Monday, November 14, 2011

To Criticise Libertarianism, First Get Your Facts Right

“bgamall” writes in Hubpages from Reno.NV HERE:

This is a contentious piece by a politically-motivated person, and normally I would ignore such twaddle, but it struck me as a fine example of the dangers of running with similar-sounding words in an attempt to add authority to a poor argument about modern politics in the United States.

“Libertarianism: Just a Smoke Screen for Avarice and Racism”

“Spontaneous order is one of two major assumptions in Libertarian thought. The other is the necessity of voluntary relationships. The two are closely related and make assumptions that are simply not true. These assumptions lead to outright lies.

Spontaneous order was a concept developed by Adam Smith. He believed that order arises in society spontaneously through the invisible hand of self regulation. He cites the development of language, the market economy, and the development of law. Regarding law, judges were to find the law rather than make the law. The natural law was out their lurking about, and all one had to do was to find it!

Natural law is a concept that was popular with the rise of historic liberalism, which was similar to today's libertarianism. Libertarians count as fathers, John Locke and Adam Smith. Adam Smith did not say that benefits from government could not exist, but rather were not the best way to help the poor. George H. W. Bush's thousand points of light and the importance of charity would have been praised by Adam Smith

I have little sympathy for bgamall’s ‘thesis’, if the coherence of calling it a thesis could be applied to it.

On the facts that I know about, ‘spontaneous order’ was not an idea of Adam Smith’s – ‘unintended consequences’ is the nearest we get to it in Smith’s works, and even that notion included the possibility of dire consequences of an action and not just the possibility of only ‘benign’ consequences.

Natural Law philosophy pre-dated Adam Smith’s thinking, inventive as it was, and was brought to Scotland from Grotius and Pufendorf’s works in the 17th century, the latter books of Pufendorf being a rich source for the teaching of Moral Philosophy in Scottish Universities, especially at Glasgow under professors Carmichael and Hutcheson (Smith’s tutor), and his texts had wide circulation across much of Western Europe into the 19th century. John Locke, among others was influenced by Pufendorf on natural law.

The ‘invisible hand’ was never about ‘self regulation’, as firmly asserted by Bgamal; it was a metaphor used only twice by Adam Smith in his major Works, first in strict reference to landords feeding their serfs, slaves, and peasants from the produce of their lands. This was he case for many millennia since 110,000 year ago and arose from an absolute necessity. Nobody can labour without daily food, hence, no food, no labour, and its companion, no labour, no food (Moral Sentiments Book IV, 1759). The second reference to the IH metaphor (a widely used metaphor in the 17th-18th centuries by theologians, preachers, dramatists, poets, and novelists) by Smith was in strict reference to some, but not all merchants, who were risk averse to investing their capital abroad, and preferred, instead, to invest domestically, which had the unintended benefit of being a public benefit because their investment added to ‘domestic revenue and employment’ (Wealth Of Nations). Self Regulation was nowhere mentioned by Smith in his use of the IH metaphor (nor were markets, nor equilibrium, nor supply and demand, nor any of the other imaginative inventions of modern economists).

In Smith’s Works he was quite clear that the likely origins of “the division of labour, from which so many advantages are derived is not originally the effect of human wisdom, which foresees and intends the general opulence.” It is the unintentional consequences of human actions that had the important unintended effects that they had and have. And the outcome of human actions could lead to benign as well as destructive consequences, which is an important corollary of unintended consequences and needs to be remembered rather than brushed over in the idea (Hayek’s I believe) of ‘spontaneous order’.

Instead it is “the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another. Whether this propensity be one of the original principles in human nature, of which no further account can be given, or whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech is not our present subject to enquire” (WN I.ii.1: 25).

Bgmal links ‘spontaneous order’ and writes “many aspects of man's cruelty, greed, and racism have also been manifested by spontaneous disorder” thus creating an effect that appears to be a criticism of Libertarianism. But Smith is not guilty; his critique of mercantile political economy is all about the malign unintended consequences of sovereigns, legislators and those who influenced them. Acting to deal with a particular problem – seeking finance for the regular wars they engaged in, the state introduced tariffs to ‘protect domestic industries’ from the outflows of gold. By doing so they unintentionally undermined the domestic economy and distorted resource allocations, not always as intended, and antagonised suspicious neighbours, adding to the risks of war.

The Elizabethan Apprentices Act unintentionally lowered product quality, created troublesome local monopolies, raised prices, and undermined consumer choices; the Settlement Acts intended to localise poor relief, instead they restricted the movement of labour and localised poverty; the trade Guilds aimed to encourage local enterprise, stifled innovation and ended in ‘conspiracies against the public’, and the Cromwellian Navigation Acts intended to provide a strong navy for the defence of the islands of Britain, instead they instituted exploitative monopoly pricing of imports and exports sent to the North American colonies, distorting domestic capital allocation (eventually, leading to a Rebellion).

That some modern libertarians – and most modern economists – have many fallacious ideas about Adam Smith is not a valid reason to vilify libertarianism by distorting the substance of an argument based on misunderstanding Adam Smith’s work as well.

Bgamal has some ways to go before he articulates a valid case against Libertarian ideas. Selective quotations from individual Libertarians about race, religion, and business ethics, are never convincing of a congenital link between libertarianism and certain disreputable ideas and a political philosophy. Many leaders among social democrats and religious leaders in the 20th Century are on the record supporting Eugenics, many business leaders give financial support to Biblical ideas of the Earth’s age as only 6,000 years, and what they call ‘intelligent design’ (the direct opposite of Smithian ‘unintended consequences’), and some do business with quite appalling regimes. Neither side of this argument is ‘Lilly white’ (metaphor).

Stick to the content of libertarian arguments, not the tittle-tattle of the association of individuals.

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