Shrugging Off the Libertarian Fantasy

How does one counter the libertarian idea that unfettered markets coupled with minimum government can actually work?

The Libertarian Party’s slogan, “Minimum Government, Maximum Freedom," sounds attractive, but only in a specious and simplistic way. As I see it, the Libertarian world view is basically stuck in the fantasy-science fiction world of Ayn Rand’s "Atlas Shrugged."

Rand, along with Nathaniel Branden, also wrote "The Virtue of Selfishness: A New Concept of Egoism," a 1964 collection of essays and papers that has virtually nothing useful to offer regarding today’s climate of rising economic inequality and environmental danger — except that the one-percent has taken the virtue of selfishness to heart.

The Nobel laureate, economist and New York Times columnist Paul Krugman recently offered a counterpoint to a long New York Times Magazine article by Robert Draper that profiled young Libertarians — basically, people who combine free-market economics with permissive social views — and asked whether we might be heading for a “libertarian moment.”

Krugman’s answer? “Probably not. Polling suggests that young Americans tend, if anything, to be more supportive of the case for a bigger government than their elders.”

Then he asks a different and more important question, especially for fans of Sen. Rand Paul: Is libertarian economics at all realistic?

The short answer, Krugman says, is no. “And the reason can be summed up in one word: phosphorus.” He goes on to explain that the city of Toledo, Ohio recently warned its residents not to drink the water, due to contamination from toxic algae blooms in Lake Erie, caused largely by the runoff of phosphorus from farms. Phosphorus is a common ingredient in industrial fertilizer.

Krugman noted that Republican heavy-hitters had spoken recently at a conference sponsored by the conservative blog Red State — “and I remembered an anti-government rant a few years back from Erick Erickson, the blog’s founder. Erickson suggested that oppressive government regulation had reached the point where citizens might want to ‘march down to their state legislator’s house, pull him outside, and beat him to a bloody pulp.’ And the source of his rage? A ban on phosphates in dishwasher detergent. After all, why would government officials want to do such a thing?”

States bordering on Lake Erie did ban or sharply limit phosphates in detergent, and according to a U.S. Geological Survey report, the action actually helped the lake’s water quality. However farming has evaded effective control, “so the lake is dying again, and it will take more government intervention to save it,” Krugman writes.

The point of this story about Lake Erie and phosphorous is that “before you rage against unwarranted government interference in your life, you might want to ask why the government is interfering. Often … there is, in fact, a good reason for the government to get involved,” he continues. Pollution controls are a great example.

Krugman says smart libertarians “have always realized that there are problems free markets alone can’t solve — but their alternatives to government tend to be implausible.” For example, Milton Friedman called for the abolition of the Food and Drug Administration. But how would consumers know whether their food and drugs were safe? Friedman’s answer was to rely on tort law: Corporations would have the incentive not to poison people because of the threat of lawsuits. Is that really a workable and efficient solution?

Actually, putting vital health and safety issues at the mercy of the court system is nothing more than a scary fantasy and a conservative talking point.

The point is that the libertarian view of big government and massive government intervention as the source of all evil is not realistic or grounded in the way a complicated and globalized world works. It is, as Krugman says, a cultural cliché, or “a projection by people who read Atlas Shrugged in their teens and never grew up.”

Image credit: Lake Erie algal bloom by michiganseagrant via Flickr