Tag Archives: Libertarianism

The Poetic Myth of Libertarianism

Ayn Rand/Alan Greenspan

“I have always found it quaint and rather touching that there is a movement [libertarians] in the United States that thinks Americans are not yet selfish enough.”
–Christopher Hitchens

Sun Tzu in The Art of War declared that the most important thing for victory was knowledge: specifically, know your enemy. But perhaps an equally important thing is to realize that you’re in a war in the first place. Congress’ recent action in dabbling with the sequestered funds just enough to allow rich people to catch their flights without delay, but not offer poor people voucher 8 certificates to allow them to remain in homes speaks volumes about their priorities, and it should also serve as an indication that, yes, we in fact are in a war; a war that places the needs and desires of our wealthiest citizens over the needs and desires of everyone else. It’s a war whose enemy is usually invisible because, by preference, those who invest millions to buy (er, lobby) Congress don’t necessarily want their names known.

Included in that list should be Pete Peterson and his merry band of austerity hounds. Recent revelations thanks to the work of Thomas Henderson and others have debunked the economic case for austerity measures as a palliative for our economic woes. In fact, most economists (and by ‘most’ I mean economists with a reputation for serious academic work) believe that austerity measures at this precise moment are hurtful to all but the wealthiest individuals in the world—and soon, if things continue to trend South—it will be hurtful to them as well. But that has not deterred the austerity minded, because, one senses, there’s more to this austerity push than simply trying to fix the economy. There’s an ideological view that government is bad, that government cannot solve problems, that –in the infamous words of Ronald Reagan, “In this present crisis, government is not the solution to our problems government IS the problem.” Government, as Grover Norquist would have it, “needs to be drowned in a bathtub.” It’s a libertarian view that appeals to the individualist in the American culture, that stoic, do it alone, head off into the sunset myth of the Wild West. Ayn Rand’s claptrap lends a patina of philosophical authority to what is principally a poetic myth. But there are many, especially those in the top income brackets who hold to this myth in part because it is self-validating and in part because, at least temporarily, it serves their economic purposes.

What’s amazing however, are the folks on the lower end of the income scale, middle class and poor folks who also buy into the myth. So much so that at least half our national government is ruled by a party so obtuse and financially naïve they are willing to destroy our economy at the behest of millionaires and billionaires while leaving the vast majority of Americans to thrash about with little to no safety net. Their logic, like Larry Summers ideas of using third world countries as a dumping ground for first world toxic wastes, is both impeccable and insane. Which brings us to Ayn Rand whose unfortunate influence is now being felt nation wide.

I was introduced to Rand’s writing by a wildly energetic red-head with a passion for handguns. I considered it my first postmodern experience, like sipping a latte while watching a crack deal go sour on K and 14th. She carried a dog-eared copy of The Fountain Head and insisted that Ayn Rand’s ‘philosophy’, her so-called ‘objectivism’, was all a thinking person needed. This was not during the late 80s and 90s when any neo-conservative could grab a slice of airtime if they could string two sentences together. No, much to her credit, she was sparking off about Rand during the early 1970s when someone like David Horowitz might have been properly stoned. I didn’t think much of her fervor until Alan Greenspan made his remarkable admonition to the free world in 2002 and announced that greed was not all good. His exact phrasing denounced the infectious greed of the current crop of businessmen:

“Infectious greed [gripped] most of [the] business community. Our historical guardians of financial information were overwhelmed. Too many corporate executives sought ways to ‘harvest’ some of those stock market gains. As a result, the highly desirable spread of shareholding and options among business managers perversely created incentives to artificially inflate reported earnings in order to keep stock prices high and rising.”

What a weird idea, I thought. First, that you had to bother to denounce greed, rather like a priest having to mention that murder is bad. Second that you describe it as infectious, as though it were not one of the seven deadly sins, but rather an alien virus, following strange vectors of human behavior. Mr. Greenspan rightly diagnosed the problem, but declared it the disease itself, rather than a symptom of something far more systemic. To put this succinctly, greed is not an aberration, or bug of free market ideology, it is the core feature.

I image now if my red-head is reading this, her cheeks are flushing, her freckles are steaming and she is ready to shout with unalloyed Scot fury, advocating the free market is not an ideology! It is merely people doing what people do, taking personal responsibility and pursuing their own enlightened self-interest (as Ayn Rand might have it) in free trade. The mark of any first-rate ideology, of course, is to deny that it is an ideology at all. My dear Scottish lass would tell you unequivocally that taking personal responsibility and following your own enlightened self-interest was simply the natural order of things made manifest. Like what Adam Smith said, “invisible hand of the market” all of that.

Now let’s step back and think about this. In the context of our most recent unpleasantness who exactly was enlightened? Did homeowners know their mortgages would be repackaged into exotic financial parcels, backed by ‘insurance’ policies that could make money on either their success or failures? Did municipal investors know those triple A rated investments were a house of cards about which prominent Goldman Sachs and JP Morgan officials internally were quite frank in assessing the risks—but curiously quiet otherwise? Of course not. The fast majority of real investors—that is folks putting money into products, like, for example, their own homes, had no Earthly idea what was going on. Some may have been motivated by greed (excuse me, self-interest!), but most just liked the idea of getting a really big house at a great rate. The structural problems, the insanely risky game that was being played by hedge fund managers and loan institutions qua banks qua gambling casinos was consciously hidden from the unsuspecting public. Not only were they not enlightened—they would never have been enlightened had their various contrivances not failed so spectacularly, and that was entirely the point.

So the whole sublime libertarian concept of ‘enlightened self-interest’ about which my lovely red-head burned so passionately is pretty much a fraud—or at any rate, a game of three card Monte. The ‘invisible hand’ of the ‘free market’ was neither wholly invisible nor wholly free—enlightenment was impossible, self-interest, therefore moot, and whatever personal responsibility might have been in play was entirely misdirected. If Adam Smith knew half of the current shenanigans, he’d be pleading from the grave…“STOP!”

But this is not the whole of the libertarian poetic myth. No, the last holdout for the Libertarian, their very raison d’etre is a single, incantatory word ‘freedom’. What a great word! And who can be against freedom? Even granted all of the limitations of our government to enforce transparency, even allowing for the heartless drum beat of manipulating advertisements that would generate desire out of thin air and distort what would really be of individual benefit (that is, self-interest), we would certainly not trade these blemishes for a loss of that core value for all Americans, freedom. Right? And more freedom is always better, right?

But maybe we should ask, first, what do we talk about when we talk about freedom? I have an abstract freedom of speech, for example, and a practical one. My abstract freedom of speech tells me that I am free to say whatever I want to whomever I want given that it’s not libelous or on order of saying something like ‘fire’ in a crowded theater (which I can also do, but could be charged later should any damages occur). That’s the abstract freedom which I share with everyone else in this country. And that’s exactly the rub. My abstract ‘freedom to say whatever I want’ has little or no effect without some method of distribution. So my freedom of speech is just dandy for talking up the trees in my backyard, but in terms of everyday practical use is as limited as a roll of toilet paper. Now with the advent of the internet and certain technological innovations, my little freedom has actually a bit more of a chance, but in practical terms, is still dramatically limited compared to the ‘freedom’ politicians have or large-scale publishers of newsprint or broadcasters, etc… In particular my little freedom is as nothing against the colossus of a multinational corporation that may in fact own the means by which I wanted to express my little puny freedom in the first place. So my practical freedom is dramatically limited by my ability to amplify what I want to say so that others may hear it and discuss and if they agree we might affect practical change (presumably the whole point of all this freedom). Unfortunately, the SCOTUS decided that there really was no such distinction and granted corporations the same ‘abstract’ level of freedom I have as a walking talking human. But this, of course, is ridiculous. Not only can a corporate entity magnify their message infinitely compared to my own poor efforts, but a corporate entity will not suffer from certain human capacities and limitations—such as sympathy, love, disease and death—features that define us against abstraction in the first place.

So abstract freedom in every instance has a counter part that we can call practical freedom or walking around freedom. The freedom that counts to me in my waking, breathing life is the practical variety. Practical Freedom depends on things like how much money I have and how healthy I am.

Let’s take an example to make this more concrete. Raising the minimum wage, or even having a minimum wage. One suspects that a libertarians view of the minimum wage would be a forthright ‘no’. In principle it’s obviously an attempt to manipulate business into providing a baseline nanny state social net that artificially drives up the costs of the products involved and [they believe] is overall hurtful to the economy. But more importantly, it’s a constraint on the sacrosanct and brilliant workings of the ‘invisible hand’ of the market place. So I would suspect a clear and declamatory ‘no’ from the libertarians out there. This despite the fact that it would greatly increase the Practical Freedom of many of our fellow citizens–even, I would suspect, a few of our less noteworthy libertarians might benefit. And the economic argument –that it would result in fewer workers hired, because they would ‘costs’ more– has not been proven out in any study I’ve seen. But on principle I suspect most libertarians will say no because it will somehow pervert the workings of the ‘market’…. Yet, the market itself is a man-made construct built of rules that can hurt either the owner or the worker or consumer in any given situation. The rules that we currently maintain are heavily tilted toward the owners (maximizing profit for share-holders, for example, much of our tax law, especially with regard to capital gains). There’s nothing natural about it, and the perversion they fear is merely man-made manipulations working for the practical benefit of the individual on the ‘labor’ side of the ledger rather than the ‘owner’ side.

A libertarian might conversely argue that given sufficient Abstract Freedom, whatever goes wrong for you in the area of Practical Freedom is axiomatically your own fault, and therefore it would be morally wrong to do anything but leave you to your own devices. This is also known as the boot strap theory of existence (as in ‘pull up by’) and the basis for Ayn Rand’s sophomoric diatribe against altruism. Hobbes had a vision of what a society following such ‘rules’ might be: nasty, brutish and short. There are psychological reasons outside the scope of this discussion why our culture has often promoted an attitude of “blaming the victim”; of finding reasons why anyone who suffers misfortune must have somehow brought it on themselves.

Predictably, 5-6% of our population can never find work (and now that figure is closer to 10%-11%) and it’s not a failure of the individual but of the very ‘invisible hand’ whose magic somehow continuously fails. Yet, the free market acolytes, the libertarians and über capitalists rather than offer some type of reasonable social safety net for the losers (much less a livable wage) prefer to think of it as a system of moral justice, as well as efficient economics. But, of course, it’s neither moral nor economically efficient.

Take the case of folks in Louisiana price gauging during the Katrina Hurricane disaster. Morally, we must ask, was that right? It certainly follows all the ‘rules’ of supply and demand. But is it morally right? Shouldn’t there be laws against it? Would the absence of laws in such situations encourage more personal responsibility or enlightened self-interest? The empirical evidence suggests otherwise. Furthermore, how does personal responsibility or enlightened self-interest take into account the behavior of those individuals who are certainly acting according to the market, but who, meanwhile, are destroying others who have been put in such a precarious position? We could ask the same questions of hedge fund managers, Blankfein of Goldman Sachs and the bevy of bailed out banks that have paid billions in bonuses to upper management while our infrastructure crumbles, our schools go without teachers and the chattering class decides to slash our only retirement system to make up revenue shortfalls—because arch conservatives and libertarians refuse to tax the wealthiest among us at reasonable rates. This is neither moral, nor economically efficient. There’s another word for it that Greenspan put his finger on back in 2002: greed.

Good ole, infectious greed.

I am put in mind of John Kenneth Galbraith’s famous quote:

… “extreme capitalism”: the obsessive, uncritical penetration of the concept of the market into every aspect of American life, and the attempt to drive out every other institution, including law, art, culture, public education, Social Security, unions, community, you name it. It is the conflation of markets with populism, with democracy, with diversity, with liberty, and with choice—and so the denial of any form of choice that imposes limits on the market. More than that, it is the elimination of these separate concepts from our political discourse, so that we find ourselves looking to the stock market to fund retirement, college education, health care, and having forgotten that in other wealthy and developed societies these are rights, not the contingent outcomes of speculative games.”

That’s why libertarianism and its adjunct, extreme capitalism, and the ‘conservative movement’ in general doesn’t rise to the level of a philosophy—not even a consistent world view, really. They are more like one-dimensional cartoons, or mythologies of the market around which people orient themselves, much as they profess a faith in one God or another, or link arms with an ideology and move blindly forward, regardless of evidence suggesting their ideological system doesn’t so much describe reality, as wish for it. The libertarian is as deluded as your average millennialist constructing an imaginary landscape to be; a utopia on Earth, that might one day exist, if we all would only close our eyes, click our heels, and believe.

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