no third solution

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Libertarians Are Not Idiots

January 18th, 2008

Government is slavery. Taxation is theft.

Libertarians are pie-in-the-sky utopian pipe-dreamers. But we’re useful idiots. Or so the argument goes.

Earlier this week, I referenced that attempt by one Bryan Angliss to paint libertarians as basically utopian pipe-dreamers, short on pragmatism and long on useless “theory.” Angliss’ commentary is pretty close to what I’ve referred to as The Conundrum, when a non-libertarian accuses the libertarian of being a base hedonist, at best. I was compelled for some reason to return to his post yesterday and peruse the comments. I’m not one to engage in comment wars on other sites, it’s often a fruitless argument against dogma. And it’s usually useless to address arguments made by other commentators, most of whom are idiots.

But then I noticed that Angliss responded to some of his detractors in the comments section. And what he said to them, well, I felt compelled to respond. Actually, “infuriating” would be a good description of how it made me feel. Enough already, I’ll respond to Angliss here.

Responding to one libertarian, Angliss perpetuates the myth of benevolent government and malevolent man:

Individual human nature is base, mean, selfish, and violent. Yep, that’s what I want my society to look like.

…And everything I’ve read convinces me that libertarian ideology, applied on a national (or even state) scale would flame out, crash, and burn. It’s all theory, no pragmatism, when representative government exists to determine the most pragmatic approach to solving problems.

The first statement is clearly a mindless regurgitation of the Hobbesian myth, that without government, life would be nasty, brutish, and short, as man finds himself in a perpetual war of all against all. Allow me to regurgitate the counterpoint to this fallacy. This is not my original idea, I probably first got it from Hoppe, but basically the argument that government is needed to reign in man’s baseness is inherently self-contradictory. If it is true, that man’s nature is base, selfish, immoral, shortsighted, and evil, then there is no reason to believe that a government being comprised of such men could be anything other than a projection of those traits on an unimaginable scale.

Moving on, it is clear that he hasn’t read The Voluntary City, to my limited knowledge, the single best compilation of articles and essays describing real world examples of how markets work to provide things generally believed to be the provenance of government. Think “roads.” Think “community planning.” Think “utilities.”

Responding to yet another comment, Angliss trolls:

A small federal government with limited powers would not have protected consumers from an AT&T monopoly, … or broken up the rail monopolies, or been able to pull us out of the Great Depression, or….

I think you get my point.

Bwahahahah!

Seriously. In terms of “the ease with which I can explode these myths,” this statement is on par with (or perhaps exceeds) his “stadiums are a legitimate public good” argument.

I don’t know about AT&T, but my understanding is that their “monopoly” status was due in no small part to previous government actions or regulations. I excised “Microsoft” from the list because I don’t know enough about the situation to even provide a synopsis. My gut tells me that they’ve been able to game the system of intellectual property rights [a Government creation, no less!] to establish their dominant position in the market place.

Continuing, a small federal government would not have had the power to grant land to the railroads creating de facto monopolies. If, on the other hand, Angliss is referring to the landmark Northern Securities case, it may be safe to argue that there was not actually a monopoly in play, and that the case is yet another (in a long line of such cases) where anti-trust law is used to protect inferior competitors from market forces, accordingly, Northern Securities, and others like it, represent a significant welfare losses to consumers.*

Many economists concur that it was the FED policies which increased both the depth and breadth of the great depression, and these are Nobel-prize winning economists like Hayek and Friedman, not just the libertarian kooks like Rothbard. A small Federal government without the Federal Reserve Act emphatically could not have plunged the U.S. (and the world) into the Great Depression to begin with.

With apologies to Mr. Angliss, I think you get my point.

Deeper still into the comments, Angliss suggests that “contracts are a form of force,” as a means of negating the general idea that a libertarian society can be self-regulating through the use and enforcement of contracts to which the several parties have voluntarily agreed.

Let’s think about this for a moment, shall we? Contracts are a form of force, right? Even if they’re entered into voluntarily, enforcing the terms of the contract if one of the contractees wants out would be a form of force, so that’s “wrong” by your own definitions. Yet voluntary contracts are one of the fundamental mechanisms by which libertarians want to run the country.

For starters, Mr. Angliss, libertarians don’t want to “run the country.” We just want to run our own lives. But this topic, along with his deification of “democracy” will have to wait for another time.

Words have meanings, Mr. Angliss, and a contract is not force. What Angliss is most likely referencing here is the idea of specific performance, where a government court system compels a party in breach of contract to fulfill the contract. Seeking specific performance is a form of force. I will not debate this.

Failure to perform one’s obligations under a contract, however, is force. So the guilty party is the one in breach, not the one seeking restitution for the force employed against him by the default. Few but the most ardent pacifists will argue that retaliation, defense, is not a justified use of “force,” so I could make the argument that specific performance could be justified under libertarian principles.

But let’s imagine, for a moment, a pacifist world where we abhor even the idea of specific performance. I can play this game. It’s clear that Angliss cannot.

There are voluntary, contractual ways to eliminate the specific performance portion of contract law. One possibility is social ostracism, “black-listing,” or some sort of ratings system like that employed on eBay. A new participant would have a hard time entering into his first several contracts without putting up some collateral, or without a guarantor or co-signer of sorts. Once “in the system,” if you will, his performance in existing contracts could be rated. Failure to perform one’s obligations per a contract would result in some sort of demerit. At the most local and informal level, we all know a friend to whom we refuse to lend money, because he has earned a reputation for not paying people back. At a more impersonal and macro-level, various rating systems, black-lists, etc., could be employed, and their accuracy, reliability, and integrity would also be subject to a market test.

Another idea which is currently in use is the escrow agreement. If I make an offer to buy real estate which is accepted by the seller, and then I decide to back out, there is no recourse to specific performance. The seller can’t force me to buy his house, for a number of reasons not worth discussing here. But what he can do is keep my earnest money deposit, which was held in escrow as a safeguard against the small possibility that I’d back out of the deal. Here, Angliss says that I can object, “Taking my EMD is force,” I am clearly incorrect. Refusing to fulfill my obligation per the contract is the application of force, in this scenario.

The money is not mine, it is the sellers per the terms of our agreement, and at this point, it would only be an exercise of force if I were to try and prevent the seller from keeping my EMD. Because there is the possibility that I might be inclined to do just this, the money was voluntarily deposited with a neutral third party as a safeguard against such an event. And this is why sellers rarely accept an offer which does not come with an EMD to be held in escrow.

Neither of these suggestions are meant as the be-all, end-all of contracts. But they are far more than the theory Angliss so flippantly besmirches. These are examples of “pragmatism” at its finest: in practice.

+ Recommended Reading +

* Antitrust and Monopoly: Anatomy of a Policy Failure by Dominick T. Armentano
Economics & The Public Welfare: A Financial and Economic History of the United States, 1914-1946 by Benjamin M. Anderson

Comments

4 Comments

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  • KipEsquire says on: January 18, 2008 at 3:11 pm

     

    Great post.

    A few points about specific performance:

    1. It can never be used to enforce a labor contract. Courts have long been unambiguous about this — it would violate the Thirteenth Amendment. Only money damages or, very rarely, negative injunctive relief* are available. (*NIR = “I can’t make you work for him, but I can order you not to work for anyone else. Only available in extreme cases, typically performing artists, newscasters, etc.).

    2. In practice, specific performance is usually only ordered in the context of replevin, which is a lawsuit to retrieve property improperly withheld after a breached contract(e.g., if we have a contract for you to watch my dog and then refuse to return her to me, then I am going to sue you for the dog and not the value of the dog — the court will order specific performance on the contract and coerce you to return it). From the perspective of the defendant, there is (usually) little difference in terms of how coerced he feels between “turn over the property” and “pay for the property.” The difference to the plaintiff, however, can be substantial (woof!).

    Did I mention that this was a great post? :-)

  • David Z says on: January 18, 2008 at 3:42 pm

     

    Thanks for the comments Kip. This post was exhausting. A good way to end the week, and start a four-day weekend…

  • Eric Sundwall says on: January 30, 2008 at 2:46 pm

     

    Yes, nice post. I hate the pragmatic accusation. The idea of contracts is tricky. The most libertarian scenario in this regard still has to function in the context of meaty legal precedent, that seems necessarily statist, in order to derive supposed legitimacy and often masked with the right of force with no remorse. But of course humans can be insanely irrational (the dog keeper example being quite good) and whether they are inherently mean, selfish or violent, often seems less likely as they are stupid. The cunning, punishing and controlling the stupid seems as likely a derivation of the state as anything sometimes.

    Love the whole ‘Market Anarchy Carnival’ bit btw.

no third solution

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