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

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