Forget The Argument From Efficiency

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For three main
reasons, freedom can never be won by arguing for economic efficiency.
Such efficiency is always debatable, inevitably rests on technical
details obscure to most people, and is one of the topics most subject
to government misinformation. In Canada, arguing that a free market
will produce lower costs in health care, for instance, always brings
the contrary example of the United States, and its high spending
on medical costs. Refuting this misleading statistic requires exhaustive
levels of detail, which the listener has likely never heard before,
and which are easy to dismiss. Arguing that health care was cheaper
before the government got involved is also unproductive, since people
can easily argue that technology was far less advanced in the past,
or that there were fewer old people, or less life-extending procedures
and pills. The argument from efficiency is never conclusive, since
it requires statistics, a mountain of specialized knowledge, enormous
patience — and it can be derailed at any time by false, missing
or incomplete information.

The argument
from efficiency also requires near-omniscience. Arguing that the
free market is more efficient — and how each of its supposed u2018inefficiencies'
always results from state intervention — requires detailed knowledge
of literally dozens of fields. Explaining to someone why the California
energy crisis resulted not from privatization, but state control,
requires at least half an hour of lecturing on economics, history
and regulation. Not a pleasant prospect! And even if the listener
makes it through to the conclusion, he or she has just learned an
interesting piece of history. He will not have the ability to extrapolate
these facts into general principles of economics — even with help
— let alone moral axioms regarding state violence.

You may be
adept at arguing against anti-monopoly legislation by referencing
the software industry — but what if your listener is well-versed
in the steel sector? Telecommunications? Libraries? At some point,
your knowledge will falter, and you will have to promise to get
back to her. This is why so many freedom advocates rush from books
to lectures to web sites for evidence — and risk turning themselves
into terminal bores. It is an impossible quest.

Imagine instead
that you are a 19th century abolitionist arguing against
slavery. You say the slaves should be freed, and base your argument
on economic efficiency. The objections you must overcome include
the following:

  • How on earth
    would freed slaves find jobs when the economy is so bad?
  • You can't
    educate slaves — that's why they're slaves!
  • Freed slaves
    have no job skills, and would just turn to crime.
  • Slaves are
    the only efficient way to run agriculture.
  • Slaves don't
    have any sense of responsibility — it would be cruel to give them
    their "freedom."
  • There is
    no way you can run a plantation without slaves.
  • They don't
    have any property, so they'd have to sell their labour to the
    plantation owner anyway — how would they be any more free?

As you can
see, you would have to be an expert on a half-dozen fields just
to answer a few of the objections that could be raised against your
argument. The debate would quickly turn into a stalemate, as do
all arguments for liberty based on economic efficiency.

The second
reason that this approach fails is that people will never accept
the risk of wrenching social change for the sake of theoretical
economic benefits somewhere down the road. Liberty advocates must
always remember that they are playing with fire whenever they talk
about a fundamental reorganization of society. Most such u2018reorganizations'
result in far worse conditions for the average citizen. People are
generally terrified of fundamental change — and for good reason.
A possible increase in economic efficiency will never motivate them
to put their entire way of life at terrible risk.

The third reason
why the efficiency argument can never win is that people don't really
care about economic efficiency very much. Two quick examples. The
first is parenthood. How could one argue that having children is
economically efficient? They are expensive, exhausting and time-consuming
— and few of the benefits of having children can be measured by
economic statistics. This is an example of what generally motivates
people. Not economic efficiency, but something else.

For another
example, look at any wartime draft. When called up by their leader,
men often flock to the slaughter without resistance. What is u2018efficient'
about that? One fundamental truth of human nature is that if people
think that something is moral, they will bear almost any burden
to support it. Women send their sons to war. Wives kiss their husbands
goodbye. Children are proud of their father's murders.

As it is with
war, so it is with state power. If people believe that the state
helps the poor, or heals the sick, or educates the ignorant, they
will bear any burden to support it. They may grumble at their levels
of taxation, but will soldier on regardless.

So if the argument
from economic efficiency does not work, what can? There are, in
my view, two other main approaches. We will only deal with one here
— the argument from consistency — and leave the other to
the next article.

What is the
argument from consistency? Well, people believe that it is moral
for the government to use force to take from the rich and give to
the poor. One effective argument against this is to ask whether
this is a universal moral principle. If the person says "yes,"
' then he has to agree that anyone can do it. A poor man can rob
a rich man at gunpoint. Anyone who owns less than someone else can
mug her, and shoot her if she resists. Is that the kind of world
they believe would be good and just? Of course not. So, the principle
that it is OK to use violence to transfer wealth has just been demolished.
It is no longer a universal moral principle, but something else

This kind of
argument does not require a sophisticated knowledge of history,
economics, politics or any other detailed discipline. More importantly,
it also does not require that the listener know any of these
topics. All that is required is some gentle Socratic persistence.

Of course,
the argument never ends there. People will come up with all sorts
of nonsense about democracy, collective decisions and the transfer
of moral authority to the state, but all those arguments are easy
to demolish, as long as one does not forget that the state is nothing
but a collection of individuals. Also, contracts that are entered
into voluntarily are morally binding. Contracts that are enforced
without consent are not. A man who buys a car must pay for it. A
man who buys a car for a woman without her consent cannot compel
her to pay for it. This is why centralized and enforced democratic
u2018decisions' are immoral.

So what does
this look like in practice? Let's take a common example: health
care. Most freedom advocates have run into the difficulty of unraveling
the US mess in particular. The argument from consistency might look
like this:

  • Medical
    care must be entirely privatized.
  • But it's
    more expensive when the State does not run it. Look at America!
  • I don't
    believe so, but what if it is? Can I tell you how much you should
    spend on health care? Perhaps, in a free society, people would
    choose to spend half their income on health care. Would you tell
    them they cannot?
  • But in the
    US, 30 million people don't have health insurance.
  • That is
    the result of terrible government laws which drive the cost of
    insurance up, and the benefits down — but let's say that it is
    purely voluntary, that many people don't want health insurance.
    So what? Would you force them to take health insurance?
  • But people
    should have health insurance!
  • Why? What
    if it costs half their income, and they're eighteen, and very
    healthy, and take the bus, and don't skydive, and always cross
    at the light, and so on? For that person, health insurance would
    probably make no sense. They would be far better off getting themselves
    educated, or saving their money, or just taking the risk of getting
    sick. Health insurance is a very personal decision. I would never
    feel comfortable making that choice for someone else.
  • But if that
    eighteen year old gets sick, they have to go to a public hospital,
    and so they incur a social cost.
  • Yes, at
    present that is true, but it won't be the case if health care
    is privatized.
  • So they'll
    just die in the streets?
  • Would that
    bother you? Watching poor people die in the streets for lack of
    health care?
  • Of course!
  • So you would
    help them, right?
  • Yes, I
    would, but…
  • And so would
    just about everyone else. Everyone cares about such things. The
    very presence and acceptance of state-funded health care proves
    that people care about sick people who can't take care of themselves.
    So that won't be a problem. But even if it is — let's say that
    not one person in society cares about sick poor people, and they
    do die in the streets. If that is so, then giving the government
    more power would not help them, because such apathetic citizens
    would never vote for politicians who would care about the poor
    — and the politicians themselves would not care about the
    poor, since no one does. So — either people care about the sick
    and poor, and will help them without the government, or they don't,
    in which case the government won't help them either. The entire
    point of privatization is that we cannot force our own preferences
    on other people. If you prefer for everyone to have health insurance,
    I think that is wonderful! You should start up an insurance
    company and figure out how to provide it. Or support someone else
    who does. Or give to charity. Or become a doctor and work two
    days a week for free. Or pay extra for your own insurance so that
    others can pay reduced rates. There are thousands of ways to help.
    But the government cannot morally force people to give
    money to the poor, or provide them with free health care, because
    if it's moral to force charity, then anyone can do it. We must
    then grant poor people the moral right to grab guns and rob doctors
    and hospitals for themselves.

This approach,
of course, rarely clinches the argument. But it might be instructive
to notice that the above argument never appeals to the economic
efficiency of the free market. One of the most powerful debating
techniques is to assume that your opponent's premises are true,
and then prove that they lead to absurd consequences. Thus, the
argument which states that certain people may use violence on behalf
of others — through taxation and welfare — can be easily countered
by saying that, if it is the right thing to do, then everyone should
be encouraged to do it. The government is then not needed — a moral
person should just arm the poor directly and submit to their inevitable

conclusion, it is high time that freedom advocates bid a fond farewell
to the argument from economic efficiency. It has been an instructive
exercise for us to prove — at least to ourselves — that the free
market can indeed provide the goods and services currently inflicted
on society by brute state power, but it will never be stirring enough
to motivate a larger movement. In the difficult march to a freer
world, we need a more powerful banner. The argument from consistency
is a good first step — but our true banner is not efficiency, or
consistency, but the morality and goodness which naturally stirs
and rouses to action every noble intent in the hearts of men.

19, 2005

Molyneux [send him mail]
has been an actor, comedian, gold-panner, graduate student, and
software entrepreneur. His first novel, Revolutions
was published in 2004, and he maintains a

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