Libertarians and Homogeneous Government

Something that often strikes me about libertarians is that they seem to see the government as a single, homogeneous mass that must be combated in its entirety. The percentage of GDP spent by the government is often cited as an indicator of how ‘big’ government has gotten, and it is thought that combating this will help reduce the evils of government in general.

However, ‘the government’ is not a unified entity; it’s a web of different and sometimes conflicting interests that are fragmented across space and time. There is no reason to think that stymieing some of its activities will have an impact on the others – for example, most libertarians object to the military industrial complex and the war on drugs, but then view social security or public healthcare as part of the same beast, and think that it is contradictory for leftists to object to the former and want to expand the latter. Quite clearly, however, the latter has very little impact on the former – you are dealing with completely different sets of interests, departments, locations and laws.

This can also be seen in the libertarian view of government as something that comes along and ‘corrupts‘ capitalism; the expansion of welfare and education is seen as part of this. But this makes no sense – the corrupt forces that give us patent law, bailouts and other corporate welfare are completely different to the democratic forces that give us health and education. In neither case does  an entity called ‘the government’ come along and act in its own interests; in both cases groups of people utilise the tool of legislation for their own gain. The difference is that in one case this gain goes to a significant number of people whereas in the other it goes to a few. But it is fallacious to equate both just because of the presence of the state.

I have said before that class is a far superior tool for analysis than the somewhat incoherent ‘government’ and ‘market’ that debate has been boxed into. Seeing ‘governments’ as the same across space and time and as homogeneous entities – ones that can be combated by a single metric like the percentage of the economy for which they are responsible – allows very little room for meaningful analysis. This is because the activities of governments are a reflection of the societies they represent, rather than an outside interference dictated by a uniform entity. To paraphrase Scott Sumner, ‘never reason from an action of the state’ – that law or program has been demanded by a group of interests, or the need for it has been brought to light by certain events. In order to understand the activities of government, you have to place them in political context.

Ultimately, the ‘state’ doesn’t actually exist – it’s a web of different classes and individuals using the tool of legislation to advance their own interests, either through representatives or more directly through lobbying and political movements. Libertarians appear to think that cutting back any of this spending has an impact on all of it, but what we actually need to do is ensure that the interests of relatively few people do not have a disproportionate impact on the state’s activities – unfortunately, this is not currently the case.


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  1. #1 by docrichard on May 7, 2012 - 5:56 pm

    Good post.

    I seem to have spent most of my life opposing the actions of the state (Nuclear weapons, sundry wars, slack controls on environmental agents &c) yet find myself defending it against the absolutist attacks of libertarians (and also, currently, a self-styled liberal).

    As you say, it is not the state per se which is the problem, but many of the myriad actions carried out by the state. Reducing the size of the state to, say, 29% of GDP is not going to help if it that money is still spent inefficiently. It is even possible to argue that if we could achieve maximum efficiency of state spending, the amount needed in taxation would shrink.

    In carrying out cognitive behavioural therapy, we very frequently have to help people see that their self-assessment “S/he is a bad person” can be more usefully re-framed into “S/he is carrying out actions that are not really useful.” It seems that libertarians are making the same mistake in their assessment of the “state.”

    However, that would take many years or decades. Osborne’s belief that debt that has built up over decades can realistically be reduced over five or ten years without causing immense damage is clearly off the wall.

    • #2 by Unlearningecon on May 7, 2012 - 10:02 pm

      Exactly. Your average libertarian would rather have 5% of GDP cut from the welfare/health budget and none cut from the military budget, than 3% cut from the military budget.

      Really, it’s all just the same old right wing knee-jerk reactionary stuff. Liberals and socialists generally put up far more of a fight against encroachments on civil liberties and the war on drugs – libertarians spend most of their time hating on the minimum wage and regulations. If you want proof, just cross-check the blogs against one another.

      EDIT: in fact, one need look no further than the time many ‘libertarians’ came out in favour of hanging and capital punishment in general.

  2. #3 by Woj on May 7, 2012 - 6:02 pm

    This highlights what I believe to be a crucial, unrecognized feature of the deregulation era. Removing regulations regardless of purpose and interaction with other regulations will not necessarily bring the economy closer to equilibrium (if one exists). One might be able to argue that a disproportionate number of regulations were maintained that support “the interests of relatively few people.” If that is true, it could partially explain why deregulation has led to more severe inequality and higher unemployment.

  3. #5 by Cris Rand (@cris_rand) on May 7, 2012 - 8:16 pm

    Excellent post. I’m a recovering libertarian and can really appreciate this analysis. Fortunately I never got into it too deep (not having studied Econ in college), and if you could advise me on any books I should read, I’d appreciate it. I’ve started reading the Galbraiths recently.

    • #6 by Unlearningecon on May 7, 2012 - 9:00 pm

      I’m a recovering libertarian

      This made me laugh.

      Thanks for the kind words. I’ll give you a comprehensive list so you can pick and choose which ones take your fancy:

      ‘The Skeptical Economist’ questions the ethical judgements implicit in economics (and by extension, libertarianism)

      ’23 Things They Don’t Tell You About Capitalism’ debunks a lot of the conventional wisdom touted by economists

      ‘ECONNED’ provides a great description of the recent crisis and more criticism of economics

      ‘Economics for the Rest of Us’ exposes how many policy prescriptions of economics actually favour the rich

      ‘The Rhetoric of Reaction’ is great for dismantling standard right wing responses to progressive propositions (though the author is not particularly biased)

      ‘Adam’s Fallacy’ is a great guide to the history of thought and the skewed thought that pervades economic reasoning

      ‘Treasure Islands: Tax Havens & the Men Who Stole the World’ is great for exposing the real world workings of capitalism (as opposed to the neoclassical/libertarian fantasy)