Abstract: How did early colonial Australians think about liberalism, economics and political economy more generally? Colonial Australia has been described variously as having a neoclassical, enlightenment, or Benthamite political culture. This paper provides an empirical approach to the question of early Australian ideas. Exploiting the records of 1,891 book sales and auctions in colonial Australia between 1800 and 1849, the paper examines the relative prevalence of key economic, political, and liberal texts available to colonial Australians. The works of neoclassical authors such as Adam Smith and John Locke were far more prevalent, and more likely in colonial demand, than those of Jeremy Bentham. To the extent utilitarian ideas were prevalent they were in the form of William Paley’s conservatism than Bentham’s radicalism.
When David Leyonhjelm won a Senate seat for the Liberal Democratic Party at the 2013 federal election, many in the media did not know how to react.
Leyonhjelm described himself as a libertarian or a classical liberal. He subsequently was attacked for being too left-wing on drugs, gay marriage and national security, and too right-wing on guns and economics. Many in the press tried to pigeonhole the plain-speaking agribusiness owner as nothing but a kook: one of the crazies who had been raised above his station merely because of the preferential contortions of that election.
Yet what was so different about Leyonhjelm’s views from those of the other parliamentarians? His most controversial position, backing the right to own guns, would not be unusual in a National Party meeting, and it certainly was common enough before the Howard government moved to limit gun ownership. His views on drugs are not much different from those held by many progressives, and they are in step with an increasing acceptance by the political class that the war on drugs has failed. His support of gay marriage is shared by a sizeable majority of the population. And his views on economic policy are exactly those espoused by the free market wing of Liberal members of parliament – indeed, after the 2013 election, there was a widespread belief within Liberal circles that Leyonhjelm’s vote, at least on economic questions, could be taken for granted in the Senate.
It’s hard not to conclude that what makes libertarians unusual is nothing more than the constellation of views they hold, rather than the specific views themselves. There is a near-infinitesimal number of political positions that any individual may take, but the country’s political culture slots everything into a binary division: you are either with the Left, and therefore vote for Labor or The Greens, or you’re with the Right, and therefore vote for the Liberals or Nationals.
So more libertarian-minded people are buried in their parties, awkwardly lumped in with those who they might vehemently disagree with on social or economic issues.
In the Liberal Party, libertarians are found among the ‘‘hard right”, who strangely share that title with the conservatives who focus on social issues like gay marriage and abortion. Labor libertarians, such as they exist, are scattered on the left and right wings of the party, either hiding their admiration for economic liberalisation or turning a blind eye to the retrograde social views of the conservative unions.
It has been more than 30 years since the Hawke government began to deregulate and liberalise the economy. We’re still not over it.
In December 1983, Bob Hawke and his treasurer, Paul Keating, floated the dollar. Their decision was both inspired and visionary. Governments started to place their faith in markets. In 1985, the government opened the banking sector – one of the most tightly monopolised and anti-competitive industries in the Australian economy – to foreign competition. Throughout the next decade, publicly owned businesses were privatised. Tariffs and other trade barriers were lowered.
The labour market was substantially deregulated. The airline market was opened to competition. Ports were sold and restrictions on shipping liberalised. The final break with the past came with changes to the tax system – the introduction of the goods and services tax in 2000 replaced a sales tax regime that had been instituted by James Scullin’s Labor government in 1930.
‘‘Reform”, of whatever stripe, has become the gold standard of government. For the political class, a successful government is that which reforms; an unsuccessful government squibs on reform. But while one of the most common tropes in the press is the business-leaders-urge-reform genre, in which CEOs and corporate lobbyists complain that politicians are avoiding tough decisions about economic change, rarely do they offer any specific proposals.
The reform mantra has allowed each side of politics to dress up regulatory or legislative change as a great reform no matter what its purpose. For the Australian Labor Party, the minerals resource rent tax and the emissions trading scheme introduced by Julia Gillard’s government were considered great reforms. For the Coalition, abolishing those two schemes constituted great reform. Each harks back to the HawkeKeating era not just as precedents for economic change but as some sort of justification for that change. Reform has become the sine qua non of government.
What made the reforms of the 1980s significant was not their constituent parts but that they added up to an agenda. Governments of the time deliberately shifted the economy from one system of political economy to another. They began to instinctively favour market solutions to policy problems where their predecessors had looked to the state. It was a revolution in philosophy as much as it was a legislative program. Once the full significance of this revolution sank in, there was a host of books published by intellectuals of the old Left who believed that Hawke and Keating had hijacked the grand old Labor Party and its socialist-tinged traditions. The sociologist Michael Pusey argued that the commonwealth bureaucracy had been captured by economic rationalists, a sort of reverse-Fabian takeover of the institutions of government. These economic rationalists had a new idea of what Australia ought to look like and what values public policy should reflect.
But budding reformists have a problem. Since John Hewson’s economic policy package Fightback! died at the hands of voters in 1993, there has been no driving vision of what Australia might look like, no vision of what values ought to underpin political change.
There is scarcely any serious contest of ideas. We can attribute that to a generation of politicians too weak to build and defend a vision. It’s a neurosis that infects the entire political class.
My book, in all modesty, is an attempt to offer a new agenda. Libertarianism is a political philosophy that favours liberty in all its facets. The libertarian agenda is deceptively simple but powerful and ambitious. It wants people to be free to trade across national borders and to move their families across them, too.
It provides a philosophical structure for open markets, unencumbered by excessive regulation and red tape, exposed to and strengthened by engagement with a global marketplace. It views overregulation not simply as a cost to business but as a brake on human progress and innovation.
It takes seriously the choices people make about how they spend their money and sell their labour, without assuming that policymakers and the government know better what values those people are weighing up when they make risky decisions. It views entrepreneurs as the central driver of economic growth, and the key to future living standards. And it says that decisions are better when they are made by the people they affect. Libertarianism offers a new and important perspective on the biggest issues facing Australian society, from human rights to the environment and inequality, from trade to sexuality and gender.
It provides a new way through our moribund political debates. The libertarianism I argue for is a fundamentally practical one. It takes people as they are. It treats human society as an impossibly complex, endlessly diverse and infinitely exciting web of relationships and ideas. It asks what economic and political system suits a world in which people have different preferences and want to lead different lives, form different communities and enjoy different lifestyles, but all have equal rights. Government can only limit our liberties, not enhance them. Markets and civil society, by contrast, facilitate such difference, encourage toleration and co-operation, and take advantage of the natural pluralism of a free people.
Libertarianism exposes old problems to a new light, helping us understand how to tackle them and what’s at stake in doing so. As for the inequality debate, governments should first realise they’re already making the problems of poverty and inequality worse before they try to ‘‘fix” economic inequality. Environmental problems are regarded by libertarians as fundamentally property rights problems. Libertarianism also has a distinctive approach to freedom of speech and privacy, two of the thorniest issues of modern public policy. Some conservatives argue that libertarians can’t handle questions of national security and foreign policy – I make the case for a security policy that respects individual freedoms, and a non-interventionist foreign policy.
Returning to the domestic sphere, I tackle freedom of choice, consumerism, and what the human rights debate tells us about the state of libertarian ideas today. The economist Adam Smith wrote that all that was necessary to allow a nation to thrive was ‘‘peace, easy taxes, and a tolerable administration of justice”. What made sense in 1755 is even more compelling now, as technological change and innovation eliminates many of what our predecessors saw as the necessary limits on the market economy. We’re on the edge of a revolution in the way we work, the way the economy functions, and the way we relate to each other. Exploiting these possibilities to the fullest will mean rethinking what government is for – and recognising its limits.
Libertarianism is a philosophy of optimism. It is a philosophy that understands what institutions can and cannot do.
It embraces change. It embraces difference and diversity and pluralism. It wants government out of your wallet and out of your bedroom. Libertarianism, alone, wants individual freedom in all its dimensions.
Melbourne University Publishing, 2016
Libertarianism wants government out of your wallet and out of your bedroom.
Libertarianism—the philosophy of government that pairs free market economics with social liberalism— presents a vigorous challenge and viable political alternative to the old Left-Right partisan shouting match.
Libertarianism offers surprising new solutions to stagnant policy debates over issues such as immigration and civil rights, and provides a framework for tackling contemporary problems like privacy, the environment and technological change.
In The Libertarian Alternative, Chris Berg offers a new agenda for restoring individual liberty in Australia, revitalising politics and strengthening our sagging economy.
Published in Econ Journal Watch (2015) vol. 12, no. 2, pp. 192-220.
Abstract: Classical liberalism, the tradition of free markets and individual liberty, has an outsider status in the Australian economics profession. This paper surveys the origin of Australian classical liberal economics in the nineteenth century, its sharp decline in the first half of the twentieth century, and its revival and growth in recent decades. Despite a period of successful market-oriented economic reform in the 1980s and 1990s, surveys suggest that classical liberalism is a minority viewpoint among Australian economists. The classical liberal tradition is sustained only by a small number of institutions and individuals. To the extent that it is influential, it is influential thanks to a political culture that prioritises public engagement. Classical liberal economists have a high degree of participation in political and economic debate outside the academy.
Available at Econ Journal Watch.
Paul Ryan told an audience in 2005 that “the reason I got into public service” was the novelist Ayn Rand.
That makes no sense at all.
Mitt Romney’s vice-presidential candidate may be fond of Rand but Rand would not have been fond of him. She hated the idea of “public service”.
No, her ideal pursuits were industry and science and art. By Rand’s death in 1982, she had elaborated this view over two best-selling novels (Atlas Shrugged and The Fountainhead) and numerous essays and treatises.
Rand admired people who produced things; people who created value. The people opposed to producers are “looters” and “moochers”. They take that value and redistribute it to rent-seeking businesses and the welfare state. They are at home with the government and the tax system; they live in a world of subsidies and congressional hearings … and bailouts.
Paul Ryan supported the bank and automotive bailouts, among the most obscene examples of looting in American history. He now says he regrets those votes, and claims to oppose “corporate welfare” passionately.
His remorse would have done little for Rand. There was nothing she disliked more than inconsistency in the name of politics.
Bailouts and inconsistency are not the only differences between the novelist and the candidate. Ryan claimed his budget plan was based on his Catholic faith. Rand despised religion. Ryan is a fan of Ronald Reagan. Rand thought the Gipper was “trying to take us back to the Middle Ages”.
The war on drugs, civil liberties, abortion, take your pick: Rand and Ryan part more often than they converge. She described the modern conservative movement as the “God-family-country swamp”.
So it’s hard to understand the hyperventilating that has greeted the announcement that Ryan will join Romney on the presidential ticket. In the New Yorker, Jane Meyer suggested that by picking such a dedicated Ayn Rand fan, Romney had “added at least the imprint of an extra woman”.
MSNBC host Chris Matthews went further – Ryan actually “is Ayn Rand”, and he wants to “screw” the poor. One Huffington Post writer described him as a Rand “devotee”. Social media, of course, went bananas.
Ryan is a common type. He apparently insists interns read Atlas Shrugged when they join his staff. Politicians like to think they are in the business of ideas, but that’s nonsense. Politics is the business of power. Ideas are an optional extra, more useful for appealing to already committed supporters than formulating policy.
All those horrified progressives trying to draw a direct line from Rand to Ryan are playing his game, suggesting this senior politician is driven by ornate principle rather than base politics.
Ayn Rand’s books are abused in this way more than most. Her novels may not be great literary works, but are rich and readable (something you could not say about Friedrich Hayek’s dense prose, for instance). More than any other iconic free market writer, she creates a world with its own specific – that is, strict – moral code. And moral codes developed through fiction are seductive in a way that economic treatises are not.
We are so used to popular culture praising public service that the story of a heroic industrialist is highly subversive. If progressive thinkers want to hunt down the source of Rand’s peculiar appeal, it will be found there – radicalism is always appealing. Right now there are few more truly radical notions than private success as noble, or of capitalism as admirable.
Rand has a reputation. But she did not believe virtue was a reflection of wealth. She was careful to draw portraits not only of industrialists but of workers and artisans. One small passage in Atlas Shrugged is more suggestive of Rand’s world view than any of her later claims about altruism and Aristotle: she describes a train engineer as having “the ease of an expert, so confident that it seemed casual, but [his] was the ease of a tremendous concentration, the concentration on one’s task that has the ruthlessness of an absolute”.
Simply put, her novels are about human excellence, small and large. The plot of The Fountainhead pivots on an architect refusing to compromise his unique artistic vision. You can imagine the appeal. And, of course, opposed to such achievement are the predatory looters with powers to tax and regulate it all away.
Does it all seem a bit cartoonish? Surely no more cartoonish than those stories about evil industrialists and heartless capitalists defeated by noble truth seekers and crusaders for the underclass. Rand was working in a popular fiction genre full of heavy-handed socialist tracts like Robert Tressell’s The Ragged-Trousered Philanthropists or the novels of Upton Sinclair.
The difference is that most of those socialist works have been forgotten and Rand’s writing endures. The themes of Tressell and Sinclair have collapsed into cliché. Rand’s remain subversive.
Rand’s books have not penetrated Australia as they did the United States. She is not part of our national consciousness. Yes, she has her fans. Malcolm Fraser was one. But as John Singleton wrote, “Malcolm Fraser admires Ayn Rand. Ayn Rand admires Malcolm Fraser. All this shows is that neither knows what the other is talking about.”
Rand was part of a distinctly American tradition. The libertarian writer Charles Murray rightly notes Rand’s idea of freedom is particularly Jeffersonian. In her lifetime, she was supported by the anti-Roosevelt, anti-New Deal movement that died out with Robert Taft’s loss to Dwight D Eisenhower for the Republican presidential nomination in 1952. That movement was reprised, in a very different form, by the presidential run a decade later by Barry Goldwater – one of the few politicians Rand liked.
Australia has none of that rich history. Our free market tradition owes more to nineteenth century British liberalism than the American Old Right. Rand is an import. When Singleton helped form the libertarian Workers Party in Australia in the 1970s, he admitted he’d given up on Atlas Shrugged 80 pages in.
There’s a reason one of the great histories of the American libertarian movement was titled It Usually Begins With Ayn Rand. But it rarely ends there.
This year what we think of as modern free market liberalism turns 50.
We can thank the 1962 book by the American economists James Buchanan and Gordon Tullock, The Calculus of Consent, for laying the intellectual foundation of the philosophy of limited government.
Call it economic rationalism or “neoliberalism” if you like.
This is not to suggest that all free marketeers have read deeply in the academic field – public choice – that this book spawned. Or that the philosophy of freedom isn’t a lot older. Supporters and opponents are more likely to focus on the more famous names of Adam Smith and Friedrich Hayek. No surprise there. Calculus of Consent is dense and mathematical.
Smith and Hayek studied the market. They were looking at the way human society was spontaneously and efficiently ordered by price system. Buchanan and Tullock shifted the focus; grounding free market thought not in how markets work, but how politics doesn’t.
Half a century later, that is still where the debate is.
Buchanan and Tullock start with a simple, seemingly obvious assumption: people are people. Whether they work in the private sector or in public service, all people respond to incentives. Everybody pursues their own goals and interests. Everybody has their own preferences about what they would like to do. Economists sometimes describe people as “profit-maximising” but this isn’t quite right. People can be salary-maximising, or enjoyment-maximising, or compassion-maximising, or leisure-maximising. Anyway, we’re all trying to maximise something.
The first half of the 20th century saw economists explore the implications of self-interest as it existed in the marketplace. They derived theories of monopoly, public goods, information problems, externalities, and predatory pricing. And they argued that when markets break, government must clean up.
Buchanan and Tullock just extended those theories to government itself. They argued that the public policy question isn’t whether markets have flaws. It is what happens when you try to resolve those flaws through collective action. The Calculus of Consent applied economic analysis to non-market decision making. The book explores the incentives faced by individuals acting in a political environment. After all, people don’t stop being people when they enter a voting booth or sit down at their computer in the Department of Agriculture. Everybody is still motivated by their own personal goals.
This was a necessary corrective to political economy, and a radical one. It is easy to imagine solutions to social and economic problems – the optimal solution is simple to design on paper. But designing and implementing those solutions in the real world is not a trivial matter. Getting self-interested individuals to work towards collective goals is hard. Special interests seek advantage. People use the public apparatus for private gain. Politicians drop good policy and embrace good politics. In a democracy the majority tend to support what is good for the majority, not what is theoretically ideal. What was optimal easily becomes corrupted.
The public choice school is relentlessly realist. It offers a vision of politics without the romance. Public choice counsels caution – if not outright scepticism – about government activity. It underpins the popular claims like Ronald Reagan’s “government is the problem”.
In his 1963 review of the Calculus of Consent, the British economist James Meade criticised his colleagues for being “much too ready to call in the State as a deus ex machina to remove the imperfections of the laissez-faire market”. It was an uncomfortable critique. Meade was a former Labour Party advisor and a firm advocate of government intervention.
The lesson Buchanan and Tullock drew from their research was that rules matter. Buchanan spent his career looking at the structures which could constrain government action and therefore keep the actions of the public service as close to the desires of the public as possible. He won an economics Nobel Prize in 1986 for this work.
So far, so good. A full recognition of the problems of collective action in government should lead to a general reluctance to trust government to act on our behalf. Not to no government, but to modest government, constitutionally restrained. The British political philosopher Mark Pennington says the goal is a “robust” political order. That is, one which is designed to face political as well as market failures – and to limit the damage caused by either.
Certainly, public choice hasn’t penetrated mainstream policy thinking. Conservative politicians (at least those of the free market variety) should be sympathetic but are as embedded in the system as anybody else. The public may be sceptical about bureaucrats and politics but they still, instinctively, want government to fix things. There always ought to be a law. And clever people pushing policy ideas tend to assume their ideas will be implemented wholesale and uncorrupted.
But we shouldn’t underestimate how much Buchanan and Tullock’s book influenced the political contest.
Even the most populist supporter of small government uses language and insights gained from public choice – the understanding, implicit or explicit, that the question isn’t whether society has problems, but whether we can really rely on the strange institution of government to solve them.
Last week, the New York Times editorialised the Ron Paul newsletters could “leave a lasting stain” on libertarianism and the libertarian movement. Who knew the Newspaper of Record was so concerned about the reputation of small government and individual liberty?
Yes, the newsletters matter. Libertarians mustn’t pretend they don’t reflect poorly on Ron Paul himself. But, no, the actions, or even views, of a presidential candidate 20 years ago don’t discredit a philosophy of government.
Published in the late 1980s and 1990s under titles like The Ron Paul Survival Report, they purported to be written by their namesake. Some of them are foul. They’re racist and homophobic and shrill. Like “We can safely assume that 95 per cent of the black males in [Washington DC] are semi-criminal or entirely criminal”. Or “I miss the closet. Homosexuals, not to speak of the rest of society, were far better off when social pressure forced them to hide their activities”.
There’s a lot more of those quotes. They’re no better – often worse – when read in context.
Until recently libertarianism was a niche philosophy. Its tenets have been held by few, and professed by even fewer. The content of Paul’s old newsletters reflects a strategy by some libertarians in the 1990s to build a coalition with cultural conservatives – to bring those cultural conservatives to radical free market economics.
This paleolibertarian strategy was formulated by Lew Rockwell and the economist Murray Rothbard, both friends of Ron Paul. Writing in 1990, Rockwell said the “Woodstockian flavour” of contemporary libertarianism was off-putting. It was time for libertarians to abandon the “Age of Aquarius” and ground themselves in religion, the family, Western culture, and the middle class. Libertarianism and libertinism are not the same thing; paleolibertarianism was supposed to sever whatever connection there was between the two completely.
That was the theory. The practice was the reactionary racism seen in the newsletters. Many libertarian commentators believe Rockwell ghost-wrote the most incendiary material. It is fairly well established Paul did not, and few believe he holds – or held – any of the views attributed to him by the newsletters.
Yet that isn’t quite an excuse. Paul may not have written the newsletters personally, but he signed off on the paleo strategy, gave his name to it, and handed his byline to its advocates. He didn’t write them, sure, but they went out with his blessing.
Strictly, libertarianism is only a philosophy of government. It does not offer a vision of the good or moral life. A libertarian can, in theory, hold any social belief they like. All they have to do is oppose the government forcing those beliefs on others.
Yet it is hard to square the racism of the newsletters with the understanding of human worth that underpins libertarian philosophy. It does not make sense to place individuals at the centre of your politics then to denigrate people based on their group membership. Ayn Rand famously said racism is the most primitive form of collectivism.
And libertarians have always emphasised the role of markets promoting toleration, because toleration is a good thing.
So the paleo fusion was awkward. Re-read the quotes at the start of this column. They’re not remotely libertarian. Society was better off when all gay people were in the closet? How do you reconcile that claim with a belief in the moral autonomy of free individuals?
And as a political strategy, it didn’t work. Libertarianism isn’t now popular because Lew Rockwell decided to play on white resentment. It is popular because it is the only philosophy of government that takes individual liberty seriously across all policy areas.
The issues animating the libertarian resurgence in 2012 are “cosmopolitan”, not paleo. Keynesian economics and the response to the global financial crisis. Drug law reform. The expansion of presidential power. Just last week Barack Obama authorised the indefinite detention without trial of US citizens suspected of terrorism. Not even George W Bush did anything so draconian, yet Ron Paul is the only presidential candidate opposed.
As Ed Crane, president of the Cato Institute, wrote in the Wall Street Journal on Saturday, Paul is the sole contender who believes in constitutionally limited government. All candidates have talked big about small government; only Ron Paul means it.
And Paul’s arguments on civil liberties (on, for example, the Bradley Manning case) have meant that his political base is now college students, not survivalists.
Paul’s most questionable policy views are the ones calibrated to the latter audience. His opposition to the North American Free Trade Agreement is less about the virtues of bilateral trade deals and more about “sovereignty”. In 2006 he claimed NAFTA was a stalking horse for a North American Union that would have a common currency, international bureaucracy, and “virtually borderless travel”. This is conspiracy theory stuff. The newsletters are full of it.
Views like those detract from the seriousness of Paul’s other messages. A recent feature on the Daily Beast of “10 Outrageous Ron Paul Quotes” lumped his NAFTA allegations with his support for property rights and drug reform, as if they were all equally crazy.
It’s disappointing that Paul’s run crowded former New Mexico governor Gary Johnson out of the Republican debates. Johnson doesn’t have a paleo bone in his body. He has none of Paul’s baggage. In many ways he is also more libertarian. Johnson switched to the Libertarian Party in December.
I wrote earlier that the past actions or views of a candidate don’t discredit a political philosophy. That’s not quite true. It’s never the scandal that hurts, it’s the cover-up.
Yes, many progressives have jumped on the newsletters to attack Paul while excusing the appalling civil liberties record of the Obama administration. Such is politics.
But if those who support Ron Paul in 2012 pretend the newsletters are no big deal (or worse, try to rationalise them) it will suggest to others intrigued by the philosophy of freedom that there is a relationship between racism and libertarianism.
There isn’t. And libertarianism is about more than Ron Paul.
Review of Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, by Brian Doherty (PublicAffairs, 2007, 768 pages)
If one relationship illustrates the uncomfortable and slightly paradoxical relationship between modern, big-tent conservatism and the radical libertarian movement, it is the one between Barry Goldwater and Karl Hess.
Hess was first and foremost an activist, standing in contrast to the more numerous academic types who constituted the American libertarian movement in the 1960s and 1970s. He was firmly counterculture. He sported a Castro beard, and dressed in that same South American revolutionary style. While Hess’s right-of-centre credentials were firmly entrenched — as a journalist for Newsweek he had expressed what was seen as an unbecoming enthusiasm for McCarthy-era anti-communism, and his own writing was strongly libertarian, as well as staunchly anti-war — he conspicuously allied himself with the New Left in the latter half of the 1960s.
Barry Goldwater, whose ideological footprint was stamped with his ghost-written Conscience of a Conservative, was the 1964 Republican nominee for President. Goldwater’s foils were the Soviets and liberals, in equal weight. And Karl Hess, the future counterculture icon, was his unlikely speechwriter.
By the early 1970s, Hess’s position as a libertarian anti-war protester had been the subject of numerous profiles in the mainstream press. His relationship with Goldwater was, however, just as strong. Hess maintained that Goldwater, despite his position as the proto-typical American conservative, was still a perfect fit for his libertarian anti-war coalition, telling the Washington Post that ‘I don’t know anybody who would make a better Weatherman’ — the anti-war terror cell of the radical left. In an almost beautiful vignette of improbable friendship, Goldwater, bumping into Hess on opposite sides of a rally outside the capital in 1969, pulled him aside to asked him to ‘give me a call as soon as you’re free’.
Libertarianism, as Bryan Doherty’s Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement reveals starkly, has always existed uncomfortably alongside its fairweather partner, conservatism. Libertarians, as Doherty points out, often have close personal and institutional connections with the traditional right — they share the same think-tanks, libertarians are often members of the dominant right party, and the two make common cause on many issues, particularly free market economics.
But in the areas of sex, drugs, some science issues such as cloning and stem-cell research, and (often) war, libertarians deviate sharply from the conservative movement. Ayn Rand, in her typically venomous, Randian manner, held conservatives ranging from National Review’s William F. Buckley to Ronald Reagan in utter contempt, dismissing them as wallowing in the ‘God-family-country swamp’.
And that swamp is repelled by libertarians’ radical views on emotionally charged issues, some of which can border almost on satire. Libertarianism often rejoices in how off-putting its beliefs are, relishing its outsider status. Doherty quotes a founder of the New York State Libertarian Party who says that ‘hard-core libertarianism has no mass constituency … there is no mass constituency for seven-year-old heroin dealers to be able to buy tanks with their profits from prostitution’.
Doherty structures Radicals for Capitalism around five major figures: four economists, Ludwig von Mises, Friedrich Hayek, Murray Rothbard & Milton Friedman, and a novelist, Ayn Rand. The title of Doherty’s book itself is in part a compromise for Rand, who hated the term ‘libertarian’ in the same manner that she hated everything else.
But around these well-knowns, Doherty brings in their intellectual ancestors and heirs, and many other peripheral figures largely ignored by modern libertarians. For instance, Doherty profiles the group Spiritual Mobilization, Christian libertarian pamphleteers who splintered out of Leonard Read’s Foundation for Economic Education (FEE). (Libertarian mythology, for some reason, tends to downplay the importance of explicitly Christian free marketeers — the Spiritual Mobilization group have suffered from the same selective memory-loss that the Free Bible Movement has suffered from in the popular mythology of the free trade Anti-Corn Law movement.)
Modern libertarian thought has coalesced around the United States and, as Doherty points out, rightly so. Read your Constitution; there has scarcely been a stronger declaration of the rights of the individual. But the history of nineteenth-century America depicts the demise of anti-statism as the dominant American ideology.
Radicals for Capitalism — after briefly surveying proto-libertarians such as Supreme Court Justice Stephen Field, Yale political scientist William Graham Sumner and political philosopher Herbert Spencer — begins the twentieth century with what were, by then, termed the ‘Old Right’ — a small, disconnected cadre of anti-statist intellectuals repulsed by Franklin D. Roosevelt’s fascistic New Deal.
The intellectual isolation of the Old Right in the country that should be most receptive to its ideas sets the trajectory of the Libertarian movement until at least the 1970s. Movements cannot thrive without an institutional base. Anti-staters before the Second World War were first and foremost intellectuals, and produced a large amount of material. But they failed to reassert themselves in the intellectual landscape of the time, let alone dominate it.
They were not helped by their theoretically incomplete political and economic programme — Ludwig von Mises and Friedrich Hayek were still formulating their comprehensive treatises before the war. The Old Right was an informal coalition built around a hatred of Roosevelt.
Libertarians emerged from the war even further from the intellectual zeitgeist. No post-war libertarian set the tone and structure of the movement more than Leonard E. Read. Read was a refugee from a pro-business lobby group which was usually free-market, but had the frustrating habit of providing an outlet for ‘both sides’ of any given debate. The anti-market side, Read thought, already dominated public debate — why build them another platform from which to attack American capitalism?
Read left the lobby group in 1946 and founded The Foundation for Economic Education (FEE) — the prototypical free-market think-tank. Read’s and the FEE’s approach was, as the name suggests, a purely intellectual and educative endeavour. FEE’s mission was to provide the intellectual stimulant for the remnants of American anti-state thought, and hopefully to convince others, through argument alone, of its merits.
The FEE defined the structure of Libertarianism. Until the Vietnam War era, libertarians almost uniformly focused their activities on education and intellectual outreach. ‘Full-service’ think-tanks, specialist schools such as the charismatic Robert LeFevre’s Freedom School, and outreach organisations focused around varieties of libertarian thought such as Ayn Rand’s objectivism — the movement spent the post-war decades building up the institutional base which it had lacked for most of the country’s history. Having been largely expelled from the government-supported educational establishment and its lucrative tenure tracks, libertarian intellectuals have had to be both scholars and entrepreneurs to stay afloat.
It wasn’t until the late 1960s and 1970s that these efforts really started to pay off. A new generation of libertarians mixed activism over academia, aping the activities of the left. The Libertarian Party held its first convention in Denver in 1972.
Karl Hess — as far from a Read-style educator as can possibly be imagined — with other young libertarians strategically aligned himself with the New Left. It was not a particularly comfortable fit. The movement was still dominated by intellectual types—as it is today. But as these intellectuals gained confidence, their proselytising took a more public dimension. Doherty relates a particular prank of the Circle Bastiat Boys, a group comprising Murray Rothbard, Leonard Liggio, Ralph Raico and others:
One of their favourite stunts involved filling the studio of a televised talk by the governor of New Jersey, hitting him with questions as if their ideological universal was the norm and his some sort of aberration. ‘What, governor? You are for public schools? Where did you get such strange ideas? Can you recommend any books on the subject?
The libertarian movement in the 1970s was a dramatically different one from the isolated remnants faced by Leonard Read, and its expansion was in no small part his achievement. Resembling the state of the movement in 2007, libertarian ideas formed the basis of a magnificent variety of sub-culture groups. And not just famous groups such as Randian Objectivists or Young Americans for Freedom. They also formed a quite sizable part of the hippy and drug movements, science fiction writers, and fans, even early computer enthusiasts.
A proliferation of small independent zines were produced across the country, amongst them Efficacy, Rights by Right, Bull$heet, Living Free and Invitu$. The now-widely circulated Reason Magazine, of which Doherty is a senior editor, was founded in 1968 as a movement zine, dedicated to libertarian gossip and libel.
Libertarianism is a large enough movement to spread out well across the academic/activist divide. However, by the 1990s, it is possible to speak of ‘establishment libertarianism’. Libertarian arguments are, certainly, a constituent part of liberal economic theory. How much the ‘radicals’ of Doherty’s book propelled the general policy drift towards free markets around the end of the century is an open question. We know that Milton Friedman and Friedrich Hayek had a significant impact by the concrete policies and politicians directly inspired by the two academics. But individualists such as Andrew Joseph Galambos, who argued that his ideas were so firmly his private property that you had no right even to describe them to others, perhaps not so much.
The Adam Smith Tie establishment — a network of libertarian-leaning academics and policy-wonks centred around free-market focused think-tanks such as the Cato Institute — has arguably been the movement’s greatest political asset. The employment stability, institutional base and open forum that think-tanks have given to free market writers, thinkers and activists contrasts with the unfortunate isolation faced by Mises, Hayek, and even Rothbard (although, one suspects, Rothbard’s instability was partly of his own making).
These institutions have also provided public credibility for libertarian ideas, even if they by necessity have had to couch their message in practical, rather than moral terms. One political philosopher, writing for Cato recently, titled his essay on broadcasting the libertarian message ‘I’m not a utilitarian, but I play one on TV’. The individuals who work at think-tanks typically have a wide span of philosophical views, but the messages they broadcast are more Friedmanite practicality than Randian moral elitism.
Although Doherty’s book is not an intellectual history, he handles the intellectual issues clearly and honestly. His discussion of Albert Jay Nock’s Our Enemy the State, a foundation text of the Old Right, reveals its uncomfortable ideological fit — its place amongst college-age libertarians is earned almost entirely by the quality of its title.
For an Australian reader, Radicals for Capitalism suffers a little from its scope. Little sense — at least once the Austrians Hayek and Mises move to America — is given of the international environment of the American libertarians. Doherty notes the role of Antony Fisher, a founder of the UK’s Institute of Economic Affairs, at franchising his think-tank model across the United States, but, with those few exceptions, American libertarianism is a closed shop. This is perhaps an unfair criticism — Doherty’s book is unambiguously a history of the modern American libertarian movement — so a synthesis of world-wide radical pro-capitalists remains to be written.
Despite its dramatic gains over the past 50 years, libertarianism still remains as marginalia in American politics. The New York Times’ review of Radicals for Capitalism demonstrates this neatly. The reviewer, an economics writer named David Leonhardt, after quickly dismissing libertarian ideas as a rhetorical aberration, dug through Doherty’s book to cherry-pick as many bad things as they could find — Milton Friedman in Pinochet’s Chile, Rothbard’s youthful flirtation with the segregationist Presidential candidate Sturm Thormond, and the anti-Semitic Merwin Hart (whose name is mentioned exactly once, and in an obviously negative context).
Leonhardt complains that ‘the book fails to ask why people who claim to love freedom have so often had a soft spot for those who would deny it to others’. It would be hard to make the case that Doherty’s book describes a libertarian movement that didn’t care about human, political and economic rights, but in the hands of the establishment left, that is its inevitable conclusion. He ends his review, appropriately, with a discussion of global warming — whatever you think about the left, they sure are focused. Leonhardt’s ignorance of libertarian beliefs and principles is, to be charitable, a reflection of the publishing and writing industry’s reluctance to produce books about the ideological foundations of the free market or the conservative sides of politics.
Sprawling and comprehensive, Radicals for Capitalism replaces Jerome Tuccille’s now 30-years-old It Usually Begins with Ayn Rand as the ‘official’ movement history. Doherty contextualises libertarian figures like Friedman and Rand amongst their peers in the wider movement and produces, as a result, a broad picture of an ideology in its ascendancy.