Libertarians want to severely reduce the size of government. Some libertarians even want to eliminate governments altogether.
To most people that probably sounds crazy. What in the world are they thinking, you may wonder. Well, I’ll try to explain.
The reasons why people want smaller governments fall into two main categories; moral and consequentialist. For libertarians, these two types of arguments lead to the same conclusion – that libertarianism is the superior political system. As Murray Rothbard put it, the utilitarian and the moral, natural rights and general prosperity, go hand in hand.
The moral argument
There are several similar versions of the moral argument. I like to argue that all interpersonal relationships should be voluntary – you shouldn’t be allowed to force someone to do something they don’t want. Naturally, this also means you shouldn’t be allowed to take something that belongs to someone else. You as an individual person shouldn’t be allowed to do that, and a large group of people, e.g. the government, shouldn’t be allowed to do so either, even though a majority should think it’s okay. Taxes are thus immoral, according to this argument, unless you have a voluntary contract with the government where you agree to paying taxes.
That’s all I wanted to say about the moral argument for now. People have different kinds of morals, and not everyone will find the libertarian moral argument compelling. So what I really want to focus on in this article are the consequentialist arguments.
Many – perhaps most – libertarians believe the government does more harm than good. Of course, that’s a statement that’s hard to prove or disprove, but I think David Friedman has done a good job of substantiating this claim in his book The Machinery Of Freedom. I’m going to include several quotes from The Machinery Of Freedom below.
Following are what I think are the best consequentialist arguments for libertarianism.
Competition is better than monopoly
If the goal is to give consumers the best possible products and services at affordable prices – greater prosperity, in other words – then competition is better than monopoly. New companies will try to steal your customers by making a better or cheaper product. To be able to compete, you will have to improve as well. The more elements of monopoly there are, the more one loses this very important incentive for progress.
Strangely, many people argue that an unregulated market economy always leads to monopoly. David Friedman, in the chapter Monopoly I: How To Lose Your Shirt in The Machinery Of Freedom, explains really well the difficulties of maintaining a monopoly in a free market. He concludes:
Monopoly power exists only when a firm can control the prices charged by existing competitors and prevent the entry of new ones. The most effective way of doing so is by the use of government power. There are considerable elements of monopoly in our economy, but virtually all are produced by government and could not exist under institutions of complete private property.
That’s not to say you can’t have elements of monopoly in a free market. In many cases one single firm can have a dominating position, but in a free market that’s actually not such a terrible situation because, unlike for government-created monopolies, there is potential competition:
Even a natural monopoly is limited in its ability to raise prices. If it raises them high enough, smaller, less efficient firms find that they can compete profitably. […] [The natural monopoly] can make money selling goods at a price at which other firms lose money and thus retain the whole market. But it retains the market only so long as its price stays low enough that other firms cannot make a profit. This is what is called potential competition.
Faster development of medical drugs
One of the most heavily regulated areas of Western society is health and medicine. People don’t want the drugs they’re taking to be dangerous, so they want government to approve drugs that are safe. That probably has had the intended effect of making the drugs that are on the market more safe. However, there are huge hidden costs, as this strategy does not minimize the number of deaths.
Regulators really don’t want to approve an unsafe drug – that’s very understandable, so they try to be cautious, and so instead of approving the drug, they sometimes ask for more tests and documentation. In some cases that may be the right thing to do. In others it may not. If a new effective drug is being delayed by the approval process, people who could have been saved will die waiting for the drug to be approved:
[I]n 1981 […] the [Food and Drug Administration (FDA) – the federal agency in charge of approving medical drugs in the US] published a press release confessing to mass murder. That was not, of course, the way in which the release was worded; it was simply an announcement that the FDA had approved the use of timolol, a ß-blocker, to prevent recurrences of heart attacks.
At the time timolol was approved, ß-blockers had been widely used outside the U.S. for over ten years. It was estimated that the use of timolol would save from seven thousand to ten thousand lives a year in the U.S. So the FDA, by forbidding the use of ß-blockers before 1981, was responsible for something close to a hundred thousand unnecessary deaths.
If the government did not regulate drugs, it’s very likely that private firms would be created that could rate the drugs made by the drug companies, for a fee. This is how it works in many other areas. These firms would then compete with each other, and it would be extremely important for them that people trusted them. Too many mistakes and they’re out of business. So they, too, need to be cautious, but at the same time, drug companies want them to be fast and affordable, so they also have an incentive not to be overcautious. See this video for a better explanation:
It wouldn’t be forbidden to sell unrated drugs or drugs with a really bad rating. However, people would know that there are big risks associated with those drugs. But when a potentially dangerous drug has the potential to save your life, the risk is probably worth it. It would be for me, anyway.
Government agencies aren’t as agile as private firms need to be, since private firms generally want to keep up with the competition. The Food and Drug Administration (FDA), is no exception. According to Peter Huber, author of The Cure in the Code: How 20th Century Law Is Undermining 21st Century Medicine:
The FDA is still largely stuck in trial protocols that do not let us exploit fully our ability to tailor drugs precisely to the patient’s molecular profiles. The only way you can find out how a drug is going to interact with different profiles is actually to prescribe it to the patients. The FDA is still very much anchored in what are called randomized blind protocols. There’s no learn-as-you-go process in the early trials, where you learn about the different ways that different patients can respond to the same drug and then refine the way you prescribe that drug.
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[T]he protocols these institutions are using, they’re now 50 years old. I think agencies develop some inertia. They get very good at doing something they’ve done for a long time and, when revolutionary change occurs, it’s difficult to adapt.
Although I believe that a libertarian society in most ways would be better than what we currently have, I actually have a good life. I really can’t complain. But others 1) aren’t so lucky. I am getting older, though, and medical science still can’t cure every disease, or aging itself. Eventually, all diseases and even aging will be cured, but until then, one of my biggest concerns is that I’ll get a deadly disease that’s presently incurable.
People older than me will generally be in a worse position than I’m in when it comes to their health. And if science and technology moves too slow, even young people will eventually get to the point where their health becomes a problem. To put it bluntly, they may die… That’s the reason I think it’s so important that science and technology moves forward as fast as possible; the sooner we can cure all diseases and aging, the more people can be saved, allowing them to live for thousands of years or more in excellent health (if they want).
About 100,000 people die every day from aging or age-related diseases. So just a small speed-up of the research process can result in millions of lives saved. Equivalently, just a small slow-down of the research process can result in millions of lives lost. As you probably remember, David Friedman said that the FDA indirectly confessed to mass murder by delaying approval of a drug that was obviously safe. I suspect that the effect of medical drug regulation and other governmental regulations that slow down technological progress are orders of magnitude bigger than that.
If progress has been slowed by just a handful of years, we’re looking at about 200 million lives that could potentially be saved worldwide, but won’t be.
Until now, we’ve talked about the number of lives lost. However, a better measure would probably be the number of life-years lost. If something causes one person to die ten years prematurely, that’s 10 life-years lost. If something causes 100 people to die one year earlier, that’s 100 life-years lost. The more life-years that are lost, the worse.
For the 100,000 people who died because they couldn’t get ß-blockers, the average number of extra years they would have lived with ß-blockers, would probably be somewhere between 1 and 10 (on average). However, people who are alive and can take advantage of effective rejuvenation therapies when they’re developed, could easily live for thousands of years. And while the quality-of-life of the people who could have lived a few extra years with ß-blockers might be relatively low, I expect most people who are alive in a highly technologically advanced post-aging world to be quite happy (since psychological problems such as depression probably also can be treated very well at that point).
Less war
Fighting wars and killing people in foreign countries is arguably the worst thing governments do – at least one of the most brutal. I certainly don’t want to pay so that the Norwegian government can bomb other countries (which they did in Libya a few years back) – I find that highly immoral, but as long as I want to live in the country where I was born, I don’t have much of a choice – I can either pay my taxes or go to jail.
Wars are very expensive, though, so why are they fought?
Does the average American gain something from his government’s wars in the Middle East? It’s hard to think of even a single benefit for the average American. There are lots of costs, though. Most obviously it costs a lot of money, which are paid by the American taxpayers. Bombing people makes the families and friends of the victims angry, it’s thus making a lot of enemies for the US, raising the risk of terrorist attacks. The higher risk of terrorist attacks is the reason for comprehensive security measure at e.g. airports, which is an inconvenience – thus a cost – to law-abiding citizens. The security measures aren’t free money-wise either, so they naturally lead to higher airfare prices.
If wars in foreign countries are a net cost to Americans, it may seem strange that they’re fought in the first place. But even though wars aren’t a benefit overall, that doesn’t mean nobody benefits. The weapons producers obviously have a lot to gain, so it’s in their interest to lobby politicians to buy weapons from them. This is one aspect of the so-called military-industrial complex. From wikipedia’s article on war profiteering:
The phrase “military-industrial complex” was coined by President Dwight D. Eisenhower in his 1961 Farewell Address. This term describes the alliance between military leaders and arms merchants. Military officials attempt to obtain higher budgets, while arms manufactures seek profit. President Eisenhower warned the American people that going to war might not serve the interest of the nation, rather the institution of the military and weapons-producing corporations. The Iron Triangle comes into play here due to war profiting industries who make financial contributions to elected officials, who then distribute taxpayer money towards the military budget, which is spent at the advantage of arms merchants. The military-industrial complex allows for arms-producing corporations to continue to accumulate significant profit.
This means that the people who decide that their country should go to war (politicians) are not the same people who are paying for the war (taxpayers). That’s a problem because it may lead to more wars being fought than what’s strictly necessary in order to defend the country, as we’ve seen in the case of the US, some European countries, and probably many other countries.
Now, try to imagine a society with no government. You can think of it as pretty similar to today’s society, except that the useful tasks that are today performed by the government would be provided by private firms or charities that people choose to be customers of/pay money to. Such a society, where there is no government, private property is respected and you have freedom of association, is called anarcho-capitalist.
Perhaps the best way to see why anarcho-capitalism would be so much more peaceful than our present system is by analogy. Consider our world as it would be if the cost of moving from one country to another were zero. Everyone lives in a housetrailer and speaks the same language. One day, the president of France announces that because of troubles with neighboring countries, new military taxes are being levied and conscription will begin shortly. The next morning the president of France finds himself ruling a peaceful but empty landscape, the population having been reduced to himself, three generals, and twenty-seven war correspondents.
We do not all live in housetrailers. But if we buy our protection from a private firm instead of from a government, we can buy it from a different firm as soon as we think we can get a better deal. We can change protectors without changing countries.
Democratic governments need consent, or at least not too much opposition, from the citizens in order to start wars. Since the real reasons to start wars have more to do with money and power than humanitarian goals, politicians have to lie to the public to get their consent. In Iraq, they lied about Saddam Hussein having weapons of mass destruction. On other occasions, supposed chemical weapons attacks have been used as the excuse.
It would also be more difficult to get consent from the governed if taxes had to be raised to finance each new war. Therefore wars aren’t exclusively financed by taxes. According to Matthew McCaffrey in a talk about the economics of war, governments also finance wars through borrowing and inflation. Inflating (or increasing) the money supply (printing money) is something governments can do since they control the country’s currency and money system. 2) Inflation eventually leads to higher prices, but this is a cost that’s much less visible to people than direct taxes. McCaffrey talks about war financing at 17:54 – 25:00 and 31:53 – 36:33 in his talk about the economics of war.
I should mention that the number of people killed in war has declined lately. Since 1946 the number of war deaths has been at an historical low, and the period since 1946 has been called The Long Peace. The atom bomb was developed during World War II – not long before 1946 – and no two countries with atomic bombs have ever fought a war with each other. So one of the reasons for The Long Peace could be the deterrent effect of the atomic bomb. As Yuval Noah Harari writes in the book Homo Deus:
Nuclear weapons have turned war between superpowers into a mad act of collective suicide, and therefore forced the most powerful nations on earth to find alternative and peaceful ways to resolve conflicts.
In addition, Harari emphasizes the fact that the world has been moving from a material-based economy into a knowledge-based economy:
Previously the main sources of wealth were material assets such as gold mines, wheat fields and oil wells. Today the main source of wealth is knowledge. And whereas you can conquer oil fields through war, you cannot acquire knowledge that way. Hence as knowledge became the most important economic resource, the profitability of war declined and wars became increasingly restricted to those parts of the world – such as the Middle East and Central Africa – where the economies are still old-fashioned material-based economies.
(Some libertarians want to have a strong military, so the less war argument – at least in the form expressed here – may not apply to all brands of libertarianism.)
Open borders and free trade
According to economists’ standard estimates, letting anyone take a job anywhere would roughly double global production – a bigger gain than any other economic reform known to man. […] We are talking about trillions of dollars of extra wealth creation, year after year.
So, luckily for libertarians, we’re generally in favor of open borders. We also want smaller governments, so we don’t want governments to give money to immigrants. However, private individuals, charities etc may still help those who can’t find work or are otherwise struggling.
The main reason wealth creation would go so much up with open borders is that it’s easier to be productive in more developed countries. As Bryan Caplan has said, If you lived in Syria or Haiti, you wouldn’t be very productive either. An article in The Economist explains:
Workers become far more productive when they move from a poor country to a rich one. Suddenly, they can join a labour market with ample capital, efficient firms and a predictable legal system. Those who used to scrape a living from the soil with a wooden hoe start driving tractors. Those who once made mud bricks by hand start working with cranes and mechanical diggers. Those who cut hair find richer clients who tip better.
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And the non-economic benefits are hardly trivial, either. A Nigerian in the United States cannot be enslaved by the Islamists of Boko Haram.
Most of the benefits of open borders go to the people who move from poor countries and their families (since many emigrants send money back to them). A policy of open borders is thus a policy that will reduce global inequality. However, according to the same Economist article, people in rich countries would see more poverty – they “would see many more Liberians and Bangladeshis waiting tables and stacking shelves”, but their poverty in a rich country would be “much less severe” than in their home country.
Many people – even some libertarians – worry that crime rates will go up, but, according to the article:
If lots of people migrated from war-torn Syria, gangster-plagued Guatemala or chaotic Congo, would they bring mayhem with them? It is an understandable fear (and one that anti-immigrant politicians play on), but there is little besides conjecture and anecdotal evidence to support it. Granted, some immigrants commit crimes, or even headline-grabbing acts of terrorism. But in America the foreign-born are only a fifth as likely to be incarcerated as the native-born. In some European countries, such as Sweden, migrants are more likely to get into trouble than locals, but this is mostly because they are more likely to be young and male. A study of migration flows among 145 countries between 1970 and 2000 by researchers at the University of Warwick found that migration was more likely to reduce terrorism than increase it, largely because migration fosters economic growth.
Open borders should also apply to trade, of course. There shouldn’t be any tariffs or import quotas. Trade restrictions help certain industries in the country that imposes them, while hurting their foreign competitors, but it only helps certain industries – most people are harmed by higher prices and fewer alternative products.
Almost all economists, whether libertarian or not, actually agree that free trade would be better than protectionist policies when it comes to raising people’s standard of living. Milton Friedman talks about free trade and this agreement among economists in the video below, where he says:
We call a tariff a protective measure. It does protect – it protects the consumer very well against one thing. It protects the consumer against low prices. And yet we call it protection. Each of us tends to produce a single product. We tend to buy a thousand and one products.
So why don’t all countries have free trade? It’s because of the internal logic of the political marketplace where concentrated interest groups have more power to influence policies than the general public, which is a dispersed group with less to gain than the special interest in each particular case.
No war on drugs
The use of recreational drugs often has negative health consequences for the user. That’s one of the reasons why many people don’t want them to be legal.
But according to libertarianism, there shouldn’t be laws against doing things that don’t harm others. So-called victimless crimes shouldn’t be crimes at all.
Not punishing victimless crimes will free up time and resources for the legal system to focus on more serious offenses. But the war on drugs has so many other bad consequences in addition. Kurzgesagt – In a Nutshell, in the video embedded below (3:01) explains:
Prohibition may prevent a certain amount of people from taking drugs, but in the process it causes huge damage to society as a whole. Many of the problems we associate with drug use are actually caused by the war against them.
For example prohibition makes drugs stronger. The more potent drugs you can store in as little space as possible, the more profit you’ll make. It was the same during alcohol prohibition which led to an increased consumption of strong liquor over beer.
The prohibition of drugs also led to more violence and murders around the world. Gangs and cartels have no access to the legal system to settle disputes so they use violence. This led to an ever-increasing spiral of brutality. According to some estimates, the homicide rate in the US is 25 to 75 percent higher because of the war on drugs, and in Mexico, a country on the frontline, an estimated 164,000 have been murdered between 2007 and 2014, more people than in the war zones of Afghanistan and Iraq in the same period, combined.
But where the war on drugs might do the most damage to society is the incarceration of nonviolent drug offenders. For example, the United States, one of the driving forces of the war on drugs, has 5% of the world’s total population but 25% of the world’s prison population largely due to the harsh punishments and mandatory minimums.
Minorities suffer because of this. Especially, African-Americans make up 40% of all US prison inmates, and while white kids are more likely to abuse drugs, black kids are 10 times more likely to get arrested for drug offenses.
No welfare trap
One of the first things that comes to mind if you’re going to find arguments in favor of having a government is probably that we obviously need a government to take care of the poor and needy. But I don’t think it’s that obvious.
A question one should ask in this regard is whether the poor would be helped in the absence of a government. With a very small government or no government at all, people would keep most or all their earnings for themselves, meaning they can decide exactly how to spend it (or save it). Today, a lot of working people struggle to make ends meet. Keeping what they now pay in taxes would help their economic situation even though they would have to pay for services out of pocket, that are today paid for by taxes. The reason they would have more left over is that prices would get lower in a more competitive market, and because there’s an overhead to collecting taxes.
Even today, with such high taxes and an expectation that it’s the government that’s responsible for helping the poor, people still give money to charitable organizations. Especially Americans are exceptionally generous. If people had more money left over, obviously more money would also be donated to charities.
Most of the people who donate would be interested in giving money to those organizations that were best at helping. Not that many people would be interested in researching which organizations were most effective at helping, though, but some definitely would, and their conclusions might reach the general public through the media. There would thus be competition between charitable organizations. Those that were best at helping would tend to get the most money.
With such a strong incentive to help effectively, one would expect these organizations to give better help than what the government, which is a monopolist, does today.
And when we look at how governments do try to help poor people, we see that there’s ample room for improvement. Often there’s an abrupt cut-off in money paid when earnings exceed a certain limit. This means that working more or getting a raise will cause total income to go down, which gives a strong incentive to not accept the raise or work more hours. This effect is called the welfare trap, because it traps people in relative poverty. It makes it harder to get out of poverty because in order to do so, you typically have to accept a temporary decline in income.
It’s pretty obvious that welfare traps are bad, so in a competitive market for welfare services, the necessary effort would surely be put in to get rid of welfare traps. Also, the best way to help poor people is to enable them to make their own living, so when welfare organizations are evaluated, how well they do this would be an important criterion. It should also be in the welfare organization’s own interest to enable their clients to make their own living, since doing so means they can pay out less money.
From my home country, Norway, we have another example of governments trying to help, but not doing it very well. People who’ve had a paid job earlier, but are now unemployed, can get money from a governmental organization called NAV. However, in order not to get their unemployment benefits cut, NAV clients need to attend various courses while they’re unemployed. Fair enough. However, there aren’t that many different courses to choose from, and for some of the courses it can be hard to get a spot. Many then end up taking a job search training course that lasts for six months. From what I understand, it’s not a very good course… People who have been unemployed for a long time often end up taking the course several times since they can’t get spots in more relevant courses. This seems like a terrible waste of time – and taxpayer money. There’s got to be a better way to help!
I’m not going to pretend to know what the exact best way to help is. But what I do know is that in a competitive market, it’s easier to discover the good solutions.
Freedom makes us happy
[T]he value to individuals of being able to run their own lives is typically greater than the value to anyone else of being able to control them – or in other words, […] increases in liberty tend to increase total utility.
A libertarian society is a tolerant society. A society that doesn’t have laws against any voluntary/peaceful actions has proven that its citizens are mostly tolerant people who accept that other people have different priorities than themselves.
In a tolerant society people who are a little bit different than everyone else has a better chance to thrive. They can follow their dreams and desires and do what they want with their lives to a greater extent than in other types of societies. Thus, it’s very likely that people on average would be happier in a libertarian society than in other, less tolerant, ones.
So, that was my list of the seven best consequentialist arguments for being a libertarian. Do you agree that these are good arguments? Are there other arguments I should have included? Don’t agree at all? Then, what are your best arguments for not being a libertarian? Let me know in the comments.
1) Others could be sick or old people, people living in war zones, people who can’t get out of poor countries, or those that have been imprisoned for victimless crimes, for example.
2) We’ll see if decentralized cryptocurrencies like Bitcoin can do something about that.
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