The other week, the Young Turks, a popular left of center Youtube channel, released video that is making its rounds on social media titled, “Libertarianism debunked.” The script was written and narrated by one Hasan Piker, who detailed his misgivings with the political philosophy.
Piker intuitively begins by explaining what libertarianism is to his audience, which he correctly describes as a philosophy which advocates minimal government restrictions on the freedoms of the people insofar as they do not infringe upon the liberties of others.
He then goes on to say that he agrees with libertarian policy prescriptions when it comes to a non-interventionist foreign policy, ending the drug war, legalizing prostitution, and other social issues. But on the economic front, he thinks libertarians are downright wrong.
In an apparent attempt to criticize Adam Smith’s theory of the Invisible Hand, he states, “when unchecked, man motivated by self-gain will not ultimately do the right thing.” He explains that this is why people commit crimes, to benefit themselves.
But the theory of the invisible hand was just Adam Smith’s way of explaining that through pursuing their self-interest in the free market, market actors will often unintentionally enrich society along with themselves. Surely, society is better off as a whole thanks to all the producers and innovators who do what they do for the purpose of making themselves better off.
This is not to say man will always do the right thing, or that he will never do the wrong thing, when pursuing his own self-interest, as Piker seems to imply given that he thinks the mere existence of crime refutes the theory of the invisible hand.
He goes on to share his belief that, “the purpose of civilization should be to ensure that everyone is fed, clothed, housed, and NOT to create the conditions so that a few can secure a substantially greater portion of resources while others are left with virtually none.”
The obvious implication being that libertarianism creates societies where the rich get richer while the poor get poorer. It’s easy to make claims like this, it’s harder to provide concrete evidence for them.
Instead, he non-ironically states, “If you want to understand what would happen in a libertarian society, watch the movie Elysium. That’s a libertarian utopia. Where the wealth disparity is abysmal and the eroding middle class has fully shifted well below the poverty line.”
A fictional story which deliberately confirms progressive biases? Not exactly very convincing.
The reality is that free markets and private property, which libertarians emphasize the importance of, are almost certainly necessary conditions for human flourishing. Economists Daron Acemoglu and Simon Johnson of MIT have quite convincingly shown that private property rights are a fundamental determinant of long-run economic prosperity.
Dozens of studies relating measures of the extent of the freedom of markets to various well-being indicators have certainly dispelled the myth that free markets destroy society. An analysis of these studies found that over 2/3’s of them related economic freedom to desirable outcomes (like higher incomes and levels of happiness) and a mere 4% related it to undesirable outcomes (like inequality.)
Piker frequently criticizes deregulation as well, as if it is obvious that it is a bad thing, and speaks of regulation as if it is, by definition, good. But there are numerous examples where deregulation has been a clear success, and where government regulations have made problems worse.
Occupational licensing laws, which have grown to cover more workers than ever, have been shown to reduce employment (including among lower income people) and raise consumer prices with little to show for them in terms of quality improvement.
In fact, standard economic models imply that, “occupational licensing can result in up to 2.85 million fewer jobs nationwide, with an annual cost to consumers of $203 billion,” according to Morris Kleiner of the University of Minnesota.
New evidence presented by economists from the University of Chicago and Harvard suggests that land-use regulations have been instrumental in driving up housing costs in wealthy areas, reducing worker mobility throughout the country, thus trapping low-skilled workers in areas with little economic opportunity, and consequently exacerbating income inequality.
On the other hand, removing restrictions on intrastate banking during the 1970’s through 1990’s lead to more competition among banks and enhancing the efficiency of banking. A paper published by the National Bureau of Research found that, “branch deregulation significantly reduced income inequality by boosting the incomes of lower income workers.”
Clearly, the simple story that regulations are good and deregulation is bad is clearly not rooted in reality.
Beyond that, what is especially unhelpful is that, despite acknowledging that there are different strands of libertarianism, Piker essentially conflates it with anarcho-capitalism (i.e no government to provide any sort of regulation or social safety net whatsoever.)
He even says that “libertarianism is similar to communism” in the respect that, though based on a noble principle, in practice both are disasters.
The reality, however, is that while libertarians are generally skeptical of and averse to government interventions into the free market or efforts to provide a social safety net, most are not so dogmatically opposed to them that they would refuse them even when it made little sense to do so.
Famous libertarian (or classical liberal) economists Milton Friedman and F.A Hayek, for example, both believed that the government had a role to play in ensuring all citizens achieved a minimum standard of living.
Libertarianism is more of political and moral philosophy, one which emphasizes the general primacy of individual liberty and non-coercion, than anything else, but Piker virtually only treats it as a prescription for anarcho-capitalism.
Anarcho-capitalism in practice may theoretically be a disaster, but that hardly “debunks” libertarianism as a philosophy or poses a serious challenge to the beliefs of libertarians who aren’t anarcho-capitalists.