Illiberal Belief #32: Libertarians are Scrooges

Bradley Doucet
Issue CCLXXIV - January 13, 2011
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Liberty is won and preserved not primarily with guns, but with ideas. Spreading freedom requires that we spread an understanding of the benefits freedom brings, that we explain to whomever will listen how freedom is really in everyone's best interest. In making the case for a truly free society, however, we will inevitably come up against a wide array of illiberal beliefs that keep others from embracing our vision of a better world. The more we seek to understand those beliefs, the better we will be able to counter them and address the concerns that underlie them. In this ongoing series, I address some of the issues we can expect to face, along with brief outlines of the kinds of responses I think can be helpful.

        When Christmas season is upon us, bringing peace and goodwill to every decent heart, the free-market enthusiast has an even better than normal chance of being asked why he or she does not care about the wellbeing of others. Supporters of the welfare state imagine that they are the compassionate ones, and that we who favour economic liberty are heartless Scrooges. How else could we oppose state-run and taxpayer-funded healthcare, education, housing, pensions, or unemployment insurance? We all deserve coal in our stockings for daring to speak ill of government safety nets.
          Writing in the 1840s, Charles Dickens can perhaps be forgiven for his caricature of the rich businessman as heartless. Life was hard in those days, and the widespread advances in prosperity brought about by the Industrial Revolution had yet to make themselves truly felt. But in this day and age, the continuing slander of libertarians as lacking in compassion is less forgivable, and needs to be challenged in no uncertain terms. 

Who You Calling “Rich”?

         Clearly, not all rich businessmen resemble Ebenezer Scrooge. In our own time, for instance, two of the world’s wealthiest men, Bill Gates and Warren Buffet, are giving away large portions of their fortunes to help the needy, as others did in earlier generations.

          More importantly for my thesis, though, is the fact that not all libertarians are rich businessmen, or rich at all, for that matter. As Roderick T. Long writes in a 1994 essay, “Who’s the Scrooge? Libertarians and Compassion,” libertarians are often portrayed as saying, “I should not be forced to help you.” Of course, they could just as easily say, “You should not be forced to help me,” or, “She should not be forced to help him.”

          Indeed, as Long points out, the equation of the moneyed, capitalist class with libertarians is doubly misleading. Not only are libertarians found in every economic stratum, but businessmen by no means make up a solidly libertarian block. Rather, they “are more likely to be lobbying [government] for special favors, protectionist legislation, and grants of monopoly privilege while their libertarian neighbors struggle to make ends meet.”
At the Point of a Gun

          Libertarians, of course, are staunchly opposed to political favours, protectionist legislation, and monopoly privileges—and for the same basic reason that we are opposed to the welfare state: we are against all initiation of force. Politicians and bureaucrats initiate force just as surely when they outlaw private health insurance or tax people to pay for public housing as they do when they bestow monopoly power or tax people to subsidize a connected corporation. In all of these cases, force is used against one group of people in order to benefit another group.

          Supporters of the welfare state may counter that it is obscene for a society as rich as ours to allow people to starve in the streets or go without medical care. We simply should help those who cannot help themselves, they might say. It’s just the right thing to do.

          But is it really compassionate to force people to help others? Personally, I think helping others is a wonderful thing to do. I don’t think it warrants sacrificing one’s own wellbeing, and I don’t think it is a moral duty per se, but I do think it is a positive thing that should be encouraged. In a libertarian society, I would be free to try to persuade others of my point of view, as would those who believe that helping is a moral duty even to the point of self-sacrifice. What neither of us would be allowed to do is impose our own moral vision on others who see things differently.
Compassionate but Wrong

          I believe that many people who support the welfare state are compassionate. They may not think of taxation as force, or they may try to elude the knowledge that it is force, or they may simply believe that the good of welfare statism outweighs the bad of enforced taxation. They intend to see that others are helped, and they think that the end justifies the means.

          Not only are they wrong about the end justifying the means; they are also wrong about their chosen means being the best path to their stated end. If you want to help others, free-market capitalism is a better means of doing so than the welfare state. The welfare state takes from some and gives to others, but many practical considerations make this transfer anything but frictionless. The disincentives to both productive taxpayers and recipients of welfare-state largesse, the inefficiencies of bureaucratic control, the suppression of innovative competition, and the corruptible nature of the humans who must manage the whole house of cards all chip away at economic growth and hence future prosperity for all.

          On the other hand, capitalism unleashes human beings’ natural propensity to improve their own lot and channels it into pursuits that others find valuable and are therefore willing to purchase on the open market. To the extent that this invisible hand has been allowed to function, it really has lifted all boats. Almost everyone living in a developed country today lives better than kings of yore in a multitude of ways. Much of the rest of the world is catching up, too. (If you don’t believe me, check out this stunning demonstration by Hans Rosling.)

          And to be clear, rich businessmen don’t just help humanity when they give their money away. They help humanity primarily by making money in the first place, i.e., by creating wealth. In the 1998 John Stossel Special “Greed,” the founder and CEO of Cypress Semiconductor, T. J. Rodgers sums up this point nicely:

Our company was worth zero in 1982. It had one employee—me—and it was in debt. Today it has 2500 employees. Our company today is worth 1.4 billion dollars. All of that money has been created. That is a positive thing that impacts favorably the lives of a lot of people. They buy cars with it, they go to school with it, they retire on it… The world is better off when I make a dollar, not worse off.

          This holiday season, let’s give thanks to all of those mean old Scrooges who helped humanity by helping themselves—and the system of relatively free-market capitalism that allowed them to do it.

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