Friday, March 27, 2015


I am often asked why I describe myself as a “Soft Libertarian” and usually oblige with a couple of pages. Daniel Klein (George Mason  University, Virginia) sent it to me the following article (one of five more to come, which I have not seen yet). I recommend it to readers are fairly representative of my views (though I have no views on Obamacare, as I do not vote in the USA or pay much attention to US domestic politics) and bring it to your attention for its exposition of ‘soft’ Libertarian views close to my own. It expresses much of what I agree with and hope it inspires you to read the other parts which are to be published HERE 
Paul Mueller introduces a series of posts about Adam Smith, giving a broad overview of his thought and situating him relative to other thinkers. A single blog post can hardly begin parsing Adam Smiths works and ideas. What would he think about Obamacare or about the Federal Reserve? Would he look favorably on the administrative state or on entitlement programs like Medicare and Social Security? This is the first post in a series exploring Smith’s thought. I hope that the reader will eventually be able to bring Smith’s ideas to bear on these questions. To begin, I should lay out a basic framework for understanding Smith’s views on politics and economics. Traditionally, Smith has been regarded as a staunch advocate of free markets and as a formidable skeptic of government intervention. That is the “traditional view.” Particularly in the last fifty years a “revisionist view” has surfaced and gained a substantial following. The revisionists, or “Left Smithians,” emphasize Smith’s skepticism towards commercial society (especially merchants and manufacturers), his praise of many government interventions, and his concern for the poor and marginalized. From there, they conclude that Smith would be friendly to the modern social-democratic welfare state. Also, they caricature the traditional view as believing that Smith was totally laissez-faire and only concerned with self-interest.Smith falls somewhere between the revisionist view and the caricature. Exactly where he falls has a great deal of bearing on whether Smith can be considered a libertarian.
Let me separate libertarianism into two camps. One camp is heavily based on rights. It includes followers of Murray Rothbard, Robert Nozick, and Ayn Rand. These libertarians start from the premise of self-ownership and the non-aggression axiom: “I can do whatever I want as long as I don’t harm you or infringe on your rights.” In this strand of thought, all government intervention is illegitimate unless it punishes or prevents the violation of others’ rights.The second category of libertarian thought expresses a more organic view of society while maintaining a healthy skepticism of the motives and efficacy of government action. This category includes followers of Friedrich Hayek, Milton Friedman, and James Buchanan. Advocates in this camp argue that markets usually work well and governments usually do not. Government action, however, may be warranted in limited contexts where strong public interests exist. But such contexts are rare. And in such situations we should rely on clearly defined rules to motivate and constrain political actors, not their own sense of altruism or “public-spiritedness.” 
George Stigler has suggested that Smith thought advancing one’s material self-interest was the most important human motivation. In his own work, Stigler thought individual self-interest was the most important assumption about political action. As a result, he thought the government should almost never intervene in the market. Yet in The Theory of Moral Sentiments, Smith argued that people have many important motivations besides their material self-interest. Furthermore, he clearly advocated many government interventions in society—interventions that Rothbard and Rand would have ridiculed and that would have made the Nozick of Anarchy, State, and Utopia uncomfortable. So Smith cannot fit in this camp based upon his policy prescriptions. But Smith also doesn’t fit in their camp because he disagrees with their axiom of natural rights. Throughout his works, Smith rarely spoke of rights and certainly never developed an extended argument about the purposes and limits of government based upon rights. Occasionally he talks about how people “own” their labor but that is the closest he gets to rights-theory.
The second camp of libertarian thought—which I prefer to call classical liberalism—is far more welcoming of Smith’s views. They are willing to grant that government should do a variety of things from providing public works to national defense. Smith’s three duties of government, plus a handful of “exceptions” to liberty to restrain egregious negative externalities, can fit in this camp. Smith’s defenses of markets and skepticism of government policy have many similarities with those of Hayek, Friedman, and Buchanan. 
The concept of the invisible hand—that individuals justly pursuing their own ends often promote the public interest (“universal benevolence”)—is one of Smith’s more powerful ideas. A system of prices and exchange will generally lead to productive outcomes, even if people are primarily motivated by self-interest. But he also refers to the invisible hand in a moral sense where it leads to a wide distribution of necessary goods in society. Besides generating wealth, commercial society fosters certain virtues and restrains many vices. The “natural system of perfect liberty and justice” was Smith’s ideal.”

I shall stop my extract here for space considerations. Needless to say, I disagree with Paul Mueler’s take on Smith’s use and meaning on the “invisible hand”.  My lastest paper on the misue of the “invisible hand” metaphor is nearing completion (first draft) and will be available later in May (readers interested in receiving a copy are invited to write to Lost Legacy should they wish to receive a copy and perhaps offer their comments:


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