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Monday, February 18, 2008

Libertarian Philosophy, Economics, and Hegemonial Free Trade: 3rd in a Series

Introductory Comments 

If you've read the first two articles in this buggy series, you should be well situated to grasp the twists and turns of today's argument. 

 Divided into two major parts, it explores for the first time the basic philosophical premises of mainstream Libertarian thought --- not just about economics and free-markets, but how the good "society" is organized.  Agreed: any reference to "society" is thoroughly suspect in Libertarian outlook: little more than a commonly used linguistic term that is, at bottom, when analyzed, fully befuddled and mystifying . . . as though a collectivity actually has some independent anchoring in substantive reality above and beyond the self-seeking individuals who create and sustain any "group" coalition for specific, strictly pragmatic interests. No matter.  We'll delve deeply into the ontology and methodological individualism of Libertarian thought later today. 

For the time being, simply note what should be self-evident about the best sort of "country" organized along Libertarian lines: in principle, unfettered free-market capitalism and very limited government . . . the more limited, the better. 

Today's Argument Unfolds in Two Parts 

Part One explores some of the key philosophical ideas of Libertarian thought, including the ontological assumption just mentioned that self-seeking, fully rational individuals with inherent rights to property and free choices about their lives are the only social agents who are anchored solidly in substantive reality.  It follows that such abstract aggregates like the "nation-state" and "patriotism" --- not to mention the shared rights and alleged "duties" of "citizens" in a "country" like the "United States" toward one another --- are all convenient linguistic fictions, nothing more.   

Why the quotation marks around these terms? 

As just noted, to avoid the mistakes of self-deluded muddle-heads who think that these aggregates amount to something substantively real.  They aren't.  How could they be? 

On the Libertarian view, you see, they're only convenient utilitarian coalitions, formed, strictly and solely, by self-contained individuals to serve their separate egocentric purposes --- but non-Libertarians, in their simple-minded ways, assume that these derivative off-shoot groups are something more than just the handy, instrumental by-products of individual social-agents with overlapping interests; in particular, self-deceived, unable to penetrate the linguistic confusion caused by these spin-off "group" aggregates, all these uninitiated ingénues invariably misinterpret and reify these ad hoc "group-alliances".  They think, to put the point plainly, that these mutually advantageous associations are rooted in some irreducible reality in their own right.  Wrong! Wrong! Wrong! Think that garbled and silly stuff, and pow! intellectual disaster is bound to follow . . . a dangerous opening, be assured, for the guileful propaganda of collectivist ideologues that will eventually undermine individual rights and freedom. 

No need to say anything more at this point.  The argument as it advances in this initial should be fairly easy to follow, whether you agree with it or not.

Part Two continues the analysis, but with a twist.  It probes at length a very recent example of standard-model Libertarian thought . . . this time about free-trade and why an American citizen who prefers buying goods made by strangers in Detroit than made by strangers in Mexico or Japan or elsewhere is, at bottom --- get this --- nothing less than a racist.  And take account of this odd thing: the fellow invoking this harsh term isn't some off-the-wall kook, rather a prominent Libertarian economist highly regarded in all mainstream Libertarian circles and by his fellow economists.  Prof bug's aim here is to use this example to highlight some of the intellectual pitfalls and dogmatic rigidities of Libertarian thought, some of which, as you will see, the buggy guy has admitted to find attractive.


Strange as it might initially seem, a good point of entry into the intellectual complexities and philosophical premises of Libertarianism is, surprisingly enough, to note that there is actually a tiny movement in American politics called Left-Wing Libertarianism. What? Is that possible without flagrant self-contradiction? 

Not in the view of mainstream Libertarian opponents. They think that these left-wing Libertarians are a self-contradictory hodgepodge, a strained and unconvincing effort to link a preference for free markets and limited government to egalitarian redistributive principles . . . the sorts of things associated in mainstream Libertarian thought as collectivfist, socialist, and thorough fly dangerous. Understand the mainstream rejection of this left-wing heresy, and you'll begin to get a good working idea of what the core substantive philosophical principles of libertarian thought happen to be.

What Left-Wing Libertarians Claim To Want:

 Consider the core contradiction as mainstream libertarians see it.  In particular, even as this small group of intellectuals claim they are applying libertarian thought to redistributive matters, they seem to be caught up in a self-made thicket of confused, thoroughly irreconcilable:

In particular, even as these left-wing Libertarians embrace ardently mainstream Libertarian thought about the unfettered rights of individuals to property ownership and their self-interested pursuit of protecting and adding to their income, wealth, or professional accomplishments through free markets ---meaning very limited government and intervention into the economy --- left-wing Libertarianism makes a huge exception for the ownership of "natural resources."  It insists that age-old ownership of such resources like land entails certain obligations to the less well-off members of the . . . of the ---well, of what? To the numerous tribal clans in African or Middle East countries if you live there?  Or maybe the local community elsewhere?  Or an ethnic group within or across borders?  Or . . .  or just the local community you live in, or the same ethnic group, or the larger national community,  or what? 

For that matter, why not the entire human race? 

After all, most national boundaries are fairly new in human history.  Why should one country, say, Iraq --- whose boundaries were established by the British after WWI --- have lots of oil, but neighboring Turkey, Jordan, and Syria don't?  Do Iraqis own a redistribution of wealth, thanks to 9 decades of owning large oil reserves, to poorer Turks, Syrians, and Jordanians?  And, just to stay with the Turks, is the redistribution supposed to be to all Turks or to the Kurdish minority that lives on the Turkish side of the border?

Why Left-Wing Libertarianism Is Seen as Muddled, Self-Contradictory, and Dangerous by Mainstream Libertarians.

The reasons why mainstream Libertarians reject all left-wing Libertarianism as a confused and menacing thicket of philosophical nonsense are worth setting out here in a systematic way, not necessarily because left-wing Libertarians are numerous or draw on well-known economists and political scientists --- they don't --- but because in laying down the mainstream's numerous objections will throw a lot of light on mainstream Libertarian thought itself.  Its key economic views --- along with a detailed analytical probe of its views of the proper roles in a country like the United States of free markets and democratic government --- will unfold in the next article in this buggy series.  Right now, focus on the more philosophical reasons why mainstream Libertarians on the political right recoil from any "egalitarian" notions of redistributing income and wealth and see any such governmental policies to that end as fully anathema, a danger that puts a country on a slope toward a "new serfdom" . . . to use an evocative book title published in 1945 by one of the two or three most influential modern-day Libertarian economists and philosophers, Friedrich Hayek, Austrian born and part of the University of Chicago's profoundly influential department of economics in the era of Milton Friedman and his Nobel-prize winning colleagues (several of them).

1. The first big problem for so-called left-wing Libertarianism isn't simply taking hardheaded assumptions about property ownership and the virtually perfect workings of unregulated free market economics and trying to marry them to some egalitarian duty of redistributing wealth --- even if the wealth is derived strictly from owning natural resources --- to the less well-off members of some unspecified community. Nor is it the vagueness of what "natural resources" means, once a business firm has bought, say, a barren piece of Nevada desert bought for a lark 70 years earlier and transformed it quickly into modern money-mad Las Vegas.

Rather, the problem at hand is the narrow theoretical focus of Libertarian thought. 

In essence, to clarify this focus, all Libertarianism sees strictly self-interested individuals and their property rights as the only real agents of economic and political life . . . real, quickly observe, understood in an unsparing ontological sense.  Everything else in human societies that seems "collective" and "group-like" is at most derivative and secondary . . . even though, observe quickly, these "collective aggregates" are invariably reified outside Libertarian circles themselves, conceived and understood, confusedly, by simple and dangerous muddle-minds as enjoying an independent, self-actualized reality.  No way! Not possible! . . . or so Libertarians, going back two hundred years to the pioneer philosopher of utilitarian thought, Jeremy Bentham, insist.

In social science theories, this core ontological premise is known as methodological individualism.  What utilitarian thought does is easy to specify. 

From its standpoint --- adopted by all Libertarians and most other free-market enthusiasts among economists --- the individuals are conceived of as wholly self-contained and self-centered, strictly motivated by rational self-interested calculations of their individual interests.  In turn, these rational, self-centered interests can alone, in the strict sense of the term, be pursued effectively only in the freedom offered to individual agents by the choices that are created by the combination of competitive, free-market capitalism and unsparingly limited democratic government.  which can be realized only through the choices open to them by free-market capitalism.   All groups, small or large, are therefore nothing but "artificial" ontological fictions . . . nothing more than intellectual snares and mirages for the woolly-minded.  They have no permanent anchoring in anything substantively real in their right . . . whether its nation-state, or shared nationalism and shared national history by tens or hundreds of millions, or shared national culture, or shared ethnicity or tribal clans (again, in Africa and the Middle East), or any shared meaning of citizenship beyond, to repeat, the legal obligations for individuals to respect one another's property ownership and each others' self-interested control of their lives. In Libertarian thought, all such holistic entities are nothing more than transient or at any rate fully malleable and changing alliances between like-minded individuals. 

It follows that self-designated left-wing communitarians are befuddled thinkers too, at any rate as mainstream Libertarians observe. 

For there can be no real meaning to a fictive collectivity of "low-income" people to whom the individual self-contained owners of "natural resources" are supposed to redistribute some of their wealth to, any more than anyone could realistically define the conceptual boundaries of this collectivity: the local community, the "state" community in the US federation, the national community, or the human community. 

All these reified fictive groups reflect the thought of self-deceived muddle-minds, nothing else.  And hence muddled left-wing Libertarians are opening the door to all destructive collectivist thought, the enemy of individualism, freedom, and the choices open to self-centered, self-seeking individuals that alone free capitalist markets and very limited democratic government can alone provide the proper social setting for.  And so?  An so, exactly like socialists, communists, fascists, radical Islamists, and ultra-nationalists, along with all other totalitarian collectivists, left-wing Libertarians --- once they un-anchor their thought about social life from its strict grounding in real, flesh-and-blood, fully self-contained individuals --- immediately start talking about the duties of certain high-income individuals to redistribute some of their income or wealth to some fictionalized collectivity.  There is no such duty free individuals have toward other individuals.  If self-interested, self-promoting collectivists say there is, they are deluding us.  Worse, such "duties" can only be enforced by coercion that is exercised by self-seeking individuals who hold political and bureaucratic power, whether they're elected or there by hereditary secession in monarchies or there by virtue of mass violence and institutionalized dictatorship, and rationalize their own selfish pursuits of wealth, status, and power in the name of some collectivist chimera.

2. Then there's the related problem just mentioned of what "natural resources" mean in left-wing Libertarian thought.

On this point, ponder the views of one of the most influential of recent Libertarian economists, Julian Simon. Before his untimely death a decade ago, he always argued with vast statistical data that the ultimate natural and renewable resource in economic life wasn't land or coal mines or petroleum or forests or gold deposits, but creative free human beings. Yes, individual humans. Their creativity would be unleashed, however, only in the right institutional setting: democratic government and free markets. In such a setting, the combination would lead individuals to constant technological innovation, to new business start-ups, and to an ever greater benign saving of the use of other "natural resources" . . . and especially in eras of revolutionary technologies, such as electricity and the internal combustion engine at the end of the 19th century or in the last quarter of the 20th century with the big breakthroughs in computers and information and communications technologies, plus a no less radical series of changes in the dominant American business firms. A good 75% of the Fortune 500 in the late 1990s hadn't even existed 20 years earlier.

As a result of such innovative creativity, Simon argued persuasively, we needn't worry about population growth and economic growth.  More population would lead to more inventive people (Simon, alas, thought that most countries would move toward free-markets and their efficiency).  More persuasively, economic growth would be propelled forward by new technologies that were, more and more, not just labor-saving but resource-saving. How strange, then, that the ownership of natural resources should entail, in left-wing Libertarian thought, some obligation to redistribute the monetary benefits of such ownership to the less well-off members in some community, always either unspecified or left ambiguous. After all, if Simon is right --- and he seems to be --- then Thomas Edison or the Wright brothers should be taxed in left-wing Libertarian thought for enjoying the DNA that they inherited for being so creative in their adulthood, no?  

A few clarifying remarks might be in order here. 

Among other things, which even non-Libertarians can admire Simon's work for, was his constant struggle to establish the evidence of this big claim against the environmental pessimism that emerged in the late 1960s and 1970s among left-wing environmentalists and related Green grass-roots movements.  That pessimism, remember, culminated in a vast project of an MIT group, sponsored by one of those movements, the Club of Rome, that used a computer-based model to "prove" that the earth was quickly running out of natural resources.  The more populations grew and the more economies did too, the quicker would be the exhaustion of oil, metals, coal, woodlands and so on.  It was a doom-doom forecast.  Specifically, the published study written by Dennis Meadows of MIT insisted, pointing to his gigantic data base and constantly churned proof in numerous equations, that it was only a matter of a couple or three decades before this doomster prediction would materialize.  Nonsense said Simon.  His own studies contradicted the Club of Rome MIT publication.

To put his money where his mouth was, in 1980 he wagered in a famous publicly reported bet with some prominent doomster demography professor at Stanford that the combination of population and economic growth, along with technological creativity and market incentives, would show that in 1990 the price of any group of natural resources the Stanford doomster chose would be lower, adjusted for inflation, than in 1980.  Needless to say, Simon won. 

Something else is of interest here.  One of Simon's most prominent followers these days, the well-known Danish statistician Bjorn Lomberg --- see his impressive book, The Skeptical Environmentalist (2001) --- was a former radical environmentalist who changed his mind when he purchased one of Simon's books and had his graduate students check out each and every one of the thousands of data-references in that Simon work.  He was convinced at the start of the project that Simon would be shown to be a right-wing demagogue.  To the astonishment of Lomberg and his entire graduate research team, all the references in the Simon book were accurate, and Lomberg --- an open-minded scholar --- immediately converted to a more free-market, Libertarian stance in his well-known scholarship. 

Only . . . well, not long afterwards, the official Danish Scientific Establishment publicly condemned Lomberg for his "unscientific" work --- the real sin, in the establishment's view, being his well-supported views that collided with radical environmentalism, the standard orthodoxy throughout Scandinavia and the wider EU.  The heads of the establishment demanded that the existing Danish government fire Lomberg from his position as an official consultant.  The center-right government then appointed its own commission, exonerated Lomberg, and severely criticized the efforts at thought-control of the establishment view.

3. These pragmatic, always-in-flux groups --- which emerge and persist only because they serve a temporary coalition of like minded individuals with overlapping, self-centered interests --- also encompass, presumably, governments, legislatures, executives, and bureaucracies, not to forget political parties and interest- and cause-groups that seek to government policymaking and behavior, at any rate in democracies. 

For the time being, ignore this inadequate view of groups, communities, nation-states, governments, and other social institutions, all likened in Libertarian thought to business firms that emerge and persist for strictly shared utilitarian interests --- in this case, making profits, paying wages, and maybe dividends to stock-holders --- and with no social glue beyond these convergent or overlapping autonomous interests.  That other glue, of course, is shared cultural beliefs and shared social norms, internalized to one degree or another through socialization processes that are transmitted from one generation to another.  Oddly, like materialist Marxists, Libertarians see all such beliefs and norms as so much hoodwinking hooey, a point that will be elaborated on at length in the next two articles in this buggy series.

Instead, focus your mind on the various cause- and interest-groups, including the Republican Party, that Libertarians themselves help create, join, and derive at least some benefits from --- with the benefits greater than the costs, or otherwise the group-coalitions would collapse as the non-hoodwinked Libertarians quickly desert them. 

For Libertarians, to acquire any and all political influence means to work diligently and successfully to restrict government to its bare-bones, laissez-faire ends to serve fully autonomous individuals --- above all, their economic and political freedoms and the unlimited pursuit of their ends through the free market, always provided that the rights of other autonomous individuals to do the same. 

Those ends, understand, aren't seen by mainstream Libertarians as confined just to maximizing income and wealth and passing these assets on to their children, at any rate if the individual parents so desires.  No, those self-centered ends also include the right and freedom to invent and innovate in the marketplace, along with the untrammeled pursuit of professional ends and intellectual and artistic creativity. 

What Role Then in Mainstream Libertarian Thought Is There for Government?

4. By now, it should be fairly clear.  Essentially the less, the better.

More accurately put, a government's roles in economic and political life should be limited as much as possible to bare-bones policies that strictly free market behavior can't easily provide. Over two centuries ago, Adam Smith identified these policies as three or four, no more: the creation of an effective just legal system that protects the lives and property of individuals, the establishment of a volunteer military for reasons of national security, some basic infrastructure like city streets (roads and freeways in the countryside can always be built by private business firms that can charge tolls), and possibly basic education. These days, such policies are known as providing "public goods".

5. Public goods, obviously, have to be funded by taxes and maintained by governments. The chief reason: unlike market goods, they are strictly non-excludable and non-divisible.

Once a volunteer military is created, say, nobody within the country can be denied the protection provided others, and you can't live in Maine and say that you only want to buy enough national security to protect the Maine coastline and the border with Canada, and the hell with the rest of the United States to the south and west of Maine itself.  As you can easily see, such public goods won't be provided by private firms: since non-payers can't be denied their benefits once a firm creates them, the firm can't charge and collect a fee.  And since strictly self-interested individuals have no reason to contribute to something the size and costs of which they themselves can't individually decide on, a public good like national security is subject to "collective action problems."  Rational, calculating individuals will end up "free-riding" . . . which we call in colloquial language "passing the buck" or "let George do it".

Obviously, then, the redistributive powers of left-wing Libertarians who want government to require that the owners of "natural resources" should compensate the less-fortunate in the whatever the larger fictive group should be --- whether local or national or global in fantasized scope --- are strictly anathema to mainstream Libertarians.  Is it any wonder, then, that no prominent economists can have identified themselves with left-wing Libertarian views here?  Hardly.  Socialists might demand such redistribution, and much more for that matter; the same might be true of left-wing liberals in the United States; not, however, Libertarians without infringing on the basic freedoms and rights of autonomous individuals.

6. One clear conclusion? For mainstream Libertarians --- who are called "conservatives" in American parlance and "liberals" in West Europe, where the term retains its late 18th and early 19th century political meaning --- a left-wing redistributive Libertarianism is self-contradictory, a jumble of confused speculation created by over-clever, and thoroughly muddled fantasists.

Libertarianism, after all, is distinguished first and foremost and always as a political theory or ideology of radical autonomous individualism.  In social theory, this is known as "methodological individualism."  All groups, however small or large and no matter what they're called, have no real autonomous life of their own.  Far from it, they are only convenient collective-alliances formed by like-minded free-thinking self-interested individuals, and nothing else --- nothing more substantial.  Whether political parties or interest groups or local communities or so-called ethnic or racial groups, never mind "social classes", groups, one and all, are always in flux, are limited to overlapping individual interests, and have no real meaning or existence beyond service such aggregated shared interests.   and since they are always in flux and are limited to overlapping individual interests, nothing more, they have no meaning or existence beyond serving such aggregated "common" ends.  Political parties come and go; so do cause groups, so do self-interested interest groups, and so do individually constituted local or national communities. 

7. Understood in these terms, then, even a country --- a nation-state today like the United States --- turns out to be only a convenient if important fictive entity.

It alone can provide for an effective legal system to protect individual rights to property and life and the pursuit of individually determined ends, provided of course that this pursuit doesn't infringe on the rights of others to do the same.  National security is needed the same way, though it should always be restricted to volunteer service in the military and protect the "nation's" independence and individual rights from the predatory behavior of socialist, communist, or fascist collectivist "states" . . .   ruled, try to grasp, by charismatic and usually paranoid megalomaniacs who would like to destroy free men and free countries and extend their collectivist self-serving dominance over them by aggressive force.  Otherwise, any talk of the "nation" beyond these necessary if limited aims that should enhance free-market exchange and individual freedom and stop strictly there is anathema to mainstream Libertarians. 

Hence such claims as that illegal immigration threatens national identity or the traditional social fabric of local communities all over the United States are meaningless mystifications for Libertarians.  Free immigration is part and parcel of all free-market exchange at home and globally, or should be.  The only complaint that makes sense to Libertarian economists about such immigration --- legal or illegal --- is that it lowers the wages of low- and semi-skilled workers.  But that's precisely the desirable aim of such immigration: to keep the costs of business firms down that are energetically competing in the market place with other like-minded firms, whether in the domestic or global economy.

One of the two or three most influential Libertarians of the last century --- the very influential economist Milton Friedman, who just died recently --- put all these sentiments succinctly and vividly when he played upon the very non-Libertarian views of John Kennedy, expressed by the latter in his inaugural presidential address in January 1961.  "Ask not what your country can do for you, ask what you can do for your country."  Kennedy, as you might recall, was trying to stoke American patriotism, in the midst of a menacing cold war and in the face of what he and other liberal Democrats regarded as major economic problems in American life, such as the recently discovered poverty of about 20-25% of the American public (mainly rural in this days, by the way).  Libertarians recoil from such rhetoric.  It strikes them as a clear step toward a new serfdom.  As Friedman said years after Kennedy's rhetorical stroke, "the free man will ask neither what his country can do for him, nor what he can do for his country."


First the Example

A well-known Libertarian economist, Steven Lundberg at the University of Rochester, told Fox News yesterday that it was racism (his word) for Americans, in large numbers, to prefer buying goods produced by total strangers who live in Detroit compared to total strangers born in Mexico or Japan.  "Both major parties are infested with protectionists who would discriminate on the basis of national origin no less virulently than David Duke or any other racist would discriminate on the basis of skin color," he told the Fox interviewer. 

Amazing, no? Could there be a more fstraightforward statement of basic Libertarian philosophy that shows how free markets, globally expanded around the world, should always trump an American citizen's preference to buy from an American firm and help American workers and then add, immediately and very confusedly --- voiced with slanderous moral passion --- that any American citizen who raises objections to free trade is, by definition, a racist if he or she prefers buying a product made by strangers in Detroit to buying a competitive good made by strangers in Mexico or Japan?  Or, why not, in Communist China where, among other things, slavery exists in some mines and factories, not to mention extraordinarily bad quality control in the production of medicines, food-stuffs, toys, cosmetics, and heaven knows what else?   For these reasons, among others, prof bug himself prefers avoiding where he can such Chinese products, the more so because the party hacks and government toadies who cater to the top-dog Communist leaders will blame the problems on foreign devils . . . the pressures of multinational firms to get products out, and so on.  Is prof bug a racist then? 

Have he and others been duped by nefarious collectivist rhetoric and come wrongly to believe that there is such a thing as shared or common citizenship --- and that, consequently, citizens have not just rights of the sort Libertarians insist upon, but also obligations and duties that such rights entails.  Apparently so ---or at least that is what mainstream Libertarian thought entails. In such thought, you have to understand, the very idea of such duties as citizens to other citizens or even to protecting the United States in major war (beyond supporting a volunteer army) amounts to something tyrannical . . .  a clear tumble into coercive collectivism.

Prof bug's take on this: what could explain such dogmatic shallowness about social life, social agents, the role of shared cultural beliefs and norms as social glue, and the nature of citizenship's rights and duties?

The Chief Explanation: Back to Libertarian Ontology

In particular, recall the basic Libertarian philosophical claim that the only agents in any human society that have any real substantive existence are individuals. These individuals who alone have an anchored ontological existence in reality are conceived of as wholly self-contained, wholly self-centered, and wholly self-seeking in rational calculating ways. Anything else in human society that is seen to be a "real" social agent is a self-mystifying delusion, with very dangerous and tyrannical collectivist implications . . . nothing else, nothing less. That means all groups are mystifications --- fictive aggregates that are reified and given independent existence by muddle-minds. Of all these confusedly understood collectivities, the biggest in territory and assumed membership is a nation-state like the USA.

Properly conceived, you see --- which means conceived by Libertarians --- the USA, like all collective aggregates, is only a legal fiction: a strictly instrumental, purposefully utilitarian coalition of 200 million adult Americans. Created in past generations by self-seeking individuals for determinedly pragmatic reasons, the United States persists as a useful, loosely formed, fully abstract coalition of 200 million self-contained, self-seeking individuals only because --- despite their mystifying, self-delusive reification of the nation-state and imaginary patriotic and moral obligations as citizens --- most Americans see the American government at all levels as serving their individual, self-centered interests to pursue their rights to property and self-fulfillment in the combination of largely (the larger, the better of course!) free-market capitalism and limited (the more limited, the better!) government that protects, in spite of its flaws and collectivist excesses, their lives and property.

But note. Only to the extent our individual freedoms are pragmatically served by these political arrangements will free, self-contained individuals who aren't victims of delusive collectivist mumbo-jumbo decide, for instrumental and utilitarian reasons, that it's in their interests to obey the laws and regulations of American government . . . yes, obey them even when clear-thinking, rationally calculating Libertarians object to many of these laws and regulation as misguided, coercive, and a thrusting nudge toward full collectivist tyranny of a socialist or fascist sort.

What's wrong with this ontological view, with its rigid, reductionist methodological individualism when it comes to making sense of social life in a country like the United States?

As It Happens Several Things

Just to single out the most blatant mental shortcoming here, consider this point. Libertarians talk a lot about individual rights. But rights entail duties, and presumably the rights of individual citizens entail duties to other citizens. Except for one minimalist duty, though, Libertarians reject this line of moral thought that extends back to Socrates 2500 years ago. That minimalist duty is that each individual is fully free to enjoy and pursue property and wealth as well as other freely exercised choices in his or her life, fully unimpeded by others, unless that individual interferes coercively --- whether directly or indirectly (the latter meaning by tyrannical governmental bureaucrats or elected office-holders) --- in the exercise of others' freedom. Observe the use of "coercion" in this thinking. It doesn't just refer to force or fraud, the prohibition and punishment of which is incorporated in criminal law in the USA and elsewhere. It refers to all government policies that regulate free-market activity, pursue tax policies above and beyond what free individuals regard as essential to maintaining the fictive reality of limited government, and seek --- worse of all --- to redistribute income from some well-off individual citizens to others less well-off.

And that's it. There are no duties and obligations of free, clearheaded individuals to anyone else, whether an American citizen or a citizen of another country.

What follows on this view is fully predictable.  Anyone who invokes patriotism, refers to shared citizenship, or argues that the mutual rights of individual citizens entail certain obligations to others is necessarily either a collectivist propagandist or a collectivist dupe.  Either way, socialist serfdom or fascist totalitarianism is the logical outcome.  And it can get nasty even on a way station to such collectivist tyranny . . . namely, those Americans who are not just duped, but actually racist because they prefer to buy goods produced by strangers in Detroit to those produced by strangers abroad. 

By extension, then, any Americans who share prof bug's thinking and prefer to keep trade increasingly open --- provided it's backed by various compensatory policies to help the losers --- must be racist too.

Note An Irony Here: Dogmatism Matched by the Radical Left

When you get down to it, who besides Libertarians see the United States as a decidedly fictional entity and American government at all levels as equally fictional if it does anything beyond what Adam Smith said was permissible two centuries ago?

Strictly speaking, only some other ideologues --- this time, on the radical left.  In those dogmatic circles, a similar belief prevails that the average American citizen is also self-deluded and philosophically blinded to the real substantive nature of American life and to government as all levels in this country. At bottom, you see, the United States is pervasively racist, homophobic, misogynist and, to boot, thoroughly evil in foreign policy, a bullying aggressor that has inflicted countless harm to others.

So much for uncompromising dogmatists.  The rest of us who aren't whole-hog Libertarians or full-tilt radical leftist, but who recognize the long-term benefits of free trade, need to come to terms with the growing discontent in the US being stoked by the turbulent disruptions of globalization and free-trade.  That means finding ways to lessen the large burdens of dislocating adjustments in the lives of laid-off workers, especially in an age of unprecedented flows of goods, services, financial flows, and technologies across borders.

Such rapid and forceful shifts in comparative advantage, to invoke a sound economic concept, were never envisaged by the founders of free trade thought: Adam Smith, David Ricardo, Ohlin and Heckscher in Sweden, and several others from the late 18th century until the late 20th century.  Comparative advantage was more fixed in the 19th century and on into the 1900s.  It reflected factor endowments --- land, climate, natural resources, the size of the labor force, and cumulative capital investments over earlier generations. Technological innovations, to the extent they entered free-trade theory, were envisaged as occurring slowly, even incrementally, and certainly not in bursting recurrent waves of what Joseph Schumpeter, a great Harvard economist of Austrian origins, called bursts of creative destruction.   These clustered breakthrough technologies --- like computers, software, the Internet, e-commerce, and all sorts of huge spillovers into communications and information sectors of the emerging post-industrial economies at work since the 1970s --- are invariably disorderly and unsettling, forcing huge changes in the structures of existing economies that require "destroying" old, increasingly rigid and low-productive industries so that skilled labor, managers, scientists, engineers, and capital could be freed to create whole new firms and industries that are at or near the technological frontier. 

The beneficiaries of the old declining industries are in other, less advanced economies.  The beneficiaries in the cutting-edge economies are initially labor and capital in the fast-growing industries.  The losers, who will be compensated only very slowly as they are laid off, find new jobs --- some better paid, some less well paid --- and enjoy ultimately a higher standard of living (thanks to cheaper import prices and new and better goods produced by domestic cutting-edge firms) cannot be expected to be happy with the "destructive" side of the changes.  In democracies, they have ways to express their discontent --- not least by voting for anti free-trade politicians. 

How to offset this growing rebellion against globalizing economic exchange and simultaneously offset some of the major burdens carried by several million American workers?

The correct answer: by some sort of temporary income-assistance and medical coverage to laid-off workers --- remember, out of a job through no misdeeds of their own --- while they find individual ways either to be retrained and find another job at the end of the training program or, alternatively, to take another lower-paying job immediately and get on-the-job training that way. Remember: all the rest of us as income-earners and consumers benefit from the freer trade. Those who lost out to foreign competition deserve, it seems, some sort of compensation from the rest of us who, as consumers, clearly benefit in the mid- and long-term from the lower prices of goods that we purchase. 

Not Full Compensation, You Understand  

Obviously not.  Otherwise, we'd end up burdening ourselves with excessive taxation. 

What's wrong, though, to get more concrete, with insisting that trade-adjustment assistance should be given, with market-oriented incentives, to the workers that lose their jobs to trade competition?  The compensation could come, for instance, as two to three years of tax-provided income-support for those laid-off workers to find another job --- the sooner, the more compensation would be paid, at a rate, say, of 60% of the difference in pay between the old and new job if the new one's wages are lower.  Alternatively, the compensation could be paid to the same laid-off worker if he or she enrolls for two or three years in a full-time retraining program that would lead to some new job in an entirely different field of work.  And such compensation should carry medical insurance if the new jobs for laid-off workers have no employer-provided medical coverage. Right now, the fear of losing a job with such coverage seems to have some limiting impact on the mobility of our labor force. Whether because an existing job-holder might want to seek another job elsewhere for reasons of income or stability or a better use of his or her talents doesn't matter. The free choice that free-markets are supposed to provide is inhibited by this fear.

Suppose, however, Libertarians still reject this line of reasoning as coercive and dangerous, a tiny opening that will lead invariably to a collectivist nightmare in the long term or shorter. Then there happens to be a sound pragmatic reason to support such a market-oriented incentive system of partial compensation. Namely? Without some such system, the snowballing grievances and worries that have begun to undermine political support for further globalization --- along with growing demands for protectionism --- will, sooner or later, do exactly what dogmatic Libertarians fear: a clear retreat from commitments to free-trade, with more and more politically motivated tariffs and subsidies to protect globally uncompetitive firms.

One Final Point, A Further Irony and Illustration of Libertarian Dogmatism

Bluntly put, in core Libertarian philosophy, their demand for unqualified rights to property and self-interested free-choice through free-markets --- all such market transactions, recall, seen as invariably contributing to the well-being of others, however faintly  --- entails no duties whatever to fellow-citizens.  That rejection of any such duties is all-encompassing.  Even in a war for national survival as in WWII, individual citizens should not respond to any patriotic appeals for military service if it doesn't suit their individual interests 

Is this position really morally sound?

After all, what Libertarians regard as the reified fictive collectivity known as the United States has institutionalized a constitutionally governed legal system that protects their lives and property, preserves a matchlessly rich and largely free market form of capitalism, and has created a military, diplomatic corps, and intelligence agencies that have crushed all the totalitarian enemies of free market and democratic government in the last century . . . whether German militarism in WWI or Nazism, Fascism, and Japanese militarism in WWII, and the Soviet Union and its Communist satellites and allies in the Cold War.  If such freedoms exist today for individual Libertarians and other American citizens, it's because of the work, toil, and sacrifices of tens of  millions of  earlier generations of American workers, American inventors, American business firms, American researchers, American teachers, American civil servants, and American servicemen.  Thanks to their efforts and sacrifices, then, Libertarian individuals are not reared in a primitive frontier-society poor, technologically backward, and full of daily dangers. 

Which thoughts bring us back to Lundberg's typical Libertarian sentiments about strangers who work in Detroit industries should have no more appeal to our individual taxes and consumption choices than strangers who produce goods we want in Mexico or Japan or presumably anywhere else.  Worse, if any Americans do hold such preferences, they are essentially racists.

Notice one more irony here. Very likely, some of these workers in Detroit --- or maybe in American firms located in any other urban or suburban area of the United States --- have themselves or have family members who have been in two recent US wars fighting a new form of totalitarianism: fanatical Islamist terrorists. These new fanatics like nothing more than to obtain weapons of mass destruction and use them to kill Americans . . . the more the better. If they succeeded in annihilating all of us, these totalitarian religious bigots would probably fall immediately to their knees and praise their God for eradicating evil from the world.

And yet if any American confesses that for this or any other reason he or she would like to buy American-made goods in preference to foreign-made ones, that American isn't just economically right or wrong, but an out-and-out racist. Well, maybe some kind Libertarians reading this buggy argument might kindly email him and explain when Chinese workers or their family members will replace American soldiers and fight the current totalitarian menaces abroad that seek to destroy American lives, our property, and our democratic government in the United States, now and way into the future.

Or in saying this, has prof bug tumbled over into the Badlands of Racism?