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Libertarianism Misconstrued

A heck of a lot of history is now open for debate since Francis Fukuyama wrote The End of History in 1992. The Harvard professor claimed that the ascendancy of Western liberal governance was the pinnacle of human ideological evolution. None of the changes since then have been great, but they have opened up a lot of discussion and debate about some of the seminal thinkers and scholars who fueled the shift towards what is now derisively referred to as “neo-liberalism” by its critics. Nancy MacLean did a hatchet job on James Buchanan; Quinn Slobodian has skillfully built imaginary conspiracy theories around successful economic growth policies that have moved poverty alleviation to the sidelines of policy discussions. Naomi Klein’s and Thomas Piketty’s bizarre takes on capitalism dominate coffee tables in Brooklyn and Berkeley. Pluralism is a necessary component of liberty, even when the ideas are wrong.

In the context of this sea change in how we are approaching neo-liberal thinkers, the publication of Andrew Koppelman’s Burning Down the House created a stir among classical liberals and libertarians when it was released last year. Koppelman is a far more serious scholar and sincere friend of free markets than any of the left-wing authors I mentioned above. Yet the book came in for some sharp criticism from friends of liberty.

Before I begin my review of it I need to make two disclosures. First, I know the author and think highly of him. We met at a Liberty Fund colloquium on freedom of expression and had a number of very interesting discussions during the sessions and breaks. I think he’s a genuinely curious and open-minded scholar, and he discussed this project with me. Second, that discussion prompted me to invite him to present the work to my colleagues while the book was in production. At that presentation, there were a lot of questions about his interpretation of the history of classical liberalism and his characterizations of various strands of the thought. None of it was fatal, but it was obvious that his vision of the material differed from ours. And that happens.

It’s hard to say what kind of academic book this is. Koppelman begins by discussing the somewhat famous, or infamous, incident in Obion County, Tennessee in which the fire department, at that time, did not provide fire protection unless the property owners in parts of the county had paid their annual fire protection fees. A resident who had failed to pay his fees for a year unfortunately had a fire break out in his home and the department did nothing to stop the blaze.

Then, despite admitting that the fire chief was not “so far as is known” an ideologue or philosopher, Koppelman begins a discussion of the reaction to the event among conservative pundits such as Jonah Goldberg, who is absolutely not a libertarian, and Glenn Beck who has certainly moved fairly close to the label in recent years. Is this a useful way to open a review and critique of libertarian thought and its impact on public policy in recent decades? I think it’s provocative and certainly worth considering extreme examples of failed policies, but unless the case can be made that this was the result of libertarianism run amok, I’m not sure it’s constructive.

He then reviews various strains of libertarian thought. On the plus side, Koppelman does see nuance. He recognizes that Hayek was certainly less radical than Rand or Rothbard, both of whom are typically associated with anarcho-capitalism and extreme individualism. That’s all well and good, but there is a lot that’s missing. He cites Brian Doherty’s Radicals for Capitalism, so he’s familiar with the text and seems aware of some of the strands. Yet he ignores much of the discussion among other members of the Austrian school, such as Mises, and more importantly, all of public choice. So the “debate” is between “reasonable” people like Hayek and “unreasonable” people like Rand and Rothbard.

He then turns his attention to John Locke, Rawls, and Nozick to some degree. Here, the problems continue. He argues that Locke was much more reasonable about redistribution than libertarians. The chapter on rights begins with a hypothetical case of a homeless man called “Joseph” with a pregnant wife in need of medical care. He argues that “in Locke’s world Joseph and his family would at least be decently provided for.”

I’m not so sure. You see, Locke was the author of a report on the problem of the poor in England in his policy life, and while Locke was somewhat “progressive” for his time, he was hardly supportive of providing homeless, unemployed people like Joseph with a decent way of life. He emphasized the importance of work. For Locke, the right to remove things from the commons was associated with mixing labor with materials, but labor also made land more productive. That aggregate social benefit was key for Locke. You could have private property if you worked it and made us all better off.

Ambiguity on the precise limits and proper use of government power makes Hayek appealing to people all over the spectrum. He’s a broad and insightful thinker and like an abstract artist, you can—within limits—see what you want to see.

In an essay he authored while serving on the Commission on the Board of Trade in 1697, Locke argued that all able-bodied poor individuals begging outside of their home parishes be seized and brought before justices of the peace and essentially put to hard labor. Children begging without a pass outside of their parish were to be sent to working schools “to be soundly whipped, and kept at work till evening,” and then sent to wherever they were to spend the night. Joseph wouldn’t have had it so great under Locke’s policy suggestions.

Koppelman later argues that Hayek himself would have approved of Obamacare because it didn’t replace the “free market” healthcare system in the US and provides a basic safety net to Americans who cannot afford health insurance. Hayek did support some broad social safety net at various points in his writing, but I am unaware that any serious scholar of Hayek or libertarian has ever made such a bold claim.

Intellectual giants are always revisited and reinterpreted. That’s why they are read over the centuries. But one must ask of each new interpretation—does this seem feasible? The Locke who wasn’t an anarcho-capitalist also wasn’t a huge fan of the unemployed poor. In order to make bold claims about authors who have produced a lot of writing, one must show care in approaching them.

Would Hayek have really supported Obamacare? That certainly runs against my priors and the way I have always thought about his work. Koppelman argues that Obamacare would have been consistent with Hayek’s general view that social welfare programs protect those in need from disasters and maintain support for liberal, democratic regimes. Perhaps one can argue that the ACA was partially an attempt to address problems in the American healthcare system that were affecting poorer Americans. But part of the difficulty in making this claim is that ACA ultimately did not separate healthcare from employment. Rather, it entrenched it even further by requiring even smaller firms, those that had 50 employees, to offer healthcare. It mandated that healthy, younger Americans get such care to pay for the program. It’s hard to imagine Hayek would have supported such anti-liberty steps. Perhaps one can make a case that Hayek would have supported a strong Medicaid program to support those in need. Better still, policies that would have increased competition, price transparency, and choice in American healthcare might have gained Hayek’s hypothetical approval.

But this is part of the danger of applying thinkers who were writing in different contexts to contemporary policy debates. As I argued using Locke’s report on the poor, it’s extremely difficult to sort through which version of a thinker can be applied to modern environments. Would Locke have supported a minimum welfare state in exchange for work requirements? Would Hayek have supported some policy interventions in healthcare because it is not a pure market and has become such a large part of the economy? Perhaps. We can make claims based on our separate readings, but when an argument runs contrary to much of the textual evidence one has to express doubt at such claims.

Koppelman is certainly correct in saying that Hayek’s approach to liberty is distinct from Rand and Rothbard. Hayek understood that socialism wasn’t feasible, and that knowledge simply couldn’t be aggregated more efficiently by government officials than it was through market mechanisms. He believed in government and law, or at least accepted its historical inevitability. He didn’t rage against the very clear and consistent problems with government; he wanted to find a way to protect the emergence of the market alongside government; and he correctly predicted nurturing markets could change the world, and boy has it. Global poverty has plummeted, we live materially centuries ahead of our recent ancestors. Markets have been a tremendous force for good in recent years despite the political backlash against it. Koppelman and I share the goal of protecting that progress and continuing it.

The ambiguity on the precise limits and proper use of government power makes Hayek appealing to people all over the spectrum. He’s a broad and insightful thinker and like an abstract artist, you can— within limits—see what you want to see. And maybe that’s what matters most about this book. Koppelman accidentally encountered Hayek and then became fascinated with him and is trying to introduce him to individuals who currently view him as a villain. That doesn’t seem to be a bad thing to me. Andrew and I don’t see the same Hayek in the texts, but we both acknowledge the amazing intellect we are encountering and want to emphasize the importance of markets for human flourishing. Whether or not individuals choose to read Burning Down the House, its publication is a good sign of the growing interest in libertarian thought. But the generalizations in this text make me hesitant to recommend it without reservation.