Arguing Against "Libertarianism"

1.0 Introduction

By "libertarianism", I mean propertarianism, a right-wing doctrine. In this post, I want to outline some ways of arguing against this set of ideas. (On this topic, Mike Huben has much more extensive resources than I can allude to.)

2.0 On Individual Details

I like to use certain policy ideas as a springboard for arguments that they have no coherent justification in economic theory. Unsurprisingly, the outdated nonsense market fundamentalists push does not have empirical support either. I provide some bits and pieces here.

Consider the reduction or elimination of minimum wages. More generally, consider advocacy of labor market flexibility. I like to provide numerical examples in which firms, given a level and composition of net output, want to employ more workers at higher wages. Lots of empirical work suggests wages and employment are not and cannot be determined by supply and demand.

Lately, I have been developing examples of international trade. (I think these examples need work when produced means of production can be traded.) In these numerical examples, the firms in each country specialize as in the theory of comparative advantage. That is, they produce those commodities that are relatively cheaper to produce domestically. I explicitly show processes for producing capital goods and assume that capitalists obtain accounting profits. Numeric examples demonstrate that a country can be worse off with trade than under autarky. Their production possibilities frontier (PPF) is moved inward. So much for the usual opposition to tariffs.

Some like to talk about the marginal productivity theory of distribution. But no such valid entity exists. I suppose one could read empirical data on the distribution of income and wealth and mobility as support for this, although others might talk about monopsony and market power.

No natural rate of interest exists. So some sort of market rate would not be an attractor, if it wasn't for the meddling of Jerome Powell and the Federal Reserve. As I understand it, this conclusion also has empirical support.

A whole host of examples arises in modeling preferences. I do not think I have previously mentioned, for example, Sen's demonstration of The Impossibility of a Paretian Liberal.

One can point out sources of market failure from a mainstream perspective. I think of issues arising from externalities, information asymmetries, principal agent problems, and so on. As I understand it, John Quiggin is popularizing such arguments in his upcoming Economics in Two Lessons.

3.0 Arguments From Legitimate Authority

I like to cite literature propertarians claim as their own. One set of arguments is of their experts advocating policies on the other side. For example, in The Road to Serfdom, Hayek advocates a basic income and social security. He says his disagreement with Keynes is a technical argument about whether fiscal or monetary policy can stabilize the economy and prevent business cycles, not a matter of the fundamental principles he is arguing about in the book. Adam Smith argues for workers and against businessmen, projectors, and speculators. He doesn't expect rational behavior, as economists define such. Among scholars, those building on Marx could with more right wear Smith ties than Chicago-school economists.

A second set of arguments from authority provide a reductio ad absurdum. One points out that propertarian authorities seem to end up praising authoritarians and fascists or adopting racists as allies. I think of Von Mises praising Mussolini, Friedman's advice to Pinochet, and Hayek's support for the same. The entanglement between propertarianism and racists in the USA has been self-evident at least since Barry Goldwater's run for president. I might also mention Ron Paul's newsletters.

4.0 Hermeneutics of Suspicion

Instead of arguing about the validity of certain supposed propositions, one might argue about why some come to hold them. Why do so many argue against their concrete material interests and for the whims of malefactors of great wealth? In social psychology, one can point to research on the need for system justification and on the just world fallacy. Marxists can draw on Lukács' analysis of reification or Gramsci's understanding of civil society and hegemony.

I also like how doubt is cast on the doctrines just by noting their arguments are easily classified as falling into a couple of categories. Propertarians can be seen as hopping back and forth from, on one foot, justifying their ideas on consequential, utilitarian, or efficiency grounds to, on the other foot, justifying it based on supposed deductions from first principles. So when you attack one argument, they can revert to the other, without ever admitting defeat. (Am I stealing from John Holbo here? From Cosma Shalizi?)

Albert Hirschman classified arguments into three categories: perversity, futility, and jeopardy. One could always say, "I agree with your noble goals", but:

• Your implementation will lead to the opposite.
• What you are attempting is to change something that is so fundamental (e.g., human nature) that it cannot succeed.
• Your attempt risks losing something else we value (e.g., self-reliance, innovation, liberty etc.)

If the arguments are always so simply classified, they cannot be about empirical reality, one might think.

5.0 Conclusion

None of the above addresses issues of political philosophy that propertarians may think central to their views. I do not talk about what roles of the state are legitimate, the source of authority in law, the false dichotomy of state versus markets, negative liberties and positive liberties, or the exertion of private power by means of the ownership of property. In short, this approach is probably irritating to propertarians. I'm good with that.

Hayek Not Opposed To Keynes On Political Principle

With characteristic cheerful carelessness, Noah Smith misinforms hapless Bloomberg readers:

"Friedrich Hayek tried to argue against Keynes' theories, but for whatever reason, he lost the debate among economists in the 1930s. But Hayek would have the last laugh, because in his book, 'The Road to Serfdom,' he attacked Keynes from a very different angle. Instead of saying Keynes' theories were wrong, Hayek prophesied that Keynesian stabilization policies would lead down the slippery slope to totalitarianism."

As a matter of fact, Hayek said nearly the opposite:

"There is, finally, the supremely important problem of combating general fluctuations of economic activity and the recurrent waves of large-scale unemployment which accompany them. This is, of course, one of the gravest and most pressing problems of our time. But, though its solution will require much planning in the good sense, it does not - or at least need not - require that special kind of planning which according to its advocates is to replace the market. Many economists hope, indeed, that the ultimate remedy may be found in the field of monetary policy, which would involve nothing incompatible even with nineteenth-century liberalism. Others, it is true, believe that real success can be expected only from the skilful timing of public works undertaken on a very large scale. This might lead to much more serious restrictions of the competitive sphere, and, in experimenting in this direction, we shall have to carefully watch our step if we are to avoid making all economic activity progressively more dependent on the direction and volume of government expenditure. But this is neither the only nor, in my opinion, the most promising way of meeting the gravest threat to economic security. In any case, the very necessary efforts to secure protection against these fluctuations do not lead to the kind of planning which constitutes such a threat to our freedom." -- Frierich A. Hayek, The Road to Serfdom (1944), Chapter IX.

Both Hayek and Keynes drew on nineteenth-century Liberalism. They agreed that the inherited lines limiting government action needed to be redrawn. Keynes said as much in the 1920s, in his essays republished in Essays in Persuasion. Hayek's reference above, to the "timing of public works" is to Keynes' ideas. Keynes doubtless would have redrawn the lines more broadly then Hayek. But Hayek explicitly says above that Keynes' approach is neither necessarily a threat to freedom, nor a station on the way to totalitarianism. Hayek says his differences with Keynes are pragmatic, a dispute over what is likely to be effective.

On The Ideological Function Of Certain Ideas Of Friedman And Barro

A Simple Keynes-Like Model

1.0 Introduction

I want to comment on an ideology that would lead to an acceptance of:

• Milton Friedman's Permanent Income Hypothesis (PIH)
• Robert Barro's so-called theory of Ricardian Equivalence

My claim is that Friedman and Barro were each responding, in their own way, to the (policy implications suggested by) Keynes' General Theory. So first, I outline, very superficially, some ideas related to the General Theory. I then briefly describe how Friedman and Barro each tried to downplay these ideas, before finally concluding.

I have a number of inspirations for this post, including Robert Waldmann's assertion that the denial of the PIH is consistent with the data; Brad DeLong noting Simon Wren-Lewis and Chris Dillow commenting on the incompetence of, say, Robert Lucas; and Josh Mason pointing out the nonsense that is taught in graduate macroenonomics about the government budget constraint and interest rates.

2.0 Governments Can End Depressions

The figure above illustrates some basic elements of Keynes' theory. This specification of a discrete-time, dynamic system includes an accounting identity for a closed economy, namely, that national income in any time period is the sum of consumption spending, investment, and government spending. And it includes a behavioral relation, namely, a dynamic formulation of a consumption function. In this system, consumption is the sum of autonomous consumption and a term proportional to national income in the previous period. One should assume that the parameter b lies between zero and one.

A policy consequence follows: government can lift the economy out of a depression by spending more. Government spending increases national income immediately. Through the consumption function, it has a positive feedback on next period's income, as well.

3.0 The Permanent Income Hypothesis

Suppose you are hostile to this policy conclusion and, like the current Republican party in the USA, dislike your fellow countrymen. How might you suggest a theoretical revision to the system structure to mitigate the influence of current government spending? One possibility is to suggest more terms enter the consumption function. With the proper manipulation, current government spending will have a smaller impact, since current income will have a smaller impact on consumption.

So, suppose the consumption function does not contain a term multiplying b by income lagged one period. Instead, assume b multiplies an unobserved and (directly) unobservable state variable which, in turn, is an aggregate of current income lagged multiple periods (Y_{t - 1}, Y_{t - 2}, ..., Y_{t - n}). Call this state variable "permanent income", and assume the aggregation is a matter of forming expectations about this variable based on a number of past values of income.

This accomplishes the goal. Current government spending can directly affect current income. But to have the same size impact as before on future income, it would have to be maintained through many lags. The policy impact of increased government spending is attenuated in this model, as compared to the dynamic system illustrated in the figure.

4.0 "Ricardian" Equivalence

One can go further with unobserved state variables. Suppose that households consume based less on recent income, but, once again, on expected values of future income. And suppose that consumers operate under the mainstream economist's mistaken theory of a government budget constraint. So consumers expect increased income today, if it results from increased government spending, to be accompanied by some combination of future decreased government spending and increased taxes. So the same current upward shock to the system causes an expectation of a future downward shock.

This is the theory of Ricardian equivalence. And, like the PIH, it suggests that Keynesian effects are not as dependable as otherwise would be the case.

5.0 Conclusion

The above story portrays economics as driven by results favorable to the biases and perceived self-interests of the extremely affluent. One would hope that academic economics is not entirely like this.

Ronald Coase, 1910 - 2013

Elsewhere, on Ronald Coase:

• An obituary in the New York Times.
• John Cassidy offers an appreciation.
• Mike Konczal explains that Coase's unintentionally undermines propertarianism (sometimes called "libertarianism").
• Discussion of Coase at Crooked Timber.
• An older piece, from Deidre McCloskey, arguing that the "Coase theorem" is misleadingly named.

Past posts from me:

• The Coase Theorem does not describe market transactions.
• Elodie Bertrand shows shows Coase was mistaken about lighthouses.
• Michael Albert argues that building a law and economics approach on the Coase theorem encourages bullying and nasty behavior.

Related past posts from me:

• Transactions costs make a nonsense out of the textbook theory of the firm under perfect competition.
• America institutionalists had combined law and economics before Coase's work was picked up.

A Barefoot Bum Critiques Propertarianism

"Larry, the Barefoot Bum" has been refuting propertarianism¹. Crudely stated, his thesis is that if you believe taxation is unjust because it implies the initiation of force (coercion by the state), you cannot coherently also defend private property.

1. To me, what was traditionally called "libertarianism" is anarchism, that is, a kind of communism.

Robert Nozick, The Refutation Of Rational Choice, Etc.

"Robert Nozick has a unique place in the annals of rational choice theory: he refuted it." -- Ian Hacking (1994)

My reaction, when reading this, was, "What?" Hacking is referring to a paper by Robert Nozick¹ on Newcomb's Paradox. I'm fairly sure I've read something about this paradox, but I had to look it up.

Suppose there exists a psychic that has shown themselves to be extremely reliable in their predictions. And the psychic has presented you with a choice, based on one of their predictions. You are presented two boxes, one transparent and one wrapped such that you cannot see the contents. The rules are that you can take either:

• Just the opaque box, or
• Both boxes.

The transparent box contains $1,000, as you can plainly see. If the psychic has predicted you will pick just the opaque box, they have placed $1,000,000 in it. If they have predicted you will pick both boxes, they have ensured that the opaque box contains nothing. The prediction has been made, and the boxes have been sealed. You know all these conditions but not what the prediction was. What should you do?

Apparently many initially are very decided on what they would do. But people split half-and-half on what that is. Anyways, Hacking states that this example shows that two principles of rational decision-making are not necessarily consistent². I guess he is correct, and I'm in no position to challenge that this is of philosophical interest³. But, since no such psychic can exist, I find other examinations of rational choice theory of more practical import.

By the way, I want to give a qualified defense of Stephen Metcalfe's comments in Slate on Nozick's Wilt Chamberlin example⁴. Strictly speaking, Metcalf's confusion about which Keynes comment was on which Hayek book is irrelevant to these comments later in the article⁵. And I accept that he doesn't describe the logic of Nozick's argument⁶. Neither did I. It is perfectly legitimate to argue that the rhetorical force of the argument comes from elements of the argument extraneous to its strict logic. And that is what Metcalf does⁷.

Footnotes

1. Nozick's "Reflections On Newcomb's Paradox" (in Knotted Doughnuts and Other Mathematical Entertainments (ed. by M. Gardner), W. H. Freeman, 1986).
2. Choose dominant strategies. Maximize mathematical expected utility.
3. I find Wittgenstein perennially fascinating.
4. Metcalf's Slate followup is here.
5. So is the fact that Nozick was smoking dope during the period in which he wrote Anarchy, State, and Utopia; I was startled to find he mentions in his book his experiences while under the influence. More by Brad DeLong on Nozick is here. Even more can be found in the Delong's blog archives.
6. By the way, Yglesias is mistaken in concluding, "Since as best I can tell nobody does hold such a [patterned] theory [of distribution]". Nozick explicitly states that marginal productivity gives such a patterned theory. Nozick is confused, since marginal productivity, correctly understood, is a theory of the choice of technique, not a theory of distribution.
7. Although I am not convinced appealing to guilty regret over the history of race relations in the United States has anything to do with Nozick's rhetoric.

Nozick's Anarchy, State, and Utopia

1.0 Overview
Propertarianism, misleadingly called "libertarianism" by its fans, is a political philosophy. Do any supposedly rigorous arguments exist for this philosophy? Some cite Robert Nozick's 1974 tome, Anarchy, State, and Utopia as a demonstration that this question can be answered in the affirmative.

The book has three main parts. In the first part, Nozick argues that a state can emerge from an anarchistic state of nature without violating anybody's rights. The state, according to Nozick, evolves from a private protection agency; its clients become citizens. In the second part, Nozick argues that a state that tries be to more than a minimal state will violate somebody's rights, especially their right to property. For the distribution of property to be just, according to Nozick, three conditions must be met:

• The original acquisition of property must not have violated anybody's rights.
• The transfer of holdings must be likewise just.
• Whatever injustices may nevertheless have arisen in original acquisition or transfer must be rectified justly.

In the last part, Nozick provides a recipe for cookbooks of the future. He describe an association of voluntary communities, where people are free to join whichever commune they like. Only some of these communities may initially be propertarian.

This obvious decomposition of the book explains the three-word title. Despite Nozick's pretense to be presenting an analytic argument, I did not find nearly as much structure at a lower level. The first part seems to beg how people in an original anarchy would behave. Nozick postulates bourgeois contract-making; I think feudalism would more likely result. He continually brings up objections and needed refinements, pursues the argument to an arbitrary level, and then declares the resolution of these details beyond his scope since he is not writing a work of psychology or epistemology or whatever. So I find it difficult to summarize much more of the book.

2.0 Popular Bits
I think Nozick originated many sayings now popular among propertarians. Maybe some he reformulated or re-emphasized.

Nozick's calls his version of Descartes' demon "The Experience Machine". His story is a science fiction story with technology, tanks to float in, and computers. It raises the question, "What else can matter to us, other than how our lives feel from the inside?"

Nozick comes fairly close to saying that there is no such thing as society:

"But there is no social entity with a good that undergoes some sacrifice for its own good. There are only individual people, different individual people, with their own individual lives."

Nozick formulates a non-aggression principle, now called the No-Initiation-of-Force principle in propertarian polemics:

"An underlying notion sufficiently powerful to support moral side constraints against the powerful intuitive force of the end-state maximizing view will suffice to derive a libertarian constraint on aggression against another."

Nozick creates a well-known example with Wilt Chamberlain. Wilt Chamberlain's contract with a basketball team gives him a share of the gate. People "cheerfully attend his team's game". Nozick's imagines that when they buy their tickets, part of the price is that each person "drops" 25 cents "of their admission price into a special box with Chamberlain's name on it." What can be wrong with all of these voluntary transactions making Chamberlin rich? In the course of this exposition, he comes up with a clever turn of phrase:

"The socialist society would have to forbid capitalist acts between consenting adults." (my emphasis)

3.0 Some Absurdities
Nozick's book is a work of political philosophy containing much economic reasoning. But Nozick makes many mistakes in economics, and ignores what seems to me some major problems in political philosophy.

For example, I think a major question in political philosophy is how people with different ideas of good and evil can live together. Nozick acknowledges he doesn't address this question:

"I have proceeded in this essay (as much as possible) without questioning or focusing upon the assumption common to much utopian and anarchist theorizing, that there is some set of principles obvious enough to be accepted by all men of good will, precise enough to give unambiguous guidance on particular situations, clear enough so that all will realize its dictates, and complete enough to cover all problems that actually will arise. To have rested the case for the state on the denial of such an assumption would have left the hope that the future progress of humanity (and moral philosophy) might yield such agreement, and so might undercut the rationale for the state.

... the day seem[s] distant when all men of good will shall agree to libertarian principles... People who prefer peace to the enforcement of their view of right will unite together in one state."

In contrast to my opinion, Nozick thinks Marxian exploitation is a normative idea¹:

"One traditional socialist view is that workers are entitled to the product and full fruits of their labor; they have earned it; a distribution is unjust if it does not give the workers what they are entitled to."

Nozick doesn't understand marginal productivity. He incorrectly thinks that it is a theory of distribution:

"Almost every suggested principle of distributive justice is patterned: to each according to his moral merit, or needs, or marginal product, or how hard he tries, or..."

I could cite many more instances in which Nozick makes this mistake.

Nozick erroneously ignores the possibilities of multiple equilibria and of path dependence:

"Let us suppose that we know from economic theory that under the standard assumptions defining a competitive market economy, income and wealth will be distributed in an efficient way, and that the particular efficient distribution which results in any period of time is determined by the initial distribution of assets, that is, by the initial distribution of income and wealth, and of natural talents and abilities. With each initial distribution, a definite efficient outcome is arrived at."

Also, Nozick begs the question of the definition of property rights, of how a society determines what can be a commodity and what cannot. I could cite even more examples of Nozick getting economics wrong.

Nozick has a definite view on the always burning question of whether or not slavery is compatible with propertarianism. He thinks it is:

"Perhaps no persons completely sell themselves into slavery... Since this very extensive domination of some persons by others arises by a series of legimate steps, via voluntary exchanges, from an initial situation that is not unjust, it itself is not unjust."

And again:

"The comparable question about an individual is whether a free system will allow him to sell himself into slavery. I believe that it would."

4.0 Conclusion
I do not find Nozick's book convincing². You might want to read it to understand some context for certain debates in political philosophy. Nozick treats Rawls in the second part of his book. Before having read Nozick, I already knew about some of the popular bits from having read Alan Haworth. Nozick tends to be cited by many soi-disant libertarians - I suspect by more than have actually read him.

Footnotes
¹Nozick does foreshadow John Roemer's game-theoretic definition of exploitation:

"An individual benefits from the wider system of extensive cooperation between the better and the worse endowed to the extent of his incremental gain from this wider cooperation; namely, the amount by which his share under a scheme of general cooperation is greater than it would be under one of limited intra-group (but not cross-group) cooperation."

Nozick formulates "a condition of stable associations" much like this in the third part of his book.

²This is probably not surprising, given my preconceptions.

Jeffrey Miron And Propertarian Advocacy Taught At Harvard

Jeffrey Miron teaches EC1017 at Harvard. "A Libertarian Perspective on Economic and Social Policy" is the course title, and PDFs for the lectures are available for download.

Based on the notes for the three lectures I looked at, Miron supposedly derives propertarian policy from intermediate principles (e.g., "efficiency"), with little to no data on relative magnitudes. I don't care for this approach myself, never mind the policy conclusions. He seems to mention no names. The reading list (from Spring 2009) does not include his book (which I haven't read). Perhaps Miron's experience is that Harvard students can be counted on to bring up Rawls, Karl Popper's piecemeal social engineering, Alan Haworth, and even Nozick.

'Libertarian' Used Correctly

"Less World! More Bank!"

I have been reading Phil Edwards' 'More Work! Less Pay!' Rebellion and Repression in Italy, 1972-7 (Manchester University Press, 2009). He occasionally uses the word 'libertarian', for example:

"the group re-emerged within the 'area' as the Collettivi Politici Operai (CPO; 'Workers' Political Collectives'), opening itself to left-libertarian as well as Leninist influences." -- Phil Edwards (p. 69)

and in translating:

"The first, numerically in the majority, is the 'creative' wing, libertarians with radical leanings ... These are the 'small-a' autonomists, who at one time or another fight for a 'better quality of life' ... The second large strand is that of the professors, the intellectuals, the theorists of the message ... The third strand, finally, is that of the 'capital-A' autonomists, or Autonomia operaia organizzata ['Organised Workers' Autonomy']" -- M. Monicelli, L'ultrasinistra in Italia 1968-1978 (1978, Phil Edwards' translation)

Apparently, the custom of street performances at protests emerged from the area of autonomia. Antonio Negri was a member of the CPO. Perhaps activists in Detroit might consider the establishment of social centers (centri sociali) by squatting in abandoned buildings.

Economists as Liars

Robert Waldmann makes some strong statements:

"...The conclusions of economic theory as presented by many or perhaps most economists do not follow from current economic theory, but rather from the 50 year old efforts at mathematical economic theory...

The problem is, I think, that when they talk to non economists, many economists pretend that traditional economic theory is a good approximation to reality. By 'traditional' I mean 50 year old. The fact that the conclusions are the result of strong assumptions made for tractability and are known to not hold without these assumptions is irrelevant...

...Once a model has been put in textbooks, it becomes immortal invulnerable not only to the data (which can prove it is not a true statement about the world but no one ever thought it was) but also to further theoretical analysis...

...I think the worse problem is that economists who are also libertarian ideologues are lying about the current state of economic theory, not only its very weak scientific standing, but the fact that, even if it were all absolutely true, their policy recommendations do not at all follow from current economic theory..." -- Robert Waldmann

Read the whole thing. (Hat tip to Ezra Klein)

Update: Having now read Mark Buchanan's New York Times editorial, I'm not at all sure I agree with Robert Waldmann in aspects of his post not quoted above. Buchanan is arguing for an agent-based modelling, out-of-equilibrium, econophysics approach. Buchanan maybe overstates the contrast between his approach and most mainstream economics, but Waldmann's post contains an element of boundary-patrolling anyways.

Brian Doherty: Completely Wrong and Nothing New

I'm trying to decide if I want to purchase Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement. I've skimmed through two chapters in my local Barnes and Noble.

The book begins with a falsehood. On the first page of the introduction, Doherty states that Social Security is unsustainable in its current form. Not too further into the introduction, he has "libertarians" building on classical liberals. In this context, Doherty makes the false statement that classical economists depicted markets as bringing about social harmony. No, neither Adam Smith nor David Ricardo depicted members of different classes as having harmonious interests.

I also looked at the chapter on the Austrian economists. My problem here was that I know this story in too much detail. I doubt I would learn much new from Doherty's account.

So I'm leaning against purchasing Doherty's book.

Why No More Great "Libertarian" Economists?

"...What distinguishes the new generation [e.g., Joe Stiglitz, Paul Krugman, and Richard Freeman] of policy-relevant mainstream economists? They are not, alas, philosophical Keynesians. But they often arrive at Keynesian policies by elaborate neoclassical routes - by building asymmetric information or increasing returns or externalities into an otherwise orthodox model and tracing through the implications. They combine a facility with this method and an openness to empirical observation, the choice of important cases, and a willingness to tackle hard problems of policy design and to consider ingenious solutions to particular policy problems. Moreover, they are willing to devote time and energy to explaining the issues to a larger public - whether in economic policy journals like Challenge or broader public forums like The New York Times. In these respects they do resemble Keynes, who remains the ultimate example of a modern economist who could do it all.

So what is the problem over there on the libertarian side? Klein is right: there is a problem - the libertarians are strangely quiet these days. One might think that new libertarian voices would emerge in the Bush era, when many actual libertarians are closer to state power than ever before. But no. There are no new Friedmans, no Hayeks, no Wanniskis, no Gilders to chorus in the new regime, to lend it an air (badly needed one might add) of intellectual authority.

I think I know the reason. The libertarians, let me suggest, have lost the courage of their convictions. Libertarian followers of Lucas, unlike, say, those of Tullock, rarely speak on public questions for a simple and well-considered reason. What they do is, indeed, very implausible. It cannot be conveyed to the ordinary literate and sensible person because, once the assumptions are spelled out, the ordinary literate and sensible person will reject them.

Furthermore, no one any longer believes Milton Friedman's old methodological saw about false assumptions being irrelevant - so long as the 'implications' are valid. The point made against Friedman long ago by Tjalling Koopmans - that this allows one to escape difficulties by reclassifying unpersuasive implications as assumptions - is elementary enough to be grasped intuitively by those who will never read Koopmans. Better to be a scholastic, in short, than a figure of fun.

A second group of scholastics is silent on policy questions for a different reason: the scholasticism that is increasingly up-and-coming inside economics no longer supports the libertarian view. It would be quite dangerous for a serious student of, say, game theory or non-linear dynamics or of models with multiple equilibria to delve too deeply into the policy implications of such work. Such forms of modern economics simply no longer support the libertarian political viewpoint, and to make this too widely known would greatly jeopardize right-wing support for mainstream economic research..." -- James K. Galbraith (2001). "Response from an Economist who also Favors Liberty", Eastern Economic Journal, V. 27, Iss. 2: 227-299.

Galbraith's paper is part of a symposium. The symposium is organized around comments on a paper by Daniel B. Klein. Gordon Tullock, Deidre McCloskey, Israel Kirzner, Charles Goodhart, Robert Frank, and James Galbraith provide the comments.

Libertarianism Versus "Libertarianism"

One might meet, in certain precincts of the Internet, soi-disant libertarians. As far as I am concerned, "libertarians" of this stripe are victims of commodity fetishim, and they have stolen the label. Traditionally, a libertarian is an anarchist, that is a kind of socialist. For example, Maureen Stapleton plays a libertarian in Warren Beatty's movie Reds. Anarchists, generally, do not have Ludwig Von Mises in their pantheon of heroes.

"...readers should take ... particular warning that I am absolutely not against freedom. On the contrary, I am for it. Libertarians ... think they are for freedom but they don't know what freedom is. In reality, their doctrine is so contrary to freedom that it ought to be entitled 'anti-libertarianism'. The thief comes in innocent disguise, but the beautiful garment is stolen. (The Right are good at that sort of thing.) So, if you want to make your copy of this book read more accurately, you should delete 'libertarian' and 'libertarianism' throughout, substituting 'anti-libertarian' and 'anti-libertarianism' as you go. For 'anti-libertarianism', etc., you should substitute 'anti-anti-libertarianism'. Unfortunately, this would make the book cumbersome to read, so I haven't followed the advice myself except in my choice of title, where my subject is named according to its true nature." -- Alan Haworth, Anti-Libertarianism: Markets, Philosophy, and Myth, Routledge, 1994: 5

Haworth does have more substantial points. Warning: this is political philosophy for those who think "If a lion could speak, we would not understand him" is a thesis worth discussing and who are comfortable with thought experiments which might lead one to be willing to say that a rock feels pain. Nevertheless Haworth is quite readable. (As an example of unreadable philosophy strongly following the later Wittgenstein, I cite John Wisdom's Other Minds.) I realize that those interested in political philosophy and "Libertarianism" should also read Robert Nozick.