[This is a repost of the Non-Libertarian FAQ (aka Why I Hate Your Freedom), which I wrote about five years ago and which used to be hosted on my website. It no longer completely reflects my current views. I dont think Ive switched to believing anything on here is outright false, but Ive moved on to different ways of thinking about certain areas. Im reposting it by popular request and for historical interest only. Ive made some very small updates, mostly listing rebuttals that came out over the past few years. I havent updated the statistics and everything is accurate as of several years ago. I seem to have lost the sources of my images, and Im sorry; if Ive used an image of yours, please let me know and Ill cite you.]

Contents

0. Introduction

A. Economic Issues

1. Externalities2. Coordination Problems3. Irrational Choices4. Lack of Information

B. Social Issues

5. Just Desserts and Social Mobility6. Taxation

C. Political Issues

7. Competence of Government8. Health Care9. Prison Privatization10. Gun Control11. Education

D. Moral Issues

12. Moral Systems13. Rights and Heuristics

E. Practical Issues

14. Slippery Slopes15. Strategic Activism16. Miscellaneous and Meta

Introduction

0.1: Are you a statist?

No.

Imagine a hypothetical country split between the tallists, who think only tall people should have political power, and the shortists, who believe such power should be reserved for the short.

If we met a tallist, wed believe she was silly but not because we favor the shortists instead. Wed oppose the tallists because we think the whole dichotomy is stupid we should elect people based on qualities like their intelligence and leadership and morality. Knowing someones height isnt enough to determine whether theyd be a good leader or not.

Declaring any non-libertarian to be a statist is as silly as declaring any non-tallist to be a shortist. Just as we can judge leaders on their merits and not on their height, so people can judge policies on their merits and not just on whether they increase or decrease the size of the state.

There are some people who legitimately believe that a policys effect on the size of the state is so closely linked to its effectiveness that these two things are not worth distinguishing, and so one can be certain of a policys greater effectiveness merely because it seems more libertarian and less statist than the alternative. Most of the rest of this FAQ will be an attempt to disprove this idea and assert that no, you really do have to judge the individual policy on its merits.

0.2: Do you hate libertarianism?

No.

To many people, libertarianism is a reaction against an over-regulated society, and an attempt to spread the word that some seemingly intractable problems can be solved by a hands-off approach. Many libertarians have made excellent arguments for why certain libertarian policies are the best options, and I agree with many of them. I think this kind of libertarianism is a valuable strain of political thought that deserves more attention, and I have no quarrel whatsoever with it and find myself leaning more and more in that direction myself.

However, theres a certain more aggressive, very American strain of libertarianism with which I do have a quarrel. This is the strain which, rather than analyzing specific policies and often deciding a more laissez-faire approach is best, starts with the tenet that government can do no right and private industry can do no wrong and uses this faith in place of more careful analysis. This faction is not averse to discussing politics, but tends to trot out the same few arguments about why less regulation has to be better. I wish I could blame this all on Ayn Rand, but a lot of it seems to come from people who have never heard of her. I suppose I could just add it to the bottom of the list of things I blame Reagan for.

To the first type of libertarian, I apologize for writing a FAQ attacking a caricature of your philosophy, but unfortunately that caricature is alive and well and posting smug slogans on Facebook.

0.3: Will this FAQ prove that government intervention always works better than the free market?

No, of course not.

Actually, in most cases, you wont find me trying to make a positive proof of anything. I believe that deciding on, for example, an optimal taxation policy takes very many numbers and statistical models and other things which are well beyond the scope of this FAQ, and may well have different answers at different levels and in different areas.

What I want to do in most cases is not prove that the government works better than the free market, or vice versa, but to disprove theories that say we can be absolutely certain free market always works better than government before we even investigate the issue. After that, we may still find that this is indeed one of the cases where the free market works better than the government, but we will have to prove it instead of viewing it as self-evident from first principles.

0.4: Why write a Non-Libertarian FAQ? Isnt statism a bigger problem than libertarianism?

Yes. But you never run into Stalinists at parties. At least not serious Stalinists over the age of twenty-five, and not the interesting type of parties. If I did, I guess Id try to convince them not to be so statist, but the issues never come up.

But the world seems positively full of libertarians nowadays. And I see very few attempts to provide a complete critique of libertarian philosophy. There are a bunch of ad hoc critiques of specific positions: people arguing for socialist health care, people in favor of gun control. But one of the things that draws people to libertarianism is that it is a unified, harmonious system. Unlike the mix-and-match philosophies of the Democratic and Republican parties, libertarianism is coherent and sometimes even derived from first principles. The only way to convincingly talk someone out of libertarianism is to launch a challenge on the entire system.

There are a few existing documents trying to do this (see Mike Hubens Critiques of Libertarianism and Mark Rosenfelders Whats (Still) Wrong With Libertarianism for two of the better ones), but Im not satisfied with any of them. Some of them are good but incomplete. Others use things like social contract theory, which I find nonsensical and libertarians find repulsive. Or they have an overly rosy view of how consensual taxation is, which I dont fall for and which libertarians definitely dont fall for.

The main reason Im writing this is that I encounter many libertarians, and I need a single document I can point to explaining why I dont agree with them. The existing anti-libertarian documentation makes too many arguments I dont agree with for me to feel really comfortable with it, so Im writing this one myself. I dont encounter too many Stalinists,so I dont have this problem with them and I dont see any need to write a rebuttal to their position.

If you really need a pro-libertarian FAQ to use on an overly statist friend, Google suggests The Libertarian FAQ.

0.5: How is this FAQ structured?

Ive divided it into three main sections. The first addresses some very abstract principles of economics. They may not be directly relevant to politics, but since most libertarian philosophies start with abstract economic principles, a serious counterargument has to start there also. Fair warning: there are people who can discuss economics without it being INCREDIBLY MIND-NUMBINGLY BORING, but I am not one of them.

The second section deals with more concrete economic and political problems like the tax system, health care, and criminal justice.

The third section deals with moral issues, like whether its ever permissible to initiate force. Too often I find that if I can convince a libertarian that government regulation can be effective, they respond that it doesnt matter because its morally repulsive, and then once Ive finished convincing them it isnt, they respond that it never works anyway. By having sections dedicated to both practical and moral issues, I hope to make that sort of bait-and-switch harder to achieve, and to allow libertarians to evaluate the moral and practical arguments against their position in whatever order they find appropriate.

Part A: Economic Issues

The Argument:

In a free market, all trade has to be voluntary, so you will never agree to a trade unless it benefits you.

Further, you wont make a trade unless you think its the best possible trade you can make. If you knew you could make a better one, youd hold out for that. So trades in a free market are not only better than nothing, theyre also the best possible transaction you could make at that time.

Labor is no different from any other commercial transaction in this respect. You wont agree to a job unless it benefits you more than anything else you can do with your time, and your employer wont hire you unless it benefits her more than anything else she can do with her money. So a voluntarily agreed labor contract must benefit both parties, and must do so more than any other alternative.

If every trade in a free market benefits both parties, then any time the government tries to restrict trade in some way, it must hurt both parties. Or, to put it another way, you can help someone by giving them more options, but you cant help them by taking away options. And in a free market, where everyone starts with all options, all the government can do is take options away.

The Counterargument:

This treats the world as a series of producer-consumer dyads instead of as a system in which every transaction affects everyone else. Also, it treats consumers as coherent entities who have specific variables like utility and demand and know exactly what they are, which doesnt always work.

In the remainder of this section, Ill be going over several ways the free market can fail and several ways a regulated market can overcome those failures. Ill focus on four main things: externalities, coordination problems, irrational choice, and lack of information.

I did warn you it would be mind-numbingly boring.

1. Externalities

1.1: What is an externality?

An externality is when I make a trade with you, but it has some accidental effect on other people who werent involved in the trade.

Suppose for example that I sell my house to an amateur wasp farmer. Only hes not a very good wasp farmer, so his wasps usually get loose and sting people all over the neighborhood every couple of days.

This trade between the wasp farmer and myself has benefited both of us, but its harmed people who werent consulted; namely, my neighbors, who are now locked indoors clutching cans of industrial-strength insect repellent. Although the trade was voluntary for both the wasp farmer and myself, it wasnt voluntary for my neighbors.

Another example of externalities would be a widget factory that spews carcinogenic chemicals into the air. When I trade with the widget factory Im benefiting I get widgets and theyre benefiting they get money. But the people who breathe in the carcinogenic chemicals werent consulted in the trade.

1.2: But arent there are libertarian ways to solve externalities that dont involve the use of force?

To some degree, yes. You can, for example, refuse to move into any neighborhood unless everyone in town has signed a contract agreeing not to raise wasps on their property.

But getting every single person in a town of thousands of people to sign a contract every time you think of something else you want banned might be a little difficult. More likely, you would want everyone in town to unanimously agree to a contract saying that certain things, which could be decided by some procedure requiring less than unanimity, could be banned from the neighborhood sort of like the existing concept of neighborhood associations.

But convincing every single person in a town of thousands to join the neighborhood association would be near impossible, and all it would take would be a single holdout who starts raising wasps and all your work is useless. Better, perhaps, to start a new town on your own land with a pre-existing agreement that before youre allowed to move in you must belong to the association and follow its rules. You could even collect dues from the members of this agreement to help pay for the people youd need to enforce it.

But in this case, youre not coming up with a clever libertarian way around government, youre just reinventing the concept of government. Theres no difference between a town where to live there you have to agree to follow certain terms decided by association members following some procedure, pay dues, and suffer the consequences if you break the rules and a regular town with a regular civic government.

As far as I know there is no loophole-free way to protect a community against externalities besides government and things that are functionally identical to it.

1.3: Couldnt consumers boycott any company that causes externalities?

Only a small proportion of the people buying from a company will live near the companys factory, so this assumes a colossal amount of both knowledge and altruism on the part of most consumers. See also the general discussion of why boycotts almost never solve problems in the next session.

1.4: What is the significance of externalities?

They justify some environmental, zoning, and property use regulations.

2. Coordination Problems

2.1: What are coordination problems?

Coordination problems are cases in which everyone agrees that a certain action would be best, but the free market cannot coordinate them into taking that action.

As a thought experiment, lets consider aquaculture (fish farming) in a lake. Imagine a lake with a thousand identical fish farms owned by a thousand competing companies. Each fish farm earns a profit of $1000/month. For a while, all is well.

But each fish farm produces waste, which fouls the water in the lake. Lets say each fish farm produces enough pollution to lower productivity in the lake by $1/month.

A thousand fish farms produce enough waste to lower productivity by $1000/month, meaning none of the fish farms are making any money. Capitalism to the rescue: someone invents a complex filtering system that removes waste products. It costs $300/month to operate. All fish farms voluntarily install it, the pollution ends, and the fish farms are now making a profit of $700/month still a respectable sum.

But one farmer (lets call him Steve) gets tired of spending the money to operate his filter. Now one fish farm worth of waste is polluting the lake, lowering productivity by $1. Steve earns $999 profit, and everyone else earns $699 profit.

Everyone else sees Steve is much more profitable than they are, because hes not spending the maintenance costs on his filter. They disconnect their filters too.

Once four hundred people disconnect their filters, Steve is earning $600/month less than he would be if he and everyone else had kept their filters on! And the poor virtuous filter users are only making $300. Steve goes around to everyone, saying Wait! We all need to make a voluntary pact to use filters! Otherwise, everyones productivity goes down.

Everyone agrees with him, and they all sign the Filter Pact, except one person who is sort of a jerk. Lets call him Mike. Now everyone is back using filters again, except Mike. Mike earns $999/month, and everyone else earns $699/month. Slowly, people start thinking they too should be getting big bucks like Mike, and disconnect their filter for $300 extra profit

A self-interested person never has any incentive to use a filter. A self-interested person has some incentive to sign a pact to make everyone use a filter, but in many cases has a stronger incentive to wait for everyone else to sign such a pact but opt out himself. This can lead to an undesirable equilibrium in which no one will sign such a pact.

The most profitable solution to this problem is for Steve to declare himself King of the Lake and threaten to initiate force against anyone who doesnt use a filter. This regulatory solution leads to greater total productivity for the thousand fish farms than a free market could.

The classic libertarian solution to this problem is to try to find a way to privatize the shared resource (in this case, the lake). I intentionally chose aquaculture for this example because privatization doesnt work. Even after the entire lake has been divided into parcels and sold to private landowners (waterowners?) the problem remains, since waste will spread from one parcel to another regardless of property boundaries.

2.1.1: Even without anyone declaring himself King of the Lake, the fish farmers would voluntarily agree to abide by the pact that benefits everyone.

Empirically, no. This situation happens with wild fisheries all the time. Theres some population of cod or salmon or something which will be self-sustaining as long as its not overfished. Fishermen come in and catch as many fish as they can, overfishing it. Environmentalists warn that the fishery is going to collapse. Fishermen find this worrying, but none of them want to fish less because then their competitors will just take up the slack. Then the fishery collapses and everyone goes out of business. The most famous example is the Collapse of the Northern Cod Fishery, but there are many others in various oceans, lakes, and rivers.

If not for resistance to government regulation, the Canadian governments could have set strict fishing quotas, and companies could still be profitably fishing the area today. Other fisheries that do have government-imposed quotas are much more successful.

2.1.2: I bet [extremely complex privatization scheme that takes into account the ability of cod to move across property boundaries and the migration patterns of cod and so on] could have saved the Atlantic cod too.

Maybe, but left to their own devices, cod fishermen never implemented or recommended that scheme. If we ban all government regulation in the environment, that wont make fishermen suddenly start implementing complex privatization schemes that theyve never implemented before. It will just make fishermen keep doing what theyre doing while tying the hands of the one organization that has a track record of actually solving this sort of problem in the real world.

2.2: How do coordination problems justify environmental regulations?

Consider the process of trying to stop global warming. If everyone believes in global warming and wants to stop it, its still not in any one persons self-interest to be more environmentally conscious. After all, that would make a major impact on her quality of life, but a negligible difference to overall worldwide temperatures. If everyone acts only in their self-interest, then no one will act against global warming, even though stopping global warming is in everyones self-interest. However, everyone would support the institution of a government that uses force to make everyone more environmentally conscious.

Notice how well this explains reality. The government of every major country has publicly declared that they think solving global warming is a high priority, but every time they meet in Kyoto or Copenhagen or Bangkok for one of their big conferences, the developed countries would rather the developing countries shoulder the burden, the developing countries would rather the developed countries do the hard work, and so nothing ever gets done.

The same applies mutans mutandis to other environmental issues like the ozone layer, recycling, and anything else where one person cannot make a major difference but many people acting together can.

2.3: How do coordination problems justify regulation of ethical business practices?

The normal libertarian belief is that it is unnecessary for government to regulate ethical business practices. After all, if people object to something a business is doing, they will boycott that business, either incentivizing the business to change its ways, or driving them into well-deserved bankruptcy. And if people dont object, then theres no problem and the government shouldnt intervene.

A close consideration of coordination problems demolishes this argument. Lets say Wandas Widgets has one million customers. Each customer pays it $100 per year, for a total income of $100 million. Each customer prefers Wanda to her competitor Wayland, who charges $150 for widgets of equal quality. Now lets say Wandas Widgets does some unspeakably horrible act which makes it $10 million per year, but offends every one of its million customers.

There is no incentive for a single customer to boycott Wandas Widgets. After all, that customers boycott will cost the customer $50 (she will have to switch to Wayland) and make an insignificant difference to Wanda (who is still earning $99,999,900 of her original hundred million). The customer takes significant inconvenience, and Wanda neither cares nor stops doing her unspeakably horrible act (after all, its giving her $10 million per year, and only losing her $100).

The only reason it would be in a customers interests to boycott is if she believed over a hundred thousand other customers would join her. In that case, the boycott would be costing Wanda more than the $10 million she gains from her unspeakably horrible act, and its now in her self-interest to stop committing the act. However, unless each boycotter believes 99,999 others will join her, she is inconveniencing herself for no benefit.

Furthermore, if a customer offended by Wandas actions believes 100,000 others will boycott Wanda, then its in the customers self-interest to defect from the boycott and buy Wandas products. After all, the customer will lose money if she buys Waylands more expensive widgets, and this is unnecessary the 100,000 other boycotters will change Wandas mind with or without her participation.

This suggests a market failure of boycotts, which seems confirmed by experience. We know that, despite many companies doing very controversial things, there have been very few successful boycotts. Indeed, few boycotts, successful or otherwise, ever make the news, and the number of successful boycotts seems much less than the amount of outrage expressed at companies actions.

The existence of government regulation solves this problem nicely. If >51% of people disagree with Wandas unspeakably horrible act, they dont need to waste time and money guessing how many of them will join in a boycott, and they dont need to worry about being unable to conscript enough defectors to reach critical mass. They simply vote to pass a law banning the action.

2.3.1: Im not convinced that its really that hard to get a boycott going. If people really object to something, theyll start a boycott regardless of all that coordination problem stuff.

So, youre boycotting Coke because theyre hiring local death squads to kidnap, torture, and murder union members and organizers in their sweatshops in Colombia, right?

Not a lot of people to whom I have asked this question have ever answered yes. Most of them had never heard of the abuses before. A few of them vaguely remembered having heard something about it, but dismissed it as you know, multinational corporations do a lot of sketchy things. Ive only met one person whos ever gone so far as to walk twenty feet further to get to the Pepsi vending machine.

If you went up to a random guy on the street and said Hey, does hiring death squads to torture and kill Colombians who protest about terrible working conditions bother you? 99.9% of people would say yes. So why the disconnect between words and actions? People could just be lying they could say they cared so they sounded compassionate, but in reality it doesnt really bother them.

But maybe its something more complicated. Perhaps they dont have the brainpower to keep track of every single corporation thats doing bad things and just how bad they are. Perhaps theyve compartmentalized their lives and after they leave their Amnesty meetings it just doesnt register that they should change their behaviour in the supermarket. Or perhaps the Coke = evil connection is too tenuous and against the brains ingrained laws of thought to stay relevant without expending extraordinary amounts of willpower. Or perhaps theres some part of the subconscious that really is worry about that game theory and figuring it has no personal incentive to join the boycott.

See the article here:

[REPOST] The Non-Libertarian FAQ | Slate Star Codex