Tuesday, August 14, 2007

Why Libertarianism is a Superior Political System

I believe libertarianism, of all political systems, allows for the highest level of efficiency in a society. I define a libertarian government as one that outlaws acts of fraud and initiated coercion against individuals and their property and taxes people to fund a police force and courts to enforce the law, a military force for self-defense against foreign aggression, and little else.

A good example of a libertarian government is the United States government circa the 19th century, when it strongly adhered to the principle of Laissez Faire, and when the United States saw itself become the world's industrial super-power. Instead of wading into more historical examples to try to prove my case about libertarianism and efficiency, I want to explain my theoretical reasoning.

The underlying reason why a libertarian econo-political system is the most efficient one is that conflict is expensive. Conflict drains and diverts resources from productive uses and disrupts productive systems through acts of destruction. We humans seek to attain and accumulate resources in the most efficient possible manner for our individual self. When the most efficient manner available is attaining the resources from other individuals through coercion or theft (including fraud), it tends to reduce the overall efficiency of society because those individuals who lost their resources to the coercion and/or theft will divert their resources to attempting to prevent future losses of resources by such means.

One example of this dynamic in effect is taxes. Tax receipts are coerced from the population at the threat of imprisonment/fines. People spend considerable amounts of time and resources trying to find ways to minimize the taxes they are forced pay. For example, they may hire an accountant to file their taxes in a way that minimizes their taxable income, or they may look for ways to move their money offshore outside the reach and sight of government agents.

None of these activities aimed at reducing how much they are taxed increases the overall efficiency of society. This type of mis-allocation of resources manifests itself whenever there is conflict amongst the participants of a society (in this case between state and citizen), so obviously, as this line of reasoning goes, the less conflict a society has, the better it is for its level of efficiency.

So the next question we face is how to reduce conflict. One option is simply putting everyone into bondage, deny them their right to privacy, and ensure that they have no choice but to obey the government. This could conceivably reduce the incentive of the citizen to resist the state's dictums to the point that conflict is reduced, but this would also give awesome powers to the government over the people, and therefore make the potential rewards of attaining the position of political leader of such a state enormous, which itself could create conditions that increase the likelihood of conflict.

It therefore seems likely that an all powerful state would create a cold war like environment where each political faction is focused on increasing their political/military strength in order to increase the probability of seizing power.

All of this political jockeying uses up resources of course, diverting them from productive purposes, and therefore mitigating whatever efficiency advantage that an all powerful state would confer from reducing citizen vs state conflict.

Furthermore, the resources required to maintain a bureaucracy that keeps the population under absolute control and surveillance would be enormous. For these reasons, I conclude that a society with an all powerful government that pervades every facet of that society cannot be economically efficient.

So the question now is, if we go to the opposite extreme, and have a society that has a small libertarian government in place rather than an all powerful pervasive one, will coercion from other, non-state, facets of society replace government coercion? Wouldn't mafias and other non-state actors simply take the place of the government?

I argue no, because there's a distinct advantage that a government has when trying to prosecute and outlaw acts of initiated coercion and fraud, over trying to prosecute other types of crime (e.g. narcotics consumption, tax evasion, etc), and that is that they have the victim on their side.

It is not just Government vs Law-breaker, in the case of a libertarian government, it is always Government + Victim vs Law Breaker. A libertarian government need only be more powerful than the next most powerful center of power in the country, in order to guarantee that no citizen is above the law. The citizens will do the bulk of the job of surveilling and reporting crime, as a natural consequence of the fact that the only crime in a libertarian society is one where a citizen is a victim and therefore has a strong incentive to report it, requiring of the government only to administer justice.

I believe this advantage of libertarianism in efficiently reducing conflict in society makes it the best form of government for maximizing efficiency in a society.

9 comments:

Anonymous said...

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scineram said...

Troublesome argument. Depends on your definition of efficiency. Other things could also be more important than efficiency thus making it inferior. Like fairness, equality.

KineticReaction said...

I define efficiency as the productivity of society.

With regards to "fairness, equality", I don't think force (government) should be used to create equality.

There are a couple fundamental problems with forced wealth distribution to create financial equality:

* It is extremely unfair to those who create more wealth than others. People should have equal rights under the law, and the government can provide that, but how much property (wealth) they acquire should be determined by their own individual luck and hardwork.

* The mechanism used to redistribute wealth by force (taxation) can be easily misused by those in power to take the population's wealth for themselves. Once wealth is collected by government agents and put into the public treasury, the powerful raid the public treasury and in this way exploit those with less political power/connections. Indeed that is what you see in nearly all nations with a lot of socialist policies, like the US.

Anonymous said...

Libertarianism (laissez faire) governance = no regulations against exploitation of workers, or pollution, or monopolies, or special interest money in politics, or consumer rights. It = no universal health care, no funding of important scientific research or education.

But it is really great for corporate profit.

KineticReaction said...

anonymous, you're absolutely wrong.

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Libertarianism (laissez faire) governance = no regulations against exploitation of workers, or pollution, or monopolies, or special interest money in politics, or consumer rights.
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Libertarianism protects workers from exploitation and citizens from pollution by protecting individual liberty, which includes property rights.

There is no special interest money in libertarian politics since there is a very small public treasury. Socialist states meanwhile collect a large amount of money and put it in the public treasury which can then be exploited by those who are politically connected.

---
It = no universal health care, no funding of important scientific research or education.
---

A libertarian society could very well have things like universal health care, but it simply would not be provided through coercion = the government would not provide it. It would have to be provided by a charity.

---But it is really great for corporate profit.---

And corporate profits allow for companies like Google and all the great technologies it creates.

Anonymous said...

What about the environment?

Do you remember the Union Cardibe disaster? How could more events like this be prevented in a Libertarian society?

KineticReaction said...

The government needs to prevent pollution, but through deterrence, the way it prevents crimes in general, not through requiring all businesses to license their operations which requires massive regulatory compliance work for any one who wants to engage in economic activity.

Anonymous said...

Your argument only makes sense in a conceptual way. Socialism actually makes sense on a chalkboard. But if you start talking about details your ideas fall apart. This is always the case with conservatives and libertarians alike. It's easy to say government has no place doing XYZ but you cannot come up with a better idea.
For example: if you're over 60, regardless of your health, no medical insurance provider will offer you a policy. Period. It's not profitable to provide a medical insurance policy to someone that age. So what's your answer? If you're over 60 and you're not rich and you get sick: die. This is why government came up with something called MediCare. The government does what private industry refuses to do. This of course becomes a target for politics. Rich people have to share a few pennies so the working poor can have medical care when they grow old. Socialism.
There are many things the free market has no place doing. These include the military, criminal justice system etc. I believe your model allows for these. There are things the free market cannot do and will not do such as the space program and most infrastructure. The big problem with your model is that it does not account for these nor does it account for the monopolization of resources and the means to create wealth - you know - the problem we have today. The truth is if we set your poetry aside, there are almost no things the government does today that it has no reason doing. I challenge you to list those things the government does today that we would be better off not having the government do. When I say "we" i'm not talking about "me and my rich rich buddies." I'm an ordinary person. I'm talking about real people who work for a living and have families and dreams. I think it's a great idea that government focuses on keeping the world we live in functioning so we don't have to. We can enjoy our families and friends and our lives. In your model I fear we would all have to focus on raising armies to fight for our rights.
I love capitalism. The only problems it has is that "it takes money to make money" and "money is power." The result of this is that the rich get richer and the poor get poorer. Opportunity favors the wealthy. I do not see how making the ultra-wealthy pay a higher tax rate equates to wealth redistribution or how taking that away makes a society more productive. Taking away the working poor's access to education and health care makes a society more productive? Sorry. It's total nonsense. Libertarianism is narrow-minded and doomed to fail.

KineticReaction said...

"For example: if you're over 60, regardless of your health, no medical insurance provider will offer you a policy. Period. It's not profitable to provide a medical insurance policy to someone that age. So what's your answer?"

There is no answer. There is such a thing as poverty in a free country, and plundering the well-off is neither a moral, or in the long run, effective way of dealing with it.

Socialism does NOT work on the chalkboard. It's short-sighted, in that it only looks at the immediate case of someone in need, and not the long term consequences of forcing others to take care of them, and it ignored morality, by rationalizing the threat of violent force that must be used to force one party to pay for the needs of another.