“The Greatest Blog Post Ever Written”

Deidre McCloskey has a post entitled Factual Free Market Fairness, which has received a great deal of attention and praise, including the claim by more than one person that it is the greatest blog post ever written!  McCloskey’s specific point is that the story told by philosophers who defend what she calls “high liberalism” (and what I would call modern welfare liberalism) rests on a factual mistake.

McCloskey writes:

The master narrative of High Liberalism is mistaken factually.  Externalities do not imply that a government can do better.  Publicity does better than inspectors in restraining the alleged desire of businesspeople to poison their customers.  Efficiency is not the chief merit of a market economy: innovation is.  Rules arose in merchant courts and Quaker fixed prices long before governments started enforcing them.

I know such replies will be met with indignation.  But think it possible you may be mistaken, and that merely because an historical or economic premise is embedded in front page stories in the New York Times does not make them sound as social science.  It seems to me that a political philosophy based on fairy tales about what happened in history or what humans are like is going to be less than useless.  It is going to be mischievous.

How do I know that my narrative is better than yours?  The experiments of the 20th century told me so.  It would have been hard to know the wisdom of Friedrich Hayek or Milton Friedman or Matt Ridley or Deirdre McCloskey in August of 1914, before the experiments in large government were well begun.  But anyone who after the 20th century still thinks that thoroughgoing socialism, nationalism, imperialism, mobilization, central planning, regulation, zoning, price controls, tax policy, labor unions, business cartels, government spending, intrusive policing, adventurism in foreign policy, faith in entangling religion and politics, or most of the other thoroughgoing 19th-century proposals for governmental action are still neat, harmless ideas for improving our lives is not paying attention.

The post then goes on to discuss many more examples of how government has worked poorly and that the true method for improving people’s lives is through markets.

This is music to my ears in several octaves.

First, and most importantly, it is based on factual claims like this that I root my consequentialist justification for a moderate libertarianism.  Markets work better than government, and government has an important, but limited role to play.  The argument against consequentialism – that it will assign to government excessive power – is wrong on the facts.

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James Bruce’s Critique of My Consequentialist Libertarianism: Part II

In my last post, I offered some responses to James Bruce’s critique of my consequentialist libertarianism.  Now, I complete my response.

4.  Consequentialism and Constitutional Rules: Next consider political institutions and constitutional rules.  At the political level, this approach suggests that we should employ rules that are designed to produce good results.  That will, of course, mean laws and institutions that protect and promote liberty, but it may have certain limited departures such as the possibility of welfare for the poor.  But while the laws and institutions should ultimately be justified based on human welfare, that does not mean, as I develop below, that the government should have the discretion to freely depart from institutions of freedom based on its claims of promoting welfare.

Now consider constitutional rules.  Bruce claims that consequentialism is “a strategy of maximization. So the state can always appeal to the need to increase prosperity or decrease unemployment to pursue its social engineering.”  Thus, Bruce suggests that consequentialism will approve of cases like Kelo v. City of New London.

But this is mistaken.  There is a strong consequentialist argument for placing in the constitution a prohibition on takings of private property for nonpublic uses (takings that Kelo wrongly approved).  Even though the state claims to be acting for the public welfare, that does not mean we should allow it to act on this claim.  Instead, the state will neither have the right incentives nor adequate information to use the eminent domain power to good effect when it is allowed to act for nonpublic use.  Thus, we should constitutionally prohibit such actions on consequentialist grounds, even though on occasion the state might act beneficially.  In general, its takings will be harmful.

Bruce counters that if Kelo is prohibited, it will be based not on a “principled objection” but “just a pragmatic one.”  But this is not persuasive for a couple of reasons.  First, I don’t know why it matters whether our constitutional provisions have a principled basis or a pragmatic one.  Second, I reject this distinction.  For a consequentialist, all constitutional provisions will be justified on the basis of promoting the welfare of the people, but that does not make them any less weighty.  Finally, as any lawyer know, the distinctions in our laws are often messy and seem pragmatic.  For example, should we allow takings for public use with just compensation or instead require the state to negotiate like any other private actor?  If we allow such takings (as Bruce seems to suggest we should), is that based on principle?  Maybe, but what principle?  Most often, such takings are justified on the ground that they are needed to promote the public welfare.

5.  Theories Based on Truth and Theories Based on Defending One’s Position

Finally, I want to speculate on the hostility that philosophers, including libertarian and conservative ones, feel about consequentialism.  The arguments that Bruce makes are representative of the criticisms of consequentialism.  (For others that are also representative, which I hope to respond to in the future, see this post by Matt Zwolinski at the Bleeding Heart Libertarians Blog.)  The basic argument is that consequentialism is problematic because freedom may not always lead to desirable results.

Now, what is odd about this argument is that libertarians almost always believe that freedom leads to good results.  The typical argument is: “While individual freedom leads to good results, you have a right to it whether or not it does.”  So why do libertarians suddenly start imagining horrible consequences when someone asserts consequentialism?

The answer may be complicated, but I do think at least one thing is going on.  When arguing with non-libertarian opponents, libertarians are able to make a cleaner argument if they pursue non-consequentialist arguments.  The non-libertarian will believe freedom often has bad consequences and rebutting those arguments is often very complicated, requiring specialized knowledge not only for the libertarian to make his argument, but also for his non-libertarian opponent to appreciate the argument.

It is so much cleaner simply to assert that people have a right to freedom.  No complicated arguments about real world consequences.  Of course, when the opponent disagrees with the moral premises – about individual freedom – there will be controversy, but it is difficult for anyone to dislodge the libertarian from his position.  He may not be able to persuade the other guy, but at least he is secure in his own position.  After many discussions with non-libertarians, the libertarian comes to feel more comfortable and secure making the non-consequentialist argument.

The problem is that, while this secure feeling may be relevant to defending libertarianism, it is not necessarily relevant to the truth of the theory.  Simply feeling liberty is important tell us about our feelings, not necessarily about the validity of the theory.  Instead, if the welfare of the people is the important thing, then it is the complicated world of real world consequences that matters, even if it makes one feel less secure.

James Bruce’s Critique of My Consequentialist Libertarianism: Part I

Last week, James Bruce wrote a critique of several of my posts that argue for a consequentialist approach to Bleeding Heart Libertarianism.  In my view, welfare consequentialism – a more refined version of utilitarianism – provides the best case for the moderate libertarianism I embrace and justifies a special focus on the interests of the poor (based on the diminishing marginal utility of money).  In this and a second post, I will respond to Bruce’s main criticisms.

1.  Consequentialism and the Argument against Statism:  Bruce argues that a consequentialist justification for my libertarian/antistatist position does not work because it does not provide an argument against statism.  Bruce claims that consequentialism will only argue against statism if small government leads to good results for the people.  If not, it will not argue against statism.

Although this argument is often made, I don’t find it persuasive.  Yes, if freedom led to bad consequences for the people, consequentialism would not justify it.  But so what?  The main argument for freedom and libertarianism under a consequentialist approach is that freedom leads to good consequences.  Liberty produces wealth, knowledge, peace, and allows people to live their lives as they choose.  Statism largely does the opposite.  That is why I value liberty.

And that is why you should as well.  If freedom led to bad consequences – if the world were as Marxists often portrayed it, with capitalism leading to immiseration and communism leading to wealth, harmony, and personal realization – then following capitalism would be morally abhorrent.  The reason Marxists are wrong is not that liberty always overrides welfare, but that liberty leads to wealth and choice, and Marxism leads to tyranny and poverty.

2. Consequentialism and Freedom: Bruce next attempts to place consequentialists on the horns of a dilemma.  He says that freedom either always produces welfare or sometimes it does not.  If one argues it always produces welfare, then one is no longer making a consequentialist argument.  But if it does not always produce welfare, then the consequentialist must recognize that there is always a possibility that limitations on liberty would be beneficial, which would leave us in a problematic world for liberty.

But this dilemma is a false one, since there is an attractive, intermediate position: One can believe that the way the world is constituted results in freedom oriented institutions, to a dominant extent, leading to the best results.  Thus, one would expect that freedom would lead to good consequences and that statism would be rejected.

It is true that there may be limited cases where restraints on liberty might make sense, such as welfare or other benefits for the poor.  But that does not lead us all the way to statism.  Instead, it leads us to a view easily recognized as within the family of classical liberalism or moderate libertarianism.

3.  Consequentialism and Moral Rules: Bruce seems to believe that consequentialists must be open to all kinds of exceptions to moral and constitutional rules.  Following J.J.C. Smart, he argues that “a consistent utilitarian must always be open to any rule being broken by the specific utilitarian concerns of the moment.  If that’s the case, then even if—somehow—a bleeding heart libertarian can create a rule that justifies human freedom for human welfare, the rule—e.g., the First Amendment—must always be open to the general rule being broken in specific circumstances.”

While many philosophers agree with Bruce here, I think he is mistaken on the level of moral rules and on the level of constitutional provisions.  First, consider moral rules.  While Bruce invokes Smart’s consequentialism, that is not the sort I am defending.  As I have indicated before, I adopt the two level theory of R. M. Hare, which argues that ordinary people – because of bias, imperfect knowledge, coordination requirements, and other matters — do better by following rules that are learnable, can be followed, promote good consequences in general, but not on a case by case basis.  Hare adds that the need to to psychologically internalize these moral rules means that people should not be taught to break them even in situations where they might appear to produce desirable results.  Thus, the rules are much more categorical than Smart suggests.  We shouldn’t be “always open to any rule being broken by the specific utilitarian concerns of the moment.”

Bleeding Heart Libertarianism V: Bryan Caplan’s Ideas

Over at our sister site, EconLog, the bloggers are discussing Bleeding Heart Libertarianism.  Caplan notes with approval David Friedman’s criticism that the BHLs have not made clear the weight which they attach to the interests of the poor.   Caplan wonders whether BHLs are claiming for the poor “anything stronger than a utilitarian would accept?”  Caplan, however, does recognize that BHL “deserve credit for pointing out the many neglected ways that government hurts the truly poor.”

These two points by Caplan give me greater confidence in my consequentialist version of BHL.  I actually don’t like the term “social justice.”  And I find it, in some BHL discussions, to be poorly defined.  By contrast, I believe that consequentialism provides both a clear and defensible normative approach that explains why the poor should receive our special consideration – to an extent.

But Caplan’s other point – that a focus on how institutions may harm (or benefit) the poor – is important.  By attending to the interests of the poor, BHL can remind us and discover ways that institutions harm them.

Finally, I should note the common criticism that BHLs are merely just trying to appear more favorable to liberals or leftists.  I suppose in some cases that may be true, but not for me.  After decades of being accused of lacking that special enlightenment that many on the left believe they exclusively possess, I feel free not to worry about it.  But that doesn’t mean that I don’t think that the diminishing marginal utility of money can sometimes justify special benefits for the poor.

Bleeding Heart Libertarianism IV

In my prior posts, I explained how I have always been a Bleeding Heart Libertarian who is concerned about the effects of liberty on the poor and how I now base my political views on a utilitarian approach.  Under that approach, the diminishing marginal utility of money is one strong reason for considering social programs for the poor but there are a variety of other reasons, such as incentive effects, the crowding out of charity, and public choice failures, for rejecting such programs.  In my last post, I want to consider in more concrete terms where I think these principles lead me concerning a country like the United States.

First, the easiest way to pursue a Bleeding Heart Libertarian approach is to identify and seek to eliminate interferences in the market that operate to harm the poor.   There are many regulations that prevent the provision of services that would benefit the poor as well as other regulations that prevent the poor from being employed.  Many regulations do great harm to the poor by raising prices for goods and services that they could otherwise purchase at cheaper prices, such as regulations involving health care, health insurance, the environment, and zoning, to name just a few.  Other regulations also harm the poor by making it more difficult for them to enter a large number of trades from hair styling to driving taxis.  In addition, there are ineffective public schools in poor neighborhoods that the poor are largely forced to attend, which could otherwise be avoided through the use of vouchers.

Second, there are serious problems created by the social insurance programs that justify their elimination.  These programs, from retirement pensions, to medical care, to unemployment insurance, operate in the main not to benefit the poor, but to transfer funds to the politically powerful, such as the elderly or organized labor.  When one considers just how much is paid by lower income people in payroll taxes for these programs the harm is quite significant.

Eliminating these regulations and social insurance programs would do enormous amounts to help the poor and would be entirely consistent with libertarian principles.  This leaves the most difficult issue: whether it makes sense to have programs that are focused on benefiting the poor, such as medicaid or welfare.  Here, I think the arguments are close and it turns on how they are structured.  It is easy to imagine these programs creating problems, such as promoting out of wedlock births or disincentivising work, but one can also imagine such programs leading to net benefits.  In the end, then, I am largely agnostic about these programs, viewing them as potentially beneficial if well designed and not overly generous.  But I don’t think the case is obvious and its quite possible that the nation and the poor would be better off without any such programs.

In the end, then, a utilitarian approach, based on a correct understanding of how institutions actually operate, can be a pretty libertarian one, while still giving serious consideration to the interests of the poor.

Bleeding Heart Libertarianism II: The Move to Utilitarianism

In my last post on Bleeding Heart Libertarianism, I described how I have always been a Bleeding Heart type of Libertarian.  Today, I want to describe where I am now on this issue.

Somewhere along the line – I think it was in the early 1980s – I became convinced of a type of utilitarianism, namely welfare consequentialism.  I had been a Nozickian libertarian but became persuaded of consequentialism.  Much of the responsibility, I believe, must be assigned to Richard Epstein and Friedrich Hayek (even though Hayek claimed not to be a utilitarian).  It was easy, as a libertarian, to become a welfare consequentialist.  If libertarian institutions have the good effects that libertarians believe they do, then welfare consequentialism provides a strong basis for libertarianism.

Moreover, the weakness of the deontological cases for libertarianism – that they rely on intuitions about the primacy of certain rights that most people do not share – can now be avoided.  Libertarianism can now be justified on the basis of its consequences for the welfare of people.  These claims are largely factual claims (albeit difficult factual claims to establish).  Further, the counterarguments made about utilitarianism – that it requires people to do unjust things, like hanging an innocent man – also can be avoided.  Under the two level theory of utilitarianism developed by R. M. Hare, these counterarguments turn out to be mistaken, because such actions will not, in the real world, be welfare enhancing.

I recognize that most libertarians eschew a (strictly) consequentialist approach to normative matters.  But I suppose that is just another way that I differ from the dominant libertarian approach.

So how, then, does welfare consequentialism address the issues central to Bleeding Heart Libertarianism?  In particular, how should government institutions address the special needs of the poor under welfare consequentialism?

This is a complicated matter, but some points can be made.  The diminishing marginal utility of money provides a strong reason why the needs of the poor should be given strong consideration.  The benefits from spending on the poor are likely, other things being equal, to be greater than the benefits from spending on other people.

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