The Very Moderate Libertarian

It’s time to succinctly define a Very Moderate Libertarian, or centrist Libertarian-leaning position, or whatever you want to call it. That’s the one I hold.

By nature, it’s not very well-represented by the more extreme Libertarian Party, but it’s definitely not a mainstream Democrat/Republican viewpoint either.

1. As a starting point: many of the structural criticisms of the corrupt, lobbyist-dominated, incumbent two-party political system aired by the Libertarian Party and by the Bernie Sanders wing alike are valid and deserve serious action.

The continuation of the Demoblican-Republicrat status quo and the rent-seeking Guilded Age that is upon us is the worst possible option.

1b. Another starting point: the US has some unique features that give it an exceptional economic dynamism relative to many of its developed-world counterparts, and there are no free-lunch solutions which can only capture the upside of this while removing the downside. In particular, wealth inequality is a byproduct of innovation and prosperity in an advanced, specialised society, and it’s here to stay. It’s not government’s job to fix it, nor is it a problem that in and of itself needs fixing.

2. No strong religion on how to fix healthcare, other than that what we’ve got now is the worst possible option, regardless of whether one goes the single-payer/state route or the free-market route.

This was true before the ACA (“Obamacare”), and it’s mostly true after the ACA too. No strong religion on whether the ACA was good or bad. It has done some good things, to be sure. But fundamentally, strong conviction that it moved some pieces around without fundamentally fixing any problems (if only because the most salient points were watered down by Republicans).  When legislation is sufficiently watered down as to be ineffectual, yet still costly, the solution is not generally to “ram it through anyway”.

The structural forces that support inflation in the healthcare sector are still there, and the obese midsection of the industry—insurers, malpractice lawyers, billing consultants, computer experts, hospital administrators, marketers, etc.—is still assured a disproportionate share of healthcare spending. It’s disproportionate in the sense that the market would rationalise it away if healthcare were nakedly exposed to the prices the market will bear. This same overhead would be trimmed by strict cost controls in a state-operated system. Both approaches have their drawbacks. The one thing the soft-libertarian knows for sure is that what we have now is a pessimal, worst-of-all-worlds approach.

3. Socially liberal by default, but open-minded and receptive to intelligently expressed concerns about unintended sociological consequences of most dogmas, including dogmatic social liberalism.

Religious critiques need not apply; religion has no place in public policy. The Constitution says so.

4. In favour of modest, competent, incremental public administration proposals, and highly allergic to grandiose initiatives and sweeping overhauls, particularly costly ones.

This applies equally to expensive, ambitious Moonshots as well as to ill-considered ideas to totally dismantle or disestablish big parts of government overnight without thinking through the consequences.

5. All other things being equal, free trade and globalisation are good things. Even if they’re not good things, they are unavoidable things.

But not all things are always equal. Of particular concern are the supra-national “accountability” structures that often created as a side effect of free trade agreements. These generally benefit private corporations seeking to trump local control (e.g. community opposition to environmental contamination) and jurisdiction (e.g. limiting ability of locals to sue foreign corporations in local courts for the very real damage they sometimes cause).

That said, global economic integration is certifiably unstoppable. Fighting it with neo-Peronist protectionist measures is stupid and ineffective. Efforts to halt or defer the “creative destruction” of dying industries for which politicians are inexplicably nostalgic (e.g. industrial manufacturing) are also pointless boondoggles.

While at first glance this sounds like a very Libertarian thing to say, this recognition runs counter to some Libertarian precepts as well. We live in an interconnected and interdependent world, and complexity of this nature increases fragility. There is no running away from the fact that we have to work and cooperate with other nations and trading partners within the logic of increasingly global structures. This goes against the inward-looking assertions of “sovereignty” of which Libertarians are sometimes fond (the Brexit mindset). In that respect, globalisation is like any bargain; you must give in order to take.

6. It’s not up to government to create jobs.

The public sector is, of course, a rather large employer, but it should never be a policy to create more jobs there than are truly necessary in order to serve some larger social objective of full employment.

A certain amount of Keynesian-style short-term countercyclical economic stimulus may be acceptable, but is discouraged and is a measure of last resort, not a tool to be wielded liberally at the first sign of a contraction or possible recession. If the GDP is only going to grow by 0.5% this quarter instead of 1.2% as promised, it’s not government’s job to swoop in and fix that by misappropriating taxpayer funds.

In general, government does not create jobs nor solve unemployment. There is no such thing as a “jobs bill”. By and large, the private economy creates jobs. Long-run societal employment comes from the health of the private sector. Misconceptions about this are widespread and very costly.

It’s also not up to government to provide re-training for the structurally unemployed. Unfortunate as it may be when middle-aged people have fallen out of the bottom of industrial employment after spending much of their life there, government cannot effectively provide them a new career or valuable skills given the specialisations demanded in our modern era. It’s a throwback to the days when relatively homogenous manual and industrial work was a growth industry. These days, it’s little more than a waste of taxpayer dollars.

7. Private-sector corruption is a very real and very serious problem, too.

To be clear, government should not be a default solution to all problems, but willfully blinding ourselves to the fact that large corporations accumulate power and use it for private gain is not the way, either.

Dogmatically blaming government for everything while holding up the private sector as the very picture of virtuous economic agency (which unfortunately Libertarians are apt to do) is misguided and dangerous. Neither are incorruptible, and neither are inherently free of pathology inherent in large organisations and bureaucracies.

8. Certain things need to be state-operated and/or state-funded, whether for reasons of natural monopoly, economies of scale, susceptibility to private corruption against the public interest, or some other valid reason. This includes fire and police, roads, public schools, transport, and defence. There is room for valid debate as to what the others are.

Public schools deserve emphasis in particular: it is integral to the function of every modern, developed economy to have a universally literate citizenry educated to certain minimum standards, no matter how mediocrely that outcome is sometimes delivered. School choice is a valid aspiration in the public discourse, but not at the expense of guaranteed universal education.

On the other hand, there is no question that our public sector is too large, too expensive, too inefficient, and often ineffective. It performs many functions that government really ought not to do, and sucks up a significant amount of tax dollars into costly boondoggles that reduce to an economic net negative.

9. A certain amount of social safety net is reasonable, and probably a requirement for the stability of any modern economy and democracy.

However, ours is outsized relative to the societal benefits it provides; other developed countries may pay even more for their social programmes, but they also get a whole lot more, pro rata. Our “welfare” (TANF) system sucks; it is limited, genuinely helps relatively few recipients out of poverty, yet costs a lot for something that doesn’t work well. Our food subsidy system (SNAP/EBT) is necessary in some form, but “SNAP benefits cost $74.1 billion in fiscal year 2014 and supplied roughly 46.5 million Americans with an average of $125.35 for each person per month in food assistance” (Wikipedia), and that’s not a cost-effective solution. $74.1bn isn’t that much, but it’s too much when spread across 46.5 million people.

Asking how we can more effectively cover more people with more food stamps is starting from the wrong end of the issue. The first question we need to ask is why there are 46.5 million people receiving SNAP when our total labour force is about 160 million (Sep 2016), and how we can empower the economy to address the larger structural issues that lead to this.

With the gutting of old welfare (AFDC) under Clinton, Social Security supplemental disability benefits have become the new “welfare”, for those able to get them (in some cases in increasingly creative ways). Medicare and the VA are barred from negotiating drug prices by Bush-era law (aka a handout to Big Pharma). There are countless more examples of perverse incentives and naked corruption throughout our social welfare programmes. To be sure, some of these are overblown and mythologised by conservative demagogues, but some of them are very real.

The real problem with social welfare programmes is not that they exist at all—at least, not from the soft-libertarian vantage point for which I advocate here. The objection is more to the lukewarm results. This stuff costs way too much and does too little for American people genuinely in need. Other developed countries’ citizens get a lot more for their tax Dollar and Euro. It needs to be reformed to be more streamlined and targeted to achieve real results. This doesn’t necessarily mean putting yet more screws to the poor, but rather better management, administration and cost control on the supply side. Big programmes may need to be split into more targeted and effective ones that solve specific problems better.

Some entitlement programmes are most likely largely ineffective, and need to be done away with. That may cause some short-term pain, and we should be prepared to endure it. On the other hand, some programmes may need to be funded more to be truly effective, and to some extent, that’s okay too, provided that the increased effectiveness is real and demonstrable, not just a handout to populist pressure or pandering to the proletariat.

10. Home ownership, college enrollment, and easy-credit expansionism should not be government policy objectives.

Top-down credit expansionism does nothing but create inflation and asset bubbles, and attract barnacles (e.g. for-profit diploma mills) to exploit it. The only reason 60% of US students have government-guaranteed student loans is because college is so expensive, and the reason it’s so expensive to begin with is because it evolved to exploit the widespread availability of student loans. The same dynamic is present in housing and real estate.

We need to return to fundamentals and bring these sectors down to earth, where they can only charge what the market will directly bear. This will cause serious pain and dislocation for the vast sectors of the economy (investment banks, lawyers, well-paid professional bureaucrats and administrators, etc.) that have evolved to exploit this teat, but they need to be weaned off through aggressive and decisive policy shifts.

11. US global interventionist foreign policy and military adventurism must be sharply curtailed.

But this should be done carefully and with realistic awareness of the fact that much of the US’s economic preeminence is tied to its global empire apparatus and the geostrategic configuration of the post-WWII environment.

It would be naive to think that we can simply withdraw troops and pursue the commonly disseminated Libertarian fairy tale of a strictly defensive, isolationist foreign policy. We are globally involved whether we like it or not, and if we abdicate that position, other actors will move in to take our place, including actors whose accession to greater global power can have very non-benign consequences, including for us. The one thing we can be absolutely sure of is that a sudden power vacuum will not bring about a beneficent pax postamericana.

At the same time, we are not the “indispensable nation”, and we don’t send our military to defend human rights or depose evil dictators. These are filthy lies we tell kids in Civics for Peasants 101. We’re totally fine with human misery and love evil dictators—when they do what we want.

Thus, while we should absolutely pull back from our more fruitless military adventures, we should recognise that we didn’t start them because we just love military adventures. Geopolitical logic is a complex, dark and cynical subject, and, rather worrisomely, it appears to be beyond the grasp of the current crop of Libertarian candidates.

At the very least, if we scale back our global military involvement, we should be prepared to make some hard sacrifices in the area of energy security and prices. This doesn’t just mean minor inconveniences at the gas pump; US GDP is very closely correlated with Vehicle-Miles Travelled. Energy is a deadly serious subject for the US economy and even for the US’s continued existence. The current crop of inward-focused, domestic policy-oriented Libertarian candidates doesn’t appear to have the pragmatism to acknowledge that. What happens abroad is highly relevant to the heartland. The year is not 1634. (Actually, it was pretty important then, too.)

12. Devolution back to the state level isn’t necessarily the way to go.

In a sharp break with Libertarian folk tradition, I don’t think the Very Moderate Libertarian should be a dogmatic states rights-ist.

Certainly, the federal government has undoubtedly usurped a lot of power over the years. And the intention of the Framers that states compete to enact the most favourable legislative and economic climates to attract residents and build prosperity is one to keep in mind at all times.

However, in the interest of simplification, streamlining and greater cost-effectiveness, the US has a lot of work to do in improving its appreciation of the concept of economies of scale. We needlessly duplicate all sorts of public administration, judicial, law enforcement and revenue structures at the municipal, county, state and federal level. A lot of our infrastructure and regulations languish in a costly morass owing precisely to the fact that we have 50 jurisdictions.

A lot of things that need to be centralised up to the federal level so that we can stop paying the enormous costs of having 50 ever-so-slightly different copies of them for no reason. When it comes to liberty, sometimes one has to be cruel to be kind; the most liberal outcome is not necessarily the one that leads to a Byzantine, morbidly obese and chaotic power structure in which it’s impossible to get anything done because everybody’s got to have their little fiefdom.

My home state of Georgia has 159 counties, second only to Texas’s 254 (and Texas is 4.5 times larger). Why does Georgia have 159 counties? This does not strike me as a positive manifestation of the virtues of liberty-loving local governance, but rather wasteful and dysfunctional bureaucracy that obstructs economic and political activity.

13. We over-regulate, but the private sector can’t be counted on to magically do the right thing.

We have a monstrously overcomplicated regulatory environment which drags down economic dynamism while frequently prosecuting the wrong things for the wrong reasons, and this is badly in need of simplification, streamlining and reform. (Part of the reason that’s so is explained in the previous point.) As the meme goes, everyone commits three felonies every day, and that’s not something we should look upon with indifference.

However, there are many examples of market failure, where private actors reliably do the wrong thing. The most classic examples of this involve the costs of negative externalities and short-term thinking not being priced in. However, there are others. So, from the fact that we regulate many things badly does not follow that we should not regulate anything, ever. Quite a few things need to be regulated. Do you really want to see the return to 1900s-era pharmacies, full of quack remedies and patent medicines, with only Consumer Reports as your guide to whether they’ll kill or help you? In the name of “freedom”? I don’t.

14. Liberal approach to immigration, but with a healthy dose of realism.

Our immigration policy is badly in need of reform, particularly the part that creates obstacles to legal immigration for productive, skilled and/or educated people who would be net-positive contributors to our economy and our society.

Furthermore, there’s no question that security concerns about refugees and the ever-present menace of “terrorism” are exaggerated demagoguery from populists pandering to a xenophobic underclass.

At the same time, to listen to some Libertarians one would have it that the doors should simply swing open. In an ideal world, perhaps. In our non-ideal world, no developed country can sustain a totally unbridled influx of unskilled economic migrants—not so long as that country has public infrastructure and services upon which those people make demands, anyway.

Immigration should be liberalised in a way that is actively guided by healthy national priorities. What kind of immigrants do we most want? Those are the kind that we should optimise the immigration system to most easily allow. Our present system does not do this, as evidenced by complaints from many captains of industry.

15. No strong religion on gun control.

The right to bear arms is enshrined in the Constitution and should be fundamentally conserved in some fashion.

We can also agree that the causes of widespread gun violence in the US run a lot deeper than mere widespread availability of firearms. There are other countries where private firearms ownership is common or ubiquitous, and they don’t deliver rates of carnage remotely in the vicinity of ours. Furthermore, we can agree that many gun control proposals are ineffective and costly boondoggles.

From this it does not follow that firearms ownership should be trivial or unrestricted. Background checks and licencing are reasonable measures so long as they are effective in doing what they set out to do (which means, they keep most people who should not have guns from having guns most of the time, not that they provide an airtight lid which determined criminals cannot pry open) and do not fundamentally infringe on the right to bear arms for the average citizen.

From this it also does not follow that all classes of firearms should be available to anyone who wants them. Constitution or no Constitution, Farmer Johnson doesn’t need grenades, mortars or artillery cannons, and I cannot conceive of good reasons why this should be legally possible.

16. Mass incarceration, zero-strikes laws, draconian sentencing = awful.

No explanation needed, really. Our rate of incarceration is absolutely unconscienable, and our highly politicised, get-tough-on-crime, law-and-order sentencing has ratcheted out of control in the last few decades.

To emerge from these medieval Dark Ages, which see a paramilitarisation of our police force, an enormous law enforcement bureaucracy that lives off of tens of billions in federal War on Drugs dollars, and even widespread criminalisation of consensual teenage sexual activity in unintended ways, all this needs to undergo a serious Renaissance, and it couldn’t possibly happen soon enough. We shouldn’t have to live in a country where talking to the police is so overwhelmingly dangerous that you would be a fool to utter a single word.

17. The tax code is Byzantine and excessive, and our taxation structures are too complicated

No strong religion on whether overall rates of taxation need to be reduced, whether the income tax should be replaced with a consumption tax, and whether the IRS need be simply “abolished”; that depends on many other things, and cannot simply be made as a blanket statement. All other things being equal, lower taxes and a more competitive economic environment are good aspirations.

What is most important is modernisation and simplification. Much of the Internal Revenue Code has not been updated since the 1970s, and does not take into account the increasingly global ways in which business is done, as evidenced by the sheer number of offshore tax loopholes available for those wealthy enough to avail themselves. The tax code does not accommodate the increasingly digital, nomadic and intangible ways in which we do business, either. This is a constant vexation to those of us in the tech industry who have to fill out tax returns clearly intended more for shoe factories than for online marketing agencies or software development companies. All this puts us at a significant competitive disadvantage.

What’s more, the Internal Revenue Code is insanely complicated, and hundreds of billions of dollars are sucked out of the economy annually for the costs of complying with that complexity. That’s little more than a handout to the accountancy and tax preparation sectors, and those sectors have lobbied mightily to ensure that filing taxes remains complicated and onerous.

Furthermore, we have a bewildering array of taxation sources in the US: federal payroll taxes, federal income taxes, state income taxes, (in some places) municipal income taxes, state sales taxes, county sales taxes, county property taxes, excise taxes, gasoline taxes, vehicle taxes, import duties—far too many kinds of taxes. Add them all up, and it becomes clear that in the aggregate, the average middle-class American taxpayer pays not much less than the average Western European, while receiving a lot less in return. This fundamental inefficiency is concealed in a dozen different ways in which we pay taxes, and deserves illumination. The soft-libertarian’s primary concern is not that taxation exists, but rather effectiveness and return on tax dollars paid. Why should we pay so much to get so little?

Finally, the US should end its fundamental conceit in taxing the worldwide income of its citizens regardless of where they reside and where it is earned, and should instead adopt taxation policies on this that are more in line with those of other developed nations. Some people will doubtless take advantage of a residency-oriented taxation scheme, but any tax scheme will be exploited by someone, somewhere. It’s still the right thing to do.

18. The environment doesn’t protect itself.

By its nature, and despite the claims of economists and their theories, it’s abundantly clear that the private sector thinks about short-term returns and doesn’t much care for longitudinal issues. The problem of negative environmental externalities is also widely understood.

For these reasons, sustainable development is an issue within the purview of government to guide. The focus should be on removing artificial subsidies that sustain our addiction to hydrocarbon fuels and on removing artificial subsidies and points of law which maintain automobile-oriented infrastructure and build more roads and highways even when that’s not what the population wants. Obstacles to the development of renewable energy should be removed and the private sector should be allowed to do its work in this area liberally. There are huge economic returns in store for the winners of that technology and commercialisation race if it is allowed to happen on a level playing field—a playing field not tilted by state collusion with Big Oil.

There is a certain category of environmentally positive infrastructure investment, such as mass transit, which is probably up to government to make because few private actors are interested in such a long and uncertain payback. That’s okay. Done right, these projects are far from being money sinks. They enable economic development and dynamism, and this can be seen all around the world in cities that have good transit networks. One could hardly argue that the Shanghai or Berlin metros are a drag on those cities’ economic growth.

I do not generally see much fruit in policies focused primarily on capping emissions. Libertarianism of any sort is a fundamentally optimistic intuition about the capacity of the private sector to solve problems if given the opportunity. In the case of the environment, it may take an extra nudge and incentives to get private actors to take the long view and work on renewables, recycling, reprocessing, repurposing and less polluting infrastructure—but that’s okay.

It is also okay for the government to step in to prevent perverse outcomes and Tragedies of the Commons in newer areas, such as the negative consequences of hydraulic fracking that are beginning to emerge.

However, whenever possible, government should get out of the way and let the market work out solutions. Government is fond of committees and agencies for the sake of having committees and agencies, and when it comes to the environment, as with other things discussed in this article, the primary focus should be on limiting these to where they are truly effective.

 19. And finally, something we can agree on with even far-right Libertarians, I think: it’s not government’s job to fix all problems.

A large category of things in life simply fall into the category of “shit happens”. Some of them government can and should fix. From this it does not follow, however, that for everything that could conceivably go wrong, there should be a government agency to oversee it, a district attorney to prosecute it, or even tort law to permit suing over it for huge sums.

We’ve seen the development of a litigation and regulation-happy society to a degree where the transaction costs and overhead of doing just about anything are greatly increased. It’s just parasitic drag, and only the lawyers win.

2 Comments on “The Very Moderate Libertarian”

  1. Steven Hann says:

    This is fantastic. It’s essentially the deeper, more detailed, more intellectually rigorous explanation of and arguments in support of moderate, centrist Libertarianism that I’ve been looking for after being drawn in this direction by the Johnson/Weld campaign. I turned my Johnson/Weld page on Facebook into “Moderate Libertarians of America” after the election and I would like to share this blog post there if that’s okay.


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