This is a work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

II. TERMINOLOGY

Introduction

American law — that is, the Constitution of the United States, the constitutions of the 50 States, statutory law, and case law — effectively recognizes two fundamental types of right: liberty and its opposite, which I will call privilege. Liberty and privilege are implemented through procedural rights (e.g., a qualified right to vote, a qualified right to Social Security benefits). There is much confusion about “freedom” — which sometimes means “liberty” and often means more than that — so, I prefer “freedom of action.” The concatenation of rights and “freedoms” in America has evolved through the influence of politics on government, under the aegis of the state.

In this part of “Practical Libertarianism for Americans” I explain what I mean by the italicized words and phrases of the preceding paragraph.

A Right

I will use this definition, from Wikipedia:

At its most fundamental, a right is a claim, on other persons, that is acknowledged and reciprocated among the principals associated with that claim. The most basic of rights is a principle of interaction between people which amounts to the simplest version of the Golden Rule (do unto others as you would have them do unto you). In other words, it is a mutually beneficial agreement between two or more people; each of them agrees to behave in a certain way towards the others so that they will behave in the same way towards him/her….

Liberty

The core of libertarianism is liberty: briefly, the negative right to be left alone — in one’s person, pursuits, and property — as long as one leaves others alone. I am using “liberty” here to encompass what the Founders intended by “life, liberty, and the pursuit of happiness” in the Declaration of Independence. But in the libertarian ideal — unlike the world of the Founders — the right of liberty is an equal right, one that should be enjoyed by all persons.

I will leave aside, for the moment, the basis of liberty; that is, whether it is innate in human beings (akin to Original Sin), or a primordial “instinct” that has been honed through eons of conflict resolution, or a desideratum that humans sometimes strive to attain through politics and warfare.

I will say here that libertarians do not believe that liberty is somehow a gift of the state, though something like liberty may be secured through the creation of a state — as in the American experience.

A person living in liberty receives nothing from others by compulsion. The only legitimate role for the state is to protect peaceful, honest citizens from predators, both foreign and domestic.

Privilege

A privilege, by contrast to liberty, is a positive right, that is, a grant of special (unequal) treatment. As Wikipedia puts it (in the context of defining rights):

Other than [the reciprocal behavior exemplified by the Golden Rule], an entity (person or group) can make any sort of claim on other persons, but those claims remain simple assertions until the other persons acknowledge that claim as binding upon them. At that point, the claim becomes a privilege (a one-sided acknowledged claim). If all parties (including the originating claimant) also agree to reciprocate acknowledgement of such a claim, it becomes applicable to all, that is, applicable to everyone in the same sense and at the same time, and thus a right….

A small, bonded group of persons (e.g., a band of hunter-gatherers) may consent mutually to the acceptance of a privilege as a right, if all stand to benefit from the privilege (e.g., sharing of food in the event of drought). But such conditions are inconceivable for the United States (or for almost any political entity within the United States), where laws made by a bare majority of a relatively small legislative body — or by a few members of a regulatory body — can be enforced by the coercive power of government.

Law-made privileges result in the direct and indirect redistribution of income and wealth through welfare and regulation. We tend to think of welfare as a subsidy or other special treatment based on age, gender, race, level of income, infirmity, or other condition of being. Welfare also includes unequal taxation; e.g., progressive taxation of personal income, a city’s granting of tax breaks to entice a business to locate there.

Regulatory privileges are accorded by specifying the conditions of economic activity for the purpose of promoting certain outcomes (e.g., “protecting” domestic manufacturers from foreign competition) and proscribing other outcomes (e.g., prohibiting the sale of certain types of drugs before they undergo a lengthy approval process). Regulation in the name of “protecting the public” is really a privilege because it (a) is accomplished by an elite group, (b) usually provides psychic satisfaction for a group of do-gooders, and (c) often does not protect the public. (The most egregious example of spurious protection of the public is the Food and Drug Administration’s lengthy process for the approval of new drugs, which does more harm than good.)

Privilege therefore differs fundamentally from liberty in that it attempts to make some persons better off through the compulsion of others persons, with the result that it usually makes almost everyone worse off. (I will have more to say about the effects of the welfare-regulatory regime in a later part of this essay.)

Procedural Rights

Liberty and privilege are given force through procedural rights. Certain elements of the Bill of Rights (e.g., freedom of speech, freedom from arbitrary searches) are, in effect, procedural rights — guarantees of freedoms that are inherent in the concept of liberty. The qualified right to vote is a procedural right that is thought to be necessary to the preservation of liberty. (The right to vote — coupled with the desecration of the U.S. Constitution — actually ensures the creation and entrenchment of privileges, thus eroding liberty.)

There are many, many procedural rights that flow from law-made privileges. Perhaps the most notorious example is the preferential treatment of blacks in university admissions and hiring.

Freedom of Action

“Freedom” is often used as a synonym for liberty. In practice, freedom usually means freedom of action, which includes the freedom to choose from among many options. For example, the definition of freedom in Wikipedia includes this example:

Economic freedom means having more choices due to being wealthy or having more economic choices and not being subject to very many natural or institutional constraints….

Economic freedom, among the other things that we call freedom, may very well arise from privilege, not liberty. Economic freedom is really freedom of action. To avoid confusion, I will not use freedom as a synonym for liberty.

Politics, the State, and Government

I defer again to Wikipedia regarding politics:

Politics is the process and method of decision-making for groups of human beings. Although it is generally applied to governments, politics is also observed in all human group interactions including corporate, academic, and religious….

In sum, politics precedes the state, and continues within and independently of the governance of a state. As for the distinction between state and government, here is Wikipedia again:

Looked at from the point of view of an individual nation, the state is a centralized organization of the whole country. Those studying this dimension emphasize the relationship between the state and its people. The English political philosopher Thomas Hobbes argued that in order to avoid a multi-sided civil war, in which life was “nasty, brutish, and short,” individuals must necessarily surrender many of their rights — including that of attacking each other — to the “Leviathan”, a unified and centralized state. In this tradition, Max Weber and Norbert Elias defined the state as an organization of people that has a monopoly on legitimate violence in a particular geographic area. Also in this tradition, the state differs from the “government”: the latter refers to the group of people who make decisions for the state….

Although I subscribe to the Hobbesian view that life in the state of nature is “nasty, brutish, and short” — thus necessitating the state’s near-monopoly on violence — I do not subscribe to the Hobbesian view that individuals surrender rights to the state. Rather, I hold the Lockean view of the Founders, which is that individuals can create a state in order to secure their rights — in particular, their liberty rights — while retaining those rights, and their ultimate sovereignty over the state. Among the rights retained by individuals is the right to self-defense, should the state fail in its duty to protect its citizens from predators of the foreign or domestic variety.

This is a work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

NOTES ON THE STATE OF LIBERTY IN AMERICAN LAW

As noted in Part II, I am using “liberty” to encompass the full spectrum of liberty rights, which the Founders captured in the phrase “life, liberty, and the pursuit of happiness.” This fragmentary addendum is a provocative gloss on that evocative phrase.

Life

Liberty is nothing without life, of course. The right to life doesn’t extend to those who would take your life: a foreign enemy who is scheming to harm the United States or an armed thug who breaks into your home, for example.

The state may act to preserve the life, liberty, and happiness of its citizens by going to war against their enemies, even at the cost of the lives of American warriors and foreign bystanders. The alternative — stubborn, moralistic, libertarian “defensism”— is an invitation to aggressors.

The state may act to preserve the life, liberty, and happiness of its citizens by punishing those who prey on their fellows, with execution as an ultimate form of punishment. Whether or not capital punishment succeeds in deterring homicide (and I believe that it does), there must be a hierarchy of certain penalties for crime, and that hierarchy must culminate in the ultimate penalty if criminals and potential criminals are to believe that crime will be punished.

But, in America, the state isn’t supposed to hold a monopoly on righteous violence. Self-defense should be an absolute right when the police or armed forces of the state are not at hand, or when they fail in their protective duty. The right to self-defense implies the right to bear arms. It is no coincidence that the most rabid opponents of the right to bear arms are statist left-wingers whose politically correct agenda reveals scant regard for liberty. As a balanced commentary on the Second Amendment puts it:

[A] state facing a totally disarmed population is in a far better position, for good or ill, to suppress popular demonstrations and uprisings than one that must calculate the possibilities of its soldiers and officials being injured or killed.

Liberty

Liberty, narrowly understood, is a set of negative rights — things that the state may not prevent individuals from doing unless and until they infringe on others’ life, liberty, or pursuit of happiness. What are those negative rights? The U.S. Constitution enumerates specific rights in Article I, Section 9; the First through Eighth Amendments; and Amendments Thirteen, Fourteen, Fifteen, Nineteen, Twenty-Three, Twenty-Four, and Twenty-Six. The rights thus enumerated are a combination of purely negative liberty rights (e.g., freedom of speech, freedom of the press) and procedural safeguards of liberty (e.g., warrants issuing upon probable cause, no excessive bail).

Life and law and law are too complex to permit unadulterated rights, of course. Consider liberty of speech: the right to express one’s views without prior restraint on the part of government (which does not mean immunity from criticism by private parties exercising their liberty of speech). Liberty of speech is fraught with limitations, most notably and recently the restrictions placed on the expression of one’s political views through so-called campaign-finance reform. There are many other examples of restricted rights, but the point I’m making is this: Operating under the aegis of the state, the branches of government can, and do, collude to convert absolute liberty rights into circumscribed ones. I’ll have more to say about the flight from the Framers’ vision of liberty in Part VI.

The Framers envisioned rights other than those enumerated in the original Constitution and the First through Eighth Amendments of the Bill of Rights. Thus we have the Ninth Amendment, which says, “The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.” What rights did the Framers have in mind when they crafted the Ninth Amendment? What were those “certain unalienable rights,” not included in “life, liberty and the pursuit of happiness” by the drafters of the Declaration of Independence? What more could there be, after liberty and its token (the right to vote) had been made universal by Amendments Thirteen, Fourteen, Fifteen, Nineteen, Twenty-Three, Twenty-Four, and Twenty-Six? It seems that Madison had nothing particular in mind:

It is clear from its text and from Madison’s statement [upon presenting the Bill of Rights to the House of Representatives] that the [Ninth] Amendment states but a rule of construction, making clear that a Bill of Rights might not by implication be taken to increase the powers of the national government in areas not enumerated, and that it does not contain within itself any guarantee of a right or a proscription of an infringement.

A mere 174 years after the ratification of the Ninth Amendment, the U.S. Supreme Court found discovered such a right, in the majority opinion in Griswold v. Connecticut (1965), delivered by Justice William O. Douglas:

[S]pecific guarantees in the Bill of Rights have penumbras, formed by emanations from those guarantees that help give them life and substance….Various guarantees create zones of privacy. The right of association contained in the penumbra of the First Amendment is one, as we have seen. The Third Amendment in its prohibition against the quartering of soldiers “in any house” in time of peace without the consent of the owner is another facet of that privacy. The Fourth Amendment explicitly affirms the “right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” The Fifth Amendment in its Self-Incrimination Clause enables the citizen to create a zone of privacy which government may not force him to surrender to his detriment. The Ninth Amendment provides: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”…

The present case, then, concerns a relationship lying within the zone of privacy created by several fundamental constitutional guarantees. And it concerns a law which, in forbidding the use of contraceptives rather than regulating their manufacture or sale, seeks to achieve its goals by means having a maximum destructive impact upon that relationship. Such a law cannot stand in light of the familiar principle, so often applied by this Court, that a “governmental purpose to control or prevent activities constitutionally subject to state regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.”…

We deal with a right of privacy older than the Bill of Rights – older than our political parties, older than our school system. Marriage is a coming together for better or for worse, hopefully enduring, and intimate to the degree of being sacred. It is an association that promotes a way of life, not causes; a harmony in living, not political faiths; a bilateral loyalty, not commercial or social projects. Yet it is an association for as noble a purpose as any involved in our prior decisions.

To which Justice Potter Stewart, dissenting, replied (same source):

[T]o say that the Ninth Amendment has anything to do with this case is to turn somersaults with history. The Ninth Amendment, like its companion the Tenth, which this Court held “states but a truism that all is retained which has not been surrendered,” was framed by James Madison and adopted by the States simply to make clear that the adoption of the Bill of Rights did not alter the plan that the Federal Government was to be a government of express and limited powers, and that all rights and powers not delegated to it were retained by the people and the individual States. Until today no member of this Court has ever suggested that the Ninth Amendment meant anything else, and the idea that a federal court could ever use the Ninth Amendment to annual a law passed by the elected representatives of the people of the State of Connecticut would have caused James Madison no little wonder.

What provision of the Constitution, then, does make this state law invalid? The Court says it is the right of privacy “created by several fundamental constitutional guarantees.” With all deference, I can find no such general right of privacy in the Bill of Rights, in any other part of the Constitution, or in any case ever before decided by this Court.

At the oral argument in this case we were told that the Connecticut law does not “conform to current community standards.” But it is not the function of this Court to decide cases on the basis of community standards. We are here to decide cases “agreeably to the Constitution and laws of the United States.” It is the essence of judicial…duty to subordinate our own personal views, our own ideas of what legislation is wise and what is not. If, as I should surely hope, the law before us does not reflect the standards of the people of Connecticut, the people of Connecticut can freely exercise their true Ninth and Tenth Amendment rights to persuade their elected representatives to repeal it. That is the constitutional way to take this law off the books.

Justice Hugo L. Black joined Justice Stewart’s dissent, adding (same source):

The Court talks about a constitutional “right of privacy” as though there is some constitutional provision or provisions forbidding any law ever to be passed which might abridge the “privacy” of individuals. But there is not. There are, of course, guarantees in certain specific constitutional provisions which are designed in part to protect privacy at certain times and places with respect to certain activities. Such, for example, is the Fourth Amendment’s guarantee against “unreasonable searches and seizures.” But I think it belittles that Amendment to talk about it as though it protects nothing but “privacy.” To treat it that way is to give it a niggardly interpretation, not the kind of liberal reading I think any Bill of Rights provision should be given. The average man would very likely not have his feelings soothed any more by having his property seized openly than by having it seized privately and by stealth. He simply wants his property left alone. And a person can be just as much, if not more, irritated, annoyed and injured by an unceremonious public arrest by a policeman as he is by a seizure in the privacy of his office or home.

One of the most effective ways of diluting or expanding a constitutionally guaranteed right is to substitute for the crucial word or words of a constitutional guarantee another word or words, more or less flexible and more or less restricted in meaning. This fact is well illustrated by the use of the term “right of privacy” as a comprehensive substitute for the Fourth Amendment’s guarantee against “unreasonable searches and seizures.” “Privacy” is a broad, abstract and ambiguous concept which can easily be shrunken in meaning but which can also, on the other hand, easily be interpreted as a constitutional ban against many things other than searches and seizures. I have expressed the view many times that First Amendment freedoms, for example, have suffered from a failure of the courts to stick to the simple language of the First Amendment in construing it, instead of invoking multitudes of words substituted for those the Framers used….For these reasons I get nowhere in this case by talk about a constitutional “right of privacy” as an emanation from one or more constitutional provisions. I like my privacy as well as the next one, but I am nevertheless compelled to admit that government has a right to invade it unless prohibited by some specific constitutional provision. For these reasons I cannot agree with the Court’s judgment and the reasons it gives for holding this Connecticut law unconstitutional….

While I completely subscribe to the holding of Marbury v. Madison…and subsequent cases, that our Court has constitutional power to strike down statutes, state or federal, that violate commands of the Federal Constitution, I do not believe that we are granted power by the Due Process Clause or any other constitutional provision or provisions to measure constitutionality by our belief that legislation is arbitrary, capricious or unreasonable, or accomplishes no justifiable purpose, or is offensive to our own notions of “civilized standards of conduct.” Such an appraisal of the wisdom of legislation is an attribute of the power to make laws, not of the power to interpret them. The use by federal courts of such a formula or doctrine or whatnot to veto federal or state laws simply takes away from Congress and States the power to make laws based on their own judgment of fairness and wisdom and transfers that power to this Court for ultimate determination – a power which was specifically denied to federal courts by the convention that framed the Constitution….

[Justice Arthur Goldberg, who joined Douglas’s majority opinion] has adopted the recent discovery that the Ninth Amendment as well as the Due Process Clause can be used by this Court as authority to strike down all state legislation which this Court thinks violates “fundamental principles of liberty and justice,” or is contrary to the “traditions and [collective] conscience of our people.”….[O]ne would certainly have to look far beyond the language of the Ninth Amendment to find that the Framers vested in this Court any such awesome veto powers over lawmaking, either by the States or by the Congress. Nor does anything in the history of the Amendment offer any support for such a shocking doctrine….That Amendment was passed, not to broaden the powers of this Court or any other department of “the General Government,” but, as every student of history knows, to assure the people that the Constitution in all its provisions was intended to limit the Federal Government to the powers granted expressly or by necessary implication. If any broad, unlimited power to hold laws unconstitutional because they offend what this Court conceives to be the “[collective] conscience of our people” is vested in this Court by the Ninth Amendment, the Fourteenth Amendment, or any other provision of the Constitution, it was not given by the Framers, but rather has been bestowed on the Court by the Court. This fact is perhaps responsible for the peculiar phenomenon that for a period of a century and a half no serious suggestion was ever made that the Ninth Amendment, enacted to protect state powers against federal invasion, could be used as a weapon of federal power to prevent state legislatures from passing laws they consider appropriate to govern local affairs. Use of any such broad, unbounded judicial authority would make of this Court’s members a day-to-day constitutional convention.

Having been cautioned against over reliance on the Ninth Amendment, the Court shifted ground, somewhat, in deciding for abortion (Roe v. Wade) and private, consensual, homosexual conduct between adults (Lawrence v. Texas) as a matter of due process. Here is Justice Anthony Kennedy, writing for the Court in Lawrence v. Texas:

Had those who drew and ratified the Due Process Clauses of the Fifth Amendment or the Fourteenth Amendment known the components of liberty in its manifold possibilities, they might have been more specific. They did not presume to have this insight. They knew times can blind us to certain truths and later generations can see that laws once thought necessary and proper in fact serve only to oppress. As the Constitution endures, persons in every generation can invoke its principles in their own search for greater freedom.

In other words, the majority found repugnant a Texas law against homosexual conduct, and so ruled that the law denied equal protection because it applied to the class of persons who practiced acts prohibited by that law. I suppose that if the Court found repugnant the Texas law that sets a 70 mile per hour speed limit on interstate highways in Texas, the Court would undo that law on the ground that it doesn’t afford equal protection to speeders.

You may like the outcomes in Griswold v. Connecticut, Roe v. Wade, and Lawrence v. Texas because they seem to be in keeping with the essence of liberty, which is the right to be left alone. But it should bother you that the Supreme Court can so blithely turn the law on its head to enact its own beliefs, on the pretext of finding rights in “penumbras, formed by emanations” of the Constitution. A Court that can do such things is a Court that can just as easily interpret the law so as to restrict liberty, all in the name of meeting a pressing social need — as it has in done in many instances, some of which I will discuss in Part VI. The Court has gone down many a slippery slope, and I am especially concerned about the slippery-slope implications that its decisions on abortion might hold for euthanasia, as I will discuss in Part VIII.

It all reminds me of this exchange from Act I, Scene 6, of Robert Bolt’s play about Sir Thomas More, A Man for All Seasons:

Roper: So now you’d give the Devil benefit of law.

More: Yes. What would you do? Cut a great road through the law to get after the Devil?

Roper: I’d cut down every law in England to do that.

More: Oh? And when the last law was down–and the Devil turned round on you–where would you hide? Yes, I’d give the Devil benefit of law, for my own safety’s sake.

(Thanks to The Delian’s Commonwealth for the dialogue, which I had remembered in essence but forgotten in detail.)

The Pursuit of Happiness

The “pursuit of happiness” gives a somewhat more positive cast to the concept of liberty. The pursuit of happiness is the advancement of one’s personal satisfaction, wherever that may lie, as long as that pursuit doesn’t trample the liberty of others. The pursuit of happiness necessarily includes the right to acquire and use property for the purpose of advancing one’s satisfaction.

The law seems bent on making happiness ever more elusive. Take smoking, for example. Governments now routinely prohibit smoking in their office buildings and in certain other places (e.g., bars, restaurants, and public parks). Such prohibitions usually are justified because of some research that links cancer to second-hand smoke. Given the uncertain state of the science on that score, it’s safe to say that smoking prohibitions serve mainly to satisfy the desire of non-smokers to avoid exposure to an irritant that makes their clothing smell bad. It’s also safe to say that the crusade against smoking is a form of reverse class warfare in which well-educated, well-paid, non-smokers are striving to dictate the mores of their social and economic “inferiors.” Instead of allowing the market to provide non-smoking bars and restaurants — which surely the market would do, given the relatively low incidence of smoking these days — do-gooders rush in to ban informed risk-taking (smoking) in the pursuit of happiness. Why not outlaw sky-diving? No, it’s a yuppie sport, can’t do that.

The anti-smoking crusade is a relatively benign manifestation of the modern reign of censoriousness. Sexual harassment laws and campus speech codes (many of them extant at government-run universities) are aimed directly at stifling the pursuit of happiness by limiting what we may say within the hearing or vision of the easily offended. For, who can deny that happiness is sometimes found in the enjoyment of humor and other forms of expression — which is sometimes racist, sexist, or just plain crude. And who is to say what forms of expression are out-of-bounds? Apparently not just the offended person, the offended person’s employer (who has a right to establish conditions of work), or the offended person’s friends. No, the majesty of the law must be invoked. Thus, saying the wrong thing in front of the wrong person in the workplace can get you fired, and it can get your employer in big trouble, too. Saying the wrong thing in front of the wrong person on campus can get you expelled.

In sum, it’s becoming ever more difficult to pursue happiness without violating the burgeoning “right” not to be offended, even if the offense does no harm. (If being offended is being harmed, then how can “we” allow James Carville and Chris Matthews to spew their idiocies over the “public” airwaves?) Happiness is becoming a positive right — a privilege — which allows those who are merely offended by the words and actions of others to control those words and actions through the law.

Summary

The great forest of American law — which imperfectly sheltered life, liberty, and the pursuit of happiness until the 1930s — has since been laid waste in the pursuit of various Devils, among them: self-defense (at home and abroad), personal responsibility (the main antidote of poverty, illiteracy, and crime), lower-class vices (smoking), (white) racism, (male) sexism, “offensive” (non-leftish) speech, “excessive” political spending and speech (especially by non-incumbents), all forms of pollution (except those necessary to finance a yuppie’s lifestyle and to propel his SUV), and life’s uncertainties in general. Now we are in the open, practically defenseless against the biggest Devil of all — the state — which dictates how much of life, liberty, and happiness we may enjoy.

I will have more to say about this in Part VI: “The Road Not Taken in American Law.”

This is a work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

III. THE ORIGIN AND ESSENCE OF RIGHTS

This is where I where I enter a debate that splits libertarianism into two camps: fundamentalists and consequentialists. Fundamentalist (or “natural right“) libertarians say that humans inherently possess the right of liberty. Consequentialists say that humans ought to enjoy liberty because, through liberty, humans are happier and more prosperous than they would be in its absence. In spite of this rather fundamental split, all libertarians agree that it is better to live in liberty than not. (For more about this debate, read the online symposium, The Transformation of Libertarianism?.)

I stand with the consequentialists. Fundamentalist libertarianism reduces liberty to a matter of faith. If libertarianism cannot stand on more than faith, what makes it any better than, say, socialism or the divine right of kings?

The virtue of libertarianism, as I will discuss in Parts IV and V, is not that it must be taken on faith but that, in practice, it yields superior consequences. Superior consequences for whom, you may ask. And I will answer: for all but those who don’t wish to play by the rules of libertarianism; that is, for all but predators and parasites.

I will focus in this part on the question whether liberty is an inherent right and the only right that arises from human nature. Libertarians must understand such things before they can hope to convince others that libertarianism is a superior political philosophy.

My Hypothesis

I begin with the negative right of liberty and its opposite — the positive right of privilege — both of which I defined in Part II.

Fundamentalist libertarians argue that the only right is liberty — the right to be left alone as long as one leaves others alone — and that it is a natural right with which human beings are endowed a priori. In one rendition, liberty is immanent — something that simply is in human nature, perhaps as a gift from God. In another rendition, humans are endowed with liberty as a logical necessity, because humans own themselves.

But appeals to immanence and self-ownership are no more meaningful than appeals to faith. Such appeals fail because they take liberty as a first principle. Liberty, which is a condition of existence, cannot be a first principle, it can only serve the first principle of existence, which is self-interest. Only experience (of the right kind) and reason can show that liberty serves self-interest.

The appeal to liberty as a first principle is unconvincing, except to those who already want to believe in the immanence of liberty because they understand that liberty serves their self-interest. A belief in the immanence of liberty — whether it is God-given or simply axiomatic — is a skyhook: “a materially unsupported (and thus implausible) entity or process.”

The concept of self-ownership as the basis of liberty is simply another skyhook. Yes, “I” am “me” and not “you,” but what gives me the right to be left alone by you, without sharing your burdens? Where does my self-ownership come from? Who or what imprinted it on me? And there we are, searching for a skyhook.

Rights — though they can exist without the sanction of government and the protection of a state — are political. That is, although rights may arise from human nature, they have no essence until they are recognized through interpersonal bargaining (politics), in the service of self-interest. It is bargaining that determines whether we recognize only the negative right of liberty, or the positive right of privilege as well. The preference of human beings — revealed over eons of coexistence — is to recognize both liberty (usually constrained to some degree) and privilege (which necessitates constraints on liberty).

The problem for libertarians, therefore, is to convince the body politic of two complementary truths: Self-interest dictates that liberty should be the paramount right. The recognition of privilege as a co-equal right undermines the benefits that flow from liberty.

Immanence and Self-Ownership, Scrutinized

A First Look at Immanence

Liberty, as I have said, is my right to be left alone as long as I leave others alone. Is it really a right? If it is, what makes it a right — a claim that you are obliged to respect — and not merely my desire? Nothing. Until you accept my “right,” it is merely a desire on my part.

If I do not think that my liberty right descends from God, or is a Platonic universal, or is somehow innate to me as a human being, who are you to say that it is one of those unprovable things? If you do say it, you are merely substituting dogma for reason. Moreover, you are putting me at the mercy of your dogma. For, you have assumed the power to define my “right,” which means that my “right” isn’t really a right but, rather, an arbitrary and capricious construct of your mind.

My “right” to be left alone actually begins as a desire on my part. If you have the same desire, we can agree to respect each other’s claim. We will then have created a right from a common desire.

By the same token, if we also agree that we will come to each other’s aid in a time of emergency, we will have created another right from a common desire. For, a right “is a claim, on other persons, that is acknowledged and reciprocated among the principals associated with that claim.”

A Second Look at Immanence

Some readers may still object that rights cannot be created or defined by human beings. Those who object are likely to say that rights simply “are” — that they exist in and of themselves and require no recognition or agreement.

Suppose that you and I are the only two persons in the world, and you harm me. Have you violated my right to be left alone, or have you simply harmed me? There is no essential difference, unless you had already agreed to leave me alone. If you had done that, then you have violated our contract, and my obligation to leave you alone is at an end.

I say, therefore, that rights arise from human desires (yearnings) and are agreed through political bargaining among humans (either before or after the creation of a state). Then, to be realized (given effect), those rights must be enforced by someone or something: individuals acting in self-defense, by stateless groups (e.g., bands of hunter-gatherers), and even by the state, if it happens to be the right kind of state (e.g., the one envisioned by the Founders of the United States).

I say that rights do not necessarily depend on the existence of a state, but do arise from politics because politics “is the process and method of decision-making for groups of human beings…[which] also observed in all human group interactions….” And those “group interactions” began long before the creation of a state. As Wikipedia puts it, “rights must be understood by somebody in order to have legal existence, so the understanding of rights is a social prerequisite for the existence of rights.”

Now, even if politics has transformed my desire to be left alone into a right, that right is meaningless to me unless it is enforced — by me, by my friends, by my community, or by the state. I may have the right to be left alone, but if that right is violated by a thug, having the right does me no particular good, especially if the thug does me irreparable harm. The only good that can come from such a harm is swift and severe punishment of the thug — as a lesson to him and others — and the redoubling of vigilance among my friends, my community, or the state to prevent other acts of thuggery.

A Third Look at Immanence

Consider the following though experiment:

1. If I am alone in the world, it is meaningless for me to say that I have the right to be left alone by other humans, as long as I leave them alone. Why would I need such a notion? And where would I get such a notion, from God or my “nature” as a human?

2. If I am in the world with one other person — call him Joe — do I have the right to be left alone by Joe? What gives me that right? God? My “nature” as a human? It is more likely that I developed a desire to be left alone because I caught Joe filching food that I had gathered, and had noticed that Joe is more interested in sleeping than gathering food, even though he looks well fed. In other words, experience and reason gave me the idea that Joe should leave me alone, so that I could devote my limited energy to my own survival — to my self-interest.

3. Does Joe have the right to be provisioned by me? A libertarian fundamentalist would say “no”; my right to be left alone is a “real” right because it’s a negative right that places no demands on Joe, whereas Joe’s desire to be provisioned is a positive right that places demands on me. Well, given that Joe and I are alone in the world, who decides that my right to be left alone is real, whereas Joe has no right to place demands on me? At this point, the fundamentalist would have to deploy the skyhook of immanence or self-ownership.

4. Thus, as far as I’m concerned, I have the desire to be left alone but I don’t have the right to be left alone, unless Joe agrees to leave me alone in exchange for something (my leaving him alone, perhaps). Then I have a right and Joe has a right — and we created those rights by a political process (i.e., interpersonal bargaining), in the absence of a third party authorized by (or imposed on) Joe and me to define and enforce our rights (i.e., the state). In the absence of the state, Joe and I must rely on each other (and self-defense) to enforce our rights — as we have defined and agreed them.

5. Women come onto the scene, and Joe and I beget progeny. Our progeny pick up on the idea that being left alone as a right, and they establish a state that they empower to enforce that right. And so it goes…until a bigger, badder band of humans comes upon the scene. What happens to the right to be left alone if the bigger, badder band of humans (flying the banner of a predatory state) doesn’t recognize the right to be left alone? Joe’s and my progeny can — through their state — fight to defend that right. I hope they win, but if they lose, they can no longer exercise the right to be left alone. Do they still have the right to be left alone. In their minds, yes, but not in the minds of the citizens of the predatory state.

Now, I have explained how I think rights come into being, but until a fundamentalist libertarian explains how he thinks the liberty right comes into being I can only conclude that he must think that (a) everyone has the same conception of rights — a proposition that seems to defy experience — or (b) everyone is somehow (mystically) endowed with the same right to liberty.

Does the Immanence of Liberty Arise from Self-Ownership?

Perhaps the answer to my challenge lies in the self-ownership argument. That argument, as forumalated by Robert Nozick, goes like this (according to R.N. Johnson’s summary of the political philosophy of Robert Nozick):

The self-ownership argument is based on the idea that human beings are of unique value. It is one way of construing the fundamental idea that people must be treated as equals. People are “ends in themselves”. To say that a person is an end in herself is to say that she cannot be treated merely as a means to some other end. What makes a person an end is the fact that she has the capacity to choose rationally what she does. This makes people quite different from anything else, such as commodities or animals. The latter can be used by us as mere means to our ends without doing anything morally untoward, since they lack the ability to choose for themselves how they will act or be used. Human beings, having the ability to direct their own behavior by rational decision and choice, can only be used in a way that respects this capacity. And this means that people can’t be used by us unless they consent.

The paradigm of violating this requirement to treat people as ends in themselves is thus slavery. A slave is a person who is used as a mere means, that is, without her consent. That is, a slave is someone who is owned by another person. And quite obviously the reverse of slavery is self-ownership. If no one is a slave, then no one owns another person, and if no one owns another person, then each person is only owned by herself. Hence, we get the idea that treating people as ends in themselves is treating them as owning themselves.

In summary (and reverting to my relationship with Joe):

1. I own myself because I am capable of making rational choices for myself.

2. If Joe “uses” me without my consent (e.g., enslaves me or steals food from me), he is denying my self-ownership.

3. Therefore, when Joe “uses” me he is treating me as a means to an end, whereas I am an end in myself because I own myself.

Oops. I went in a circle. I own myself; therefore, I can’t be used by Joe, because I own myself.

Nozick’s proposition amounts to nothing more than the assertion that everyone must act from the same principle. Immanuel Kant made essentially the same assertion in his categorical imperative:

Act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as an end.

Well, what if the person making that statement believes that his end is to be a slave-owner — and he has the power to make me a slave?

The fact is that people, all too often, do not act according to Nozick’s or Kant’s imperatives. As Dr. Johnson said, I refute it thus: Look around you.

Self-Interest Trumps Philosophy

Returning to my old friend Joe, why should he not steal my food if he thinks he can get away with stealing it? (He might even think that I would steal from him if he had food and I didn’t have any.) Joe — being Joe, and knowing nothing of immanence and self-ownership — must be given a reason not to steal my food. It probably wouldn’t matter to Joe if I were to tell him that I wouldn’t steal his food. After all, Joe doesn’t have any food, except what he steals from me. Joe might stop stealing my food if I were to tell him that I’ll hurt him if he doesn’t stop. But that would work only if I were bigger and faster than Joe, and if I were willing to spend time watching out for Joe instead of gathering food. In any event, Joe is willing to run the risk of being hurt by me because he thinks that stealing is in his self-interest: Stealing enables Joe to enjoy a lot of leisure, which he prizes.

The most likely way to deter Joe’s thieving is for me to tell him that I will send a group of my friends to beat him up if he doesn’t desist. Joe may then be convinced that he’d be better off if he were to stop stealing my food and become self-reliant. And he probably would be better off, once he becomes used to the idea of gathering his own food. It’s called the pursuit of self-interest.

Am I suggesting that might makes “right”? No! It’s just that the right to liberty can’t be pulled out of the air in the form of propositions about immanence and self-ownership. Those are philosophical “oughts” that cannot, in themselves, dictate the “is” of human behavior. It is the actuality of human behavior that matters. To influence that, we must turn to reason — for the acceptance of the proposition that liberty serves self-interest — and (as necessary) to the use of force to compel adherence to the dictates of reason.

For, the logic of liberty, as I have said, lies in its superior consequences. Liberty can prevail through mutual assent. But it will not always prevail through mutual assent, because the yearning for liberty competes with other aspects of human nature. The upshot is that humans, for the most part, fail to comprehend that unalloyed liberty is the best servant of self-interest.

Humans in the State of Nature

Human instincts — as they have accrued over eons and become “hard wired” — are far from purely libertarian. Consider this (from Denis Dutton’s review of Paul H. Rubin’s Darwinian Politics: The Evolutionary Origin of Freedom:

The scene of evolution is the Environment of Evolutionary Adapted-ness, the EEA, essentially the Pleistocene, the whole, long period lasting from 1.6 million years ago up until the shift to the Holocene with the invention of agriculture and large settlements 10,000 years ago. Our present intellectual constitution was achieved by about 50,000 years ago, or 40,000 before the Holocene….It was in the earlier, much longer period that selective pressures created genetically modern humans….

Rubin’s summary of the political impulses and preferences of the Pleistocene presents a mixed and contradictory picture. This makes it possible for most political theorists to find inspiration for a favored point of view somewhere in hunter-gatherer psychology. Looking at life in the EEA, fascists and militarists can take heart, and so can Rawlsian egalitarians, Peter Singer socialists, and liberals of either the free-market or welfarist stripe. Still, the big picture for Rubin shows behavioral tendencies that we ignore at our peril. One, for example, is that as practiced in recent U.S. history, affirmative action programs are liable to create social friction and undermine the legitimacy of the state, perhaps outweighing benefits of such programs in the long term….

Before anyone jumps to the conclusion that Rubin is using evolution­ary psychology merely to support his own political predispositions (an antipathy to affirmative action being one of them), we should note what he says about libertarianism. Rubin confesses that libertarianism — the minimal interference by the state in the life of the individual — appeals to him personally: “in a libertarian regime, government would define and protect property rights, enforce contracts, and provide true public goods, but would do nothing else.” That is obviously not what people want, or there would have been more libertarian governments, Rubin says. Libertarianism was not a viable strategy for the EEA. The actions of individuals produce by-products to affect whole communities, and “we have evolved preferences to control these actions.” We are genetically predisposed, it seems, “to interfere in the behavior of others,” even where the behavior has little demonstrable adverse effect on a community….We are fundamentally meddlesome creatures.

Rubin speculates that this impulse to control our fellows, even in matters that have little or no material effect on living standards or resource allocation, is an adaptation designed to increase group solidarity.

More support for the notion that we humans are essentially communitarian and meddlesome creatures comes from Alan Fiske’s essay, “The Inherent Sociability of Homo Sapiens“:

People typically seek to join with others and belong, to defer and take responsibility for others, to exchange gifts and take turns for the sake of the social relationships themselves. It is rare for social interaction to be primarily a means to extrinsic asocial ends; the only people who persistently organize their lives this way are sociopaths. Sometimes people even buy and sell for the satisfaction of the social game, not just for the material objects they acquire. Even when people act in pursuit of material goods, they typically do so for the sake of the social significance of the goods: to create or transform social relationships. Your house, your car, your clothes, your meals, and of course your money mediate your relationships with your social world. Even your health or your life may be valuable to you primarily because of the social relationships that it permits.

The inherent sociability of Homo sapiens must stem from the adaptive advantages to our ancestors of socially organized production, exchange, consumption, decision-making, moral judgment, and sanctioning. Our unique communicative abilities, complex technical capacities, and delayed maturation resulted in unique opportunities for kin selection and reciprocal altruism to generate ultrasocial adaptations. These adaptations involve extraordinarily strong social motives, such that humans need to engage in relationships—and are strongly disposed to judge and sanction others.

One of the “drawbacks” of liberty — which carries with it responsibility for one’s own future — is that responsibility is in conflict with instant gratification. On the other hand, one allure of statism (e.g., communism) and communitarianism (e.g., quasi-socialist “welfare democracy”) is the (false) sense of being provided for without first having to work and save. Work by David Stephens (“Impulsive behavior may be relict of hunter-gatherer past“) suggests that

taking rewards without hesitation may have paid off for our foraging ancestors, as it does for blue jays and other foragers. Modern society forces us to make either-or decisions about delayed benefits such as education, investment and marriage; the impulsive rules that work well for foragers do more harm than good when applied in these situations.

“Impulsiveness is considered a big behavior problem for humans,” said Stephens. “Some humans do better at binary decisions like ‘a little now or a lot later’ than others. When psychologists study kids who are good at waiting for a reward, they find those kids generallly do better in life. It looks as though this is a key to success in the modern world, so why is it so hard for us to accept delays? The answer may be because we evolved as foragers who encountered no penalties for taking resources impulsively.

Finally, J. Philippe Rushton suggests that

evolution has shaped people’s attitudes of social responsibility making them genetically inclined to help others.

“People are innately good,” said J. Philippe Rushton, professor of psychology at the University of Western Ontario, “…If educational systems, families, and preaching all stopped tomorrow, children would still grow up with “social glue.'”…

[Rushton’s] study compared identical twins with non-identical twins to see how much they agreed on 22 questions, such as “I am a person people can count on,” “It is important to finish anything you have started,” and “Cheating on income tax is as bad as stealing,” using a scale from 1 (strongly disagree) to 5 (strongly agree). Answers are known to predict real-life behavior such as whether a person votes in elections or volunteers to help others….

If monozygotic [identical] twins agree more than dizygotic [fraternal] twins it suggests that that morality has a biological basis and is part of our evolved psychology.

The answers of the identical twins were almost twice as alike as those of the non-identical twins. The results showed that genes account for 42% of the individual differences in attitudes, growing up in the same home for 23%, and differences within the same home for the rest….

In previous research Rushton has shown that genes influence people’s levels of altruism and aggression–including feelings of empathy like enjoying watching people open presents and acts of violence such as fighting with a weapon. Rushton has also demonstrated that the male sex hormone testosterone sets the levels of aggression and altruism.

When asked about his findings Prof. Rushton noted, “They join a host of recent research in showing that both genes and upbringing influence almost every human behavior. It is especially interesting to see that this applies to moral attitudes.”

The key point here is not the particular brand of “goodness” or “social glue” being touted by Rushton — which smacks of communitarianism — but the apparent fact that “moral attitudes” of the kind outlined by Paul Rubin, Alan Fiske, and David Stephens seem to be genetically and environmentally heritable. We humans at are war with ourselves. Whatever longings we have for liberty are competing with our longings for communism (in its pure form), control, aggression, and gratification of a kind that isn’t always compatible with liberty.

The Upshot: A Constellation of “Rights”

Is it any wonder, then, that political bargaining has led to the recognition of both privilege and liberty as fundamental rights? (See Part II for more about liberty, privilege, and rights.) We want liberty, but we also want things that are incompatible with liberty because the getting of those things requires taking from and controlling our fellow human beings. Consider, for example, the following excerpts of the UN’s Universal Declaration of Human Rights, a collectivist manifesto that undoubtedly has billions more adherents (witting and unwitting) than libertarianism:

Article 1

All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood.

Article 2

Everyone is entitled to all the rights and freedoms set forth in this Declaration, without distinction of any kind, such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status….

Article 3

Everyone has the right to life, liberty and security of person.

Article 4

No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms.

Article 5

No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

Article 6

Everyone has the right to recognition everywhere as a person before the law.

Article 7

All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination….

Article 12

No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the protection of the law against such interference or attacks….

Article 22

Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international co-operation and in accordance with the organization and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.

Article 23

1. Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.

2. Everyone, without any discrimination, has the right to equal pay for equal work.

3. Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.

4. Everyone has the right to form and to join trade unions for the protection of his interests.

Article 24

Everyone has the right to rest and leisure, including reasonable limitation of working hours and periodic holidays with pay.

Article 25

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control….

Article 26

…Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups ….

Article 29

Everyone has duties to the community in which alone the free and full development of his personality is possible….

It begins in liberty and devolves into a platform that might have been written by any leftist political party in the world. In fact, it reads much like the de facto Constitution of the United States: the “living” Constitution that has been created through legislative, executive, and judicial assumption of powers neither granted nor intended by the pact of 1789.

Conclusion

I would like to be able to say, with fundamentalist libertarians, that liberty is an innate human right — and the only innate right. But that would be nothing more than an assertion, however cleverly I might clothe it in the language of philosophy.

I would like to be able to say that liberty is a paramount human instinct, honed through eons of human existence and experience. But we are surrounded by too much evidence to the contrary, both in recorded and natural history. The social and intellectual evolution of humankind has led us to a mixed bag of rights, acquired politically through cooperation and conflict resolution, often predating the creation of governments and the empowerment of states. The notion that we ought to enjoy the negative right of liberty is there among our instincts, of course, but it is at war with the positive right of privilege — the notion that we are “owed something” beyond what we earn (through voluntary exchange) for the use of our land, labor, or capital. Liberty is also at war with our instincts for control, aggression, and instant gratification.

I do not mean that the social and intellectual evolution of humankind is right — merely that it is what it is. Libertarians must accept this and learn to work with the grain of humanity, rather than against it. There is no profit in simply asserting the inherent wrongness of laws and government actions that undermine liberty. Nor is there much profit in arguing the unconstitutionality of illiberal laws and government actions; it is obvious that appeals to the Constitution will be of little avail unless and until we have a Supreme Court that abides wholeheartedly by the Constitution.

There can be much profit in demonstrating, logically and factually, how illiberal laws and government actions make people worse off — often the same people who are supposed to benefit from those laws — and in offering superior alternatives. In other words, consequentialist libertarianism can make real gains for liberty by appealing successfully to self-interest. But self-interest must be seduced by reason (Part IV) and bribed by the promise of greater rewards (Part V).

This is a work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

IV. LIBERTY AND ITS PREREQUISITES

Introduction

In Part II, I defined libertarianism and the liberty right in this way:

The core of libertarianism is liberty: briefly, the negative right to be left alone — in one’s person, pursuits, and property — as long as one leaves others alone. I am using “liberty” here to encompass what the Founders intended by “life, liberty, and the pursuit of happiness” in the Declaration of Independence.

In sum, the liberty right is a triune concept, with life as its basis and the pursuit of happiness (personal satisfaction or self-interest) as its end.

I argued in Part III that the liberty right is neither innate in humans nor a right that flows exclusively from the evolution of human behavior:

I would like to be able to say, with fundamentalist libertarians, that liberty is an innate human right — and the only innate right. But that would be nothing more than an assertion, however cleverly I might clothe it in the language of philosophy.

I would like to be able to say that liberty is a paramount human instinct, honed through eons of human existence and experience. But we are surrounded by too much evidence to the contrary, both in recorded and natural history. The social and intellectual evolution of humankind has led us to a mixed bag of rights….The notion that we ought to enjoy the negative right of liberty is there among our instincts, of course, but it is at war with the positive right of privilege — the notion that we are “owed something”….Liberty is also at war with our instincts for control, aggression, and instant gratification.

As I said also in Part III:

The virtue of libertarianism…is not that it must be taken on faith but that, in practice, it yields superior consequences. Superior consequences for whom, you may ask. And I will answer: for all but those who don’t wish to play by the rules of libertarianism; that is, for all but predators and parasites.

By predators, I mean those who take liberty from others, either directly or through the coercive power of the state. By parasites, I mean those who seek to advance their self-interest through the coercive power of the state rather than through their own efforts. I also classify as parasites those who seek political power for its own sake or on the basis of their service to parasites. (The term “parasites” doesn’t include those persons who are truly incapable of taking care of themselves. Such persons, in fact, stand to benefit from liberty, as I will discuss in Part V.)

In other words, a people who band together in liberty — and who successfully defend their liberty against encroachments from within and without — not only will be able to pursue happiness, but also will reap greater happiness (call it personal satisfaction or well-being, if you will). For, the pursuit of happiness isn’t a zero-sum game; you can advance your happiness by helping me advance mine, and vice versa. But we can do so only if we are at liberty to do so — untrammeled by predators, parasites, and constraints — other than those constraints of law and custom that help to secure our liberty. A firm, communal commitment to liberty is therefore a matter of self-interest to all but predators and parasites.

The Evolution of Libertarian Thought: The Unification of Economic and Personal Liberty

Libertarianism, like physics, has evolved from rudimentary beginnings. Physics has evolved because physicists have expanded their store of facts about the physical world and found truer ways of describing the forces that make the universe what it is — in the large and in the small. Libertarianism has evolved beyond the assertion that humans have “certain unalienable rights” because such thinkers as Adam Smith (1723-90), John Stuart Mill (1806-73), and Friedrich A. Hayek (1899-1992) observed the workings of society — in all of its aspects — and told us how liberty serves self-interest.

Smith, writing in The Wealth of Nations (1776), took libertarianism a step beyond its mystical origins in the writings of Locke and that proto-Communist, Rousseau: Here is Smith:

As every individual, therefore, endeavours as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

Smith wasn’t a libertarian by today’s standards, but his understanding of the economic benefits of free markets put us on the road to empirical (consequentialist) libertarianism.

Then came Mill, who recognized the value of liberty in non-market behavior. Wikipedia tells us that Mill’s vastly influential essay, On Liberty (1859), is

about the nature and limits of the power which can be legitimately exercised by society over the individual. One argument that Mill formed was the harm principle, that is, people should be free to engage in what ever behaviors they wish as long as it [sic] does not harm others.

That’s the sum of Mill’s argument. Now, the meat of it. First, with regard to freedom of speech, Mill says, in Chapter II of On Liberty:

First, if any opinion is compelled to silence, that opinion may, for aught we can certainly know, be true. To deny this is to assume our own infallibility. Secondly, though the silenced opinion be an error, it may, and very commonly does, contain a portion of truth; and since the general or prevailing opinion on any subject is rarely or never the whole truth, it is only by the collision of adverse opinions that the remainder of the truth has any chance of being supplied. Thirdly, even if the received opinion be not only true, but the whole truth; unless it is suffered to be, and actually is, vigorously and earnestly contested, it will, by most of those who receive it, be held in the manner of a prejudice, with little comprehension or feeling of its rational grounds. And not only this, but, fourthly, the meaning of the doctrine itself will be in danger of being lost, or enfeebled, and deprived of its vital effect on the character and conduct: the dogma becoming a mere formal profession, inefficacious for good, but cumbering the ground, and preventing the growth of any real and heartfelt conviction, from reason or personal experience.

In other words, freedom of speech advances the truth, and we are better off for knowing the truth, however much we might resent hearing it in some instances. Similarly, in Chapter III Mill argues that we are better off if we respect individuality rather than impose uniformity of behavior:

As it is useful that while mankind are imperfect there should be different opinions, so is it that there should be different experiments of living; that free scope should be given to varieties of character, short of injury to others; and that the worth of different modes of life should be proved practically, when any one thinks fit to try them. It is desirable, in short, that in things which do not primarily concern others, individuality should assert itself. Where, not the person’s own character, but the traditions of customs of other people are the rule of conduct, there is wanting one of the principal ingredients of human happiness, and quite the chief ingredient of individual and social progress.

Having established the importance of freedom of speech and action, how does Mill balance these freedoms in a societal context? In Chapter IV, Mill says this:

Though society is not founded on a contract [though the government of the United States is founded on a contract: ED], and though no good purpose is answered by inventing a contract in order to deduce social obligations from it [touché, Rousseau: ED],…the fact of living in society renders it indispensable that each should be bound to observe a certain line of conduct towards the rest. This conduct consists first, in not injuring the interests of one another; or rather certain interests, which, either by express legal provision or by tacit understanding, ought to be considered as rights; and secondly, in each person’s bearing his share (to be fixed on some equitable principle) of the labours and sacrifices incurred for defending the society or its members from injury and molestation. These conditions society is justified in enforcing at all costs to those who endeavour to withhold fulfillment. Nor is this all that society may do. The acts of an individual may be hurtful to others, or wanting in due consideration for their welfare, without going the length of violating any of their constituted rights. The offender may then be justly punished by opinion, though not by law….In all such cases there should be perfect freedom, legal and social, to do the action and stand the consequences.

That is, the state acts legitimately when it punishes those who attack our liberty, and it may tax us for its protective services. But a person who merely says or does something that offends others may be punished only by the force of opinion and reason, to which he may or may not choose to bow.

But Mill comes up short in Chapter V:

Again, trade is a social act. Whoever undertakes to sell any description of goods to the public, does what affects the interest of other persons, and of society in general; and thus his conduct, in principle, comes within the jurisdiction of society: accordingly, it was once held to be the duty of governments, in all cases which were considered of importance, to fix prices, and regulate the processes of manufacture. But is now recognised, though not till after a long struggle, that both the cheapness and the good quality of commodities are most effectually provided for by leaving the producers and sellers perfectly free, under the sole check of equal freedom to the buyers for supplying themselves elsewhere. This is the so-called doctrine of Free Trade, which rests on grounds different from, though equally solid with, the principle of individual liberty asserted in this Essay. Restrictions on trade, or on production for purposes of trade, are indeed restraints; and all restraint, quâ restraint, is an evil: but the restraints in question affect only that part of conduct which society is competent to restrain, and are wrong solely because they do not really produce the results which it is desired to produce by them. As the principle of individual liberty is not involved in the doctrine of Free Trade, so neither is it in most of the questions which arise respecting the limits of that doctrine….

Thus, despite his acknowledgment that commerce is a social act, and despite having made a good defense of free trade, Mill posits an essential difference between personal and economic liberty.

It was left to Hayek to unify personal and economic liberty. Virginia Postrel, writing in The Boston Globe, explains:

Hayek’s most important insight, which he referred to as his “one discovery” in the social sciences, was to define the central economic and social problem as one of organizing dispersed knowledge. Different people have different purposes. They know different things about the world. Much important information is local and transitory, known only to the “man on the spot.” Some of that knowledge is objective and quantifiable, but much is tacit and unarticulated. Often we only discover what we truly want as we actually make trade-offs between competing goods.”

The economic problem of society,” Hayek wrote in his 1945 article [“The Use of Knowledge in Society“], “is thus not merely a problem of how to allocate `given’ resources — if `given’ is taken to mean given to a single mind which deliberately solves the problem set by these `data.’ It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in totality.”

The key to a functioning economy — or society — is decentralized competition. In a market economy, prices act as a “system of telecommunications,” coordinating information far beyond the scope of a single mind. They permit ever-evolving order to emerge from dispersed knowledge.

“What’s the single most important thing to learn from an economics course today?” economist Lawrence Summers said in an interview for “The Commanding Heights,” Daniel Yergin and Joseph Stanislaw’s 1998 study of the resurgence of economic liberalism. “What I tried to leave my students with is the view that the invisible hand is more powerful than the hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That’s the consensus among economists. That’s the Hayek legacy.” Summers, who was then deputy treasury secretary and is now president of Harvard, recently reaffirmed those views in an e-mail.

Information technology has strengthened Hayek’s legacy. At MIT’s Sloan School, Erik Brynjolfsson uses Hayek to remind students that feeding data into centralized computers doesn’t necessarily solve a company’s information problems. In any complex operation, there is too much relevant information for a single person or small group to absorb and act on.

“As Hayek pointed out, the key thing is to have the decision rights and the information co-located,” says Brynjolfsson. “There are at least two ways of achieving that. One is to move information to decision maker. The other is to move decision rights to where the information is.”

This analysis, which applies as much to culture as to economics, informs Hayek’s best-known work, The Road to Serfdom, which he wrote as a wartime warning to a popular audience. Published in 1944 and dedicated “to the socialists of all parties,” the book argued that the logic of socialist central planning implied the erosion of personal freedoms. Britain’s well-intended socialists were headed down the same path as the National Socialists whose rise Hayek had witnessed in Austria….

[H]e argued that to fully control the economy meant to control all aspects of life. Economic decisions are not separate from individual values or purposes. They reflect those purposes.”We want money for many different things, and those things are not always, or even rarely, just to have money for its own sake,” explains Jerry Z. Muller, a historian at Catholic University….”We want money for our spouses or our children or to do something in terms of the transformation of ourselves — for everything from plastic surgery to reading intellectual history or building a church. These are all noneconomic goals that we express through the common means of money.”

Hayek argued that only in a competitive market, in which prices signal the relative values placed on different goods, can people with very different values live together peacefully. And only in such a market can they figure out how best to meet their needs and wants — or even what those needs and wants are.

Postrel’s précis captures the thrust of Hayek’s argument, but not its richness. (For much more by and about Hayek see the addendum to this post.) Moreover, Postrel focuses on Hayek’s warnings about the dangers of totalitarianism and central planning, which seemed imminent in the socialist-leaning Britain of 1944 and 1945. But, as Hayek argued so well, economic and personal (or social) liberty are always indivisible; an encroachment on one is necessarily an encroachment on the other. The modern welfare-regulatory state is far from totalitarian, but it smacks of totalitarianism in many of its actions — and it is certainly very far from libertarian.

Consequentialist Libertarianism, in Summary

Smith observed that when we are at liberty to advance our own economic interests we must necessarily advance the economic interests of others.

Mill instructed us that personal freedoms should be preserved because through them we become more knowledgeable and more capable. Therefore, the state should intervene in our lives only to protect us from actual harm, as opposed to mere offense.

Hayek made the case that economic and personal liberty are inseparable: We engage in economic activity to serve our personal values, and our personal values are reflected in our economic activity. When the state restricts economic liberty, it necessarily restricts personal liberty, and vice versa. The state, simply cannot make personal and economic decisions more effectively than individuals operating freely within an ever-evolving socio-economic network.

To return to a metaphor from Part I, think of yourself as a business. You are good at producing certain things — as a family member, friend, co-worker, employee, or employer — and you know how to go about producing those things. What you don’t know, you can learn through education, experience, and the voluntary counsel of family, friends, co-workers, and employers. But you are unique — no one but you knows your economic and social preferences. If you are left to your own devices you will make the best decisions about how to run the “business” of getting on with your life. When everyone is similarly empowered, a not-so-miraculous thing happens: As each person gets on with the “business” of his or her own of life, each person tends to make choices that others find congenial. As you reward others with what you produce for them, economically and socially, they reward you in return. If they reward you insufficiently, you can give your “business” to those who will reward you more handsomely. But when government meddles in your affairs — except to protect you from actual harm — it damages the network of voluntary associations upon which you depend in order to run your “business” most beneficially to yourself and others. The state can protect your ability to run the “business” of your life, but once you let it tell you how to run your life, you compromise your ability to make choices that are right for you.

Thus liberty serves self-interest. And it is self-interest that should motivate us to embrace liberty — not a belief in a mystical essence that is somehow innate in humans.

The Prerequisites of Liberty

If only it were as easy to enjoy liberty as it is to explain how it serves self-interest. But the attainment of liberty — or an approximation of it — requires several things of a band, tribe, or nation:

• an agreement among a controlling faction that liberty is the paramount right;

• the willingness and ability of that faction to defend liberty against predators and parasites;

• forbearance from meddling in the economic and social affairs of individuals, except to deter and punish actual harms; and

• replacement of the controlling faction and/or curtailment of its power when it uses that power to subvert liberty.

It is easy to agree to the fundamentalist view that humans ought to enjoy liberty “just because.” (After all, there are precious few persons who don’t want liberty for themselves, “just because.”) But it is equally easy to abandon the fundamentalist view because of its shallowness. A welfare-state demagogue, by contrast, has at his disposal many spurious arguments that appeal to self-interest.

It is best, therefore, if the commitment to liberty arises from an understanding of consequentialist libertarianism. But the consequentialist view is subtle and non-intuitive. It is the philosophical equivalent of special relativity: Just as one cannot move rapidly in space without slowing time, one cannot enjoin the government to intervene in private affairs without diminishing the welfare of all but predators and parasites.

The defense of liberty against predators is the easier defense to arrange, but only relatively so, as we know from the long-running debates about how to deal with foreign enemies and domestic criminals. It is rather more difficult to defend liberty from parasites: those who seek privilege, for themselves or on behalf of others. The difficulty of that defense arises in part from the subtlety of consequentialism, in part from meddlesome and collective human instincts that conflict with liberty, and in part from the inevitability that those who are entrusted with power will sooner or later abuse it.

Forbearance from meddling in the socio-economic order implies laissez-faire, except to prevent or remedy an actual harm (discussed below). As Hayek pointed out, liberty requires a degree of stability in society; otherwise, how can you decide, with any degree of confidence, what sort of life and livelihood to pursue? Of course, there can be such a thing as too much stability (as Hayek also argued), as well as too much instability. Thus it is equally damaging to liberty to use the law to bar interracial marriage, to foster affirmative action as it is practiced in the United States, to prohibit smoking on private property, or to regulate economic activity on the basis of environmental hysteria rather than sound science.

To paraphrase what I wrote here, you may want government to meddle in certain private matters because that meddling seems to advance liberty. But it should bother you that government can just as easily restrict liberty, all in the name of meeting a pressing social or economic need. Government has taken liberty down a slippery slope, and every instance of meddling — always for a “good” cause — creates a precedent for another step down the slope. It all reminds me of this exchange from Act I, Scene 6, of Robert Bolt’s play about Sir Thomas More, A Man for All Seasons:

Roper: So now you’d give the Devil benefit of law.

More: Yes. What would you do? Cut a great road through the law to get after the Devil?

Roper: I’d cut down every law in England to do that.

More: Oh? And when the last law was down–and the Devil turned round on you–where would you hide? Yes, I’d give the Devil benefit of law, for my own safety’s sake.

Not only are economic and social liberty indivisible, but also is liberty itself indivisible. To reap the full benefit of liberty we must be willing to accept “bad” outcomes as well as “good” ones. That is, we must adhere to the principle of liberty and ignore the occasionally unhappy outcome that flows from it. For, as I will discuss further in Parts V and VI, liberty can improve the lot of all but predators and parasites.

By what criteria, then, should we decide where to draw the line between governmental action and private action? I propose these principles:

1. Government may not act or condone action (e.g., civil litigation) except when it seeks to deter, prevent, or remedy an actionable harm to liberty.

2. An actionable harm to liberty is one that arises or would arise directly from the commission of a specific act or acts by any person or entity, domestic or foreign. An expression of thought is not an act, for this purpose.

3. An expression of thought cannot be an actionable harm unless it

a. intentionally obstructs or would obstruct governmental efforts to deter, prevent, or remedy an actionable harm (e.g., divulging classified defense information, committing perjury),

b. intentionally causes or would cause an actionable harm (e.g., plotting to commit an act of terrorism, forming a lynch mob), or

c. purposely — through a lie or the withholding of pertinent facts — causes a person to act against self-interest in an economic transaction (e.g., misrepresenting a product, inflating a corporation’s statement of earnings).

4. An expression of thought cannot be an actionable harm until it has led or will lead directly to the commission of an act. A mere statement of fact, belief, opinion, or attitude cannot be an actionable harm, regardless of the subject of the statement, unless it amounts to slander or libel (both of which are offenses against liberty). Othewise, those persons who do not care for the facts, beliefs, opinions, or attitudes expressed by other persons would be able to stifle speech they find offensive merely by claiming to be harmed by it.

5. An act of omission (e.g., the refusal of social or economic relations because of some form of bias), other than a breach of contract or duty, cannot be an actionable harm. It is incompatible with liberty for government to judge voluntary actions that are not otherwise actionable harms.

In other words, to enjoy the benefits of liberty we must enjoy broad latitude of action (or inaction), speech, and thought.

When the controlling faction persistently abridges the principles of liberty it must be replaced and/or its power must be curtailed. I am cynical about the ability of any controlling faction to resist the thrall of power. The more feasible alternative is to garner enough support to curtail the power of government, a bit at a time. The deregulation movement is one example. The nascent movement toward federalism is another example. The effort to privatize Social Security is yet another example. I’ll discuss such remedies in Parts VII and VIII.

I. INTRODUCTION

This is a brief excerpt of Part I of a nine-part work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

This essay is an explanation and examination of libertarianism by a libertarian who comes to his “faith” from experience, rather than from the precincts of philosophy or law. Die-hard libertarians will find nothing new here but my particular interpretation of libertarianism. I am writing for neophyte libertarians and curious non-libertarians who seek a practical guide to the origins, principles, and policy implications of libertarianism.

My focus is on American libertarianism because the Constitution of the United States of America holds the promise of liberty. Building on that promise, Americans can strive to perfect liberty in the United States. But the rest of the world isn’t bound by our Constitution, and it is foolish to think that the rest of the world prizes America’s liberty….

As you read what follows, please keep these points in mind:

• Equality before the law is a noble ideal, as long as the law serves everyone’s liberty.

• Liberty is indivisible; to restrict economic liberty is to restrict social and political liberty.

• Prosperity is a concomitant of liberty, not its enemy.

• Prosperity isn’t a zero-sum game. Absent corporate welfare and protective regulation (both of which are anti-libertarian), the wealthy get that way not by robbing others but by providing jobs, products, and services for them.

• Liberty comes from the people — or the liberty-minded among them — not from the state. Yet, the state — properly governed by the people’s representatives — can serve as a bulwark of liberty.

• The American state’s first and foremost obligation is to protect the lives and liberty of American citizens; the Constitution is not a suicide pact.

Finally, there are many paths to libertarianism, as I’ll discuss. But there are libertarian purists who put great stock in following the “right” path. I’m not of that ilk. What matters, in the end, is whether you believe that life would be better with a much smaller, far less intrusive, and far less costly government — one that’s focused on defending your liberty — and whether you act accordingly.

Click here for the full text of Part I.

This is a work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

MORE HAYEK

Let’s begin with some excerpts of Hayek’s 1945 essay, “The Use of Knowledge in Society“:

Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules: the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others because he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active coöperation. We need to remember only how much we have to learn in any occupation after we have completed our theoretical training, how big a part of our working life we spend learning particular jobs, and how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances….

It follows…that central planning based on statistical information by its nature cannot take direct account of these circumstances of time and place and that the central planner will have to find some way or other in which the decisions depending on them can be left to the “man on the spot.”…

We must look at the price system as such a mechanism for communicating information if we want to understand its real function—a function which, of course, it fulfils less perfectly as prices grow more rigid….The most significant fact about this system is the economy of knowledge with which it operates, or how little the individual participants need to know in order to be able to take the right action. In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.

Of course, these adjustments are probably never “perfect” in the sense in which the economist conceives of them in his equilibrium analysis. But I fear that our theoretical habits of approaching the problem with the assumption of more or less perfect knowledge on the part of almost everyone has made us somewhat blind to the true function of the price mechanism and led us to apply rather misleading standards in judging its efficiency. The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction. This is enough of a marvel even if, in a constantly changing world, not all will hit it off so perfectly that their profit rates will always be maintained at the same constant or “normal” level.

I have deliberately used the word “marvel” to shock the reader out of the complacency with which we often take the working of this mechanism for granted. I am convinced that if it were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aim, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind. Its misfortune is the double one that it is not the product of human design and that the people guided by it usually do not know why they are made to do what they do. But those who clamor for “conscious direction”—and who cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously—should remember this: The problem is precisely how to extend the span of out utilization of resources beyond the span of the control of any one mind; and therefore, how to dispense with the need of conscious control, and how to provide inducements which will make the individuals do the desirable things without anyone having to tell them what to do.

The problem which we meet here is by no means peculiar to economics but arises in connection with nearly all truly social phenomena, with language and with most of our cultural inheritance, and constitutes really the central theoretical problem of all social science. As Alfred [North] Whitehead has said in another connection, “It is a profoundly erroneous truism, repeated by all copy-books and by eminent people when they are making speeches, that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them.” This is of profound significance in the social field. We make constant use of formulas, symbols, and rules whose meaning we do not understand and through the use of which we avail ourselves of the assistance of knowledge which individually we do not possess. We have developed these practices and institutions by building upon habits and institutions which have proved successful in their own sphere and which have in turn become the foundation of the civilization we have built up.

The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coördinated utilization of resources based on an equally divided knowledge has become possible. The people who like to deride any suggestion that this may be so usually distort the argument by insinuating that it asserts that by some miracle just that sort of system has spontaneously grown up which is best suited to modern civilization. It is the other way round: man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible. Had he not done so, he might still have developed some other, altogether different, type of civilization, something like the “state” of the termite ants, or some other altogether unimaginable type. All that we can say is that nobody has yet succeeded in designing an alternative system in which certain features of the existing one can be preserved which are dear even to those who most violently assail it—such as particularly the extent to which the individual can choose his pursuits and consequently freely use his own knowledge and skill.

Hayek, writing in The Constitution of Liberty (1960) went on to say:

[B]efore we can try to remould society intelligently, we must understand its functioning; we must realise that, even when we believe that we understand it, we may be mistaken. What we must learn to understand is that human civilisation has a life of its own, that all our efforts to improve things must operate within a working whole which we cannot entirely control, and the operation of whose forces we can hope merely to facilitate and assist so far as we can understand them. [Chapter 4, pp. 69-70]

As one writer puts it:

[I]n Hayek’s moral philosophy, human beings are seen as only the product of the biological and cultural evolution, not as the creator of civilization; and, in the evolution of society, human economy “‘blindly follows the route of maximum resource use just as within biology evolutionary change tends towards a maximum economy in the use of resources.” Neither a conscious or teleological force, nor a supernatural deity autonomous from the natural order sets evolution in motion; therefore, the notion of agency, either human or divine, is only infantile and the notion of the inevitability of progress is only exuberant and naïve. Such notions are only an intellectual retrogression to the “anthropomorphic tendencies of all primitive thinking.” Therefore, for Hayek, all progress must be understood in the sense of cultural evolution which is characterized by the discovery of the unknown, and whose consequences are therefore unpredictable. Hayek argues that human civilization has a life of its own, and therefore our attitude to it ought to be similar to that of the physician toward a living organism.

But, in a postcript to The Constitution of Liberty (“Why I Am Not a Conservative“), Hayek was careful to distinguish his philosophy from that of conservatism:

This difference between [classical] liberalism and conservatism must not be obscured by the fact that in the United States it is still possible to defend individual liberty by defending long-established institutions. To the liberal they are valuable not mainly because they are long established or because they are American but because they correspond to the ideals which he cherishes.

…Before I consider the main points on which the liberal attitude is sharply opposed to the conservative one, I ought to stress that there is much that the liberal might with advantage have learned from the work of some conservative thinkers. To their loving and reverential study of the value of grown institutions we owe (at least outside the field of economics) some profound insights which are real contributions to our understanding of a free society. However reactionary in politics such figures as Coleridge, Bonald, De Maistre, Justus Möser, or Donoso Cortès may have been, they did show an understanding of the meaning of spontaneously grown institutions such as language, law, morals, and conventions that anticipated modern scientific approaches and from which the liberals might have profited. But the admiration of the conservatives for free growth generally applies only to the past. They typically lack the courage to welcome the same undesigned change from which new tools of human endeavors will emerge.

This brings me to the first point on which the conservative and the liberal dispositions differ radically. As has often been acknowledged by conservative writers, one of the fundamental traits of the conservative attitude is a fear of change, a timid distrust of the new as such,…while the liberal position is based on courage and confidence, on a preparedness to let change run its course even if we cannot predict where it will lead. There would not be much to object to if the conservatives merely disliked too rapid change in institutions and public policy; here the case for caution and slow process is indeed strong. But the conservatives are inclined to use the powers of government to prevent change or to limit its rate to whatever appeals to the more timid mind. In looking forward, they lack the faith in the spontaneous forces of adjustment which makes the liberal accept changes without apprehension, even though he does not know how the necessary adaptations will be brought about. It is, indeed, part of the liberal attitude to assume that, especially in the economic field, the self-regulating forces of the market will somehow bring about the required adjustments to new conditions, although no one can foretell how they will do this in a particular instance. There is perhaps no single factor contributing so much to people’s frequent reluctance to let the market work as their inability to conceive how some necessary balance, between demand and supply, between exports and imports, or the like, will be brought about without deliberate control. The conservative feels safe and content only if he is assured that some higher wisdom watches and supervises change, only if he knows that some authority is charged with keeping the change “orderly.”

This fear of trusting uncontrolled social forces is closely related to two other characteristics of conservatism: its fondness for authority and its lack of understanding of economic forces. Since it distrusts both abstract theories and general principles,…it neither understands those spontaneous forces on which a policy of freedom relies nor possesses a basis for formulating principles of policy. Order appears to the conservative as the result of the continuous attention of authority, which, for this purpose, must be allowed to do what is required by the particular circumstances and not be tied to rigid rule. A commitment to principles presupposes an understanding of the general forces by which the efforts of society are co-ordinated, but it is such a theory of society and especially of the economic mechanism that conservatism conspicuously lacks. So unproductive has conservatism been in producing a general conception of how a social order is maintained that its modern votaries, in trying to construct a theoretical foundation, invariably find themselves appealing almost exclusively to authors who regarded themselves as liberal. Macaulay, Tocqueville, Lord Acton, and Lecky certainly considered themselves liberals, and with justice; and even Edmund Burke remained an Old Whig to the end and would have shuddered at the thought of being regarded as a Tory.

Let me return, however, to the main point, which is the characteristic complacency of the conservative toward the action of established authority and his prime concern that this authority be not weakened rather than that its power be kept within bounds. This is difficult to reconcile with the preservation of liberty. In general, it can probably be said that the conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes. He believes that if government is in the hands of decent men, it ought not to be too much restricted by rigid rules. Since he is essentially opportunist and lacks principles, his main hope must be that the wise and the good will rule – not merely by example, as we all must wish, but by authority given to them and enforced by them….Like the socialist, he is less concerned with the problem of how the powers of government should be limited than with that of who wields them; and, like the socialist, he regards himself as entitled to force the value he holds on other people.

When I say that the conservative lacks principles, I do not mean to suggest that he lacks moral conviction. The typical conservative is indeed usually a man of very strong moral convictions. What I mean is that he has no political principles which enable him to work with people whose moral values differ from his own for a political order in which both can obey their convictions. It is the recognition of such principles that permits the coexistence of different sets of values that makes it possible to build a peaceful society with a minimum of force. The acceptance of such principles means that we agree to tolerate much that we dislike. There are many values of the conservative which appeal to me more than those of the socialists; yet for a liberal the importance he personally attaches to specific goals is no sufficient justification for forcing others to serve them. I have little doubt that some of my conservative friends will be shocked by what they will regard as “concessions” to modern views that I have made in Part III of this book. But, though I may dislike some of the measures concerned as much as they do and might vote against them, I know of no general principles to which I could appeal to persuade those of a different view that those measures are not permissible in the general kind of society which we both desire. To live and work successfully with others requires more than faithfulness to one’s concrete aims. It requires an intellectual commitment to a type of order in which, even on issues which to one are fundamental, others are allowed to pursue different ends.

It is for this reason that to the liberal neither moral nor religious ideals are proper objects of coercion, while both conservatives and socialists recognize no such limits. I sometimes feel that the most conspicuous attribute of liberalism that distinguishes it as much from conservatism as from socialism is the view that moral beliefs concerning matters of conduct which do not directly interfere with the protected sphere of other persons do not justify coercion. This may also explain why it seems to be so much easier for the repentant socialist to find a new spiritual home in the conservative fold than in the liberal.

In the last resort, the conservative position rests on the belief that in any society there are recognizably superior persons whose inherited standards and values and position ought to be protected and who should have a greater influence on public affairs than others. The liberal, of course, does not deny that there are some superior people – he is not an egalitarian – bet he denies that anyone has authority to decide who these superior people are. While the conservative inclines to defend a particular established hierarchy and wishes authority to protect the status of those whom he values, the liberal feels that no respect for established values can justify the resort to privilege or monopoly or any other coercive power of the state in order to shelter such people against the forces of economic change. Though he is fully aware of the important role that cultural and intellectual elites have played in the evolution of civilization, he also believes that these elites have to prove themselves by their capacity to maintain their position under the same rules that apply to all others.

Closely connected with this is the usual attitude of the conservative to democracy. I have made it clear earlier that I do not regard majority rule as an end but merely as a means, or perhaps even as the least evil of those forms of government from which we have to choose. But I believe that the conservatives deceive themselves when they blame the evils of our time on democracy. The chief evil is unlimited government, and nobody is qualified to wield unlimited power….The powers which modern democracy possesses would be even more intolerable in the hands of some small elite.

Admittedly, it was only when power came into the hands of the majority that further limitations of the power of government was thought unnecessary. In this sense democracy and unlimited government are connected. But it is not democracy but unlimited government that is objectionable, and I do not see why the people should not learn to limit the scope of majority rule as well as that of any other form of government. At any rate, the advantages of democracy as a method of peaceful change and of political education seem to be so great compared with those of any other system that I can have no sympathy with the antidemocratic strain of conservatism. It is not who governs but what government is entitled to do that seems to me the essential problem.

In 1973, Hayek wrote a long article on “Liberalism” [classical liberalism, of course] for the Italian Enciclopedia del Novicento. The article was reprinted as Chapter Nine of New Studies in Philosophy, Politics, Economics and the History of Ideas. Some relevant excerpts:

The central belief from which all liberal postulates may be said to spring is that more successful solutions of the problems of society are to be expected if we do not rely on the application of anyone’s given knowledge, but encourage the interpersonal process of the exchange of opinion from which better knowledge can be expected to emerge. It is the discussion and mutual criticism of men’s different opinions derived from different experiences which was assumed to facilitate the discovery of truth, or at least the best approximation to truth which could be achieved. Freedom for individual opinion was demanded precisely because every individual was regarded as fallible, and the discovery of the best knowledge was expected only from that continuous testing of all beliefs which free discussion secured. Or, to put this differently, it was not so much from the power of individual reason (which the genuine liberals distrusted), as from the results of the interpersonal process of discussion and criticism, that a progressive advance towards the truth was expected. Even the growth of individual reason and knowledge is regarded as possible only in so ‑far as the individual is part of this process.

That the advance of knowledge, or progress, which intellectual freedom secured, and the consequent increased power of men to achieve their aims, was eminently desirable, was one of the unquestioned presuppositions of the liberal creed. It is sometimes alleged, not quite justly, that its stress was entirely on material progress. Though it is true that it expected the solution of most problems from the advance of scientific and technological knowledge, it combined with this a somewhat uncritical, though probably empirically justified, belief that freedom would also bring progress in the moral sphere; it seems at least true that during periods of advancing civilization moral views often came to be more widely accepted which in earlier periods had been only imperfectly or partially recognized. (It is perhaps more doubtful whether the rapid intellectual advance that freedom produced also led to a growth of aesthetic susceptibilities; but liberal doctrine never claimed any influence in this respect.)

All the arguments in support of intellectual freedom also apply, however, to the case for the freedom of doing things, or freedom of action. The varied experiences which lead to the differences of opinion from which intellectual growth originates are in turn the result of the different actions taken by different people in different circumstances. As in the intellectual so in the material sphere, competition is the most effective discovery procedure which will lead to the finding of better ways for the pursuit of human aims. Only when a great many different ways of doing things can be tried will there exist such a variety of individual experience, knowledge and skills, that a continuous selection of the most successful will lead to steady improvement. As action is the main source of the individual knowledge on which the social process of the advance of knowledge is based, the case for the freedom of action is as strong as the case for freedom of opinion. And in a modern society based on the division of labour and the market, most of the new forms of action arise in the economic field.

There is, however, yet another reason why freedom of action, especially in the economic field that is so often represented as being of minor importance, is in fact as important as the freedom of the mind. If it is the mind which chooses the ends of human action, their realization depends on the availability of the required means, and any economic control which gives power over the means also gives power over the ends. There can be no freedom of the press if the instruments of printing are under the control of government, no freedom of assembly if the needed rooms are so controlled, no freedom of movement if the means of transport are a government monopoly, etc. This is the reason why governmental direction of all economic activity, often undertaken in the vain hope of providing more ample means for all purposes, has invariably brought severe restrictions of the ends which the individuals can pursue. It is probably the most significant lesson of the political developments of the twentieth century that control of the material part of life has given government, in what we have learnt to call totalitarian systems, far‑reaching powers over the intellectual life. It is the multiplicity of different and independent agencies prepared to supply the means which enables us to choose the ends which we will pursue.

For more of Hayek in his own words, go here. For other takes on Hayek and the indivisibility of economic and social liberty, go here, here, here, and here.

This is a work in progress. I welcome constructive criticisms and suggestions. Please send an e-mail to: libertycorner-at-sbcglobal-dot-net .

V. THE ECONOMIC CONSEQUENCES OF LIBERTY

Introduction

I should call this part “The Benefits of Liberty That Can Be Measured in Dollars, and How They Have Been Reduced Dramatically by the Regulatory-Welfare State” or “The Price of Privilege.” To recap what I said in Part II:

The core of libertarianism is liberty: briefly, the negative right to be left alone — in one’s person, pursuits, and property — as long as one leaves others alone. I am using “liberty” here to encompass what the Founders intended by “life, liberty, and the pursuit of happiness” in the Declaration of Independence….

A privilege, by contrast to liberty, is a positive right, that is, a grant of special (unequal) treatment….

Law-made privileges result in the direct and indirect redistribution of income and wealth through welfare and regulation. We tend to think of welfare as a subsidy or other special treatment based on age, gender, race, level of income, infirmity, or other condition of being. Welfare also includes unequal taxation; e.g., progressive taxation of personal income, a city’s granting of tax breaks to entice a business to locate there.

Regulatory privileges are accorded by specifying the conditions of economic activity for the purpose of promoting certain outcomes (e.g., “protecting” domestic manufacturers from foreign competition) and proscribing other outcomes (e.g., prohibiting the sale of certain types of drugs before they undergo a lengthy approval process). Regulation in the name of “protecting the public” is really a privilege because it (a) is accomplished by an elite group, (b) usually provides psychic satisfaction for a group of do-gooders, and (c) often does not protect the public. (The most egregious example of spurious protection of the public is the Food and Drug Administration’s lengthy process for the approval of new drugs, which does more harm than good.)

Privilege therefore differs fundamentally from liberty in that it attempts to make some persons better off through the compulsion of others persons, with the result that it usually makes almost everyone worse off. (I will have more to say about the effects of the welfare-regulatory regime in a later part of this essay.)

This is that later part. I will assess here the economic benefits of liberty by estimating how much better off Americans would be if their liberty hadn’t been curtailed progressively (pun intended) over the past 100 years.

The logical incompatibility of liberty rights and privileges doesn’t keep most people from wanting both. People want to be left alone, but it seems that almost everyone also yearns for some version of the welfare-regulatory state. (See Part III.) People seem to believe that government — through taxation and regulation — does things that are more valuable than the freedom of action they forego because of taxation and regulation. Most Americans simply don’t understand the true costs and illusory benefits of the welfare-regulatory state.

Americans’ economic illiteracy has been exploited by equally ignorant “public intellectuals” and cynical demagogues who have dominated political discourse and politics since the accidental and unfortunate elevation of Theodore Roosevelt to the presidency. (I include not only Democrats among those cynical demagogues but also the many Republicans who have abandoned the party’s long commitment to limited government for the sake of holding onto power.)

When Americans and their “public servants” clamor for privileges they undo the work of liberty because privileges impose a heavy economic burden on almost everyone — including their intended beneficiaries. Why? Because, privileges depend on taxation or regulation for their effect, thus blunting economic incentives and diverting resources to less-productive and unproductive uses.

Absent the welfare-regulatory state, most of the poor would be rich, by today’s standards. And those who remain relatively poor or otherwise incapable of meeting their own needs — because of age, infirmity, and so on — would reap voluntary charity from their affluent compatriots.

The Cumulative Cost of Government Intervention

The cumulative cost of government intervention can be approximated by analyzing trends in Gross Domestic Product. GDP has its limitations as a measure of happiness, because happiness — or personal satisfaction or self-interest, if you prefer — cannot be aggregated, nor can it measured entirely in dollars:

• Not everything that makes us happy is included in GDP. A compelling if brief list of exclusions: early retirement, having children, parenting one’s own children in lieu of paid employment, fresh air and unspoiled scenery, tranquility, and freedom from worry about crime. In fact, large numbers of Americans forgo income (which is captured in GDP) for the sake of such things as having children (the enjoyment of which isn’t included in GDP).

• Not everything that’s for sale is included in GDP (e.g., illegal transactions and barter).

• GDP captures many things of negative value (e.g., the cost of government programs that restrict freedom of choice; the cost of cleaning up pollution; and the amounts of money we spend on crime, traveling on congested highways, and trying briefly to escape the daily grind of urban living).

It is obvious — especially someone who knows life as it was lived more than 50 years ago — that the correlation between GDP and happiness has declined over time. Consider, for example, the double-edged influx of women into the workforce, which began in earnest around 1970. That influx has deprived children of parenting (not included in GDP) while bringing to many households a second money income (included in GDP). In another post I analyzed the effect of that shift over the span of the twentieth century:

Because estimates of GDP don’t capture the value of child-rearing and other aspects of “household production” by stay-at-home mothers, the best way to put 1900 and 2000 on the same footing is to estimate GDP for 2000 at the labor-force participation rates of 1900. The picture then looks quite different: real [inflation-adjusted] GDP per capita of $4,300 in 1900, real GDP per capita of $25,300 in 2000 (a reduction of 28 percent), and an annualized growth rate of 1.8 percent, rather than 2.1 percent.

I went on to say:

The twentieth century was a time of great material progress. And we know that there would have been significantly greater progress had the hand of government not been laid so heavily on the economy. But what we don’t know is the immeasurable price we have paid — and will pay — for the exodus of mothers from the home. We can only name that price: greater incivility, mistrust, fear, property loss, injury, and death.

Money can buy happiness, but GDP has become an increasingly unreliable proxy for happiness because of the unavoidable — and often undesirable — correlates of economic growth, namely, population growth and social change. Nevertheless, as I will show, the net effect of government intervention has been to reduce the aspect of happiness that is represented by GDP. We have paid a steep price for such interventions as these:

• direct spending on government operations and capital acquisitions

• disincentives to work, innovate, and invest arising from taxation (especially taxes on income, and more especially progressive taxes on income)

• disincentives to work and save arising from social programs and transfer payments (including, but certainly not limited to Social Security, Medicare, and Medicaid)

• diminution of competition and efficiency through myriad laws and regulations that hamper the design, production, and sale of goods and services ranging from aspirin to yogurt

• restrictions on voluntary exchange (e.g., minimum wage laws, compulsory recognition of labor unions, and imposition of tariffs).

There are bottom-up estimates of the cost of government intervention. The usual bottom-up estimate includes:

• the cost of government purchases of goods and services for current operations and capital (buildings and equipment)

• the value of government transfer payments, which take money from those who produce and give it to those who don’t produce (as in the case of Social Security, Medicare, and Medicaid)

• the amount by which social and economic regulations reduce the level of economic output.

Government purchases of goods and services plus transfer payments absorbed more than 30 percent of GDP in 2004: $3.6 trillion out of a GDP valued at $11.7 trillion (see footnote a). A credible estimate of the regulatory burden is 15 percent of GDP (see footnote b). Thus the productive sectors of the economy sacrifice something like 40 to 50 percent of their current output to fund government purchases, transfer payments, and regulatory compliance.

But that estimate measures only the heavy hand that government lays on current economic output. It doesn’t measure the cumulative effect that government intervention has had on economic activity. Actions by government that discourage or diminish work, saving, investment, competition, efficiency, and voluntary exchange have irretrievable, long-term, negative effects on economic output. Economic opportunities, once forgone, cannot be recovered; they compound, like negative interest.

Consider, for example, a capital investment that isn’t made because of high taxation or oppressive regulation. The return on that investment would have produced income that would have funded other investments, which would have produced yet more income that would have funded yet more investments, and on and on, in a reverse accelerator effect. There’s an analogous effect whenever current economic output is reduced because of a government action that discourages or distorts incentives to work, save, invest, innovate, compete, improve efficiency, or enter into a voluntary economic exchange.

And that’s what has happened in America. Real (inflation-adjusted) GDP began to rise sharply after the Civil War, thanks mainly to the Second Industrial Revolution. Despite the occasional slump — which the economy worked its way out of, thank you — things continued to go well until about 1906. Then the trajectory of GDP growth fell suddenly, sharply, and (it seems) permanently. The Panic of 1907 coincided with, but did not cause, the deceleration of America’s economy.

Data on real GDP for 1870-2003 are from Louis Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1789 – Present.” Economic History Services, March 2004, URL: http://www.eh.net/hmit/gdp/. Real GDP for 2004 estimated by deflating nominal 2004 GDP (source at footnote a) by increase in CPI between 2000 and 2004 (from Bureau of Labor Statistics).

The stock market — an accurate, if volatile, indicator of the nation’s economic health — corroborates my judgment about the downward shift in economic growth. After 1906 the S&P 500 (as reconstructed back to 1870) dropped to a new trendline that has a shallower slope and an intercept that is 48 percent lower than that of the trendline for 1870-1906.

Real S&P price index constructed from annual closing prices of the S&P 500 Composite Index (series “S&P 500® Composite Price Index (w/GFD extension)”), available at Global Financial Data, Inc., and the GDP deflator (see notes for previous chart).

What happened around 1906? First, the regulatory state began to encroach on American industry with the passage of the Food and Drug Act and the vindictive application of the Sherman Antitrust Act, beginning with Standard Oil (the Microsoft of its day). There followed the ratification of the Sixteenth Amendment (enabling the federal government to tax incomes); the passage of the Clayton Antitrust Act (a more draconian version of the Sherman Act, which also set the stage for unionism); World War I (a high-taxing, big-spending, economic-control operation that whet the appetite of future New Dealers); a respite (the boom of the 1920s, which was owed to the Harding-Coolidge laissez-faire policy toward the economy); and the Great Depression and World War II (truly tragic events that imbued in the nation a false belief in the efficacy of the big-spending, high-taxing, regulating, welfare state).

The stock-market debacle of 1916-20 was as bad as the crash of 1929-33 (see second chart above), and the ensuing recession of 1920-21 was “sharp and deep,” as the unemployment rate rose to 12 percent in 1921. But Americans and American politicians didn’t panic and scramble to “fix” the economy by adopting one perverse scheme after another. Thus prosperity ensued.

But less than 10 years later — at the onset of the Great Depression — Americans and American politicians lost their bearings and joined Germany, Italy, and Russia on the road to serfdom. Most Americans still believe that government intervention brought us out of the Depression. That bit of shopworn conventional wisdom has been debunked thoroughly by Jim Powell, in FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, and Murray N. Rothbard, in America’s Great Depression. The bottom line of FDR’s Folly is stark:

The Great Depression was a government failure, brought on principally by Federal Reserve policies that abruptly cut the money supply; unit banking laws that made thousands of banks more vulnerable to failure; Hoover’s tariff’s, which throttled trade; Hoover’s taxes, which took unprecedented amounts of money out of people’s pockets at the worst possible time; and Hoover’s other policies, which made it more difficult for the economy to recover. High unemployment lasted as long as it did because of all the New Deal policies that took more money out of people’s pockets, disrupted the money supply, restricted production, harassed employers, destroyed jobs, discouraged investment, and subverted economic liberty needed for sustained business recovery [p. 167].

(Also see this.) All we got out of the New Deal was an addiction to government intervention, as people were taught to fear the free market and to believe, perversely, that government intervention led to economic salvation. The inculcation of those attitudes set the stage for the vast regulatory-welfare state that has arisen in the United States since World War II. (See footnote c.)

You know the rest of the story: Spend, tax, redistribute, regulate, elect, spend, tax, redistribute, regulate, elect, ad infinitum. We became locked into the welfare state in the 1970s (see the chart at footnote a), and the regulatory burden on Americans is huge and growing. The payoff:

• Real GDP (in year 2000 dollars) was about $10.7 trillion in 2004.

• If government had grown no more meddlesome after 1906, real GDP might have been $18.7 trillion (see first chart above).

• That is, real GDP per American would have been about $63,000 (in year 2000 dollars) instead of $36,000.

• That’s a deadweight loss to the average American of more than 40 percent of the income he or she might have enjoyed, absent the regulatory-welfare state.

• That loss is in addition to the 40-50 percent of current output which government drains from the productive sectors of the economy.

And that is the price of privilege — of ceding liberty piecemeal in the mistaken belief that helping this interest group or imposing that regulation will do little harm to the general welfare, and might even increase it.

Wrong, wrong, wrong! The sum of human happiness — or that part of it which can be measured in dollars — has been diminished drastically and permanently by the corrosive action of TR’s Square Deal, FDR’s New Deal, HST’s Fair Deal, LBJ’s Great Society, and the other statist agendas of the past 100 years.

Lesson Learned?

Unless Americans become aware of the extremely high and largely hidden cost of the regulatory-welfare state, they will remain addicted to it. For reliance on government is an addictive drug — and a very expensive one. We swallow each dose in the hope that it will make us secure, and when that dose doesn’t make us secure we swallow another dose, in the hope that that dose will make us secure. And on and on. In the end, we are left with nothing but a costly addiction to government that impairs our liberty therefore ruins our economic health.

What Americans have failed to understand, is that there is less risk of coming to harm in a free-market economy — where individuals have an incentive to take care of themselves — than there is of coming to harm in the regulatory-welfare state. (See my series of posts on “Fear of the Free Market,” in three parts; my post on “Free Market Healthcare“; and my post on “Why Class Warfare Is Bad for Everyone.”) Free people do not stay mired in poverty and tend not to repeat their mistakes, if they are allowed to learn from those mistakes. (See my posts about income inequality.) As Arnold Kling says:

Ultimately, it is people who make decisions in markets and in government. People are fallible in both settings. The difference is that in a market setting mistakes are corrected more quickly than in a government setting. Thus, even if markets were wrong nine times out of 10 and government were right nine times out of 10, over time markets would achieve better outcomes.

But Kling is too generous to government, the imperative of which is aggrandizement, not self-betterment. Government isn’t the people and cannot replicate what people would do if they were allowed to do it for themselves. (See these excerpts of Hayek’s writings and my post on “Socialist Calculation and the Turing Test.”) Michael Munger says it well:

Bureaucracy can not be improved, because its very nature is incompatible with a society of free citizens who take responsibility for their own lives and their own choices. The incentives and hierarchies in the two forms are fundamentally different.To put it most starkly, citizens may say, and believe, that the problem is unresponsive bureaucracy, or corruption, but these are the essential features of the governments of large nations. The solution is a citizenry that understands the economic and political forces that make government inherently incapable of carrying out the tasks we want to assign to it. But the mainstream media, nearly entirely innocent of knowledge of basic economic principles, has no hope of aiding such an understanding, and more often than not contribute to the “we can do better” mindset by carrying sensational stories of corruption inevitably followed by demands for reform.

Economics can be as abstruse as the physics of special relativity. But it rests on two things that are easily learned:

• Incentives matter.

• There’s no such thing as a free lunch.

When people are deprived of incentives through taxation, regulation, and welfare, they are less able and willing to strive for themselves. And it is self-striving that leads people to do things that are valued by others. Regulation and welfare (the “free lunch”) impose costs (bureaucratic overhead), where there otherwise would be no costs, and distort the free-market signals that tell people how they can do better for themselves by doing better for others.

Quo Vadimus?

Will Americans learn that incentives matter and that there is no free lunch? The battle over Social Security will tell the tale. If partial privatization succeeds, perhaps something close to full privatization might follow. After that, anything is possible: the end of Medicare and more vigorous deregulation, for example.

Help may be on the way. America — in spite of the past 100 years of creeping and galloping statism — may be on the verge of rapid economic growth. (See this, this, and this.) A sustained burst of growth would obviate the felt need for many facets of the regulatory-welfare state: When times are bad people turn to government for succor; when times are good, people have more confidence in their ability to take care of themselves.

Whether a new era of rapid growth materializes will depend greatly on our ability to retain our collective sanity in the face of environmental hysteria. (Go here and follow the links. See this, also.) There are market solutions (e.g., nuclear power and clean coal), but their implementation will be resisted by contemporary “Bootleggers and Baptists.” (“Bootleggers” are market incumbents — as represented by the American Medical Association and the American Bar Association, for example — who benefit from the suppression of competition, as did bootleggers during Prohibition. “Baptists” are self-appointed guardians of our health and well-being — the sum of all our risk-averse fears, you might say.)

The next several years will see a showdown between the forces of darkness and the forces of progress in America. The forces of darkness — having already greatly diminished the general welfare in the name of improving it — will seek to tighten the shackles of the regulatory-welfare state in the name of environmentalism. The forces of progress will seek to tame the regulatory-welfare state — if not repeal it. But they will be labeled evil, greedy, know-nothings for trying to protect us generally from the predations of the welfare-regulatory state and particularly from the ravages of environmental hysteria. As Ludwig von Mises put it:

[I]f a revolution in public opinion could once more give capitalism free rein, the world will be able gradually to raise itself from the condition into which the policies of the combined anticapitalist factions have plunged it.¹⁴ [Quoted by Bryan Caplan.]

I am doubtful of a revolution in public opinion, especially because it would require a revolution in elite opinion and in the media — both of which are in thrall to the god of the regulatory-welfare state.

As I will argue in Part VI, we have come to our present state because public opinion, elite opinion, and the media have combined to undo the great work of the Framers, whose Constitution prevented tyranny by the majority. Unchecked democracy has become the enemy of liberty and, therefore, of material progress. As Michael Munger says, “The real key to freedom is to secure people from tyranny by the majority, or freedom from democracy.”

The last best hope for liberty and prosperity lies in the neutralization of public opinion through a renewal of constitutional principles. I’ll have more to say about that in Parts VII and VIII.
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a. In 1929 and earlier, government spending and transfer payments hovered around 10 percent of GDP in peacetime. Defense spending always has fluctuated in response to threats from abroad. But other government outlays — especially transfer payments — have risen steadily since the end of World War II; they now account for more than 25 percent of GDP. Thus the relative burden of governments’ nondefense activities (including transfer payments) on the productive sectors of the economy is now about 2.5 times as great as it was before the Great Depression. In absolute terms, of course, the burden of government spending is astronomically higher than it was in 1929.

Percentages are derived from U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Table 1.1.5: Gross Domestic Product (data for 1929-2004), line 1 (Gross domestic product), lines 22 and 23 (Federal defense and nondefense expenditures), and line 24 (State and local expenditures); and Table 3.1: Government Current Receipts and Expenditures (data for 1929-2004), line 17 (Current transfer payments).

b. An official estimate of the annual benefits flowing from federal regulations places the value of those benefits at less than $200 billion. But the annual cost of those regulations — including the hidden costs not included in the government estimate — is approaching or has exceeded $1 trillion, as discussed here, here, here, and here.

c. There have been so many instances of government failure in the last 60 years that I won’t even try to sample them here. Almost everything you’d like to know about how government usually makes things worse through intervention in the affairs of Americans can be found here:

AEI-Brookings Joint Center

Cato Institute, Regulation Magazine

Competitive Enterprise Institute

George Mason University, Mercatus Center

The Destruction of Income

I wrote in Part V about the loss of income that has resulted from the intrusions of the regulatory-welfare state into America’s economy.

Real (inflation-adjusted) GDP began to rise sharply after the Civil War, thanks mainly to the Second Industrial Revolution. Despite the occasional slump — which the economy worked its way out of, thank you — things continued to go well until about 1906. Then the trajectory of GDP growth fell suddenly, sharply, and (it seems) permanently. The Panic of 1907 coincided with, but did not cause, the deceleration of America’s economy.

Data on real GDP for 1870-2003 are from Louis Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1789 – Present.” Economic History Services, March 2004, URL: http://www.eh.net/hmit/gdp/. Real GDP for 2004 estimated by deflating nominal 2004 GDP (source at footnote a) by increase in CPI between 2000 and 2004 (from Bureau of Labor Statistics).

The stock market — an accurate, if volatile, indicator of the nation’s economic health — corroborates my judgment about the downward shift in economic growth. After 1906 the S&P 500 (as reconstructed back to 1870) dropped to a new trendline that has a shallower slope and an intercept that is 48 percent lower than that of the trendline for 1870-1906.

Real S&P price index constructed from annual closing prices of the S&P 500 Composite Index (series “S&P 500® Composite Price Index (w/GFD extension)”), available at Global Financial Data, Inc., and the GDP deflator (see notes for previous chart).

What happened around 1906? First, the regulatory state began to encroach on American industry with the passage of the Food and Drug Act and the vindictive application of the Sherman Antitrust Act, beginning with Standard Oil (the Microsoft of its day). There followed the ratification of the Sixteenth Amendment (enabling the federal government to tax incomes); the passage of the Clayton Antitrust Act (a more draconian version of the Sherman Act, which also set the stage for unionism); World War I (a high-taxing, big-spending, economic-control operation that whet the appetite of future New Dealers); a respite (the boom of the 1920s, which was owed to the Harding-Coolidge laissez-faire policy toward the economy); and the Great Depression and World War II (truly tragic events that imbued in the nation a false belief in the efficacy of the big-spending, high-taxing, regulating, welfare state).

The stock-market debacle of 1916-20 was as bad as the crash of 1929-33 (see second chart above), and the ensuing recession of 1920-21 was “sharp and deep,” as the unemployment rate rose to 12 percent in 1921. But Americans and American politicians didn’t panic and scramble to “fix” the economy by adopting one perverse scheme after another. Thus prosperity ensued.

But less than 10 years later — at the onset of the Great Depression — Americans and American politicians lost their bearings and joined Germany, Italy, and Russia on the road to serfdom. Most Americans still believe that government intervention brought us out of the Depression. That bit of shopworn conventional wisdom has been debunked thoroughly by Jim Powell, in FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, and Murray N. Rothbard, in America’s Great Depression. The bottom line of FDR’s Folly is stark:

The Great Depression was a government failure, brought on principally by Federal Reserve policies that abruptly cut the money supply; unit banking laws that made thousands of banks more vulnerable to failure; Hoover’s tariff’s, which throttled trade; Hoover’s taxes, which took unprecedented amounts of money out of people’s pockets at the worst possible time; and Hoover’s other policies, which made it more difficult for the economy to recover. High unemployment lasted as long as it did because of all the New Deal policies that took more money out of people’s pockets, disrupted the money supply, restricted production, harassed employers, destroyed jobs, discouraged investment, and subverted economic liberty needed for sustained business recovery [p. 167].

(Also see this.) All we got out of the New Deal was an addiction to government intervention, as people were taught to fear the free market and to believe, perversely, that government intervention led to economic salvation. The inculcation of those attitudes set the stage for the vast regulatory-welfare state that has arisen in the United States since World War II. (See footnote c.)

You know the rest of the story: Spend, tax, redistribute, regulate, elect, spend, tax, redistribute, regulate, elect, ad infinitum. We became locked into the welfare state in the 1970s (see the chart at footnote a), and the regulatory burden on Americans is huge and growing. The payoff:

• Real GDP (in year 2000 dollars) was about $10.7 trillion in 2004.

• If government had grown no more meddlesome after 1906, real GDP might have been $18.7 trillion (see first chart above).

• That is, real GDP per American would have been about $63,000 (in year 2000 dollars) instead of $36,000.

• That’s a deadweight loss to the average American of more than 40 percent of the income he or she might have enjoyed, absent the regulatory-welfare state.

• That loss is in addition to the 40-50 percent of current output which government drains from the productive sectors of the economy.

And that is the price of privilege — of ceding liberty piecemeal in the mistaken belief that helping this interest group or imposing that regulation will do little harm to the general welfare, and might even increase it.

The Destruction of Wealth

The destruction of income necessarily results in the destruction of wealth; income not received cannot be saved and invested.

How much wealth has been forgone because of the vast amounts of income that have been destroyed in the past 100 years? I can’t hazard a guess. But by drawing on the data presented in the charts above I can estimate how much higher stock prices would be today if government were no more intrusive than it had been a century ago. Consider this chart of the relationship between GDP and the S&P index (data for 1870-1906 are plotted in green, data for 1907-2004 are plotted in red):

As I noted above, GDP in 2004 might have been $18.7 trillion if government had grown no more intrusive after the early 1900s. Taking that level of GDP and using the relationship between GDP and the S&P for 1870-1906 (shown in green), the S&P price index for 2004 would have been 30.8 (with 1870 = 1). The actual S&P price index for 2004 stood at 20.4.* In other words, the stocks of corporations in the S&P 500 are currently undervalued by one-third because of the depradations of the regulatory-welfare state, which have lowered investors’ expectations for future earnings.** The effect of those lowered expectations is shown in the difference between the green (1870-1906) and red (1907-2004) trendlines.

And that’s only the portion of wealth that’s represented in the S&P 500. Think of all the other forms in which wealth is stored: stocks not included in the S&P 500, corporate bonds, mortgages, home equity, and so on.

If government had left its grubby hands off the economy, there never would have been a Great Depression, Social Security, Medicare, Medicaid, and the myriad regulations that have us tied in knots.
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* The index for 2004 is significantly out of line with the trendline for 1907-2004, which suggests that there is still some air in the stock market bubble. Or it could be that the market is anticipating the expected growth surge I wrote about toward the end of Part V — a surge that may not take place if environmental hysteria prevails and Social Security taxes are raised.

** As Jeremy Siegel, author of Stocks for the Long Run, explains in a piece at the Library of Economics and Liberty:

The price of a share of stock, like that of any other financial asset, equals the present value of the expected stream of future cash payments to the owner. The cash payments available to a shareholder are uncertain and subject to the earnings of the firm….

[T]he price of a stock can rise even if the firm does not pay a dividend and never intends to do so. If and when the assets of these firms are sold or liquidated, a cash distribution will be made and shareholders will realize a capital gain. Some firms pursue this policy to enable their shareholders to realize lower taxes, since taxes on capital gains are deferred and often paid at a lower rate.

If liberty is so wonderful, why don’t we enjoy it in full? Why are our lives so heavily regulated and legislated by so many federal, State, and local agencies at such a high cost? What happened to the promise of liberty given in the Declaration of Independence and Constitution? The answers to those questions are bound up in human nature and the nature of governance in a democracy.

I will first address the human imperatives that conflict with liberty. I will then examine their effect on the Constitution, which has become the servant of privilege where it was supposed to be the protector of liberty; that is:

• Liberty is the negative right to be left alone — in one’s person, pursuits, and property — as long as one leaves others alone. “Liberty” encompasses what the Founders intended by “life, liberty, and the pursuit of happiness” in the Declaration of Independence. Because of its reciprocal nature, liberty necessarily is (or should be) a right enjoyed equally by all citizens.

• Privilege, by contrast to liberty, is a positive right, that is, a grant of special (unequal) treatment. Privilege, not being reciprocal, necessarily conflicts with liberty because a grant of privilege compels some to surrender their liberty so that others may enjoy special treatment.

Human Nature and Liberty

Here, I will say more about the impulses and machinations that undermine our feeble instinct for liberty. They are impulses and machinations that the Framers tried to keep in check, but which have nevertheless been given rein through the corruption of the Constitution. I will not be gentle, for there is too much at stake in what may well be a twilight struggle between liberty and the despotism that serves privilege.

Liberty Is Not a Paramount Human Instinct

As I wrote in Part III:

I would like to be able to say that liberty is a paramount human instinct, honed through eons of human existence and experience. But we are surrounded by too much evidence to the contrary, both in recorded and natural history. [See this and this, for example.] The social and intellectual evolution of humankind has led us to a mixed bag of rights, acquired politically through cooperation and conflict resolution, often predating the creation of governments and the empowerment of states. The notion that we ought to enjoy the negative right of liberty is there among our instincts, of course, but it is at war with the positive right of privilege — the notion that we are “owed something” beyond what we earn (through voluntary exchange) for the use of our land, labor, or capital. Liberty is also at war with our instincts for control, aggression, and instant gratification.

As I said more recently,

The superior consequences of liberty [see here and here] argue for its acceptance, not for its inevitability. If the state of liberty were inevitable simply because of its demonstrable superiority, we would never have had to fight any wars to acquire and preserve it, nor would America have traveled as far down the road to serfdom as it has in the past 70 years.

It is easy to endorse liberty in principle and yet be its enemy in practice. Many persons — perhaps most — simply lack the requisite temperament, or worldview. Thomas Sowell, in A Conflict of Visions: Ideological Origins of Political Struggles, posits two opposing visions: the unconstrained vision (I would call it the idealistic vision) and the constrained vision (which I would call the realistic vision). As Sowell explains, at the end of chapter 2:

The dichotomy between constrained and unconstrained visions is based on whether or not inherent limitations of man are among the key elements included in each vision….These different ways of conceiving man and the world lead not merely to different conclusions but to sharply divergent, often diametrically opposed, conclusions on issues ranging from justice to war.

Thus, in chapter 5, Sowell writes:

The enormous importance of evolved systemic interactions in the constrained vision does not make it a vision of collective choice, for the end results are not chosen at all — the prices, output, employment, and interest rates emerging from competition under laissez-faire economics being the classic example. Judges adhering closely to the written law — avoiding the choosing of results per se — would be the analogue in law. Laissez-faire economics and “black letter” law are essentially frameworks, with the locus of substantive discretion being innumerable individuals.

By contrast,

those in the tradition of the unconstrained vision almost invariably assume that some intellectual and moral pioneers advance far beyond their contemporaries, and in one way or another lead them toward ever-higher levels of understanding and practice. These intellectual and moral pioneers become the surrogate decision-makers, pending the eventual progress of mankind to the point where all can make moral decisions.

In sum, it’s all about trust. You can trust in people to do the right thing because it’s to their benefit to do so, as it is in free markets and free societies. Or you can tie people down, economically and socially, in a morass of statutes and regulations, such as those to which I linked in the opening paragraph.

Trust doesn’t mean an absence of rules, but the rules have only to be minimal, socially evolved rules of acceptable conduct, such as the Golden Rule or the last six of the Ten Commandments. The clearer and more intuitive the rules, the more likely they are to be enforced by self-interest, by fear of social opprobrium, and by pride in reputation — with swift, sure, and hard justice as a backup.

But none of that goes down well with the untrusting, who think that the road to happiness must be paved with hard-and-fast rules for everything and everyone (except those who break the rules, if they have certain racial, sexual, and socio-economic characteristics). Otherwise, how would people know what to do?

Beyond a worldview that oozes lack of trust — which is quite enough, in itself, to have sold us into semi-slavery to the state — there lies economic illiteracy, which fails to grasp such simple principles as these:

• Incentives matter. Taxes and regulations result in the reduction and misdirection of economic activity and social trust.

• There’s no free lunch. Government can’t provide something for nothing. It never could, it never will. Every governmental action has an opportunity cost: that which the private sector could do with the same resources. There’s no such thing as “federal money” or “government money”; there’s only “our money.”

• Government doesn’t add value. At best it protects what we value, by defending us at home and abroad.

• The economy isn’t a zero-sum game. Bill Gates is immensely wealthy because he has created things that are of value to others. When Indian computer geeks man call centers for lower salaries than those of American computer geeks, it makes both Indians and Americans better off.

• There’s no such thing as “market failure.” Rather, there is only failure of the market to provide what some people think it should provide. Even defense and justice (both classic examples of a “public good“) could be provided by the market, as anarcho-capitalists aver, but minarchists (as I am) fear the consequences (warlord rivalry) and reluctantly trust in the state for those essential underpinnings of a free society.

Most people simply don’t understand the consequences of the rules that they so fervently seek to impose on others. They have little idea of the measurable costs of intervention (the share of GDP that goes into government programs, for instance), and they have no idea of the hidden costs of that intervention (the vast amounts of income and wealth forgone as a result of intervention (see the addendum to Part V). They simply cannot comprehend the indivisibility of economic and social (or personal) liberty: Restrict one and you have restricted the other, as I discussed in Part IV and its addendum.

I could go on about “whiners” and “losers” and “envy” and the like, but those unadmirable human traits simply reflect a worldview of mistrust, compounded by a misapprehension of economic reality. When you don’t trust others and you fail to understand how the world works, you are driven to seek control over others, either personally or through the state.

The State Exploits Human Nature and Human Nature Exploits the State

I admit that politicians — those persons who engage in governance (judges included) — are people. Most governors, like those they govern, suffer from a dysfunctional worldview, economic illiteracy, and all the rest. Thus they are able to empathize with and draw power from the masses. Once having drawn it, they always seek to aggrandize it. Governors succeed in their quest for power because those who ultimately grant them power — the people — never seem to learn from the mistakes of government. As I wrote in Part V:

[R]eliance on government is an addictive drug — and a very expensive one. We swallow each dose in the hope that it will make us secure, and when that dose doesn’t make us secure we swallow another dose, in the hope that that dose will make us secure. And on and on. In the end, we are left with nothing but a costly addiction to government that impairs our liberty therefore ruins our economic health.

As Ludwig von Mises wrote in 1929:

With a few exceptions contemporary commentators on economic problems are advocating economic intervention….Then everyone—usually even the authorities responsible for them—call them insufficient and unsatisfactory. Generally the demand then arises for the replacement of unsatisfactory interventions by other, more suitable measures. And once the new demands have been met, the same scenario begins all over again….

This attitude toward specific interventions is readily understood by anyone who recognizes that intervention necessarily is illogical and unsuitable, as it can never attain what its champions and authors hope to attain. It is remarkable, however, that it is obstinately defended in spite of its shortcomings, and in spite of the failure of all attempts at demonstrating its theoretical logic.

What happens, then, is a ratcheting of government power, in response to demands for government to “do something,” and in furtherance of the ambitions of power-seeking politicians. There is no in-between solution. There is either a government of strictly limited powers — such as the one envisioned by the Framers — or there is, inevitably, socialism or something very close to it. As Mises explained in a speech he made in 1950, “Middle-of-the-Road Policy Leads to Socialism“:

The course of events in the past thirty years shows a continuous, although sometimes interrupted progress toward the establishment in this country of socialism of the British and German pattern. The United States embarked later than these two other countries upon this decline and is today still farther away from its end. But if the trend of this policy will not change, the final result will only in accidental and negligible points differ from what happened in the England of Attlee and in the Germany of Hitler. The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.

How does it work?

There are two methods available for the transformation of capitalism into socialism [and thus liberty into serfdom: ED]. One is to expropriate all farms, plants, and shops and to operate them by a bureaucratic apparatus as departments of the government. The whole of society, says Lenin, becomes “one office and one factory, with equal work and equal pay,”1 the whole economy will be organized “like the postal system.”2 The second method is the method of the Hindenburg plan, the originally German pattern of the welfare state and of planning. It forces every firm and every individual to comply strictly with the orders issued by the government’s central board of production management. Such was the intention of the National Industrial Recovery Act of 1933 which the resistance of business frustrated and the Supreme Court declared unconstitutional. Such is the idea implied in the endeavors to substitute planning for private enterprise.

In the second method, the substitution doesn’t take place all at once, but rather bit by bit, through the piecemeal enactment of statutes and regulations.

Democracy Enables the Regulatory-Welfare State

We have been following the piecemeal route to serfdom — adding link to link and chain to chain — in spite of the Framers’ best intentions and careful drafting. Why? Because the governed — or dominant coalitions of them — have donned willingly the chains that they have implored their governors to forge. Their bondage is voluntary, though certainly not informed. But their bondage is everyone’s bondage.

Friedrich Hayek explained it, in a 1961 article (in German, summarized by Fritz Machlup):

[Hayek] asks why it is that personal liberty is in continual jeopardy and why the trend is toward its being increasingly restricted. The cause of liberty, he finds, rests on our awareness that our knowledge is inevitably limited. The purpose of liberty is to afford us an opportunity to obtain something unforeseeable; since it cannot be known what individuals will make of their freedom, it is all the more important to grant freedom to everybody….Liberty can endure only if it is defended not just when it is recognized to be useful in particular instances but rather continuously as a fundamental principle which may not be breached for the sake of any definite advantages obtainable at the cost of its suspension….It is not easy to convince the masses that they should sacrifice foreseeable benefits for unforeseeable ones. (“Hayek’s Contribution to Economics,” in Essays on Hayek [1976], p. 41.)

As Michael Munger says, in “Democracy is a Means, Not an End,”

blanket endorsements of majority rule make me wonder whether democracy is a fraud or just a conceit. As William Riker pointed out in his 1982 book, Liberalism Against Populism, the claim that “fair” processes always, or even often, lead to “good” outcomes ignores much of what is known about institutions and institutional change. If people disagree, and if there are several choices, democracy is manipulable, even dictatorial….

The pretense that in the multitude we find rectitude is dangerous: many of us would love to impose our “wisdom” on others….

[W]e don’t just demand too little of our democratic procedures, we are expecting too much of our democratic process. The educational system in the U.S. has failed students, because we don’t know the limits of unlimited democratic choice. We teach that consensus as a value in itself, even though we know that true consensus appears only in dictatorships or narrowly defined decisions. As James Buchanan, Kenneth Arrow, and a host of public choice scholars have shown, groups cannot be thought to have preferences in the same way that individuals do. To put it another way, it is perfectly possible, and legitimate, for reasonable people to disagree. The role of democracy is not to banish disagreement, but rather to prevent political disagreements from devolving into armed conflict….

The real key to freedom is to secure people from tyranny by the majority, or freedom from democracy. The problem, then, is what Fareed Zakaria has called “illiberal democracy.” The metaphor we use to understand ourselves matters, because it figures in how we try to advise others.

For much of modern history, what characterized governments in Europe and North America, and differentiated them from those around the world, was not democracy but constitutional liberalism. The “Western model of government” is best symbolized not by the mass plebiscite but the impartial judge. (Fareed Zakaria, The Future of Freedom, p. 20.)

The framers of the U.S. Constitution fully recognized that there is nothing, nothing at all, inherent in democracy that ensures the freedom of persons or property.

But because we have undone the work of the Framers, as I shall come to, we have descended to tyranny by the majority, where the majority is a loose but potent coalition of interest- and belief-groups bent on imposing its aims on everyone.

Unchecked democracy undermines liberty and its blessings. Unchecked democracy imposes on everyone the mistakes and mistaken beliefs of the controlling faction. It defeats learning. It undoes the social fabric that underlies civility. It defeats the sublime rationality of free markets, which enable independent individuals to benefit each other through the pursuit of self-interest. As “anonymous” says, with brutal accuracy, “Democracy is two wolves and a lamb voting on lunch.”

The Broken Promise

Where We Began

The Framers understood human nature as a natural enemy of liberty. That is why they strove to check the passions of the mob and the power of government. As Madison wrote in The Federalist Papers: No. 51:

In order to lay a due foundation for that separate and distinct exercise of the different powers of government, which to a certain extent is admitted on all hands to be essential to the preservation of liberty, it is evident that each department should have a will of its own….

Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself….

In republican government, the legislative authority necessarily predominates. The remedy for this inconveniency is to divide the legislature into different branches; and to render them, by different modes of election and different principles of action, as little connected with each other as the nature of their common functions and their common dependence on the society will admit….

There are, moreover, two considerations particularly applicable to the federal system of America, which place that system in a very interesting point of view. First. In a single republic, all the power surrendered by the people is submitted to the administration of a single government; and the usurpations are guarded against by a division of the government into distinct and separate departments. In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself. Second. It is of great importance in a republic not only to guard the society against the oppression of its rulers, but to guard one part of the society against the injustice of the other part. Different interests necessarily exist in different classes of citizens. If a majority be united by a common interest, the rights of the minority will be insecure.

There are but two methods of providing against this evil….The second method will be exemplified in the federal republic of the United States. Whilst all authority in it will be derived from and dependent on the society, the society itself will be broken into so many parts, interests, and classes of citizens, that the rights of individuals, or of the minority, will be in little danger from interested combinations of the majority.

But a not-so-funny thing happened on the way to the state of liberty foreseen by Madison and the other Framers: Human nature has overcome constitutional obstacles. The governed and their governors — locked in a symbiotic relationship that is built on a mistrustful worldview, economic illiteracy, and baser instincts — have conspired to undermine the Constitution’s checks and balances. People, given their mistrustful and ignorant nature, have turned to government for “solutions” to their “problems.” Government, in its turn, has seized whatever power is necessary to go through the motions of providing “solutions.” For rare is the legislator who doesn’t want to legislate, the executive who doesn’t want to act, and the judge who doesn’t want to exercise his judgment by interpreting the law rather than simply apply it.*

Where We Have Ended — In Summary

The upshot is what I have called “The Erosion of the Constitutional Contract.” It would be more accurate to say “the torture of the constitutional contract,” which is now a twisted version of the Constitution that was crafted to perfect the promise of liberty given in the Declaration of Independence.

Judge Douglas Ginsburg calls it the “Constitution-in-exile,” referring to those parts of the Constitution that have been either ignored or twisted out of all recognition. He includes in that phrase the neglected doctrine of nondelegation, which bars the assignment of legislative power to executive agencies,

along with the doctrines of enumerated powers, unconstitutional conditions, and substantive due process, and their textual cousins, the Necessary and Proper, Contracts, Takings, and Commerce Clauses. The memory of these ancient exiles, banished for standing in opposition to unlimited government, is kept alive by a few scholars who labor on in the hope of a restoration, a second coming of the Constitution of liberty — even if perhaps not in their own lifetimes.

Professor Randy Barnett, in his recent book, Restoring the Lost Constitution: The Presumption of Liberty, has more to say. Here’s a summary of some key points, courtesy of Wikipedia:

Over the years, the Constitution’s original meaning has been slowly eviscerated.

The necessary and proper clause has been read to allow Congress to do whatever they find convenient for exercising their enumerated powers, starting with the creation of a federal bank in McCullough vs. Maryland (1819).

The privileges and immunities clause has been interpreted as meaningless redundancy, starting with allowing Louisiana to create a slaughterhouse monopoly in The Slaughterhouse Cases (1873).

Violating the Ninth Amendment has become Supreme Court policy, starting with the famous footnote four of United States v. Carolene Products Co. (1938), which held that only rights listed in the first ten amendments could be protected by the courts. (Carolene Products itself ruled that Congress could prohibit entire forms of milk.)

The Tenth Amendment has been made meaningless, now that Congress has the power to do almost anything.

The Commerce Clause has been interpreted as allowing Congress to regulate practically anything, starting with meatpackers in Swift v. United States (1905) and going all the way to country clubs in Heart of Atlanta Motel v. United States (1964). (The unchecked expansion finally ended when the Court drew the line at carrying a gun in United States v. Lopez (1995), but even this was heavily contentious.)

The police power of the states has been ruled as having no limit.

The Second Amendment has simply been ignored.

The Fifth Amendment‘s takings clause has been neutered by reading “public use” as “public purpose”.

Where We Have Ended — In Detail

Several years ago, my own reading (before Barnett’s book was published) led me to similar conclusions, which I had published as “The Erosion of the Constitutional Contract” in a pre-blog version of Liberty Corner. I began with the nature of the Constitution itself. It is — or was meant to be — a contract between the States, acting on behalf of their citizens. In that contract, the States cede certain powers to a government of the “united States,” which is a creature of the States. Thus, for example, in Section 10 of Article I, the States voluntarily deny themselves certain powers that in Section 9 they vest in Congress — creation of money, regulation of trade among the States and between the States and other nations, conduct of foreign relations, and conduct of war.

The Preamble lists the States’ reasons for entering into the constitutional contract, which are “…to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity….” These are ends desired, not outcomes promised.

To further these ends, the Constitution establishes a government of the united States, and authorizes it to enact, execute, and adjudicate laws within a delimited sphere of authority. The Constitution not only delimits the federal government’s authority but also diffuses it by dividing it among the federal government’s legislative, executive, and judicial branches.

The Framers knew what we are now only re-learning: A government is a power-hungry beast — even a representative government. More power in the hands of government means less power for individuals. Individuals are better off when they control their own lives than when government, directly or indirectly, controls their lives for them.

Thus the limited scope of the constitutional contract provides for:

• primacy of the federal Constitution and of constitutional laws over those of the States (This primacy applies only within the limited sphere of authority that the Constitution grants to the federal government. The federal government is not, and was not intended to be, a national government that supersedes the States.)

• collective obligations of the States, as the united States, and individual obligations of the States to each other

• structure of the federal government — the three branches, elections and appointments to their offices, and basic legislative procedures

• powers of the three branches

• division of powers between the States and federal government

• rights and privileges of citizens

• a process for amending the Constitution.

The principles embodied in the details of the contract are few and simple:

• The Constitution and constitutional laws are the supreme law of the land, within the clearly delimited scope of the Constitution.

• The federal government has no powers other than those provided for by the Constitution.

• The rights of citizens include not only those rights specified in the Constitution but also any unspecified rights that do not conflict with powers expressly granted the federal government or reserved by the States in the creation of the federal government.

The Constitution may be the “supreme law of the land” (Article VI), but as the ardent federalist Alexander Hamilton explained, the Constitution “expressly confines this supremacy to laws made pursuant to the Constitution.” (From The Federalist Papers: No. 33.)

Thus the authority of the federal government — the government formed by the united States — enables the States to pursue common objectives. But that authority is limited so that it does not usurp the authority of States or the rights of citizens.

Moreover, the “checks and balances” in the Constitution limit the federal government’s ability to act, even within its sphere of authority. In the legislative branch neither the House of Representatives nor the Senate can pass a law unilaterally. In his sole constitutional role — as head of the executive branch — the President of the United States must, with specified exceptions, sign acts of Congress before they become law, and may veto acts of Congress — which may, in turn, override his vetoes. From its position atop the judicial branch, the Supreme Court is supposed to decide cases “arising under” (within the scope of) the Constitution, not to change the Constitution without benefit of convention or amendment.

The Constitution itself defines the sphere of authority of the federal government and balances that authority against the authority of the States and the rights of citizens. Although the Constitution specifies certain powers of the federal executive and judiciary (e.g., commanding the armed forces and judging cases arising under the Constitution), federal power rests squarely and solely upon the legislative authority of Congress, as defined in Article I, Sections 8, 9, and 10. The intentionally limited scope of federal authority is underscored by Amendments IX and X.

The myriad statutes and regulations through which the federal government has seized the powers and rights of States and citizens are, to put it plainly, unconstitutional. Such statutes and regulations rest on constitutionally weak foundations; for example:

• the phrase “promote the general welfare” in the Preamble. This was a desired result of the adoption of the Constitution, not an edict to redistribute income and wealth.

• the power of Congress “to regulate commerce…among the several states [Article I, Section 8].” This power was meant to prevent the States from restricting or distorting the terms of trade across their borders, not to enable the federal government to dictate what is traded, how it is made, or how businesses operate.

• the authority of Congress “[t]o make all Laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any department or officer thereof [Article I, Section 8].” The words “necessary and proper” have been wrenched out of their context and used to turn the meaning of this clause upside down. It was meant to limit Congress to the enactment of constitutional legislation, not to give it unlimited legislative authority.

• the “equal protection” clause of Amendment XIV: “…nor shall any State…deny to any person within its jurisdiction the equal protection of the laws.” Amendment XIV was meant to secure the legal equality of those former slaves whose freedom had been secured by Amendment XIII. Amendment XIV became, instead, the basis for Supreme Court decisions and federal laws and regulations that have given special “rights” to specific, “protected” groups by curtailing the constitutional rights of the many who cannot claim affiliation with one or another of the “protected” groups.** As the proponents of such groups might ask, is it fair?

The authors of the Declaration of Independence, were they writing it today, would be able to list “a long train of abuses and usurpations” by the federal government against the States and the people. Their list would rightly include these charges, once levelled against the British monarch:

…erected a multitude of new offices, and sent hither swarms of officers to harrass our people and eat out their substance….

…combined with others to subject us to a jurisdiction foreign to our Constitution and unacknowledged by our laws….

…[took] away our [State] charters…and alter[ed] fundamentally the forms of our governments….

That should be enough to convince anyone that the Constitution’s promise of liberty has been broken and ground into little pieces. Go here, here, here, here, and here if you want more.

Conclusion

As discussed in Part IV and its addendum, not only are economic and personal liberty indivisible, but liberty itself is indivisible. We have to accept the bad outcomes that flow from liberty alongside the good ones. Liberty is an all-or-nothing proposition, which makes it a daunting one. It seems easier to give up a bit of liberty for this or that perceived benefit. In a democracy is all too easy to demand — and receive — a benefit to match the benefits enjoyed by others. The problem is that the (illusory) benefits are all too visible, whereas the (immense) costs are diffuse and hidden.

In brief, liberty has been vanquished in the mistaken belief (or hope) that government can effectively and efficiently make us better off, salve our woes, and put an end to social and racial divisions. To those ends, the governed and their governors, walking hand in hand, have taken liberty for a stroll down a slippery slope. Every step they have taken down that slope has made more problematic our journey back up the slope.
__________
* As Judge Douglas Ginsburg explains:

[Chief Justice John] Marshall’’s reasoning [in Marbury v. Madison], however well-accepted, is not without its difficulties. He wrote:

Certainly, all those who have framed written constitutions contemplate them as forming the fundamental and paramount law of the nation, and consequently, the theory of every such government must be, that an act of the legislature,
repugnant to the constitution, is void.

This theory, which Marshall later described as ‘‘essentially attached to a written constitution,’’ avoids neatly the question who decides whether a law is indeed repugnant to the Constitution. That said, judicial review is with us still, and Marbury v. Madison is a foundation-stone of our legal system, built as it is upon a written constitution. And Chief Justice Marshall’s observations about the reason for enacting a written constitution are of great relevance to our topic:

That the people have an original right to establish, for their future government, such principles as, in their opinion, shall most conduce to their own happiness, is the basis on which the whole American fabric has been erected. . . . The powers of the legislature are defined and limited; and that those limits may not be mistaken or forgotten, the constitution is written.

A written constitution is not without its arguable disadvantages. Indeed, the virtues of such a document—its immutability, its constraint upon government action—could become drawbacks when rapid action is necessary or desirable. Moreover, a written Constitution imposes upon judges the difficult task of interpreting and applying the text to circumstances that could not have been imagined by the Framers. What role for the First Amendment in regulating the airwaves? Is using thermal imaging technology to penetrate the walls of a home a ‘‘search’’? That these questions are difficult, however, does not mean we should give them short shrift and capitulate to those who either do not conceive or care not to apprehend how the constraints of a written Constitution protect our liberty.

Regardless whether one prefers the constrained government bequeathed by the Framers or an activist, more freewheeling government like that of the contemporary United Kingdom, there can be no question about what our Constitution established. It is a written document. It carefully enumerates and circumscribes the powers and duties of each branch of the national government, of the national government in relation to the states, and of both with respect to individuals. And because that is what we have, and what federal judges swear to uphold and defend, we ought to be faithful to it and, as we are sworn to do, decide cases ‘‘agreeably to the Constitution and laws of the United States,’’ and thus preserve the advantages of having a written constitution.

To be faithful to our written Constitution, a jurist must recognize and respect the limiting nature of its terms. Granted, what a term such as ‘‘due process’’ requires in a particular circumstance is not always clear. Nevertheless, there should be no question at all about whether a 34-year-old or a naturalized citizen may become President of the United States. That the terms giving rise to most questions of constitutional meaning lie somewhere between inherent ambiguity and mathematical certainty is no excuse from the duty of fidelity to the text. Rather, to be faithful to the written Constitution a jurist must make it his goal to illuminate the meaning of the text as the Framers understood it. To be sure, there will be disagreements even among principled jurists whose only goal is fidelity to the text, but with the aid of historical sources such disagreements will be confined to the ordinarily narrow and determinate zone within which competing constructions of a word or phrase are reasonable.

Through most of the history of the Republic, judges were faithful in their subservience to the text of the Constitution….

Despite sporadic departures like Dred Scott, respect for the text of the Constitution was the norm from Marbury through the first third of the twentieth century. But the Great Depression and the determination of the Roosevelt Administration placed the Supreme Court’s commitment to the Constitution as written under severe stress in the 1930s, and it was then that the wheels began to come off….

Not only structural constraints in the written Constitution have been disregarded; even precepts within the Bill of Rights have been blinked away. The Takings Clause of the Fifth Amendment, which provides that the Government may not take private property except for a public use, and then only if it pays just compensation, provides no protection against a regulation that deprives the nominal owner of most of the economic value of his property.

At the same time that the Court redacted the textual limits upon the authority of the Congress to regulate, it has interlineated the Constitution with new rights, which is to say new limits upon government, of its own devising. In so doing, the Court acts as a council of revision with a self-determined mandate. Its decisions are frankly legislative in character: invalidating acts of the national and state legislatures on grounds that are not to be found in the Constitution, and on its own initiative placing new obligations upon the federal and state governments. However one might approve of the Court’s decisions as matters of policy, they have only the merest pretense of comporting with the Constitution as it was written….

The question remains whether this freewheeling style of constitutional decisionmaking, in which the document itself plays only a cameo role, is to be a permanent feature of constitutional law, or whether we can regain the virtues of a written constitution. If history is any guide, then reform is not likely to spring from any branch of the federal government.

** What about discrimination? Yes, there are many kinds of discrimination: racial, sexual, political, intellectual, class-based, appearance-based, and on and on. Discrimination of one kind or another is an inescapable part of life.

Where should government draw the line in its effort to remedy the effects of discrimination? Is it damaging to liberty if a prevailing social sentiment (e.g., racial bias) results in harm (e.g., a refusal on the part of whites to trade with blacks), even when the harm flows from voluntary behavior and not from force? Well, the harm flows both ways; the biased pay a price for their bias, as did white business-owners who refused the patronage of blacks. As I wrote here:

I conclude that the state has no business telling its citizens how they may or may not carry their racial attitudes into the conduct of their affairs, as long as that conduct is passive — that is, as long as it takes such forms as not buying from, hiring, or otherwise associating with members of certain groups. I say that not out of bigotry — I long ago outgrew the attitudes of my native State — but because we have gone far beyond the abolition of slavery and the granting of equal civil rights. We have practically repudiated freedom of association, we have severely undermined property rights, and — more lately with speech codes and hate-crime laws — we have entered an early stage of thought policing.

Is that “hard” or “uncompassionate”? I think not. Most of us are born with or acquire a “handicap” of some kind: shortness, weakness, poor eyesight, obesity, unattractive features, below-average intelligence, below-average family income (though that is no longer the same thing as poverty). The only thing government can do — other than to abolish slavery and grant equal civil rights — is to get out of the way. Governmental efforts to erase the effects of certain genetic and social “handicaps” through reverse discrimination have several untoward effects:

• The beneficiaries of reverse discrimination tend not to benefit fully, if at all, from their special treatment because they are resented and depreciated by others.

• The beneficiaries of reverse discrimination must eventually make it on their own, a task that is made more difficult because they have been sheltered from many of the kinds of learning and toughening experiences that are essential to social and economic advancement.

• Reverse discrimination exacts huge hidden costs, as I have explained here, here, and here, for the case of affirmative action.

I ended Part VI by saying that

liberty has been vanquished in the mistaken belief (or hope) that government can effectively and efficiently make us better off, salve our woes, and put an end to social and racial divisions. To those ends, the governed and their governors, walking hand in hand, have taken liberty for a stroll down a slippery slope. Every step they have taken down that slope has made more problematic our journey back up the slope.

Is it possible to journey back up the slope — even part of the way — toward something resembling liberty? And if so, by what route?

The Options, in Brief

Rebellion: The central government has more than enough power at its disposal to snuff out anything that smacks of rebellion. Most State governments, as presently constituted, would join the central government. The Spirit of ’76 died at Appomattox Court House.

Secession: Secession is as unlikely as rebellion, for the same reasons. The idea of “taking over” a State, propounded by the Free State Project, seems to be going nowhere. And what’s the good of taking over a State when the central government already has usurped most of the powers of the States and many of the liberties of their citizens?

Nullification: The nullification of unconstitutional federal statutes by the States has been proposed by no less than Jefferson and Madison and tried by South Carolina. But the idea is as doomed as rebellion and secession. Anyway, nullification is a recipe for legal chaos. If there is to be any kind of federal government — as there must be, for the common defense and a few other things — there must be a binding set of federal laws.

Jurisdiction stripping or departmentalism: Removing power from the courts or defying the courts would be good solutions if the courts were the only problem. But jurisdiction stripping and departmentalism, to the extent that they’re constitutionally valid, leave us defenseless against legislative and executive fiat. That is why I reluctantly subscribe to the doctrine of judicial supremacy. (See here, here, here, and here.) In fact, I will argue here that the reconstitution of liberty in America depends on the reinstitution of pro-libertarian federalism through the Supreme Court.

Federalism: The Supreme Court could help the cause of liberty by going beyond the Rehnquist Court’s rather halting steps toward federalism, that is, the devolution of power and rights to the States and the people, in accordance with the Constitution’s original meaning. But for federalism to succeed, the president must nominate the right judges, the Senate must confirm them, and the Supreme Court must roll back 70 years of unconstitutional legislation and judicial usurpation.

At this moment in history, federalism seems the most promising option because the Left is now beginning to understand that the power of the federal government may be used not only to advance its agenda but also to thwart that agenda. Leftists, like conservatives and pragmatic libertarians, may be willing to settle for a “good” solution rather than hold out for the “best” of all possible worlds. But, as I will explain, the way to federalism isn’t through a collaboration between Left and Right.

The Left Discovers Federalism

The Left’s new respect for federalism arises from its petulant reaction to Bush’s re-election. Just after the presidential election of 2004, Jesse Walker, writing at Tech Central Station, noted that

a series of satiric proposals for blue-state secession have been floating around the Internet. Here’s an idea for liberals looking for a more realistic political project: Team up with some hard-core conservatives and make a push for states’ rights and local autonomy. If you have to get the government involved in everything under the sun, do it on a level where you’ll have more of a popular consensus. Aim for a world where it won’t matter what Washington has to say about who can marry who and whether they can smoke after sodomy.

Pejman Yousefzadeh, writing at Tech Central Station a few weeks later, produced a roundup of post-election reaction from the Left, in which he noted that

secession is being openly talked about as an option — with this geographic arrangement being one of the more popular ones in quasi-serious secessionist corners.

(I especially like the idea of Blue-State secession, though its proponents should check out Texas v. White.)

Fantasies about secession then morphed into a discovery — by the Left — of the merits of federalism. Consider a post-election post by publius at Legal Fiction (a regressive blog), which includes these tidbits (with my comments in bolded brackets):

From the New Deal on, the courts allowed the legislature to have the final say-so on whether a given law was related to interstate commerce. Maybe the legislature was right, maybe it was wrong – but it was the final arbiter. In the 1990s, the Rehnquist Court (for the first time in over half a century) [unthinkable!] found that a congressionally enacted law did not relate to interstate commerce and was therefore unconstitutional. [Imagine that!] The Court ruled that the law was outside the Article I enumerated powers in a case called Lopez and later in a case called Morrison….

But here’s what was really going on. Lopez and Morrison were less about enumerated powers and more about increasing the power of the judiciary…. [Actually it was about exercising the judiciary’s constitutional power. See below.]

So here’s what’s coming – and this will be the “first front” against the New Deal’s legislatively-enacted regulatory state. [That’s an almost-accurate description, but don’t forget the judiciary’s acquiescence.] If Republicans keep appointing judges, the number of laws found to be outside of the commerce power and Article I will grow. [One hopes.] In the beginning, they will be politically appealing decisions such as striking down federal laws banning medicinal marijuana. [You wish!] But with the principle firmly established, the courts will move on to bigger game. Though I doubt any of them will have the guts [a Republicans-are-racists slur] to declare the Civil Rights Act unconstitutional (it was enacted under the commerce power), they could very well strike down the entire environmental regulatory regime. Jeffrey Rosen (via Kevin Drum) recently wrote an excellent article that outlined just how much the administrative state could be threatened.

In short, the greatest danger from a Bush Court is not the overruling of Roe v. Wade but the overruling of the post-New Deal regulatory state.

That’s 100% correct. Rosen also makes the astute observation that, just like in the political sphere, conservatives scream about social issues like abortion to distract Americans from the economic consequences of approving Republican judges. But Rosen misses an essential point. Things like the EPA and the Endangered Species Act and anti-discrimination laws and workplace protections were all legislatively approved by democratic majorities. [So what, if they aren’t constitutional?] Conservatives cannot get a political majority to overturn the Clean Air Act, so they’re systematically stocking the judiciary with judges who will. It’s exactly what Bork was talking about, except that the judges are thwarting the political process in the economic and regulatory arena as opposed to the social arena. You can see how it works – Lopez and Morrison shift the power to the judiciary to be the final arbiters. [No, the Constitution does that.] Once that principle is established, GOP judges will start using that power to strike down the regulatory state. [Right on!]

So that’s the first front of the battle-to-come. The second front is a revival of Lochner. This is less likely, but as I explained earlier this week, Lochner revivals are stirring. For non-lawyers, just remember what I said yesterday. The Constitution is an obstacle course of sorts. If a law gets through the Article I obstacles, it must then not violate any other part of the Constitution. What a new Lochner would do would be to establish a new obstacle in the form of a “right to economic freedom” that could not be unreasonably infringed upon.

Here’s how this would work. Currently, if you argue that a given law violates your economic freedom (or economic due process rights or equal protection rights), it is reviewed under a “rational basis” test. That’s legalese for “anything goes.” The big point here is that, since the New Deal, courts have decided that the legislature (and not judges) should have the final say-so on the wisdom of an economic law or regulation. [As if the New Deal supplanted the Constitution.]

A new Lochner (or even a new watered-down version of Lochner) would increase the “scrutiny” applied to economic regulations. [Actually, Lochner is bad law; the same result can and should be achieved through the contracts clause, as I explain here.] More regulations would be struck down on the grounds that they infringe upon people’s economic freedoms. [True.] But the big point, once again, is that such a move would shift power from the legislature to the judiciary. Judges, and not legislatures, would be the final arbiter of what economic laws are acceptable…. [True, and proper, according to the Constitution.]

If this happened, judges would be thwarting the [unconstitutional] will of the democratic majorities in order to enact their own minority political preferences [actually, their preference for constitutional laws].

If this is all too confusing, here’s the big point. Much of the conservative judiciary has adopted a judicial philosophy that is strikingly anti-democratic [read, anti-socialist and pro-constitutional] in the economic sphere. This philosophy – if enacted – would shift the power to judge economic regulations from the legislature to the judiciary….[What a novel concept: The power to judge would reside in the judiciary. And it would be the power to judge the legislation that authorizes regulations, as well as the conformity of regulations to legislation.]

It’s clear that publius is antagonistic to the idea of judicial supremacy — even though, within the confines of the three branches of the federal government — the judiciary necessarily has the last word in most instances. Moreover, it’s clear that publius believes that the power of Congress should not be limited to those powers enumerated in the Constitution — even though that is plainly what the Framers intended. (See here, here, here, here, and here, for example.)

Given publius‘s leanings I am especially heartened by his forebodings as to the demise of the national regulatory-welfare state. If a conservative or libertarian were predicting that demise, I would say that he was smoking a controlled substance (though that wouldn’t bother me). But publius‘s prediction fills me with hope because it comes from the keyboard of someone who clearly begrudges it.

The Left’s alternative to the national regulatory-welfare state is — drum roll — the devolution of power to the States (but not to the people, of course). Here’s Jonah Goldberg, writing at NRO in December:

Federalism! It’s not just for conservatives anymore! That’s right. All of a sudden, liberals have discovered federalism and states’ rights. I discovered this while listening to a recent episode of NPR’s Talk of the Nation, in which host Neal Conan and various callers discussed the idea as if some lab had just invented it….It’s not surprising that liberals would suddenly be interested in federalism, given that a sizable fraction of them think George Bush is an evangelical mullah, determined to convert America to his brand of Christianity. As conservatives have known for decades, federalism is the defense against an offensive federal government….

The problem with the last half-century of public policy is that liberals have abused the moral stature of the civil rights struggle to use the federal government to impose their worldview — not just on racial issues but on any old issue they pleased. But now, all of a sudden, because they can’t have their way at the federal level anymore, the incandescently brilliant logic of federalism has become apparent: Liberals in blue states can live like liberals! Wahoo!

The Left’s embrace of federalism may be more than a passing fad. Consider, for example, three articles at Slate (a semi-respectable sounding board for Leftists). In “ The New Blue Federalists,” Richard Thompson Ford, a professor of law at Stanford, notes that “Federalism is not just for conservatives, anymore.” Jack Shafer, Slate’s editor-at-large, writing about “PBS Unplugged,” gives an example of how centralized power now threatens the Left’s agenda:

The new CPB chairman, Republican Kenneth Y. Tomlinson, invokes the “objectivity and balance” clause to demand that PBS abandon what he considers to be its liberal line….

Left-wing activists fear that Tomlinson’s meddling in CPB affairs will result in a media filibuster by the conservative majority. The activists want “the people” and “the local stations” to decide public broadcasting’s future, not top-down partisans….

For the longest time, calling for the defunding of public broadcasting was a Republican pastime. Now that the GOP rules public broadcasters, who will be the first Democrat brave enough to call for the end of PBS and NPR as we know them?

Then there’s what Slate‘s editor, Jacob Weisberg, calls ” Interest Group Conservatism“:

In this, the third year that Republicans have controlled everything, a variation on the old interest-group liberalism has emerged as the new governing philosophy. One might have expected that once in command, conservative politicians would work to further reduce Washington’s power and bury the model of special-interest-driven government expansion for good. But one would have been wrong. Instead, Republicans have gleefully taken possession of the old liberal spoils system and converted it to their own purposes. The result is the curious governing philosophy of interest-group conservatism: the expansion and exploitation of government by people who profess to dislike it….

True, the clients, patrons, and causes are different. Instead of the Children’s Defense Fund pushing to fully fund Head Start, we now have church-affiliated social service agencies lobbying to have faith-based drug treatment funded by HHS. Instead of Sen. Ted Kennedy of Massachusetts promoting a hate-crimes bill endorsed by the Leadership Conference on Civil Rights, it’s Sen. Wayne Allard of Colorado introducing a constitutional amendment to ban gay marriage on behalf of James Dobson’s Focus on the Family. Instead of the Environmental Protection Agency proposing higher air-quality standards, it’s the Federal Communications Commission levying fines and threatening broadcast licenses on the basis of profanity and indecency.

The Left simply thought that it would hold the reins of power indefinitely, and so it gave little heed to the possibility that the power it vested in the national government would be used against the Leftist agenda.

The Left’s Conception of Federalism

The Left may now wish for federalism, but in a decidedly anti-libertarian form. Consider “Reclaiming Federalism” (Dissent, Spring 2005), by by Prof. David J. Barron of Harvard Law School (emphasis added by me):

What would a progressive federalism look like? It might well be a mirror image of Rehnquist Federalism. It would give states and local governments much greater room to regulate the private market. This would check national and multinational business influence as Louis Brandeis and earlier progressives once imagined. It would also give the national government much more power to regulate nonmarket social relations. This would give Congress the power to protect basic Fourteenth Amendment rights.

To expand the ability of states and local governments to regulate private business, progressive federalism would permit federal statutes to trump state regulations only when they were in clear conflict. In other words, states would get the benefit of the doubt in this area. A progressive federalism would also interpret the Takings Clause to give more deference to local efforts to make developers assume the costs of their development. And rather than characterizing state and local regulations as protectionist or as obstructive of the national market, as the Court often does in its Dormant Commerce Clause decisions, progressive federalism would permit sensible attempts by state and local governments to protect their communities from the harsh and dislocating effects of larger economic forces.

But progressive federalism would do more than free states from the limits imposed by Rehnquist Federalism. It would promote a different view of Congress’s enumerated powers. It would reinforce Congress’s Fourteenth Amendment power to “enforce” basic constitutional rights and thereby protect the prerogatives of national citizenship from threats posed by local prejudices. Among the highest priorities of progressive federalism would be to reverse the Rehnquist Court’s unwarranted curtailing of this vital power….

Progressives for too long have been strikingly unimaginative when it comes to federalism. They speak only in a national key. But it is clear that their faith in unlimited national authority was the contingent product of liberal control of national institutions. Circumstances have changed. We should now look at the Constitution’s federalism with fresh eyes. Doing so would cast some much needed doubt on the stereotype that progressives love big government….

So, the next time you read a progressive trashing of the Rehnquist Court, resist the impulse to applaud the national government as our sole hope and savior. Federalism is what we make of it. Rehnquist and his conservative colleagues have been making the most of it for more than a decade. It’s time for progressives to do the same.

The stereotype that Barron seeks to disclaim is all too true. The Left does loves big government, that is, all-powerful government. But the Left knows that big government needn’t reside in Washington if it can reside in Statehouses and city halls.

Toward Pro-Libertarian Federalism

The Left’s vision of federalism is to devolve the central government’s acquired anti-libertarian powers to somewhat less remote commissars at the State and local level. The Left simply isn’t to be trusted as a partner in the shaping of a new federalism. A pro-libertarian federalism would not only limit the power of the central government but would also limit the power of State and local governments to advance the Left’s anti-libertarian agenda.

The only way to advance pro-libertarian federalism is to ensure that the Left neither controls the central government nor has little influence over its policies. This is especially true of the Supreme Court. For the surest way to return to a form of federalism that, in the main, advances liberty and prosperity is through Supreme Court rulings of the kind so feared by publius and his ilk: “the overruling of the post-New Deal regulatory state.”

Something resembling pro-libertarian federalism will come about only if a Republican president, aided by a strongly Republican Senate, is able to stock the courts with judges who are committed to the restraint of government power — at all levels of government. (Janice Rogers Brown is that kind of judge.)

Certainly not all decisions by all Republican appointees to the bench will satisfy all libertarians, many of whom seem to focus on narrowly tailored “rights,” such as abortion and gay marriage (both of which are in fact threats to liberty, as I argue here and here). But by siding with the Left on such issues, libertarians effectively abjure more basic rights — rights that broadly affect the ability of most Americans to pursue happiness — such as freedom of speech, freedom of association, and freedom of contract.

In the real world there are real choices. The real choice for libertarians is between what seems “best” for a few and what is actually “better” for the many. I choose the latter, without hesitation.

Pro-libertarian federalism is the best practical way to redeem the promise of liberty. The surest route to pro-libertarian federalism, it seems to me, can be found in an alliance with the Republican Party. The GOP may not be reliably anti-statist, but it is less statist than the Left. And it is more likely to defend our basic rights — in the courts, in the streets, and in foreign fields.

This post consists of extracts of my series, “Practical Libertarianism for Americans.” I have smoothed and revised the original text for the sake of continuity and clarity. I have necessarily omitted many supporting details and links to sources, which can be found in the original posts. Each of the main section headings below links to a corresponding part of the series; this outline provides links to all parts of the series, including several addenda.

INTRODUCTION

My focus is on American libertarianism because the Constitution of the United States of America holds the promise of liberty. Building on that promise, Americans can strive to perfect liberty in the United States. But the rest of the world isn’t bound by our Constitution, and it is foolish to think that the rest of the world prizes America’s liberty. America’s sovereignty and strength is the shield of America’s liberty, imperfect as it may be.

What is libertarianism, and why should you embrace it? Here is a formal definition of libertarianism, which has disappeared from Wikipedia:

Libertarianism is a political philosophy which advocates individual rights and a limited government. Libertarians believe that individuals should be free to do anything they want, so long as they do not infringe upon what they believe to be the equal rights of others. In this respect they agree with many other modern political ideologies. The difference arises from the definition of “rights”. For libertarians, there are no “positive rights” (such as to food, shelter, or health care), only “negative rights” (such as to not be assaulted, abused or robbed). Libertarians further believe that the only legitimate use of force, whether public or private, is to protect these rights.

Here’s my rendition:

If you are doing no harm to anyone, no one should harm you physically, coerce you, defraud or deceive you, steal from you, or tell you how to live your life. “No one” includes government, except to the extent that government is empowered — by the people — to defend life, liberty, and property through the circumscribed use of police, courts, and armed forces.

There are varieties of libertarianism. (See this excellent post for a legal theorist’s take.) In this post I’ll explain the variety I prefer, why I prefer it, and why you should prefer it. But what matters, in the end, is not so much the variety you prefer as whether you believe that life would be better with a much smaller, far less intrusive, and far less costly government — one that’s focused on defending your liberty. America could fulfill the Constitution’s promise of liberty if enough of us believed that.

KEY CONCEPTS

A Right

I will use this definition, from Wikipedia:

At its most fundamental, a right is a claim, on other persons, that is acknowledged and reciprocated among the principals associated with that claim. The most basic of rights is a principle of interaction between people which amounts to the simplest version of the Golden Rule (do unto others as you would have them do unto you). In other words, it is a mutually beneficial agreement between two or more people; each of them agrees to behave in a certain way towards the others so that they will behave in the same way towards him/her.

Liberty

The core of libertarianism is liberty: briefly, the negative right to be left alone — in one’s person, pursuits, and property — as long as one leaves others alone. I am using “liberty” here to encompass what the Founders intended by “life, liberty, and the pursuit of happiness” in the Declaration of Independence. But in the libertarian ideal — unlike the world of the Founders — the right of liberty is an equal right, one that should be enjoyed by all persons.

I will leave aside, for the moment, the basis of liberty; that is, whether it is innate in human beings (akin to Original Sin), or a primordial “instinct” that has been honed through eons of conflict resolution, or a desideratum that humans sometimes strive to attain through politics and warfare.

I will say here that libertarians do not believe that liberty is somehow a gift of the state, though something like liberty may be secured through the creation of a state — as in the American experience.

A person living in liberty receives nothing from others by compulsion. The only legitimate role for the state is to protect peaceful, honest citizens from predators, both foreign and domestic.

Privilege

A privilege, by contrast to liberty, is a positive right, that is, a grant of special (unequal) treatment. As Wikipedia puts it (in the context of defining rights):

Other than [the reciprocal behavior exemplified by the Golden Rule], an entity (person or group) can make any sort of claim on other persons, but those claims remain simple assertions until the other persons acknowledge that claim as binding upon them. At that point, the claim becomes a privilege (a one-sided acknowledged claim). If all parties (including the originating claimant) also agree to reciprocate acknowledgement of such a claim, it becomes applicable to all, that is, applicable to everyone in the same sense and at the same time, and thus a right.

A small, bonded group of persons (e.g., a band of hunter-gatherers) may consent mutually to the acceptance of a privilege as a right, if all stand to benefit from the privilege (e.g., sharing of food in the event of drought). But such conditions are inconceivable for the United States (or for almost any political entity within the United States), where laws made by a bare majority of a relatively small legislative body, a few members of a regulatory body, or a court can be enforced by the coercive power of government.

Law-made privileges result in the diminution of income and wealth — in vast amounts, as I will show.

Freedom of Action

“Freedom” is often used as a synonym for “liberty.” In practice, freedom usually means freedom of action, which includes the freedom to choose from among many options. The definition of freedom in Wikipedia includes this example:

Economic freedom means having more choices due to being wealthy or having more economic choices and not being subject to very many natural or institutional constraints….

Economic freedom, in that context, means freedom of action, which may very well arise from privilege, not liberty. I will not use “freedom” as a synonym for “liberty.”

THE ORIGIN AND ESSENCE OF RIGHTS

Where do rights come from? And are liberty rights the only rights?

This is where I where I enter a debate that splits libertarianism into two main camps, which I call the fundamentalists and the consequentialists. Fundamentalist (or “natural rights“) libertarians say that humans inherently possess the right of liberty. Consequentialists say that humans ought to enjoy liberty because, through liberty, humans are happier and more prosperous than they would be in its absence. (For more about this debate, read the online symposium, The Transformation of Libertarianism?.)

I stand with the consequentialists. Fundamentalist libertarianism reduces liberty to a matter of faith. If libertarianism cannot stand on more than faith, what makes it any better than, say, socialism or the divine right of kings?

The virtue of libertarianism is not that it must be taken on faith but that, in practice, it yields superior consequences (as I will show in the next main section). Superior consequences for whom, you may ask. And I will answer: for all but those who don’t wish to play by the rules of libertarianism, that is, for all but predators and parasites.

My Hypothesis

Fundamentalist libertarians argue that the only right is liberty, and that it is a natural right with which human beings are endowed a priori. In one rendition, liberty is immanent — something that simply is in human nature, perhaps as a gift from God. In another rendition, humans are endowed with liberty as a logical necessity, because humans own themselves.

But appeals to immanence and self-ownership are no more meaningful than appeals to faith. Such appeals fail because they take liberty as a first principle. Liberty, which is a condition of existence, cannot be a first principle, it can only serve the first principle of existence, which is self-interest.

The appeal to liberty as a first principle is unconvincing, except to those who already want to believe in the immanence of liberty because they understand that liberty serves their self-interest. A belief in the immanence of liberty — whether it is God-given or simply axiomatic — is a skyhook: “a materially unsupported (and thus implausible) entity or process.”

The concept of self-ownership as the basis of liberty is simply another skyhook. Yes, “I” am “me” and not “you,” but what gives me the right to be left alone by you, without sharing your burdens? Where does my self-ownership come from? Who or what imprinted it on me? And there we are again, searching for a skyhook.

Rights — though they can exist without the sanction of government and the protection of a state — are political. That is, although rights may arise from human nature, they have no essence until they are recognized through interpersonal bargaining (politics), in the service of self-interest. It is bargaining that determines whether we recognize only the negative right of liberty, or the positive right of privilege as well. The preference of human beings — revealed over eons of coexistence — is to recognize both liberty (usually constrained to some degree) and privilege (which necessitates constraints on liberty).

The problem for libertarians, therefore, is to convince the body politic of two complementary truths: Self-interest dictates that liberty should be the paramount right. The recognition of privilege as a co-equal right undermines the benefits that flow from liberty.

Humans in the State of Nature

Human instincts — as they have accrued over eons and become “hard wired” — are far from purely libertarian. Consider this (from Denis Dutton’s review of Paul H. Rubin’s Darwinian Politics: The Evolutionary Origin of Freedom):

The scene of evolution is the Environment of Evolutionary Adapted-ness, the EEA, essentially the Pleistocene, the whole, long period lasting from 1.6 million years ago up until the shift to the Holocene with the invention of agriculture and large settlements 10,000 years ago. Our present intellectual constitution was achieved by about 50,000 years ago, or 40,000 before the Holocene….It was in the earlier, much longer period that selective pressures created genetically modern humans….

Rubin’’s summary of the political impulses and preferences of the Pleistocene presents a mixed and contradictory picture. This makes it possible for most political theorists to find inspiration for a favored point of view somewhere in hunter-gatherer psychology. Looking at life in the EEA, fascists and militarists can take heart, and so can Rawlsian egalitarians, Peter Singer socialists, and liberals of either the free-market or welfarist stripe. Still, the big picture for Rubin shows behavioral tendencies that we ignore at our peril. One, for example, is that as practiced in recent U.S. history, affirmative action programs are liable to create social friction and undermine the legitimacy of the state, perhaps outweighing benefits of such programs in the long term….

Before anyone jumps to the conclusion that Rubin is using evolution­ary psychology merely to support his own political predispositions (an antipathy to affirmative action being one of them), we should note what he says about libertarianism. Rubin confesses that libertarianism –— the minimal interference by the state in the life of the individual — appeals to him personally: ““in a libertarian regime, government would define and protect property rights, enforce contracts, and provide true public goods, but would do nothing else.”” That is obviously not what people want, or there would have been more libertarian governments, Rubin says. Libertarianism was not a viable strategy for the EEA. The actions of individuals produce by-products to affect whole communities, and ““we have evolved preferences to control these actions.”” We are genetically predisposed, it seems, ““to interfere in the behavior of others,”” even where the behavior has little demonstrable adverse effect on a community….We are fundamentally meddlesome creatures.

Rubin speculates that this impulse to control our fellows, even in matters that have little or no material effect on living standards or resource allocation, is an adaptation designed to increase group solidarity.

Whatever longings we have for liberty are in competition with our longings for control, among other innate urges that are incompatible with liberty — aggressiveness, avarice, envy, mistrust, and sloth, among our baser instincts.

Is it any wonder, then, that political bargaining has led to the recognition of both privilege and liberty as fundamental rights? We want liberty, but our “dark side” also wants us to control others and extract privileges fom them. Every grant of privilege erodes liberty.

LIBERTY AND ITS PREREQUISITES

Earlier, I defined libertarianism and the liberty right in this way:

The core of libertarianism is liberty: briefly, the negative right to be left alone — in one’s person, pursuits, and property — as long as one leaves others alone. I am using “liberty” here to encompass what the Founders intended by “life, liberty, and the pursuit of happiness” in the Declaration of Independence.

In sum, the liberty right is a triune concept, with life as its basis and the pursuit of happiness (personal satisfaction or self-interest) as its end.

But, as I have just argued, the liberty right is neither innate in humans nor a right that flows exclusively from the evolution of human behavior. It must be fought for, in the political sphere and on the battlefield. To win the political argument for liberty it is necessary to show that it yields superior consequences for all but those who don’t wish to play by the rules of libertarianism; that is, for all but predators and parasites.

In the next two subsections I will sketch the intellectual argument for libertarianism and the political conditions for its success.

The Evolution of Libertarian Thought: The Unification of Economic and Personal Liberty

Libertarianism has evolved beyond the assertion that humans have “certain unalienable rights” because such thinkers as Adam Smith (1723-90), John Stuart Mill (1806-73), and Friedrich A. Hayek (1899-1992) observed the workings of society — in all of its aspects — and told us how liberty serves self-interest

• Smith observed that when we are at liberty to advance our own economic interests we must necessarily advance the economic interests of others.

• Mill instructed us that personal freedoms should be preserved because through them we become more knowledgeable and more capable. Therefore, the state should intervene in our lives only to protect us from actual harm, as opposed to mere offense.

• Hayek made the case that economic and personal liberty are inseparable: We engage in economic activity to serve our personal values, and our personal values are reflected in our economic activity. When the state restricts economic liberty, it necessarily restricts personal liberty, and vice versa. The state, simply cannot make personal and economic decisions more effectively than individuals operating freely within an ever-evolving socio-economic network.

Think of yourself as a business. You are good at producing certain things — as a family member, friend, co-worker, employee, or employer — and you know how to go about producing those things. What you don’t know, you can learn through education, experience, and the voluntary counsel of family, friends, co-workers, and employers. But you are unique — no one but you knows your economic and social preferences. If you are left to your own devices you will make the best decisions about how to run the “business” of getting on with your life. When everyone is similarly empowered, a not-so-miraculous thing happens: As each person gets on with the “business” of his or her own of life, each person tends to make choices that others find congenial. As you reward others with what you produce for them, economically and socially, they reward you in return. If they reward you insufficiently, you can give your “business” to those who will reward you more handsomely. But when government meddles in your affairs — except to protect you from actual harm — it damages the network of voluntary associations upon which you depend in order to run your “business” most beneficially to yourself and others. The state can protect your ability to run the “business” of your life, but once you let it tell you how to run your life, you compromise your ability to make choices that are right for you.

Thus liberty serves self-interest. And it is self-interest that should motivate us to embrace liberty — not a belief in a mystical essence that is somehow innate in humans.

The Prerequisites of Liberty

If only it were as easy to enjoy liberty as it is to explain how it serves self-interest. But the attainment of liberty — or an approximation of it — requires several things of a band, tribe, or nation:

• an agreement among a controlling faction that liberty is the paramount right;

• the willingness and ability of that faction to defend liberty against predators and parasites;

• forbearance from meddling in the economic and social affairs of individuals, except to deter and punish actual harms; and

• replacement of the controlling faction and/or curtailment of its power when it uses that power to subvert liberty.

It is easy to agree to the fundamentalist view that humans ought to enjoy liberty “just because.” After all, there are precious few persons who don’t want liberty for themselves, “just because.” But it is equally easy to abandon the fundamentalist view because of its shallowness; there’s nothing beneath the “just because.” A welfare-state demagogue, by contrast, has at his disposal many plausible, anti-libertarian arguments that appeal to self-interest by purporting show how life will be better (for some, at least) with the adoption of this government program, that form of income redistribution, or yet another regulation.

It is best, therefore, if the commitment to liberty arises from an understanding of consequentialist libertarianism. But the consequentialist view is subtle and non-intuitive. To reap the full benefit of liberty we must be willing to accept “bad” outcomes as well as “good” ones. That is, we must adhere to the principle of liberty and ignore the occasionally unhappy outcome that flows from it.

By what criteria, then, should we decide where to draw the line between governmental action and private action? I propose these principles:

1. Government may not act or condone action (e.g., civil litigation) except when it seeks to deter, prevent, or remedy an actionable harm to liberty.

2. An actionable harm to liberty is one that arises or would arise directly from the commission of a specific act or acts by any person or entity, domestic or foreign. An expression of thought is not an act, for this purpose.

3. An expression of thought cannot be an actionable harm unless it

a. intentionally obstructs or would obstruct governmental efforts to deter, prevent, or remedy an actionable harm (e.g., divulging classified defense information, committing perjury),

b. intentionally causes or would cause an actionable harm (e.g., plotting to commit an act of terrorism, forming a lynch mob), or

c. purposely — through a lie or the withholding of pertinent facts — causes a person to act against self-interest in an economic transaction (e.g., misrepresenting a product, inflating a corporation’s statement of earnings).

4. An expression of thought cannot be an actionable harm until it has led or will lead directly to the commission of an act. A mere statement of fact, belief, opinion, or attitude cannot be an actionable harm, regardless of the subject of the statement, unless it amounts to slander or libel (both of which are offenses against liberty). Otherwise, those persons who do not care for the facts, beliefs, opinions, or attitudes expressed by other persons would be able to stifle speech they find offensive merely by claiming to be harmed by it.

5. An act of omission (e.g., the refusal of social or economic relations because of some form of bias), other than a breach of contract or duty, cannot be an actionable harm. It is incompatible with liberty for government to judge voluntary actions that are not otherwise actionable harms.

In other words, to enjoy the benefits of liberty we must enjoy broad latitude of action (or inaction), speech, and thought.

When the controlling faction persistently abridges the principles of liberty it must be replaced or its power must be curtailed. I am cynical about the ability of any controlling faction to resist the thrall of power. The more feasible alternative is to garner enough support to curtail the power of government, a bit at a time. The fairly successful deregulation movement is one example. The nascent and temporarily stalled movement toward federalism is another example. The struggling effort to privatize Social Security is yet another example.

THE ECONOMIC CONSEQUENCES OF LIBERTY

The logical incompatibility of liberty and privilege doesn’t keep most people from wanting both. People want to be left alone, but it seems that almost everyone also yearns for some version of the welfare-regulatory state. People seem to believe that government does things that are more valuable than the freedom of action they forego because government does things. Most Americans simply don’t understand the true costs and illusory benefits of the welfare-regulatory state.

Absent the welfare-regulatory state, most of the poor would be rich, by today’s standards. And those who remain relatively poor or otherwise incapable of meeting their own needs — because of age, infirmity, and so on — would reap voluntary charity from their affluent compatriots.

The Cumulative Cost of Government Intervention

The cumulative cost of government intervention can be approximated by analyzing trends in Gross Domestic Product. GDP has its limitations as a measure of happiness, because happiness — or personal satisfaction or self-interest, if you prefer — cannot be aggregated, nor can it measured entirely in dollars:

• Not everything that makes us happy is included in GDP. A compelling if brief list of exclusions: early retirement, having children, parenting one’s own children in lieu of paid employment, fresh air and unspoiled scenery, tranquility, and freedom from worry about crime. In fact, large numbers of Americans forgo income (which is captured in GDP) for the sake of such things as having children (the enjoyment of which isn’t included in GDP).

• Not everything that’s for sale is included in GDP (e.g., illegal transactions and barter).

• GDP captures many things of negative value (e.g., the cost of government programs that restrict freedom of choice; the cost of cleaning up pollution; and the amounts of money we spend on crime, traveling on congested highways, and trying briefly to escape the daily grind of urban living).

But money can buy happiness, although GDP has become an increasingly unreliable proxy for happiness because of the unavoidable — and often undesirable — correlates of economic growth, namely, population growth and social change. Nevertheless, as I will show, the net effect of government intervention has been to reduce the aspect of happiness that is represented by GDP. We have paid a steep price for such interventions as these:

• direct spending on government operations and capital acquisitions

• disincentives to work, innovate, and invest arising from taxation (especially taxes on income, and more especially progressive taxes on income)

• disincentives to work and save arising from social programs and transfer payments (including, but certainly not limited to Social Security, Medicare, and Medicaid)

• diminution of competition and efficiency through myriad laws and regulations that hamper the design, production, and sale of goods and services ranging from aspirin to yogurt

• restrictions on voluntary exchange (e.g., minimum wage laws, compulsory recognition of labor unions, and imposition of tariffs).

There are bottom-up estimates of the cost of government intervention. The usual bottom-up estimate includes:

• the cost of government purchases of goods and services for current operations and capital (buildings and equipment)

• the value of government transfer payments, which take money from those who produce and give it to those who don’t produce (as in the case of Social Security, Medicare, and Medicaid)

• the amount by which social and economic regulations reduce the level of economic output.

Government purchases of goods and services plus transfer payments absorbed more than 30 percent of GDP in 2004: $3.6 trillion out of a GDP valued at $11.7 trillion. A credible estimate of the regulatory burden is 15 percent of GDP. Thus the productive sectors of the economy sacrifice something like 40 to 50 percent of their current output to fund government purchases, transfer payments, and regulatory compliance.

But that is only an estimate of the heavy hand which government lays on current economic output. It doesn’t capture the cumulative effect that government intervention has had on economic activity. Actions by government that discourage or diminish work, saving, investment, competition, efficiency, and voluntary exchange have irretrievable, long-term, negative effects on economic output. Economic opportunities, once forgone, cannot be recovered; they compound, like negative interest.

Consider, for example, a capital investment that isn’t made because of high taxation or oppressive regulation. The return on that investment would have produced income that would have funded other investments, which would have produced yet more income that would have funded yet more investments, and on and on, in a reverse accelerator effect. There’s an analogous effect whenever current economic output is reduced because of a government action that discourages or distorts incentives to work, save, invest, innovate, compete, improve efficiency, or enter into a voluntary economic exchange.

And that’s what has happened in America. Real (inflation-adjusted) GDP began to rise sharply after the Civil War, thanks mainly to the Second Industrial Revolution. Despite the occasional slump — which the economy worked its way out of, thank you — things continued to go well until about 1906. Then the trajectory of GDP growth fell suddenly, sharply, and (it seems) permanently:

Data on real GDP for 1870-2003 are from Louis Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1789 – Present.” Economic History Services, March 2004, URL: http://www.eh.net/hmit/gdp/. Real GDP for 2004 estimated by deflating nominal 2004 GDP by the increase in CPI between 2000 and 2004.

The stock market — an accurate, if volatile, indicator of the nation’s economic health — corroborates my judgment about the downward shift in economic growth. After 1906, the S&P 500 (as reconstructed back to 1870) dropped to a new trendline that has a shallower slope and an intercept that is 48 percent lower than that of the trendline for 1870-1906.

Real S&P price index constructed from annual closing prices of the S&P 500 Composite Index (series “S&P 500® Composite Price Index (w/GFD extension)”), available at Global Financial Data, Inc., and the GDP deflator (see notes for previous chart).

How much wealth has been forgone because of the vast amounts of income that have been destroyed in the past 100 years? I can’t hazard a guess. But by drawing on the data presented in the two preceding charts I can estimate how much higher stock prices would be today if government were no more intrusive than it had been a century ago (data for 1870-1906 are plotted in green, data for 1907-2004 are plotted in red):

These three charts depict vast destruction of income and wealth in the United States since the advent of the regulatory-welfare state around 1906. Before I turn to the bottom line, I should explain what happened around 1906 — and since — to cause that vast destruction of income and wealth.

First, the regulatory state began to encroach on American industry with the passage of the Food and Drug Act and the vindictive application of the Sherman Antitrust Act, beginning with Standard Oil (the Microsoft of its day). There followed the ratification of the Sixteenth Amendment (enabling the federal government to tax incomes); the passage of the Clayton Antitrust Act (a more draconian version of the Sherman Act, which also set the stage for unionism); World War I (a high-taxing, big-spending, economic-control operation that whet the appetite of future New Dealers); a respite (the boom of the 1920s, which was owed to the Harding-Coolidge laissez-faire policy toward the economy); and the Great Depression and World War II (truly tragic events that imbued in the nation a false belief in the efficacy of the big-spending, high-taxing, regulating, welfare state).

The stock-market debacle of 1916-20 was as bad as the crash of 1929-33 (see chart of real S&P price index, above), and the ensuing recession of 1920-21 was “sharp and deep,” as the unemployment rate rose to 12 percent in 1921. But Americans and American politicians didn’t panic and scramble to “fix” the economy by adopting one perverse scheme after another. Thus prosperity ensued.

But less than 10 years later — at the onset of the Great Depression — Americans and American politicians lost their bearings and joined Germany, Italy, and Russia on the road to serfdom. Most Americans still believe that government intervention brought us out of the Depression. That bit of shopworn conventional wisdom has been debunked thoroughly by Jim Powell, in FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression, and Murray N. Rothbard, in America’s Great Depression. The bottom line of FDR’s Folly is stark:

The Great Depression was a government failure, brought on principally by Federal Reserve policies that abruptly cut the money supply; unit banking laws that made thousands of banks more vulnerable to failure; Hoover’s tariff’s, which throttled trade; Hoover’s taxes, which took unprecedented amounts of money out of people’s pockets at the worst possible time; and Hoover’s other policies, which made it more difficult for the economy to recover. High unemployment lasted as long as it did because of all the New Deal policies that took more money out of people’s pockets, disrupted the money supply, restricted production, harassed employers, destroyed jobs, discouraged investment, and subverted economic liberty needed for sustained business recovery [p. 167].

All we got out of the New Deal was an addiction to government intervention, as people were taught to fear the free market and to believe, perversely, that government intervention led to economic salvation. The inculcation of those attitudes set the stage for the vast regulatory-welfare state that has arisen in the United States since World War II. You know the rest of the story: Spend, tax, redistribute, regulate, elect, spend, tax, redistribute, regulate, elect, ad infinitum. We became locked into the welfare state by the 1970s; the resulting regulatory burden on Americans is huge and growing.

Now, for the bottom line:

• Real GDP (in year 2000 dollars) was about $10.7 trillion in 2004.

• If government had grown no more meddlesome after 1906, real GDP might have been $18.7 trillion (from the chart entitled “Real GDP: 1870-1906, 1907-2004”).

• That is, real GDP per American would have been about $63,000 (in year 2000 dollars) instead of $36,000.

• That’s a deadweight loss to the average American of more than 40 percent of the income he or she might have enjoyed, absent the regulatory-welfare state.

• That loss is in addition to the 40-50 percent of current output which government drains from the productive sectors of the economy.

• Moreover, the stocks of corporations in the S&P 500 are currently undervalued by one-third because of the depradations of the regulatory-welfare state, which have lowered investors’ expectations for future earnings. (The effect of those lowered expectations is shown in the chart entitled “Real S&P Index vs. Real GDP.”) And that’s only the portion of wealth that’s represented in the S&P 500. Think of all the other forms in which wealth is stored: stocks not included in the S&P 500, corporate bonds, mortgages, home equity, and so on.

That is the measurable price of privilege — of ceding liberty piecemeal in the mistaken belief that one more government program, a bit more income redistribution, or yet another regulation will do little harm to the general welfare, and might even increase it.

Wrong, wrong, wrong! The sum of human happiness — or that part of it which can be measured in dollars — has been diminished drastically and permanently by the corrosive action of TR’s Square Deal, FDR’s New Deal, HST’s Fair Deal, LBJ’s Great Society, and the other statist agendas of the past 100 years.

Lesson Learned?

Unless Americans become aware of the extremely high and largely hidden cost of the regulatory-welfare state, they will remain addicted to it. For reliance on government is an addictive drug — and a very expensive one. We swallow each dose in the hope that it will make us secure, and when that dose doesn’t make us secure we swallow another dose, in the hope that that dose will make us secure. And on and on. In the end, we are left with nothing but a costly addiction to government that impairs our liberty therefore ruins our economic health.

What Americans have failed to understand, is that there is less risk of coming to harm in a free-market economy — where individuals have an incentive to take care of themselves — than there is of coming to harm in the regulatory-welfare state. (See my series of posts on “Fear of the Free Market,” in three parts; my post on “Free Market Healthcare“; my post on “Why Class Warfare Is Bad for Everyone“; and my posts about income inequality.) Free people do not stay mired in poverty and tend not to repeat their mistakes, if they are allowed to learn from those mistakes. As Arnold Kling says:

Ultimately, it is people who make decisions in markets and in government. People are fallible in both settings. The difference is that in a market setting mistakes are corrected more quickly than in a government setting. Thus, even if markets were wrong nine times out of 10 and government were right nine times out of 10, over time markets would achieve better outcomes.

But Kling is too generous to government, the imperative of which is aggrandizement, not self-betterment. Government isn’t the people and cannot replicate what people would do if they were allowed to do it for themselves. (See these excerpts of Hayek’s writings and my post on “Socialist Calculation and the Turing Test.”) Michael Munger says it well:

Bureaucracy can not be improved, because its very nature is incompatible with a society of free citizens who take responsibility for their own lives and their own choices. The incentives and hierarchies in the two forms are fundamentally different.To put it most starkly, citizens may say, and believe, that the problem is unresponsive bureaucracy, or corruption, but these are the essential features of the governments of large nations. The solution is a citizenry that understands the economic and political forces that make government inherently incapable of carrying out the tasks we want to assign to it. But the mainstream media, nearly entirely innocent of knowledge of basic economic principles, has no hope of aiding such an understanding, and more often than not contribute to the “we can do better” mindset by carrying sensational stories of corruption inevitably followed by demands for reform.

Economics can be as abstruse as the physics of special relativity. But it rests on two things that are easily learned:

• Incentives matter.

• There’s no such thing as a free lunch.

When people are deprived of incentives through taxation, regulation, and welfare, they are less able and willing to strive for themselves. And it is self-striving that leads people to do things that are valued by others. Regulation and welfare (the “free lunch”) impose costs (bureaucratic overhead), where there otherwise would be no costs, and distort the free-market signals that tell people how they can do better for themselves by doing better for others.

Quo Vadimus?

Will Americans learn that incentives matter and that there is no free lunch? The battle over Social Security may tell the tale. If partial privatization succeeds, perhaps something close to full privatization might follow. After that, anything is possible: the end of Medicare and more vigorous deregulation, for example.

Help may be on the way. America — in spite of the past 100 years of creeping and galloping statism — may be on the verge of rapid economic growth. (See this, this, and this.) A sustained burst of growth would obviate the felt need for many facets of the regulatory-welfare state: When times are bad people turn to government for succor; when times are good, people have more confidence in their ability to take care of themselves.

Whether a new era of rapid growth materializes will depend greatly on our ability to retain our collective sanity in the face of environmental hysteria. (Go here and follow the links. See this, also.) There are market solutions (e.g., nuclear power and clean coal), but their implementation will be resisted by contemporary “Bootleggers and Baptists.” (“Bootleggers” are market incumbents — as represented by the American Medical Association and the American Bar Association, for example — who benefit from the suppression of competition, as did bootleggers during Prohibition. “Baptists” are self-appointed guardians of our health and well-being — the sum of all our risk-averse fears, you might say.)

The next several years will see a showdown between the forces of darkness and the forces of progress in America. The forces of darkness — having already greatly diminished the general welfare in the name of improving it — will seek to tighten the shackles of the regulatory-welfare state in the name of environmentalism. The forces of progress will seek to tame the regulatory-welfare state — if not repeal it. But they will be labeled evil, greedy, know-nothings for trying to protect us generally from the predations of the welfare-regulatory state and particularly from the ravages of environmental hysteria. As Ludwig von Mises put it,

if a revolution in public opinion could once more give capitalism free rein, the world will be able gradually to raise itself from the condition into which the policies of the combined anticapitalist factions have plunged it.¹⁴ (Quoted by Bryan Caplan.)

I am doubtful of a revolution in public opinion, especially because it would require a revolution in elite opinion and in the media — both of which are in thrall to the god of the regulatory-welfare state. As I will argue below, we have come to our present state because public opinion, elite opinion, and the media have combined to undo the great work of the Framers, whose Constitution prevented tyranny by the majority. Unchecked democracy has become the enemy of liberty and, therefore, of material progress. As Michael Munger says, “The real key to freedom is to secure people from tyranny by the majority, or freedom from democracy.”

THE BROKEN PROMISE OF LIBERTY

If liberty is so bounteous, why don’t we enjoy it in full? Why are our lives so heavily regulated and legislated by so many federal, State, and local agencies at such a high cost? What happened to the promise of liberty given in the Declaration of Independence and Constitution? The answers to those questions are bound up in human nature and the nature of governance in a democracy.

Human Nature, Liberty, and Democracy

Here, I will say more about the impulses and machinations that undermine our feeble instinct for liberty. They are impulses and machinations that the Framers tried to keep in check, but which have nevertheless been given rein through the corruption of the Constitution. As I said above:

Whatever longings we have for liberty are in competition with our longings for control, among other innate urges that are incompatible with liberty — aggressiveness, avarice, envy, mistrust, and sloth, among our baser instincts.

It is easy to endorse liberty in principle and yet be its enemy in practice. Our need for control and our baser instincts lead many of us to become politicians and cause most of us to succumb to political rhetoric. Most of us simply lack the requisite temperament, or vision, for libertarianism.

Thomas Sowell, in A Conflict of Visions: Ideological Origins of Political Struggles, posits two opposing visions: the unconstrained vision (I would call it the idealistic vision) and the constrained vision (which I would call the realistic vision). As Sowell explains, at the end of chapter 2:

The dichotomy between constrained and unconstrained visions is based on whether or not inherent limitations of man are among the key elements included in each vision….These different ways of conceiving man and the world lead not merely to different conclusions but to sharply divergent, often diametrically opposed, conclusions on issues ranging from justice to war.

Thus, in chapter 5, Sowell writes:

The enormous importance of evolved systemic interactions in the constrained vision does not make it a vision of collective choice, for the end results are not chosen at all — the prices, output, employment, and interest rates emerging from competition under laissez-faire economics being the classic example. Judges adhering closely to the written law — avoiding the choosing of results per se — would be the analogue in law. Laissez-faire economics and “black letter” law are essentially frameworks, with the locus of substantive discretion being innumerable individuals.

By contrast,

those in the tradition of the unconstrained vision almost invariably assume that some intellectual and moral pioneers advance far beyond their contemporaries, and in one way or another lead them toward ever-higher levels of understanding and practice. These intellectual and moral pioneers become the surrogate decision-makers, pending the eventual progress of mankind to the point where all can make moral decisions.

In sum, it’s all about trust and its opposite: control. You can trust others to do the right thing because it’s to their benefit to do so, as it is in free markets and free societies. Or you can control others, economically and socially, through a morass of statutes, regulations, and judge-made law.

Trust doesn’t mean an absence of rules, but the rules have only to be minimal, socially evolved rules of acceptable conduct, such as the Golden Rule or the last six of the Ten Commandments. The clearer and more intuitive the rules, the more likely they are to be enforced by self-interest, by fear of social opprobrium, and by pride in reputation — with swift, sure, and hard justice as a backup.

But none of that goes down well with those who think that the road to happiness must be paved with hard-and-fast rules for everything and everyone. Otherwise, how would people know what to do?

The demand for control is fed by economic illiteracy, the prevalent failure to grasp such simple principles as these:

• Incentives matter. Taxation, redistribution, and regulation result in the reduction and misdirection of economic activity and social trust.

• There’s no free lunch. Government can’t provide something for nothing. It never could, it never will. Every governmental action has an opportunity cost: that which the private sector could do with the same resources. There’s no such thing as “federal money” or “government money”; there’s only “our money.”

• Government doesn’t add value. At best it protects what we value, by defending us at home and abroad.

• The economy isn’t a zero-sum game. Bill Gates is immensely wealthy because he has created things that are of value to others. When Indian computer geeks man call centers for lower salaries than those of American computer geeks, it makes both Indians and Americans better off.

• There’s no such thing as “market failure.” Rather, there is only failure of the market to provide what some people think it should provide. Even defense and justice (both classic examples of a “public good“) could be provided by the market, as anarcho-capitalists aver, but minarchists (as I am) fear the consequences (warlord rivalry) and reluctantly trust in the state for those essential underpinnings of a free society.

Most people simply don’t understand the consequences of the rules that they so fervently seek to impose on others. They have little idea of the measurable costs of intervention — the 40-to-50 percent of GDP that goes into government programs, for instance — and they have no idea of the hidden costs of that intervention — the additionale of an additonal 40 percent of income and untold amounts of wealth. They simply cannot comprehend the indivisibility of economic and social liberty (though the Supreme Court’s recent decisions in Raich and Kelo may open some eyes).

Control-seeking politicians — most of whom also suffer from economic illiteracy — are able to draw power from the masses by appealing to the insecurity and economic illiteracy of the masses. Once having drawn that power, they seek always to aggrandize it. What happens, then, is a ratcheting of government power, in response to never-ending demands for government to “do something” — because government’s previous efforts to “do something” have inevitably failed to achieve nirvana.

Thus we have been following a piecemeal route to serfdom — adding link to link and chain to chain — in spite of the Framers’ best intentions and careful drafting. Why? Because the governed — or dominant coalitions of them — have donned willingly the chains that they have implored their governors to forge. Their bondage is voluntary, though certainly not informed. But their bondage is everyone’s bondage.

As Michael Munger says, in “Democracy is a Means, Not an End,”

blanket endorsements of majority rule make me wonder whether democracy is a fraud or just a conceit. As William Riker pointed out in his 1982 book, Liberalism Against Populism, the claim that “fair” processes always, or even often, lead to “good” outcomes ignores much of what is known about institutions and institutional change. If people disagree, and if there are several choices, democracy is manipulable, even dictatorial….

The pretense that in the multitude we find rectitude is dangerous: many of us would love to impose our “wisdom” on others….

The real key to freedom is to secure people from tyranny by the majority, or freedom from democracy. The problem, then, is what Fareed Zakaria has called “illiberal democracy.” The metaphor we use to understand ourselves matters, because it figures in how we try to advise others.

For much of modern history, what characterized governments in Europe and North America, and differentiated them from those around the world, was not democracy but constitutional liberalism. The “Western model of government” is best symbolized not by the mass plebiscite but the impartial judge. (Fareed Zakaria, The Future of Freedom, p. 20.)

The framers of the U.S. Constitution fully recognized that there is nothing, nothing at all, inherent in democracy that ensures the freedom of persons or property.

But because we have undone the work of the Framers (as I shall come to), we have descended to tyranny by the majority, where the majority is a loose but potent coalition of interest- and belief-groups bent on imposing its aims on everyone.

Unchecked democracy undermines liberty and its blessings. Unchecked democracy imposes on everyone the mistakes and mistaken beliefs of the controlling faction. It defeats learning. It undoes the social fabric that underlies civility. It defeats the sublime rationality of free markets, which enable independent individuals to benefit each other through the pursuit of self-interest. As “anonymous” says, with brutal accuracy, “Democracy is two wolves and a lamb voting on lunch.”

The Framers’ Work Undone

The Framers understood human nature as a natural enemy of liberty. That is why they strove to check the passions of the mob and the power of government. As Madison wrote in The Federalist Papers: No. 51:

It is of great importance in a republic not only to guard the society against the oppression of its rulers, but to guard one part of the society against the injustice of the other part. Different interests necessarily exist in different classes of citizens. If a majority be united by a common interest, the rights of the minority will be insecure.

There are but two methods of providing against this evil….The second method will be exemplified in the federal republic of the United States. Whilst all authority in it will be derived from and dependent on the society, the society itself will be broken into so many parts, interests, and classes of citizens, that the rights of individuals, or of the minority, will be in little danger from interested combinations of the majority.

But a not-so-funny thing has happened on the way to the state of liberty foreseen by Madison and the other Framers: Human nature has overcame constitutional obstacles. The governed and their governors have conspired to undermine the Constitution’s checks and balances. People, given their mistrustful and ignorant nature, have turned to government for “solutions” to their “problems.” Government, in its turn, has seized whatever power is necessary to go through the motions of providing “solutions.” For rare is the legislator who doesn’t want to legislate, the executive who doesn’t want to act, and the judge who doesn’t want to exercise his judgment by interpreting the law rather than simply apply it.

The upshot is what I have called “The Erosion of the Constitutional Contract.” It would be more accurate to say “the torture of the constitutional contract,” which is now a twisted version of the Constitution that was crafted to perfect the promise of liberty given in the Declaration of Independence. Judge Douglas Ginsburg calls it the “Constitution-in-exile,” referring to those parts of the Constitution that have been either ignored or twisted out of all recognition. Professor Randy Barnett, in his recent book, Restoring the Lost Constitution: The Presumption of Liberty, makes these key points, as summarized at Wikipedia:

Over the years, the Constitution’s original meaning has been slowly eviscerated.

The necessary and proper clause has been read to allow Congress to do whatever they find convenient for exercising their enumerated powers, starting with the creation of a federal bank in McCullough vs. Maryland (1819).

The privileges and immunities clause has been interpreted as meaningless redundancy, starting with allowing Louisiana to create a slaughterhouse monopoly in The Slaughterhouse Cases (1873).

Violating the Ninth Amendment has become Supreme Court policy, starting with the famous footnote four of United States v. Carolene Products Co. (1938), which held that only rights listed in the first ten amendments could be protected by the courts. (Carolene Products itself ruled that Congress could prohibit entire forms of milk.)

The Tenth Amendment has been made meaningless, now that Congress has the power to do almost anything.

The Commerce Clause has been interpreted as allowing Congress to regulate practically anything, starting with meatpackers in Swift v. United States (1905) and going all the way to country clubs in Heart of Atlanta Motel v. United States (1964). (The unchecked expansion finally ended when the Court drew the line at carrying a gun in United States v. Lopez (1995), but even this was heavily contentious.)

The police power of the states has been ruled as having no limit.

The Second Amendment has simply been ignored.

The Fifth Amendment‘s takings clause has been neutered by reading “public use” as “public purpose”.

The Lost Constitution of Liberty

The Constitution was meant to be a contract between the States, acting on behalf of their citizens. In that contract, the States cede certain powers to a government of the “united States,” which is a creature of the States. Thus, for example, in Section 10 of Article I, the States voluntarily deny themselves certain powers that in Section 9 they vest in Congress — creation of money, regulation of trade among the States and between the States and other nations, conduct of foreign relations, and conduct of war.

The Preamble lists the States’ reasons for entering into the constitutional contract, which are “…to form a more perfect union, establish justice, insure domestic tranquillity, provide for the common defence, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity….” These are ends desired, not outcomes promised.

To further these ends, the Constitution establishes a government of the united States, and authorizes it to enact, execute, and adjudicate laws within a delimited sphere of authority. The Constitution not only delimits the federal government’s authority but also diffuses it by dividing it among the federal government’s legislative, executive, and judicial branches.

The Framers knew what we are now only re-learning: Governments — even representative ones — have an insatiable hunger for power. More power in the hands of government means less power for individuals. Individuals are better off when they control their own lives than when government, directly or indirectly, controls their lives for them. Thus the constitutional contract rests on a few simple principles:

• The Constitution and constitutional laws are the supreme law of the land, but only within the clearly delimited scope of the Constitution. (As Alexander Hamilton explained, the Constitution “expressly confines this supremacy to laws made pursuant to the Constitution.” [From The Federalist Papers: No. 33.])

• The federal government has no powers other than those provided for by the Constitution.

• The rights of citizens include not only those rights specified in the Constitution but also any unspecified rights that do not conflict with powers expressly granted the federal government or reserved by the States in the creation of the federal government.

Moreover, the “checks and balances” in the Constitution are there to limit the federal government’s ability to act, even within its sphere of authority. In the legislative branch neither the House of Representatives nor the Senate can pass a law unilaterally. In his sole constitutional role — as head of the executive branch — the President of the United States must sign acts of Congress before they become law, and may veto acts of Congress — which may, in turn, override his vetoes. From its position atop the judicial branch, the Supreme Court is supposed to decide cases “arising under” (within the scope of) the Constitution, not to change the Constitution without benefit of convention or amendment.

The Constitution itself defines the sphere of authority of the federal government and balances that authority against the authority of the States and the rights of citizens. Although the Constitution specifies certain powers of the federal executive and judiciary (e.g., commanding the armed forces and judging cases arising under the Constitution), federal power rests squarely and solely upon the legislative authority of Congress, as defined in Article I, Sections 8, 9, and 10. The intentionally limited scope of federal authority is underscored by Amendments IX and X.

In spite of all that, we now have myriad statutes, regulations, and court rulings through which the federal government — acting at the people’s behest and in their name — has arrogated unconstitutional power to itself (and sometimes to the States). And the people suffer.

REDEEMING THE PROMISE OF LIBERTY

Is it possible to redeem the Constitution’s promise of liberty? And if so, by what route?

The Options, in Brief

Rebellion: The central government has more than enough power at its disposal to snuff out anything that smacks of rebellion. Most State governments, as presently constituted, would join the central government. The Spirit of ’76 died at Appomattox Court House.

Secession: Secession is as unlikely as rebellion, for the same reasons. The idea of “taking over” a State, propounded by the Free State Project, seems to be going nowhere. And what’s the good of taking over a State when the central government already has usurped most of the powers of the States and many of the liberties of their citizens?

Nullification: The nullification of unconstitutional federal statutes by the States has been proposed by no less than Jefferson and Madison and tried by South Carolina. But the idea is as doomed as rebellion and secession. Anyway, nullification is a recipe for legal chaos. If there is to be any kind of federal government — as there must be, for the common defense and a few other things — there must be a binding set of federal laws.

Jurisdiction stripping or departmentalism: Removing power from the courts or defying the courts would be good solutions if the courts were the only problem. But jurisdiction stripping and departmentalism, to the extent that they’re constitutionally valid, leave us defenseless against legislative and executive fiat. That is why I reluctantly subscribe to the doctrine of judicial supremacy. (See here, here, here, and here.) In fact, I will argue here that the reconstitution of liberty in America depends on the reinstitution of pro-libertarian federalism through the Supreme Court.

Federalism: The Supreme Court could help the cause of liberty by going beyond the Rehnquist Court’s rather halting steps toward federalism, that is, the devolution of power and rights to the States and the people, in accordance with the Constitution’s original meaning. But for federalism to succeed, presidents must nominate the right judges, the Senate must confirm them, and the Supreme Court must roll back 70 years of unconstitutional legislation and judicial usurpation.

At this moment in history, federalism seems the most promising option because the Left is now beginning to understand that the power of the federal government may be used not only to advance its agenda but also to thwart that agenda. Leftists, like conservatives and pragmatic libertarians, may be willing to settle for a “good” solution rather than hold out for the “best” of all possible worlds. But, as I will explain, the way to federalism isn’t through a collaboration between Left and Right.

The Left Discovers Federalism

The Left’s strange new respect for federalism arises from its petulant reaction to Bush’s re-election. Pejman Yousefzadeh, writing at Tech Central Station a few weeks after the election of 2004, produced a roundup of post-election reaction from the Left, in which he noted that

secession is being openly talked about as an option — with this geographic arrangement being one of the more popular ones in quasi-serious secessionist corners.

Fantasies about secession then morphed into a discovery — by the Left — of the merits of federalism. Consider a post-election post by publius at Legal Fiction (a regressive blog), which includes these tidbits (with my comments in bolded brackets):

From the New Deal on, the courts allowed the legislature to have the final say-so on whether a given law was related to interstate commerce. Maybe the legislature was right, maybe it was wrong – but it was the final arbiter. In the 1990s, the Rehnquist Court (for the first time in over half a century) [unthinkable!] found that a congressionally enacted law did not relate to interstate commerce and was therefore unconstitutional. [Imagine that!] The Court ruled that the law was outside the Article I enumerated powers in a case called Lopez and later in a case called Morrison….

So here’s what’s coming – and this will be the “first front” against the New Deal’s legislatively-enacted regulatory state. [That’s an almost-accurate description, but don’t forget the judiciary’s acquiescence.] If Republicans keep appointing judges, the number of laws found to be outside of the commerce power and Article I will grow. [One hopes.] In the beginning, they will be politically appealing decisions such as striking down federal laws banning medicinal marijuana. [Wrong!] But with the principle firmly established, the courts will move on to bigger game. Though I doubt any of them will have the guts [a Republicans-are-racists slur] to declare the Civil Rights Act unconstitutional (it was enacted under the commerce power), they could very well strike down the entire environmental regulatory regime. Jeffrey Rosen (via Kevin Drum) recently wrote an excellent article that outlined just how much the administrative state could be threatened.

In short, the greatest danger from a Bush Court is not the overruling of Roe v. Wade but the overruling of the post-New Deal regulatory state.

That’s 100% correct. Rosen also makes the astute observation that, just like in the political sphere, conservatives scream about social issues like abortion to distract Americans from the economic consequences of approving Republican judges. But Rosen misses an essential point. Things like the EPA and the Endangered Species Act and anti-discrimination laws and workplace protections were all legislatively approved by democratic majorities. [So what, if they aren’t constitutional?] Conservatives cannot get a political majority to overturn the Clean Air Act, so they’re systematically stocking the judiciary with judges who will. It’s exactly what Bork was talking about, except that the judges are thwarting the political process in the economic and regulatory arena as opposed to the social arena. You can see how it works – Lopez and Morrison shift the power to the judiciary to be the final arbiters. [No, the Constitution does that.] Once that principle is established, GOP judges will start using that power to strike down the regulatory state. [One hopes!]

So that’s the first front of the battle-to-come. The second front is a revival of Lochner. This is less likely, but as I explained earlier this week, Lochner revivals are stirring….What a new Lochner would do would be to establish a new obstacle in the form of a “right to economic freedom” that could not be unreasonably infringed upon….

A new Lochner (or even a new watered-down version of Lochner) would increase the “scrutiny” applied to economic regulations. [Actually, Lochner is bad law; the same result can and should be achieved through the Contracts Clause, as I explain here.] More regulations would be struck down on the grounds that they infringe upon people’s economic freedoms. [True.] But the big point, once again, is that such a move would shift power from the legislature to the judiciary. Judges, and not legislatures, would be the final arbiter of what economic laws are acceptable…. [True, and proper, according to the Constitution. Read Article III.]

If this happened, judges would be thwarting the [unconstitutional] will of the democratic majorities in order to enact their own minority political preferences [actually, their preference for constitutional laws].

If this is all too confusing, here’s the big point. Much of the conservative judiciary has adopted a judicial philosophy that is strikingly anti-democratic [that is, anti-socialist and pro-constitutional] in the economic sphere. This philosophy – if enacted – would shift the power to judge economic regulations from the legislature to the judiciary….[What a novel concept: The power to judge would reside in the judiciary. And it would be the power to judge the legislation that authorizes regulations, as well as the conformity of regulations to legislation.]

Given publius‘s leanings I am especially heartened by his forebodings as to the demise of the national regulatory-welfare state.

The Left’s alternative to the national regulatory-welfare state is — drum roll — the devolution of power to the States (but not to the people, of course). Here’s Jonah Goldberg, writing at NRO in December:

Federalism! It’s not just for conservatives anymore! That’s right. All of a sudden, liberals have discovered federalism and states’ rights. I discovered this while listening to a recent episode of NPR’s Talk of the Nation, in which host Neal Conan and various callers discussed the idea as if some lab had just invented it….It’s not surprising that liberals would suddenly be interested in federalism, given that a sizable fraction of them think George Bush is an evangelical mullah, determined to convert America to his brand of Christianity. As conservatives have known for decades, federalism is the defense against an offensive federal government….

The problem with the last half-century of public policy is that liberals have abused the moral stature of the civil rights struggle to use the federal government to impose their worldview — not just on racial issues but on any old issue they pleased. But now, all of a sudden, because they can’t have their way at the federal level anymore, the incandescently brilliant logic of federalism has become apparent: Liberals in blue states can live like liberals! Wahoo!

The Left’s embrace of federalism may be more than a passing fad. Consider, for example, three articles at Slate (a semi-respectable sounding board for Leftists). In “ The New Blue Federalists,” Richard Thompson Ford, a professor of law at Stanford, notes that “Federalism is not just for conservatives, anymore.” Jack Shafer, Slate’s editor-at-large, writing about “PBS Unplugged,” gives an example of how centralized power now threatens the Left’s agenda:

The new CPB chairman, Republican Kenneth Y. Tomlinson, invokes the “objectivity and balance” clause to demand that PBS abandon what he considers to be its liberal line….

Left-wing activists fear that Tomlinson’s meddling in CPB affairs will result in a media filibuster by the conservative majority. The activists want “the people” and “the local stations” to decide public broadcasting’s future, not top-down partisans….

For the longest time, calling for the defunding of public broadcasting was a Republican pastime. Now that the GOP rules public broadcasters, who will be the first Democrat brave enough to call for the end of PBS and NPR as we know them?

Then there’s what Slate‘s editor, Jacob Weisberg, calls ” Interest Group Conservatism“:

In this, the third year that Republicans have controlled everything, a variation on the old interest-group liberalism has emerged as the new governing philosophy. One might have expected that once in command, conservative politicians would work to further reduce Washington’s power and bury the model of special-interest-driven government expansion for good. But one would have been wrong. Instead, Republicans have gleefully taken possession of the old liberal spoils system and converted it to their own purposes. The result is the curious governing philosophy of interest-group conservatism: the expansion and exploitation of government by people who profess to dislike it….

True, the clients, patrons, and causes are different. Instead of the Children’s Defense Fund pushing to fully fund Head Start, we now have church-affiliated social service agencies lobbying to have faith-based drug treatment funded by HHS. Instead of Sen. Ted Kennedy of Massachusetts promoting a hate-crimes bill endorsed by the Leadership Conference on Civil Rights, it’s Sen. Wayne Allard of Colorado introducing a constitutional amendment to ban gay marriage on behalf of James Dobson’s Focus on the Family. Instead of the Environmental Protection Agency proposing higher air-quality standards, it’s the Federal Communications Commission levying fines and threatening broadcast licenses on the basis of profanity and indecency.

The Left thought that it would hold the reins of power indefinitely, and so it gave little heed to the possibility that the power it vested in the national government would be used against the Leftist agenda.

The Left’s Conception of Federalism

The Left may now wish for federalism, but in a decidedly anti-libertarian form. Consider “Reclaiming Federalism” (Dissent, Spring 2005), by by Prof. David J. Barron of Harvard Law School (emphasis added by me):

What would a progressive federalism look like? It might well be a mirror image of Rehnquist Federalism. It would give states and local governments much greater room to regulate the private market. This would check national and multinational business influence as Louis Brandeis and earlier progressives once imagined. It would also give the national government much more power to regulate nonmarket social relations….[that is, to completely undo freedom of association]

Progressives for too long have been strikingly unimaginative when it comes to federalism. They speak only in a national key. But it is clear that their faith in unlimited national authority was the contingent product of liberal control of national institutions. Circumstances have changed. We should now look at the Constitution’s federalism with fresh eyes….

Federalism is what we make of it. Rehnquist and his conservative colleagues have been making the most of it for more than a decade. It’s time for progressives to do the same.

In summary, the Left’s vision of federalism is to devolve the central government’s acquired anti-libertarian powers to somewhat less remote commissars at the State and local level. The Left simply isn’t to be trusted as a partner in the shaping of a new federalism. A pro-libertarian federalism would not only limit the power of the central government but would also limit the power of State and local governments to advance the Left’s anti-libertarian agenda.

Toward Pro-Libertarian Federalism

The only way to advance pro-libertarian federalism is to ensure that the Left neither controls the central government nor has little influence over its policies. This is especially true of the U.S. Supreme Court. For the surest way to return to a form of federalism that, in the main, advances liberty and prosperity is through Court rulings of the kind so feared by publius and his ilk: “the overruling of the post-New Deal regulatory state.”

Something resembling pro-libertarian federalism will come about only if a Republican president, aided by a strongly Republican Senate, is able to stock the courts with judges who are committed to the restraint of government power — at all levels of government. (Janice Rogers Brown is that kind of judge.)

Certainly not all decisions by all Republican appointees to the bench will satisfy all libertarians, many of whom seem to focus on narrowly tailored “rights,” such as abortion and gay marriage. But by siding with the Left on such issues, libertarians effectively abjure more basic rights — rights that broadly affect the ability of most Americans to pursue happiness — such as freedom of speech, freedom of association, and freedom of contract.

In the real world there are real choices. The real choice for libertarians is between what seems “best” for a few and what is actually “better” for the many. I choose the latter, without hesitation.

Pro-libertarian federalism is the best practical way to redeem the promise of liberty. The surest route to pro-libertarian federalism, it seems to me, can be found through the Republican Party. The GOP may not be reliably anti-statist, but it is less statist than the Left. And it is more likely to defend our basic rights — in the courts, in the streets, and in foreign fields.

Thus endeth the lesson about practical libertarianism.