The Angry Libertarian

Libertarians believe, to one degree or another, that taxation is government-sponsored theft. Some apparently realize that a certain amount of government structure is required, but the purest form of the philosophy would abolish all government and have everything depend upon individual property rights.

Without dwelling too much on the philosophical underpinnings, the pure form suffers from several failures. The axiom that private property is fundamental, and those that now own it have some special right to it by virtue of a ill-defined concept of historical ownership, is just another in a long line of justifications for the rights of the "haves" over the "have nots". The wealthy always come up with justifications for the preservation of their favored position: "Divine Right of Kings", hacked from the wilderness, inheritance, legally sanctioned, etc. We will leave to others to explain how justification of inequality by prior taking can be logically defended.

From a practical point of view we can see that allowing the "marketplace" to operate freely produces undesirable outcomes. While it may be pleasant for the true believers to blame societal failures on the existence of even a residual state, there are too many cases where reality just contradicts these ideas. It is not true that competing groups will avoid conflict since it would not be "rational". Private police or armies do not divide up things in a rational fashion. Thus, in those areas of the world where an effective state does not exist (the Libertarian ideal) we see unending conflict. We have Rwanda, Columbia, Sudan, Kosovo, Serbia, Croatia and Afghanistan as example in just the past two decades. Rival factions do not behave rationally, they try to become dominant and eliminate their opponents. Without a central authority to maintain peace a stateless region drops into barbarism.

Similar cases can be made for the control of markets and natural resources. Organizations don't plan for the distant future, they plan for now. The result is the depletion of natural resources, pollution and the permanent destruction of the environment. Uncontrolled logging in New England during the 18th and 19th Centuries caused the total elimination of most of the forests. When there was nothing left of economic value, the land was turned over to the states for use as parks. With government management we now have, once again, forests in New England. A total failure of the private market. Similar cases can be seen with over fishing. The cod population is within a few years of extinction, as was the whale population until government action put a stop to it. Each group tries to extract the most it can and, without a series of rules, eventually everyone suffers. Whatever the attractions of a stateless society of rational actors may be, it is just not borne out by history. Just as sports can not be played without rules and referees, so society must have a structure to make the rules and prevent abuse by those who wish not to follow them.

What we need to be concerned with is why Libertarian ideas have taken hold among those with little to gain from their adoption, and why is this mostly an American phenomena? So we address the practical consequences of the anti-tax movement. In Europe and Japan we see little of a movement towards self reliance, even though the effective tax rate is higher for most people than in the US. There is no clamor to eliminate retirement support, public health programs, child care, unemployment benefits or free higher education. Apparently people think they are getting something of value for their taxes. Why not here?

There is one fundamental difference between the US and most of the other developed countries. The US spends a much larger fraction of its government revenue on militarism and policing. Roughly half the monies collected by the government goes to this sector. So the average taxpayer gets about 40% less in social services than his counterparts elsewhere. The size of this budget difference is downplayed in the US. Various accounting techniques are used to mask the size of the outlays. For example, many weapons systems are transferred to the Energy Department and NASA budgets. Similarly health costs associated with veterans and war injuries are reassigned. Veterans retirement benefit are not considered a military cost. Another technique is to use supplemental budget allocations to fund purely military expenses. Currently this technique is being used to disguise the costs of the wars in Afghanistan and Iraq. The net result of all this accounting adjustment has been to distort the public's perception of where their tax dollars are going.

Many people also believe that our contribution to foreign aid and international organizations is higher than it is. The US spends about 1% on real foreign assistance, the lowest of any developed country as a percentage of the GNP. Many people think this is in the 10-20% range. Similar misperception occur with the size of our contributions to the UN and related organizations.

On the other side of the balance sheet people are continually misled about the cost of social programs. Welfare type programs are much smaller than most people think. Nevertheless we have developed an angry group which oppose taxation because they think it is be used wastefully or immorally on human services. They are right that they are not getting their money's worth, but the reason is not defects in social services but the loss of the use of about half their taxes. Another misconception is that government spending on social programs is inefficient. Stories about government waste seldom arise in discussions of social security or Medicare. The $4000 toilet seat syndrome is in the defense budget not social security. When given the task of collecting funds for social services, and then redistributing them as appropriate, the government does not have to generate a 10-30% profit for investors. The government does not pay the head of Social Security a multi-million dollar salary as is prevalent in the private health care industry. Why have most of the nonprofit health care organizations been eliminated recently? Once a Blue Cross goes for-profit, the owners give themselves big salaries and the rates climb. So private enterprise needs to demonize the public sector to make sure there is no comparison between the two models.

Another angry Libertarianism belief has to do with the power of unions to drive up costs and make companies inefficient. With only about 9% of the workforce unionized in the US this argument no long stands up to close examination. Unions have been in retreat for almost forty years, at best they have been able to cushion the changes in their industries as work is outsourced and benefits have been cut. Once again, Europe is the comparison. The union movement is still much stronger there and, as a consequence, workers have better working conditions, longer vacations, more secure pensions, better unemployment benefits and continuing adequate wages. If the unions were responsible for so much of the trouble with industry, than Europe would be in a noncompetitive position and we wouldn't be buying Mercedes. Once again the anger has been misdirected.

Another source of anger is the consolidation of big business or, as sometimes stated, the joining together of business and government into a common interest group at the expense of the people. This is an unmistakable trend. There was a change in attitude towards big business during the Teddy Roosevelt era. That is when the anti-trust legislation was first created, the big trusts split up, and the creation of government monitoring agencies started. This was also the era where the lower and middle class made its greatest gains in standard of living. This era started to end during the Reagan administration. Since then there has been no attempt to limit the size or reach of corporations. The power of the regulatory agencies has been curtailed and the power of corporate money in elections has grown to an unprecedented level.

If angry Libertarians are right about some of these developments, why have they continued without interruption? The simplest explanation is that people's anger is being redirected to areas where it creates a lot of commotion, but does not address the real problems. Changes in social security or welfare have nothing to do with corporate consolidation, or the drop in the standard of living of the average worker, or the rise in health costs. So while some of the anger may be justified, the techniques being used to correct the perceived problems are essentially ineffectual.

Gathering together into groups of like minded individuals to share complaints and ridicule those thought to be responsible may be a satisfying activity, but as a means of effective political action it has been a total failure. One can be an idealist and bemoan the imperfections of the current society, or one can be a realist and at least attempt to organize and take steps to bring about change.

I seriously doubt that there is much commonality of interest between the average middle-class angry Libertarian and the wealthy pundits of the Cato Institute or Alan Greenspan. These groups continually feed the Libertarian anger while promoting the status quo and their own privilege status.

Choose your allies carefully: there is many a wolf in sheep's clothing.

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Copyright © 2005 Robert D Feinman
Feel free to use the ideas, but the words are mine.