Libertarianism: Michael Munger Responds to His Critics

I appreciate the care, and the variety of close readings, given to my Liberty Forum essay by Nathan Schlueter, Nikolai Wenzel, and Scott Yenor. The question we took up was a practical one: Can libertarianism be a governing philosophy? The answer one settles on will depend partly on what one means by libertarianism and partly on what it takes to be a governing philosophy.

Nathan Schlueter does what many classical liberals do, making some distinctions that ensure that the movement will be fragmented and obsessed with infighting and checking one another’s “papers” for authenticity. Having myself been active in “Big L” libertarian politics, it’s easy to recognize the impulse to have a very small, but ideologically pure, group of associates who agree with you about everything. Ultimately, libertarianism, or classical liberalism, can’t possibly be a governing philosophy if we act on Schlueter’s desire to make the two sub-movements smaller and less inclusive. Still, he is quite right to make the distinction, as it is an important one to many people.

Nikolai Wenzel makes an interesting point, and I think he’s got this right. Society may not need “Big L” government, if citizens assimilate libertarianism as a philosophy of life. Willingness to refrain from initiating force and an insistence on leaving others alone could easily be a substitute for having “Big L” Libertarians in public office. Perhaps libertarianism cannot be Libertarianism, the governing philosophy, but it’s not meant to be. Self-governance would do the trick, if it were universal.

Scott Yenor raises an aspect of libertarian “politics” that I had left out, and he is right to chide the omission. As I argued in a debate a couple of years ago with Professor James Stoner (published by Law and Liberty at the time) and in an interview I did with Nick Gillespie of Reason magazine, it is a mistake, politically and morally, to cede the “public” aspects of our lives to the statists. It’s simply not true that everything we need can be obtained through impersonal exchange in markets. What libertarians must do, to have a claim of being a comprehensive philosophy of living, is to (re)annex the voluntary public sphere, reclaiming precisely that space that classical political philosophy rightly held to be so important. In an essay for the Foundation for Economic Education, I called this “voluntary private cooperation”; I did not discuss it in the essay to which Yenor responded.

The reason that Yenor’s point is so important is that he’s wrong about libertarianism (though not wrong about my statement of it). Alexis de Tocqueville’s emphasis on “association,” and what Richard Cornuelle called the “independent sector,” are the keys to making libertarianism a philosophy of public interaction. The notion that there are only two spheres of human action, the state and the market, is simply a canard. Instead, we need to focus on the distinction between what is voluntary and cooperative, and what is coerced and commanded, and claim for ourselves everything in the first category. This is why James Buchanan, and public choice theory (as I argued in my 2015 book Choosing in Groups), should be seen as part of political philosophy, not a contribution to the study of markets.

Nonetheless, it is quite true that many libertarians focus exclusively on markets as the only alternative to coercive state action. It’s an impoverished view of libertarianism, but many who identify themselves as libertarian hold exactly this view. Consequently, Yenor is not wrong to say that if “socially atomistic market agents” are all that citizens can be, then we need something more. Unless and until libertarianism can claim voluntary private cooperation in groups—“politics”—as an important feature of its vision of society, libertarianism can’t be a governing philosophy.

This leads us back to libertarians and classical liberals. Several readers of the essay responded to me in emails expressing various views of the notion of rights. These different outlooks concerning rights and contract relate to the useful comparison drawn by Nathan Schlueter. For “real” libertarians, it is often an article of faith that if I truly own something, then I can make whatever use I want of that thing. It should then be true that I can enter into contracts even if it might harm someone else. Many would disagree, of course, and say that contracts cannot harm others not party to the contract without the consent of those affected.

One way to think about the distinctions that might be made is put forward by Richard Epstein, particularly in his book Design for Liberty (2011). The “pure” libertarian, natural rights conception would hold that contracts between consenting parties are always allowable, and must be enforced by the coercive apparatus of the state. In fact, the coercive apparatus has no existential justification other than its ability to enforce contracts.

Such contracts would extend, in the pure libertarian conception, even to “restraint of trade” agreements, or price-fixing. If two sellers want to collude on the prices they charge in the market, they are free to do so. Further, if one seller violates the agreement by undercutting the price, the other party to the contract could sue, and win, and the state would oversee the process of adjudication.

The “common law” or classical liberal conception, according to Epstein, is less accommodating. Sellers can collude or communicate about price-fixing, but the agreements are not legally enforceable. If one seller violates the agreement, the other seller cannot sue or use the state to prosecute the violation. In effect, public policy protects, or at least does not proscribe, attempts at predation in markets because of the competitive threat posed by implicit or latent competition. If one firm can drive another out of the market by charging low prices, that’s okay, because in the absence of barriers to entry, the pricing behavior of even a single firm is disciplined by potential new firms. This passivity is a “policy” in the sense that it relies on market forces to regulate market excesses, the core of classical liberal (but not libertarian) economics.

There is a third position, which we might call progressive or statist, which would entail active antitrust enforcement. In addition to not enforcing contracts in restraint of trade, any attempt to negotiate such contracts would be per se illegal under this view. Moreover, price-fixing would be a crime, with fines and jail time for those found guilty. Under this conception, economic agents do not have the right to enter into contracts as they see fit, and they do not have the right to charge any price they wish as a result of colluding with other producers. Further, charging low prices that tend to drive competitors out of business is seen as harmful to the level of actual competition, leading the authorities to seek to preserve even weak firms. This view presupposes that law enforcement officials can tell the difference between predation and vigorous competition, and that they can insulate themselves from political pressures to protect the weakest market actors from honest competition.

All three of these views have coherent, though very different, implications for a governing philosophy. The libertarian view would restrict state action to enforcement of any contract that does not explicitly harm any other party, preserving the right to charge whatever price one wants for one’s own property. The classical liberal takes a more consequentialist turn, judging the value and enforceability of contracts in terms of their social merit. Since there is no social benefit in enforcing contracts in restraint of trade there is no commitment to such enforcement. Finally, the statist focus is skeptical of the ability of markets to discipline themselves, and invokes active antitrust management of prices and behavior.

My intention here is to illustrate the difference in governing philosophy implied by the libertarian view, grounded as it is in deontology rather than consequentialism. Of course, it is precisely the deontic and unequivocal nature of libertarianism that attracts many adherents. The problem is that arguments based on rights theory are unpersuasive to those who don’t share those deontic commitments. Arguments about consequences admit of appeals to evidence; arguments about fundamental moral imperatives mystify outsiders and nonbelievers.

The intention of my Liberty Forum essay was to suggest that “directional” libertarian governance could create an effective political alliance between libertarians and classical liberals. I was not confused about the difference between them, but I am optimistic that what they share can make libertarian directionalism a potent political force. The insistence that classical liberals are just different from libertarians, and should go their own way, is mistaken.