has yet to materialize, even though the Republican Party has harnessed an explosion of socially conservative volunteerism in the service of the same business interests that benefit from Washington's "Libertarian" bullshit factories. Money from business interests provides the only real political pressure pushing policy in a Libertarian direction.

Yes, the libertarian "movement" in USA is quite undefined. Very often statements by referents get out of the core of the concept. For example:

* Privatization of large public sectors, but not making a proper market and destroying regulation, therefore placing monopolies or oligopolies (e.g. Enron's abuse of pricing.)

* Keeping a systems of taxes and special bailouts or credit lines to large corporations that never reach small business or individuals.

* Keeping the system of immunity of owners of corporations for the behavior of the organization (something that appeared after Adam Smith, and is more aligned with his economic rivals.)

* The backers of US mainstream (alleged) Libertarians (save Ron Paul) are mostly backed by the US military-industrial complex, an industry completely against free market and almost exclusively based on tax-dollars supplied by a gigantic war-mongering government.

And the list goes on. I'm sure there are true good Libertarians but the masses seem to be enchanted , yet again, by large anti-free market interests.

IMHO, Libertarians shouldn't support any large organization as it would just replace government with similar flaws. And a true Libertarian can't be part of the Republican Party.


Hey! Put some carriage returns in there! You're screwing up the page rendering...


Not his fault that "pg" hasn't implemented something along the lines of:

  pre {
      overflow: scroll; /* currently set to hidden. Why? */
      width: /* something reasonable */
  }
A little CSS goes a long way for usability.


I think he did that so that things like code, which are messed up by wrap-around, can be presented cleanly.


See this thread on the feature-request perma-story:

http://news.ycombinator.com/item?id=229095

PG previously added a fix I suggested that, at least in FF2, had the nice quality of clipping PRE areas to whatever your browser width is, while enabling a horizontal scrollbar for the PRE when you moused in.

Unfortunately, this never worked quite right in other browsers, and doesn't work in FF3. In my experiments, the only way to get the same desirable effect in FF3 is with a DIV-based layout. (There might be some DOCTYPE voodoo that would make it work with TABLEs, but I haven't found it.)

So as far as I can tell: the best fix requires a change to the News.YC/arc HTML generation.


That could be, but there's got to be a solution that doesn't force me to set my browser window to 1920 pixels wide to get rid of the horizontal scroll bar.


Most code examples are ok. The problem is that users use it for quotes. Perhaps a better solution would be to support the <blockquote>


Sounds like a job for user preferences.


Thought you were going to say "Sounds like a job for big government!" :-) only joking


"overflow: scroll" doesn't force a line-wrap. What you're thinking of is the "white-space" property.


    <code style="overflow: scroll; width: 40em;"><font color="#5a5a5a">  * Privatization of large public
     **snip**
       by a gigantic war-mongering government.
     </font></code>


The person who submits quotations that way (as I did once) can fix the problem with a quick edit to remove the leading spaces. The leading spaces indicate (by HN formatting default) a block of quoted code, which will be displayed without word wrapping. Any time you edit a post or comment, you'll see the link to the formatting defaults here (the link text says "help" and appears at the lower right corner of the form for submitting the edit).


As stated above, Libertarians are against big government and big corporations. The argument has been made that big government couldn't exist without big government.


"Greenspan and friends were all major libertarians, and even Greenspan said he was full of shit." Oh well, at least that line made it worth reading.


Greenspan was a self-proclaimed libertarian who used to support a gold standard.

Of course then he gained virtually unlimited power by controlling the entire US economy. Power naturally corrupts, he renounced his views, encouraged every American to spend more than he or she possessed, artificially lowered interest rates and caused the entire housing boom.

Article is a joke. Can't believe this crap gets out there.


This is, however jaded it sounds, is basically correct. Read Greenspan's book (Age of Turbulence) to get it in his own words. While he was running the fed he was definitely not a libertarian.

In fact, I'd argue that that you can't be a member of the fed and be a libertarian, their entire purpose is to artificially manipulate the economy through government... or quasi-governmental intervention.


Maybe I missed the day where they fed us the bullshit that it all is a zero sum game. You cannot "make a fortune" at the expense of others, but only by offering others a better deal and, thereby, making them richer.


Zed's political commentary is a ghetto.


See how pointless BSchool is?


Libertarianism is fundamentally about liberty, not efficiency or anything to do with government vs. corporations. The "unstated goal of most libertarian doctrine" is to prevent people from getting bossed around or stolen from at gunpoint. He can't even comprehend such an approach from his "let's tinker with society for optimal outcomes" political vantage point.


Zed. There are many more than two.

For starters:

http://world.std.com/~mhuben/libindex.html http://en.wikipedia.org/wiki/Criticism_of_libertarianism

Notwithstanding these and the adolescent, Platonic fantasyland in which libertarians reside, it's a source of predictable and endless amusement how libertarians perenially attempt to present (and poorly camouflage) simpleminded greed as supposed societal good.

Odd, that dishonesty. And the last eight years, if not the last three decades, further show the lie of libertarian economics.

Any libertarians celebrate the 24th anniversary of Bhopal (and all the subsequent "market corrections" of Union Carbide) back in December?


This is the first well-written, lucid piece of writing on zedshaw.com in a long time, and it's actually quite good. For those of you turned off by just the name Zed Shaw, put that aside for a second. I'm not sure I agree with what he's saying, but there is no cursing, complaining about mean people, or talking about how unfair the ruby/rails community has been.

Maybe he is going to keep that no-rant promise.




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