Is Government Ever Necessary: A Conservative-Libertarian Debate

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Dear Scott,

Thank you for
the opportunity to have this debate. I’ve learned a lot from you
over the years, and I’m sure I’ll learn more over the course of
this exchange. But let me get right to the point. I think that libertarianism
as an ideology fails because it cannot provide a general proof that
government intervention is never beneficial. Libertarians, especially
the Austrian variety, offer very useful critiques of individual
policies. But only a cost-benefit analysis can tell us whether a
policy is a good idea or a bad one, and libertarians cannot prove
that every policy will fail the test.

Before I continue
with some examples, let me explain that I am specifically criticizing
the Austrian school of libertarianism, which claims, at least by
your own definition, that market intervention always does more economic
harm than good in a utilitarian sense. I am not going to address
broader philosophical arguments about the "right" to individual
freedom separate from the economic utility it provides. You have
told me before that, as an evangelical, you would like to ban all
sorts of immoral behavior, if only it were possible. Your
argument, and apparently the Austrian position in general, is not
that humans possess a large set of natural rights, but simply that
government always destroys wealth when it intervenes, whether in
people’s private lives or in the broader marketplace. It is this
utilitarian argument for libertarianism that I believe is unprovable
and almost certainly incorrect.

At the heart
of policy analysis is the simple cost-benefit test. If the benefits
of a policy outweigh the costs, then the policy is a good idea.
But, too often, both liberals and libertarians pay attention to
only one side of the analysis. Libertarians are great at identifying
the costs of a policy. That the minimum wage creates unemployment,
for example, is an important effect to consider. That lighter, more
fuel-efficient cars kill their passengers more often during collisions
is also crucial to know. On the other hand, liberals tend to emphasize
only the benefits of government policy. The minimum
wage will give more money to poor people! Lighter cars will save
on energy! These observations are probably true, but they must be
balanced against the costs that libertarians identify. Here is the
key point — we simply do not know how the benefits of these policies
will compare to the costs without a case-by-case analysis. Just
as it is ridiculously short-sighted for liberals to advocate a minimum
wage or lighter cars merely because of the benefits, it is equally
wrong for libertarians to oppose these policies merely because of
the costs.

As a conservative,
I am very skeptical of government intrusion. I think that, too often,
the costs of policies are not adequately taken into account. But
this does not mean that the costs are always actually greater
than the benefits. Healthy skepticism of government (my position)
is much different from complete condemnation of government (your
position). The major difference is that I remain open-minded.

Let’s look
at another example — drug laws. Few issues better demonstrate the
distinction between conservatives like me and libertarians like
you. The libertarian critique of the drug war is essentially that
the costs of enforcement outweigh the benefits of fewer people using
drugs. My response is — prove it! I’m not saying that you have to
start crunching the numbers, but ask yourself the following question:
Could the results of an empirical study convince you to support
the drug war? If the answer is no, then you are taking a position
of hubris, not science.

In order to
dispense with empirics but still maintain that libertarianism is
correct from a utilitarian standpoint, you must prove theoretically
that intervention always causes a net economic loss. But
where is this argument? What broad theory can you use to show that
the drug war specifically is a bad idea, without resorting to empirics?

I’m running
out of my allotted space for my opening statement, and there is
a lot more I’d like to say, but I think I’ve sufficiently thrown
down the gauntlet. In order to win this debate, you must present
to me an abstract proof that all government intervention causes
more harm than good. If you cannot — if you must resort to a case-by-case
analysis — then you have implicitly admitted that the libertarian
ideology is not a foolproof rule, but merely a helpful guide that
could easily be wrong on occasion.

~ Jason

Dear Jason,

Thank you for
your comments. I appreciate that you are willing to rationally evaluate
public policy matters on a utilitarian basis rather than on the
more insipid traditionalist and jingoistic grounds of many of your
conservative brethren. Nonetheless, I think you misrepresented the
methodology liberals, conservatives, and libertarians employ in
determining public policy. While you correctly assert that liberals
tend to only focus on the ostensible benefits of government action,
you imply that conservatives never do the same thing, but this is
clearly erroneous. While liberals may piously declare that anyone
who is opposed to the welfare state is automatically indifferent
to poverty, conservatives take a similar tact in regard to those
who oppose their vaunted drug war and military campaigns.

You are partially
correct when you assert that libertarians tend to look only at the
costs of such measures, but this is because they tend to be the
only ones to actually question the costs of government actions!
The modern day left and right both treat the government as if it
were some supernatural actor that can freely bestow blessings onto
the nation as long as those "blessings" are desirable.
For example, the debate over stem cell research essentially boils
down to a debate over whether the research itself is a good idea.
If it is, funding it is a wise move; if not, then the Bush administration
was correct in withholding funding, but nobody in this debate discusses
whether state subsidies themselves are actually effective.

Now, I believe
you agree that subsidies tend not to work. However, the institution
that creates these subsidies is the government. I contend that the
government is nothing more than an instrument of public policy that
can be evaluated and dismissed as a poor method for improving efficiency
and net economic gains. This evaluation can be achieved through
both observation and experience.

If you have
a car that never makes it around the block, you would rationally
note that this is a poor instrument of transportation. Furthermore,
in the theoretical realm, economists recognize the law of demand
because they know that (all else held equal) humans consume more
at a lower price while physicists recognize gravity because they
know that an object when released will fall to the earth. Both economic
and physical scientists recognize these axioms despite the fact
that they haven't conducted tests on every instance of human behavior
or physical action.

The fact that
I can't think of anything the government does better than the private
sector is enough for me to reject the necessity of the state; however,
I suppose that since economists use marginal utility to explain
the law of demand and there is a whole body of physics underlying
the law of gravity, it is incumbent upon libertarians to provide
a theoretical basis for their observations about the state.

The state's
actions range from providing inferior services compared to the private
sector — Government roads work but are congested, expensive to maintain,
and often times very dangerous — to outright disastrous — destructive
wars and monetary/economic instability. What explains this? The
state is simply an inefficient and unresponsive monopoly. Neoclassical
economists and Austrians disagree on the origins of monopolies,
but no one disagrees with their results. Monopolies are unresponsive
to consumer demand, can make poor decisions without any real repercussions,
and overcharge for their lousy services. I don't think there's a
better description for what we see with the government.

You raise the
issue of the drug war in your comments, and not only does this issue
underscore the difference between conservative and libertarian policy
prescriptions, it also demonstrates the difference in methodological
approaches between the ideologies. Conservatives essentially want
to ban narcotics because they're bad. I agree, but why don't most
conservatives support banning cigarettes, alcohol, or firearms?
The reason likely is because these products are essentially the
three "food groups" in certain conservative circles. Libertarians
oppose drug prohibition, not because they're (for the most part)
pro-narcotic, but as you correctly noted, they feel that the cost
of prohibition outweighs the benefits of whatever disincentive to
drug consumption is created.

However, an
appropriate analysis of drug prohibition goes further; in fact,
it highlights the two major problems associated with the monopolistic
state: market/incentive distortions and the inability to calculate
the cost/benefits of a policy as efficiently as private entities.
While prohibition is a debate in itself, let me try to do my position
justice in the limited space I have:

Drug prohibition
doesn't work because there are people who simply want drugs and
are willing to do what it takes to obtain them. Both empirical evidence
and the economics of black markets prove this. While it's true that
some people at the margins may be dissuaded from consuming drugs
because of the fear of being caught, it is further true that individuals
will also be attracted to this conduct because of the novelty of
its illegality. More importantly, however, all sorts of additional
costs will be added to the equation: Increased law enforcement and
incarceration costs, public corruption, and of course handing an
entire industry over to violent criminal syndicates. In essence,
drug use continues relatively unabated but at a far higher social
cost.

On the calculation
side, we are able to further see the absurdity of government. Despite
the egregious costs of this effort, a military campaign in South
America, and no real evidence of its effectiveness, there isn't
any indication that this policy will ever end. Imagine if a private
company offered a service that was this costly, dangerous, or ineffective
— They'd be out of business in short order, but the state and its
programs never go out of business. Private entities can, however,
effectively and efficiently prohibit things with which they disagree.
I'll direct you to my article
on Pensacola Christian College
in order to save space.

The state is
a territorial monopoly which can't effectively control human behavior
or provide an efficient alternative to the private sector. Greedy
people are still greedy no matter how high tax rates may be — they
just shift their resources to less productive financial instruments
under higher rates. Welfare subsidies don't give the impoverished
a hand up, they merely encourage sloth. The criminal justice system,
US highway system, and public schools are a bloated, inefficient
mess. Meanwhile, the private sector efficiently allows us to consume,
exchange, and produce, and when an entity in the free enterprise
system fails to do this, it is either forced to change or to disappear.
The government faces no such challenge to its status, and look at
the results.

~ Scott

Dear Scott,

You say that
some conservatives ignore costs. I agree, but perhaps we can have
a truce on the back-and-forth of "what conservatives do"
versus "what libertarians do." I fear that each of us
will be made to defend the lesser elements of our movements. I only
made the initial generalization, about libertarians ignoring the
benefits of policy, because I thought it applied to the specific
view you were defending. But I’ll stick to debating just you as
long you debate only me.

You say that
experience alone proves to you that the government will always fail,
but here you are actually conceding my point — there is no abstract
proof that libertarianism is correct. It must be constantly subject
to reevaluation on a case-by-case basis. As you pointed out, there
is hardly a more consistently experienced law than gravity. But
if I told you that the law of gravity does not apply in outer space,
would you scoff at the notion? Would you refuse to believe me even
if I showed you astronauts floating around in spaceships?

I do appreciate
your theoretical discussion that followed. In the context of the
broad marketplace, you are almost certainly correct. Businesses
are forced to make good decisions, otherwise they ultimately cease
to exist. As you say, it is folly to think that government, which
has no profit motive, can allocate resources more efficiently than
the rational marketplace. But individual humans are a bit
different. Humans don’t always drop dead — leave the marketplace,
so to speak — when they make bad choices.

In reality,
individual human beings often make very bad choices. Sometimes these
choices are so bad that even government intervention to stop them,
despite all its costs, is worthwhile. The drug war is just one example
of such an attempt. You did a very good job, as I expected you to
do, of explaining the costs of the drug war in detail. But your
conclusion rested on empirical claims, not theory. You assumed that
the impact of the drug war on drug usage is a wash. But what if
this were not true? Would you revise your conclusion? You didn’t
answer my question that I originally posed to you — if a serious
empirical investigation of all the costs and benefits of the drug
war showed a net gain, how would you react? Would you continue to
argue that gravity must exist in outer space?

So we don’t
get bogged down in the complicated drug issue, let’s also talk about
simply compelling people to wear seatbelts. Wearing a seatbelt imposes
virtually no costs on its wearer but provides valuable benefits
in the case of an accident. In fact, I think you’d agree, wearing
a seatbelt is the rational choice in virtually all cases. (Even
if there were a case that it was not, it would be so rare that it
would not affect the overall benefit-cost calculus.) So why not
force everyone to wear a seatbelt? There are enforcement costs,
of course, but like all other costs, they can simply be weighed
against the benefits. You can easily see how seatbelt laws could
save more dollars — in terms of lives, injuries, and pain — than
they cost to enforce. Once you accept that people don’t act as rationally
as they should, the case against all intervention crumbles.

Once again,
I acknowledge the limitations of government regulation. I would
not advocate intervening in choices about food, sex acts, vacation
destinations, etc., simply because we would have very high enforcement
costs chasing meager benefits. But in those places where human behavior
is so obviously destructive, I see a place for government. You have
said that individual rights are not your concern, and that your
only interest is maximizing social utility. So why don’t you agree
with me?

~ Jason

Dear Jason,

The purpose
of my criticism of conservatism in my earlier comments was not to
set up a straw man. As I mentioned, I appreciate that your approach
to public policy issues is more rational than that of many of your
conservative colleagues. Nonetheless, all versions of conservatism
have the same fundamental flaw as socialism. Socialism seeks to
create a new, socialist man who does not respond to traditional
incentives and can calculate economic costs apart from a price system,
thereby making the socialist utopia tenable.

This, of course,
denies basic natural laws of human behavior, and not surprisingly,
socialism has repeatedly failed. Prohibition, however, is also based
upon the same premise. Perhaps I was too specific in depicting the
errors of drug prohibition in my earlier statements, so permit me
to provide a more general explanation: Humans want things that are
bad for them (X). Outlawing X does not affect their underlying desire
for X — it only makes X inaccessible by legal means. There are individuals
who are willing to violate the law in order to make money, and therefore
X becomes available illegally. Under prohibition, problem X still
exists; HOWEVER, we now have all sorts of inefficiencies and enforcement
costs in addition to the problem. Before prohibition, we only had
problem X. Problem X by itself is better than problem X plus the
additional costs. Ergo, prohibition is more costly than non-prohibition.

As for your
seatbelt example, some of the above applies, but you're discussing
rules on government-run roads. I would probably counter that the
high cost of enforcement in addition to the limited likelihood that
one would end up in a situation where a seatbelt would actually
save one's life makes this an inefficient rule, but I could be wrong.
However, with government run roads, how do we solve this dispute?
– If I beat you in an election? If you get an appointment over me?
If I have a better PR campaign?

Under a system
of private roads, however, the owners/managers would have to look
to a number of rational indicators such as public reaction, insurance
rates, civil liability, and damage to the infrastructure. Once again,
this is an example of the supremacy of private calculation over
government calculation.

Overall, the
government is an unresponsive and inefficient monopoly that attempts
to artificially ignore natural laws while lacking the rational calculation
methods of the private sector. Any ideology that rejects this failed
instrument of public policy as a whole is clearly a consistent and
rational system of thought. Libertarianism fits this bill, and that's
why I fully endorse it.

~ Scott

April
9, 2007

Scott
Rosen [send him mail] is
a law student at the Villanova University School of Law. Jason Richwine
[send him mail] is
a graduate student at the Kennedy School of Government at Harvard.

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