Recently, there appears (and ‘appears’ is the word – it’s almost certainly an artefact of looking over a few blogs and reading more into tone than into content, but this is something that has been remarked on by people other than myself) to have been an influx into the Liberal Democrats of Libertarians. This is typified by the members of ‘Liberal Vision‘, which is in turn part of a Tory organisation called ‘progressive voice’ (essentially a bunch of Objectivists).
Now, in many ways I agree with libertarians on many subjects – which is, of course, why we can be in the same party – I am all for more personal freedom, for a lack of government interference in people’s lives, for the restoration of recently-lost civil liberties and so on. But libertarians seem, to me, to have two big holes in their thinking, both of which are summed up by some recent comments by ‘Nick’ in this thread on Liberal Conspiracy (scroll down).
‘Nick’ may or may not be a self-described libertarian (or indeed liberal) but he’s following the libertarian ‘party line’ almost exactly. The government should not interfere with the workings of the market when companies are failing. Not only should they not spend any money bailing out the companies (a reasonable, debatable position) or on retraining the workers so they can get jobs elsewhere (a much less reasonable position in my view) – they should not even pay unemployment benefit to the people who lose their jobs, because the money would be better allocated by the market.
Now, there are two distinct errors here. The first, and less important, is the one that pretty much every ‘free market’ advocating politician of whatever stripe for the last thirty years has fallen into – the belief that markets will always guarantee the most efficient allocation of resources.
People who know a little about economics can fall into this trap, because free-market economists define ‘efficiency’, tautologically, as the state where everyone has the maximum possible without anyone else having any of their property taken from them – in other words, as ‘that state which a market will produce’.
However, ‘efficiency’ in this context is merely a local optimum, not an overall optimum. As an example, suppose that you, O Hypothetical Reader, have a pound – a whole shiny pound all to yourself. And I have nothing. Now, assuming you don’t want to just give me your money, that’s the most efficient distribution of the money possible.
But suppose that, while you don’t want to give me your money, you were forced to, and I invested the money and made ten pounds, of which I was forced to give you five. Instantly, we have *both* benefited, substantially, even though this is ‘less efficient’ in market terms.
Now, in this hypothetical situation, you would of course either just give me the money or invest it yourself. But in a real life situation involving billions of pounds in the pockets of millions of people, it can’t be guaranteed that the equivalent would happen.
A market is a very good way of ensuring, not that the economy always gets more efficient or runs at peak efficiency, for the common understanding of the word efficiency as opposed to the economists’ understanding, but rather that the economy *always moves into the most efficient adjacent position in the economic phase space*. These are very similar things, but they can be crucially different.
As an analogy (appropriately Newtonian for today) imagine a ball rolling downhill. Now, normally, that ball will continue down until it reaches the bottom of the hill (a state of maximum gravitational efficiency). But imagine a little dip in the hill halfway down. The ball rests there, because to go any further down it would first have to go up.
That kind of situation, economically, is when it makes sense for government intervention. Sometimes a mass of people acting independently do not come up with the most efficient solution, and a change, even an arbitrary one, needs to be made to free the ball from the rut. As an example, we need laws stating that you should only drive on one side of the road. The choice of which side is arbitrary, but not having those laws would cause infinitely more problems than the tiny amount of personal freedom given up.
I think the main defining characteristic of a liberal – as opposed to a libertarian – is that a liberal recognises the need for such measures but thinks they should be as few and as minimal as possible.
However, I have left the more important error to last, which is simply this – who says ‘efficiency’ of whatever kind is the thing we need most? For a long time the right have predetermined the terms of the debate by talking about ‘economic efficiency’ and ‘modernisation’. These are probably good things, overall, but are they the be-all and end-all? I think not.
Libertarians almost all seem to believe that they have achieved everything in life entirely by themselves, having struggled against mighty odds and overwhelming enemies to become moderately successful computer programmers, despite the horrible disadvantages of being born white, English-speaking heterosexual males in middle-class families. Their thought is ultimately a selfish one – “I did this, so anyone else can, and I had no help so I won’t help anyone else”.
I, on the other hand, have experienced poverty. I’ve never been at the lowest possible point, but the few months when I had to support my now-wife and myself on one person’s benefits were unpleasant, to say the least. So now I’m in a position where I’m working for a well-known company, earning a good income, doing a job I enjoy, I feel not only an obligation to society to pay back what I’ve taken (for I couldn’t have got this job without help both from individuals and from government institutions), but a profound *need* within myself to make sure that no-one else should have to dig around for half an hour to find twenty pence for a pack of custard creme biscuits which will be their only meal of the day…
PEOPLE are inefficient, messy things. There is no possible rational justification for supporting the continued existence of the human race, let alone helping individual members of it. But anyone who would gladly see tens of thousands of people jobless and with no source of income, either in the name of keeping a few extra pence a week in their own pocket or in the name of a heartless ‘efficiency’ has so little compassion in their heart, so little empathy, that I can’t even begin to imagine a common frame of reference for discussion, despite many surface similarities in our philosophies.