The Libertarian Fantasy

Matt Yglesias writes,

My post on the prospect of billionaires like Sheldon Adelson deciding to really dig deep and spend on politics prompted a certain amount of silly partisan responses (yes, there are liberal billionaires, too, but a world in which politics is a contest between competing teams of billionaires is a depressing idea) but also some interesting discussion.

But “a world in which politics is a contest between competing teams of billionaires” is, I fear, pretty much an inescapable fact of life. Consider Matt’s “solution,” “simply to prevent such utterly massive concentrations of wealth.” Matt understands that this isn’t in fact “simple” at all, that the framework by which we’d prevent individuals from accumulating wealth would yield new patterns of power and privilege. We’ve all familiar with unintended consequences. I used to be a patriot dollars enthusiast, and I wrote a favorable review of Voting With Dollars many years ago. But who do you think will use those patriot dollars? I’m guessing it will be the same people who make small donations now. The mix of spending will likely change somewhat, with downscale evangelicals having somewhat more resources and perhaps influence. Will this revitalize American democracy or reverse our alleged slide into plutocracy?

Matt cites Larry Bartels’ finding that legislators are only responsive to the richest two-thirds of their constituents. But let’s think about who is in the bottom third: this is often the most transient, youngest slice of the population and the slice that is least likely to participate in the labor market at all. Granted, that’s too bad, part of the reason I support wage subsidies, prison reform, and other measures designed to create a more inclusive economy. And yet a little context goes a long way.

The NHS, one of the world’s most egalitarian institutional designs, still “delivers” unequal healthcare outcomes. Human beings are equal in a number of very important ways. But we aren’t equal in all respects, most importantly in our capacity for judgment.

But I’ve titled this post, somewhat provocatively, “the libertarian fantasy.” My criticisms of Matt probably look like a common libertarian lament, and I have great sympathy with that lament. It strikes me as the most persuasive critique of contemporary left-right politics. At the same time, I think Matt was absolutely right in an earlier post.

One point of dispute, though, is that to me the idea of state committed to neutral and effective administration of justice around laissez faire lines seems like an illusion. The alternative to reasonably effective democratic institutions and a viable left-wing political movement isn’t free markets but the capture of the state by large economic interests as during the Gilded Age or, indeed, the Bush administration.

Dani Rodrik makes this point equally well, and libertarian Arnold Kling graciously acknowledges that fact.

Kling: I favor limited government.

Rodrik: I favor right-sized, adaptive government. Government must select policies and regulations that take into account local history and conditions. Government must experiment and correct its own mistakes.

Kling: Adaptive government is an oxymoron. In reality, you never observe adaptive government.

Rodrik: The same could be said of limited government.

Kling: [burble]

My objection, if you can call it that, is to the “effective democratic institutions” part. If you believe as I do in Rauchian demosclerosis, you can’t really invest your hope in democratic institutions, which tend to grow less effective over time. What you can invest your hopes in is communities of competence. Imagine a left-wing political movement that tried to rebuild left-wing civil society. That would be a cause worth fighting for. The same goes for efforts on the political right. I increasingly think that they best way to regain control of our lives is to take control of our own lives, through various forms of community self-organization.

Of course, no one is going to give up the battle to capture the government. Rival gangs of billionaires have too much at stake. So this isn’t a brief for total political disengagement. It is, however, a call for humility, and families and neighborhoods to stop thinking that someone else — Hillary Clinton, perhaps, or the faith-based initiative — is going to come to the rescue with a big bag of someone else’s money. This is also a call for government activism that understands the dynamics of the grabbing hand.

I’m feeling very ill, by the way, so this could be even more daft than usual.