The Case for Small Government

A Libertarian Perspective on Economic and Social Policy

March 31, 2006

Liberal vs. Libertarian Legalizers

An essay I wrote in 2004 discusses liberal versus libertarian views on drug legalization. The first paragraph is here:
To most observers of the drug policy debates, all drug legalizers are alike. The reality, however, is that legalizers come in two distinct flavors. Most legalizers are liberals, and their views on drug policy are consistent with liberal views on other issues. A minority of legalizers are libertarians, however, and their views on drug policy reflect libertarian perspectives on policy generally. There is ample overlap in the views espoused by these two camps. But there are also substantial differences in their views on legalization and related matters.
The full essay is here.

35 Comments:

At 10:45 PM, Blogger daksya said...

I would mostly fall into the 'liberal' camp.

Concerning your essay:

Liberals do not generally trust individuals to make reasonable choices about drug use, and they think government should adopt policies that attempt to discourage drug use.

I believe that individuals can make reasonable choices, provided that accurate, comprehensive & lucid information is available. Liberals do not trust commercial interests to paint such a picture. Government should adopt policies that recognize that drug harms fall along a gradient i.e. drinking coca tea is not even in the same boat as smoking crack; taking mushrooms & acid is not like taking PCP, although all three are classified as 'hallucinogens'.

Under full legalization, the production, distribution, sale and possession of drugs are
all legal; the law treats drugs like any other commodity.


The second clause doesn't follow. Alcohol is not treated like any other commodity. There are restrictions on its sale, advertising, age-limits..etc.

I agree that decriminalization is an odd policy. Even a Dutch minister belonging to the ruling CDA party, which morally opposes cannabis use, suggests that either the Dutch trade should be fully legalized or fully prohibited (with the second choice being rhetorical).

libertarians advocate outright legalization rather than decriminalization, although
they agree that decriminalization is preferable to current practice.


Tactically, decriminalization is a bad move. There's the danger that the dominant prohibitionist sentiment will paint reformers as claiming that decriminalization will solve the major problems related to drugs; when that doesn't happen, as it won't if the supply side is still underground, it will be portrayed as the fundamental impotence of all diverse reform-oriented initiatives (by association).

They [Libertarians] agree that some commodities are reasonably characterized as habit-forming, but they do not regard addiction as a problem per se.

Depends on the effects of the drug. Heroin addiction, per se, may not be a problem, as demonstrated by the heroin prescription programs in the UK, Netherlands, Switzerland..etc, but methamphetamine addiction has serious physical effects. It's easy to say, "they [libertarians] believe those addicted to drugs bear responsibility for their actions" but the two kids of a meth-addicted aggressive father, won't feel the same.

Liberal legalizers assume that, even if legal, drugs should be subject to substantially more regulation and taxation than applies to most other commodities.

Regulation, sure. Taxation, not so sure. I think usage should be directted by education, not high taxes. One of the key goals of legalizers is to eliminate the black-market. Legalization can't start with high taxes. The established black market will outcompete, as far as drugs like pot, are concerned.

They believe minors often evade these restrictions, which breeds contempt for the law by the minors who purchase the goods and by the merchants who sell them.

The key question is, to what extent does evasion occur? And more importantly, which age groups? A 22 year old who procures alcohol for his 18 yr old brother and friends does so because he doesn't think his younger brother (& friends) would be harmed by the beer. But he wouldn't buy beer for his 10 year old brother. In the libertarian system, the 10 year old could walk into a store and get a six-pack. The current prohibition is pretty effective at keeping drugs out of the hands of those 12 and under. It's also known that marijuana moderates psychosis in adolescents with a variant of the COMT gene, but not adults. There would be a well-grounded basis to place the easy barriers to access.

Libertarians would impose few if any restrictions on advertising of legalized drugs. In part this reflects respect for the First
Amendment; in part it reflects the view that advertising does not persuade people to consume
goods but merely shifts preferences across brands.


Ha Ha!! This belief falls down when you think about why you think that advertising can do the latter, but not the former. All advertising targets existing psychological drives and molds the perception of the end-product favorably, whether the task is introducing a new brand or a new product. It's a matter of degree, not kind. And the difference is not insurmountable.

 
At 11:05 PM, Blogger Mike Huben said...

An accurate glimpse into libertarian propaganda about their strange beliefs.

And belief is the operative word, as most of them are highly distorted, unrealistic views of the world.

For example, legalizing drug purchase and use by children. Remember Joe Camel? It wouldn't be long before age-appropriate cartoon characters were hawking adictive candy based on nicotine, crack, opiates, or whatever other substance works best to generate return customers through addiction. And let's not forget "The Old Dope Peddler": "He gives the kids free samples...."

It's also surprising to me that an economist would so downplay the question of externalities of drug use. Expenses to family, neglect of family, loss of time at work due to health issues, increased accident rates, etc. The libertarian overemphasis on individuals deciding for themselves alone conflicts harshly with reality.

And we do have to wonder what sources this came from. This line looks like a howler:

"Thus, for commodities viewed as substantially
harmful (e.g., tobacco), liberals are willing to consider prohibition..."

If there's a liberal tobacco prohibition movement, it's a tiny minority.

 
At 12:56 AM, Blogger James said...

daksya: "I believe that individuals can make reasonable choices, provided that accurate, comprehensive & lucid information is available. Liberals do not trust commercial interests to paint such a picture."

Exactly what is it about government interests that you believe makes them more trustworthy than corporate interests?

 
At 7:09 AM, Blogger Mike Huben said...

James, government is designed to serve us, to negotiate deals among diverse interests. Thus more information comes out about those interests and the opportunities offered. This happens through public discussion, no matter what a few players in government try to suppress. Which is precisely why we're having this discussion about drugs now.

Corporations serve a tiny class of owners, who profit by deceiving us. You need only look at the history of the tobacco, asbestos, and drug industries to see a long history of public deception.

 
At 8:11 AM, Anonymous Joe Martin said...

Mike Huben: If there's a liberal tobacco prohibition movement, it's a tiny minority.

What, exactly, would you call the drive for smoking bans then? The city of Calabasas, California just passed a smoking ban that pretty much makes it a crime to smoke anywhere but in your own home and car. The city has even hinted that they might ban smoking in all apartments.

It certainly looks to me like there's a liberal tobacco prohibition movement.

 
At 8:50 AM, Blogger Mike Huben said...

Joe, that is full legalization with regulation according to the conventions in Miron's article. You can still own and purchase and use: just not use in some locations.

 
At 10:03 AM, Blogger Brian said...

I think a libertarian views advertising as education while a liberal views advertising as deception.

Long term I believe the liberatarian view is the correct view because free enterprise forces business to be honest. Dishonest businesses do not survive.

 
At 11:46 AM, Blogger Mike Huben said...

Brian, your belief overlooks the idea of equilibrium: even if some deceptive businesses go out of business, new ones arise to take their place.

You might as well say that, in the long term, there is no tyranny because human tyrants will grow old and die.

 
At 2:38 PM, Blogger James said...

Mike,

You might have some design in mind for a government that will do this or that, but every design for government that I know of involves trusting the government with a set of powers and authorities that any crook would love to have. I fail to see how any design existing in your mind will serve to prevent crooked people in the real world from using the powers of the state to pursue their own greedy agendas, either by entering the government, manipulating it to serve their ends, or both.

So really, your response fails to answer my initial question: Exactly what is it about government interests that you believe makes them more trustworthy (here, on earth, not in some intelligent designer's mind) than corporate interests?

 
At 3:20 PM, Blogger Mike Huben said...

James, your general-purpose demand for perfection is a foolish argument. Of course some people will abuse power. Can't stop it, whether it's private corporations hiring Brinks goons to smash heads or whatever.

The OBVIOUS reason we believe government will do better is because the alternative is mafias and warlords. Those are capitalists without governments to reign them in.

 
At 5:21 PM, Blogger daksya said...

james: Exactly what is it about government interests that you believe makes them more trustworthy than corporate interests?

Stronger feedback loop & leash, relative to corporations, but not much more. The problem isn't so much with government & corporations as with their size/scale relative to their "client base". A mom & pop company or a village council are pretty much easy to figure out & are generally honest. They can deal with their 'clients' as individuals, and maintain some intimacy & empathy. Large governments & large corporations can't. I don't necessary mean that malice will set in, but selfishness and apathy certainly. Governments may very well make problems worse, but from that it doesn't follow that the very contained government of Libertaria is an improvement.

 
At 9:14 PM, Blogger James said...

mike,

I'm not demanding perfection. I'm asking why you trust the government with powers and authorities that you find too dangerous to trust anyone else with. In fact, your comment "...the alternative is mafias and warlords," really makes me wonder what behavioral assumptions you are making. Sure, warlording is one alternative in the absence of government, but I don't see any reason to be believe that it is the alternative.

Do you believe that people are normally so interested in bettering their own circumstances that they will all try to become warlords if a government isn't around AND believe that a government made of people won't become an instrument of the same tendencies that lead to warlording?

I don't believe people are quite as willing to exploit others as you do, but if I did, I would not anticipate that people in the government would somehow be any nicer than the rest of us. Your behavioral assumptions seem inconsistent with themselves and also with history.

There have been many times in the history of mankind where some region was temporarily without a government and the alternative you describe, corporations turning into mafias without governments to supervise them, didn't happen. I believe the Zildjian musical instrument company has been through at least as many stateless periods as any other firm since they date back to around the 1200s or so. They never turned to warlording. The Grey Poupon mustard company has been through at least one revolution but they never decided to branch out of the the mustard business to try warlording. These are but two examples. Can you tell me about some private firms deciding to get in the warlording business when there was no government around to regulate them?

Don't get me wrong, warlording is a real possibility, but warlords that get started in the absence of a government are seldom private corporations branching out into the warlording industry. They are, almost without exception, criminals aspiring to become governments. I'm a little surprised that you wouldn't see such aspirations more favorably, given your fondness for governments.

At any rate, you never did explain this whole bit about design. Have you changed your mind, or are you just changing the subject?

daksya: I'm not sure about the "... feedback loop & leash ..." If I don't like the service I'm getting from some private firm, I can complain, or take my business elsewhere. The switching costs are relatively low, usually zero. If I don't like the service I get from a government, I can complain, which is somewhat less likely to be effective than with a private firm, or I can try voting which gives me odds of about 1/100,000,000 at changing anything, or I can take my business elsewhere by leaving the country. That's an option, but the switching cost is enormous. If any private firm's customers faced such switching costs, I imagine you'd call it corporate crime. And of course governments can very easily change the rules and ignore all feedback either overtly, or by establishing a bureaucracy so thick that no one would bother to offer any feedback.

Besides, keeping the feedback loop and leash working is something that someone has to do. I don't expect the government to actively shorten its own leash. The incentives are all wrong. Nor do I expect private individuals to keep the feedback loop and leash on the government working properly. Doing so constitutes a public good, and as such I anticipate that it will be underprovided or even unprovided. From casual empricism, I observe that most people want to loosen the leash and give government even more power over the rest of us.

"Governments may very well make problems worse, but from that it doesn't follow that the very contained government of Libertaria is an improvement."

But I'm not a libertarian just because I think governments *may* make problems worse. I'm a libertarian for the same reasons that I oppose allowing my grandmother's sewing club, or Dr. Miron, or the management of IBM, or the family next door, etc., the power to tax you and regulate you. I believe that the risk is too great that such power will be abused. That's a subjective probability, so I wouldn't call you crazy for disagreeing about that.

Maybe there is some reason to believe that giving all these people the power to tax and regulate others isn't really a bad risk at all. But I think it far less likely to be the case that giving all of these people such power is a bad risk, *and* that giving such power to a government is a good risk. I don't see what is so exceptional about the people in governments. (I won't restate my views on the feedback loop and leash here.)

I could still be wrong about this too; maybe people in government are actually different from everyone else, less likely to exploit others for their own benefit. I just have a hard time seeing how that would be. The powers of the state would be too attractive to those who are interested in benefitting themselves at the expense of others.

If you wanted to exploit others, would you go into business, or run for office? If I wanted to exploit others, I wouldn't waste a moment forming a corporation or anything else. I'd start a government career. In a firm, my customers and employees could leave and I'd quickly run out of money to continue the operation. The government faces none of these problems.

 
At 10:01 PM, Blogger daksya said...

james: If I don't like the service I'm getting from some private firm, I can complain, or take my business elsewhere. The switching costs are relatively low, usually zero.

I thought you would bring this up. It should be clear that situation isn't so flexible, just by looking at the emergence and maintenance of the very public government you detest ("if people don't like their govt., they will revolt"). As a practical illustration, consider the case of Microsoft Windows. If a 3D graphics artist doesn't like Windows, can she just switch? Not if she's using 3d Studio Max, an expensive software not available for the Mac or on Linux, and for which she has spent months or years to hone skills, and if the bulk of her archived work requires the software, for access.

The simple fact is that survival & stability are valued over freedom. Most people aren't proactive, but reactive. People tolerate problems as long as they escalate incrementally and don't cross a certain threshold. This is a basic psychological fact, amenable to exploitation by both large govt. powerbrokers & corporate interests. In Libertaria, there's no comparable public institution to check on these commercial interests, and there's no guarantee that major competing interests won't simply form a mutual understanding, rather than serve as a balance, depending on the game theory in play.

This is all not to say that Big Government is ultimately helpful, just that libertarianism can't deliver what it promises. The search for a workable & productive societal foundation continues..

 
At 12:54 AM, Blogger James said...

daksya,

I don't deny that switching costs exist when dealing with private firms. They are usually zero for must things I buy, though not always. But when such switching costs exist when dealing with private firms, they are orders of magnitude lower than the switching costs involved with governments.

As one example, the US government forces me to contribute about 12% of my pay to a retirement program. If I decide to switch governments, all of my contributions so far are gone forever. I don't know of any private firm offering a retirement program with such enormous switching costs. If any did, I imagine you would object to such unchecked corporate greed. I would also guess that you find the same behavior completely acceptable when it's a government doing it.

If I wanted to change the firm I use to save for retirement, the bulk of the switching costs would be imposed by the government in the form of taxes. Here, the government is actually creating the sort of barriers to switching that you find problematic and claim would not be checked in libertaria. If you see high switching costs as a problem, I don't really disagree. But that implies that the bigger problem is government, not firms.

"The simple fact is that survival & stability are valued over freedom."

I don't disagree with this or any of your other sociological observations, but I don't think they prove that much besides the fact that big government is an existing social equilibrium. Libertarians already agree with the descriptive claim, but it's a big is-ought leap to go from the fact that big government is an existing social equilibrium, to the belief that it should be.

"...libertarianism can't deliver what it promises."

Exactly what do you think libertarianism is promising? There are heaven-on-earthers in my camp as well as yours, but that's not really what libertarianism is all about. Our host, like most libertarians, believes libertarianism will generate benefits to society that outweight the asociated costs. I suspect he's right, but I'll let him defend his own claims.

I, like a smaller number of libertarians, do not come by my libertarianism for instrumental reasons. Like most libertarians and even most non-libertarians, I believe that (at least prima facie) no one should have the power to tax, to regulate, to maintain a monopoly through violence, to redistribute the property rights of others, etc. I also don't believe that statists have made a strong case for excepting government from this prima facie concern.

The case that you've been making seems basically to be that private firms might use market power to gain at the expense of others where possible (which I agree with) and that the best available option is for a government to have special powers that it might use to check the market power of private firms (which I don't agree with). I can't buy the second part for at least three reasons.

Historically, governments have been far worse than firms whether you compare the best of each, the worst of each, or the central tendency of each.

The service of making sure that any new government doesn't degenerate into something worse than the problems that it is supposed to rectify is a public good, and so I doubt that that service will be adequately provided by anyone inside or outside of government.

Also, such an argument doesn't really explain why government is the exceptional case; that is, I could make an argument parallel to yours with a conclusion that you wouldn't accept for anything other than the government: since firms might use market power at the expense of others, organization XYZ, rather than the government, should have the power to tax and regulate.

 
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