Economically Liberal, Socially Conservative

A provocative piece by Samuel Gregg, “Markets, Catholicism, and Libertarianism” (Public Discourse, October 24, 2016) reminds me of an idea for a post that flitted through my aging brain a while back. Gregg writes:

In a recent American Prospect article, John Gehring maintains that Catholics like myself who regard markets as the most optimal set of economic conditions are effectively promoting libertarian philosophy. Gehring’s concerns about libertarianism and what he calls “free market orthodoxy” have been echoed in other places.

The generic argument seems to be the following. Promoting market approaches to economic life involves buying into libertarian ideology. . . .

What [Gregg and other] critics seem to miss is that a favorable assessment of markets and market economics need not be premised on acceptance of libertarianism in any of its many forms. . . .

Libertarianism’s great strength lies in economics. Prominent twentieth-century libertarian economists, such as Ludwig von Mises and Friedrich von Hayek, made major contributions to the critique of socialist economics.. . . .

Philosophically speaking, Mises associated himself, especially in Human Action (1949), with Epicureanism and utilitarianism. Hayek’s views were more complicated. While his Law, Legislation and Liberty (1973/1976/1979) rejected Benthamite utilitarianism, Hayek embraced a type of indirect-rule utilitarianism in works such as The Constitution of Liberty (1960). He also articulated progress-for-the-sake-of-progress arguments and social evolutionist positions heavily shaped by David Hume’s writings.

Such philosophical views are characteristic of many self-described libertarians. . . .

None of the above-noted contributions to economics by Mises and Hayek are, however, dependent upon any of their libertarian philosophical commitments.

That’s exactly right. The great insight of libertarian economics is that people acting freely and cooperatively through markets will do the best job of producing goods and services that match consumers’ wants. Yes, there’s lack of information, asymmetrical information, buyer’s remorse, and (supposed) externalities (which do find their way into prices). But the modern “solution” to such problems is one-size-fits-all regulation, which simply locks in the preferences of regulators and market incumbents, and freezes out (or makes very expensive) the real solutions that are found through innovation, entrepreneurship, and competition.

Social conservatism is like the market liberalism of libertarian economics. Behavior is channeled in cooperative, mutually beneficial, and voluntary ways by the institutions of civil society: family, church, club, community, and — yes — commerce. It is channeled by social norms that have evolved from eons of voluntary social intercourse. Those norms are the bedrock and “glue” of civilization. Government is needed only as the arbiter of last resort, acting on behalf of civil society as the neutral enforcer of social norms of the highest order: prohibitions of murder, rape, theft, fraud, and not much else. Civil society, if left alone, would deal adequately with lesser transgressions through inculcation and disapprobation (up to and including ostracism). When government imposes norms that haven’t arisen from eons of trial-and-error it undermines civil society and vitiates the civilizing influence of social norms.

The common denominator of market liberalism and social conservatism is that both are based on real-world behavior. Trial and error yields information that free actors are able to exploit for their betterment and (intended or not) the betterment of others.

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