Liberty isn’t rugged invidualism

Advocates of liberty are often wrongly characterized as ‘rugged individualists.’ I often hear our position referred to as ‘survival-of-the-fittest’ or an ‘on-your-own’ society.

I think this straw man exists for a couple of reasons.

First, it’s an expedient portrait to paint of political opponents when you don’t wish voters to think too deeply about the issues. It turns out that Don’t vote for the mean guys is a compelling campaign message.

Second, and possibly more common, is that a great many people confound government and society as one in the same. They see society expressed through government, rather than government as having a specific and limited role to play in society, like the role a janitor or security guard has in cleaning and protecting a building.

To these folks “we”, government and society are interchangeable ideas. Whatever “we” think “we” should do, should be done through government.

In my The Government Subsidy Fallacy post from January, 2012, I reference a David Henderson Econlog blog post that referenced this quote from 1800s French economist, Frederic Bastiat:

When we oppose subsidies, we are charged with opposing the very thing that it was proposed to subsidize and of being the enemies of all kinds of activity, because we want these activities to be voluntary and to seek their proper reward in themselves.

This applies to all government activity. If you oppose a government program intended to help the poor, you are accused by the people who confound government and society for not wanting to help the poor at all.

And, if you prefer liberty to big government, then that can only mean that you are a rugged individualist — you believe only the fittest should survive and everyone should carry their own weight.

But, you don’t need to be a rugged individualist to respect that the next guy deserves a chance to decide what is right for him without you sticking your nose in, just as you expect the same respect from him (“golden rule of liberty”).  You earn your freedom by letting others have theirs’.

That may be individualism, but it is not rugged individualism. And definitely not ‘survival of the fittest’ or ‘on your own’ society.

Individuals are important. Individuals are the building block of society. Without them, there is no society. It’s as simple as that. I think this is something that most people in our country believe intuitively. That’s not an -ism. I don’t think we would take the effort to educate people or attempt to help others through government or otherwise if we didn’t believe individuals were important.

Respecting the liberty of others doesn’t mean that you want an ‘on-your-own’ society. Quite the contrary. It means that you recognize that the greater good is better served from the voluntary actions of individuals than through involuntary, even if well-intended, actions of government.

Voluntary actions work so well for the greater good that not only do the unfit survive, but they don’t even really exist. In a free society with lots of specialization, nearly everyone can usually find something with which they are fit.

But for those who confound government and society, they have trouble seeing the benefits that result from voluntary actions be it trading, charity or otherwise. Why?

Even as they personally benefit from so many things provided by profit-seeking trading including basics like indoor plumbing, bountiful food, shelter, climate control and amenities like fashion handbags, smartphones and a camera in just about everything, these people scoff at the idea that businesses do good by seeking profit for their owners. They view profit-seeking as a drain on society.

They don’t see that they are the very people who have rewarded the owners with profit. They also don’t understand why they rewarded the owners — because they too gained value (or profited) from the product. Even though they participate and benefit from this activity 24/7, it is such a part of their daily lives, it is invisible to them.

These people also discount the notion that charitable activities can ever be generous enough to meet all the needs of the poor or they have strange ideas about why they do not prefer private charity. I recall one conversation where I mentioned how well churches carry out charity. The person agreed, but said she didn’t want people in need to have to get a pitch on religion just to get help. There was so much wrong with that, I didn’t know where to begin.

So, with trade, charity and other voluntary actions discredited as a reliable and viable way to achieve the greater good, that leaves government. If they see one person who wasn’t served well by private actions (usually these are the people who are asked to stand at State of the Union addresses), that’s all the convincing they need for government intervention. Rarely do they ask, can I do something to help solve this problem? It’s far easier to support government doing it and then assume the moral high-ground for that. In fact, that requires no action beyond flapping lips.

So, as a supporter of liberty, when someone tries to pin you with the ‘on-your-own’, rugged individualist tag, don’t let them off so easy. Explain that one of the things that attracts you liberty is that it does a far better job of serving the greater good than government and why you think that. It may not lead to an immediate change in thinking, but it could plant a seed that could blossom later.

The forgotten viewpoint

Mark Perry, at Carpe Diem, reminds us of some good advice from French economist, Frederic Bastiat:

Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.

Let’s apply this advice to some common situations.

Minimum wage.  Here’s a good story about how consumers pay for higher minimum wages (HT: Don Boudreaux, Cafe Hayek). The costs to the consumer includes higher prices and fewer options. Some of the cost is also born by low-skilled workers who will have fewer employment opportunities.

Credit card regulations: Don Boudreaux does a nice job in his Pittsburgh Tribune column, Help That Hurts, of looking at the credit card regulations from the viewpoint of consumers.  Here’s an excerpt:

Congress, the White House and most of the news media describe CARD [Credit Card Accountability, Responsibility and Disclosure Act of 2009] as “pro-consumer.” At first glance this description seems accurate. After all, don’t consumers benefit when the fees and interest rates they must pay are reduced?

Although the answer to this question is “yes,” this isn’t the correct question.

The correct question is, “Don’t consumers prefer to have the option of paying higher fees and interest rates if the alternative is having no access to credit at all?”

Not everyone is financially careful or responsible. Traditionally, credit-card issuers dealt with this fact not by refusing to lend to consumers with poor credit scores but, instead, by using an ingenious approach that helps both those consumers with poor credit scores as well as the banks that lend to them. That approach is to charge delinquent customers significant fees for late payments and to raise interest rates on delinquent balances.

Here are a couple more things where the consumer viewpoint is usually ignored:

  • Foreign trade – Who would be hurt by restricting access to foreign goods? Consumers.
  • Labor unions – Who funds the generous wages and benefit packages of unions? Consumers.

I’ve added a new category to my blog, Consumer Viewpoint, to remind me to continue to apply Bastiat’s advice as I encounter various situations.

The Government Subsidy Fallacy

Lyndon Baines Johnson Department of Education ...

No Federal Department Left Behind

Just because you don’t think the government should do it, doesn’t mean that you’re against it.

David Henderson points out a Bastiat insight in this blog post that I, as well, find frustrating.  This is from Bastiat’s What is Seen and What Is Not Seen:

When we oppose subsidies, we are charged with opposing the very thing that it was proposed to subsidize and of being the enemies of all kinds of activity, because we want these activities to be voluntary and to seek their proper reward in themselves.

Henderson then shares a technique he uses in his economics class to illustrate this:

When I teach this article in class, I ask the students, who are almost all American, how many of them favor having government subsidize religion or requiring that people be religious. Typically no one raises his hand. Then I say:

Wow! That’s really something. I’m going to go home tonight and say to my wife, “Babes, I have a class of 25 people and all of them are atheists.” Did I get that right? Am I leaving something out?

The classic example of this is the Federal Department of Education.

Mention that we should get rid of it and — despite the fact that since its establishment per student, inflation-adjusted spending on public education has tripled while declining in quality, despite the fact that DC driven education accountability has proven not work (not under this guy, that guy, or that one) and the best accountability is parents, despite the common sense view that sending our money to Washington to have bureaucrats give it a hair cut and then send it back to our schools doesn’t make sense — you will likely be accused of being against education.

When actually, it’s just the opposite.

Policy by anecdote

At the 9:30 mark of the Peter Schiff video in this post, Mr. Cummings of the Congress on Jobs Committee says of “stimulus” spending:

You can say what you want about the stimulus bill, but I can bring in a room full of people who would say if it were not for the stimulus the would not have had jobs.  I know it has an effect.

I believe even the staunchest Keynesian (people who actually believe government stimulus works under certain conditions) may advise Mr. Cummings that his anecdote does not actually address the key point made by critics of so-called stimulus spending.  The key point was made by Frederic Bastiat in 1850.

It says that while it’s easy to see the beneficiaries of any specific spending or program, it’s not so easy to see what might have happened without that spending or program, and to determine if the spending helped or hurt on whole.

While we tend to credit that spending amount as 100% beneficial, we don’t consider what would have happened anyway.  Bastiat called this the broken window fallacy.  We see a broken window and say, the silver lining is that the window maker will benefit by selling an additional window.  We easily forget (or are easily distracted) that the money spent to replace the window could have been spent on something else, something even more productive and valuable than replacing something that you already had.

Unfortunately, neglecting what would have happened anyway permeates political and business decision-making.  We focus on what is easily seen and set policy by it.   I call this management-by-anecdote.

Anecdotes are powerful political tools.  If a picture is worth a thousand words, then anecdotes are worth ten thousand.  And, if you can mention the name, place, or show the face of the person in the anecdote, that ups the value of anecdote another 10 fold.  Notice all the anecdotes that sit in the balcony during the State of the Union address.

It concerns me that we have so many people in leadership roles, like Mr. Cummings, in business and government in this country that so easily succumb to the anecdote.

Litmus test: Morality of law

Cover of "The Law"

Can the eye on the cover see the unseen?

In his latest column, Walter Williams quotes French economist/philosopher Frederic Bastiat.   Bastiat provided a great litmus test for judging the morality of a law and government action:

See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Bastiat added in his book The Law:

When law and morality contradict each other, the citizen has the cruel alternative of either losing his moral sense or losing his respect for the law.