Friday, January 4, 2013

Libertarianism


There have been some comments lately seeking clarification on the meaning of libertarianism so here is the wiki link to libertarianism.  Some key excerpts:
The word stems from the French word libertaire. The use of the word "libertarian" to describe a set of political positions can be tracked to the French cognate, libertaire, which was coined in 1857 by French anarchist Joseph Déjacque who used the term to distinguish his libertarian communist approach from the mutualism advocated by Pierre-Joseph Proudhon.[11] Hence libertarian has been used by some as a synonym for left anarchism since the 1890s.[12] The term libertarianism is commonly considered to be a synonym of anarchism in countries other than the US.[9] Albert Jay Nock and H.L. Mencken were the first prominent conservatives in the US to call themselves "libertarians," which they used to signify their allegiance to individualism and limited government, feeling that Franklin D. Roosevelt had co-opted the word "liberal" for his New Deal policies, which they opposed.
So looks like this whole concept came out of France in the latter half of the 1800s.  No coincidence then that the "Statue of Liberty" idol came from France to the U.S. in the late 1800s.  It must have been really big in France back then and eventually just spilled over into the U.S. and got in.

More information about the characteristics of this secular philosophy:
Libertarianism is the group of political philosophies which advocate minimizing coercion and emphasize freedom, liberty, and voluntary association. Libertarians generally advocate a society with significantly less government compared to most present day societies. There is no consensus on the precise definition of libertarianism. The Stanford Encyclopedia of Philosophy defines libertarianism as the moral view that agents initially fully own themselves and have certain moral powers to acquire property rights in external things.[1] George Woodcock, author of a history of libertarianism, defines it as the philosophy that fundamentally doubts authority and advocates transforming society by reform or revolution.[2] Libertarian philosopher Roderick Long defines libertarianism as "any political position that advocates a radical redistribution of power from the coercive state to voluntary associations of free individuals", whether "voluntary association" takes the form of the free market or of communal co-operatives.[3] According to the U.S. Libertarian Party, libertarianism is the advocacy of a government that is funded voluntarily and limited to protecting individuals from coercion and violence.
So it looks like this philosophy "libertarianism" has no place in human history before the mid 19th century, and this relatively new to the scene philosophy is basically anti-authority and anti-civil government, really anti-civilization and anarchical.  It has found a place both on the political left and the political right in the present era which is interesting... hedged in from both sides!

This philosophy is at core what blinds the minds of those who are ignorant of, adverse to and oppose a tax "driven" state currency system like that which we have in place today here in the U.S.  Even though this is the type of system we have, the libertarians continue to deny this reality and are living in some sort of fantasy world of gold standards or private currencies, reserve banking, you name it; all sorts of ignorant libertarian ficticious alternatives to reality.

Some opposed are more overt about their opposition and up-front about it, for instance the Rothbardian right-libertarians, the right "gun culture", "gold lovers", etc..;  but this philosophy is also blinding the minds of the left-libertarians who just can't seem to embrace and understand the idea of a state currency system, and cling to the "we're out of money!" and "we're a debtor nation!" and the "we need a balanced budget!" mantras.

These left-libertarians are the ones Bill Mitchell has referred to as:  "friends like these...".

The left's libertarianism is covert, but it is always there and is a powerful enemy in this intellectual warfare we are engaged in.

37 comments:

Anonymous said...

"The left's libertarianism is covert, but it is always there and is a powerful enemy in this intellectual warfare we are engaged in."

The warfare MMT is in is not intellectual for the most part. It is ignorance that we are fighting. "we are out of money", "living at expense of our children" are ignorant slogans.

Matt Franko said...

money,

You're tellin' me?!??!

;) rsp,

Anonymous said...

This philosophy is at core what blinds the minds of those who are ignorant of, adverse to and oppose a tax "driven" state currency system like that which we have in place today here in the U.S. Matt Franko

So long as we have government then government money MUST ONLY be inexpensive fiat according to the libertarian principle of no government privileges for private interests.

Unknown said...

hang on, don't Tom Hickey and Bill Mitchell both describe themselves as 'left libertarians'...?

This history of libertarianism sees things a bit differently:

http://www.libertarianism.org/history

Dustin said...

I am a "left libertarian" and I believe that MMT has both the most accurate description of macro-economics and that the JG is good solution to the problems it uncovers.

The two things are tough to synthesize. I just have to admit, that "as long as governments can levy taxes and fines and issue money" MMT has the best solution to lack of demand in the economy.

Some libertarians just don't like the government doing those things. And if the said libertarian is an uncompromising dogmatic purist, you'll never win them over.

There are ways to reach out to libertarians, I think Warren Mosler does the best with phrases like "MMT works no matter what size of government you have".

You can also point out that MMT does say that private institutes CAN'T issue money. Private money can coexist with government tax money.

You can also point out that taxing people in a "private currency" gives power to a private banking institute that is unaccountable to others.

Granted MMT is a tough sell to libertarians(and libertarianism a tough sell to most MMTers), but they don't HAVE to be mutually exclusive. I'm proof of that.

Matt Franko said...

y,

not much different than the wiki account imo...

Key excerpt from the wiki: " There is no consensus on the precise definition of libertarianism...."

This is revealing by itself... can't even define it.

rsp,

PS I dont agree with either Tom's or Bill's self-assessments in this regard. If you support a system of state currency, I can't see how you can be a libertarian at least as it is discussed by the wiki article...

Anonymous said...

Private money can coexist with government tax money. DustinM

Indeed. But there are several different private money forms and any number of potential private money forms. Therefore, it would be "un-libertarian" for government to define what private money is since that definition could not possibly be exhaustive since some private money forms have yet to be invented.

So government should focus exclusively on defining what government money is and leave private money to be defined by the private sector.

Dustin said...

>> If you support a system of state currency, I can't see how you can be a libertarian at least as it is discussed by the wiki article<<

Because as long as you have any kind of state(even for just defense and courts), then you MUST have a tax system. And whatever thing the state taxes you on is going to create demand for that currency. Whoever issues that currency will have a get a distinct economic benefit of having the only thing you can pay your taxes in.

Therefore, your choice becomes the state either getting that benefit(and HOPEFULLY giving some of it back to the people) or the state grants that authority to whomever is issuing the private currency.

MMT doesn't say that you can' have competing private currencies along with the government currency.

Dustin said...

>>So government should focus exclusively on defining what government money is and leave private money to be defined by the private sector.<<
Agreed!

Tom Hickey said...

There is a big debate going on now about monetary economics and monetary reform.

Libertarians of both right and left oppose giving government full control of money creation, i.e., ending private banking. Some Libertarians (libertarians of the right) want to go to free banking. Many libertarians of the left want to end central banking. Dennis Kucinich (AMI proposal) joined with Ron Paul in this endeavor. But many libertarians of the left also oppose allowing the private banking system to take over currency creation, too. Practical libertarians are OK with a a combination of public and private money creation, but with the proviso of ending independent central banking, which creates a command economy under a small group of unelected and unaccountable technocrats. Libertarians in general are opposed to an international monetary system with a global currency.

The person who probably best understands monetary economics and is libertarian leaning is Bernard Lietaer a former Belgian central banker.

Matt Franko said...

Dust,

"along with the government currency."

Youve made my point... rsp,

Tom Hickey said...

y hang on, don't Tom Hickey and Bill Mitchell both describe themselves as 'left libertarians'...?

This history of libertarianism sees things a bit differently:


Yes, and note that that piece begins with Lao Tzu ( one of my favorites in perennial wisdom). But examination of Lao Tzu reveals that he was speaking of an elevated level of collective consciousness. The prevailing social paradigm at the time was Confucian, which is based on the authority of the Canons. However, Taoism finds the law written in the human heart.

This is indeed the teaching of perennial wisdom. A truly libertarian society is only possible when a people is collectively enlightened and has enlightened rulers, because only then can cultural rituals and social institutions be based not only on lofty ideals but also the ability to live them.

This teaching is quite explicit in Lao Tzu but it is also at the heart of perennial wisdom in general, and it is found in Heraclitus and Plato, Buddha and Jesus. It is also the basis of Ram Raj in the Vedic tradition.

Many ancient traditions contain the idea of four ages, the golden age of rule of wisdom and love and no narrow self-interest, the silver age when some self-interest arises but is not yet narrow, the bronze age when self-interest narrows, and the iron age, when self-interest hardens and chains humanity to lust, anger, greed, hate, pride, selfishness, and jealousy.

The iron age is topsy-turvy. "I have seen servants on horses, And princes walking as servants on the earth." Ecclesiastes 10:6-8

Guess which age we are living in now? Fortunately, the wise say that this age is coming to a close and the new golden age is about to arise.

See Meher Baba, The New Humanity.

Tom Hickey said...

I can't see how you can be a libertarian at least as it is discussed by the wiki article...

Don't believe everything your read it Wikipedia. It is generally good, but some stuff is flat out wrong, like the macro texts that describe loanable funds, crowding out, and the money multipier.

Tom Hickey said...

The way that contemporary libertarians of the left describe their position is consensual government with distributed power rather than hierarchical with centralized power.

POlitics is about power, and economics about distribution of scarce resources. Whoever holds political power determines the distribution of scarce resources.

That is what is going on in a nutshell.

Now who do you want holding power?

Tom Hickey said...

I believe in the eventually withering away of the "state" as we conceive it. It will happen as humankind matures, gradually and with fits and starts.

But for the foreseeable future there will be nation states and we will have to deal with them as creatively as possible. MMT allows us to do this without having to change anything in a major way, which always a tough sell.

The looming threat is the direction that the international order will take. Most concerning is the decisive role that politically independent central banks and international institutions like the IMF are assuming. This is the direction of a centralized command economy directly in under the control of the global elite. All libertarians right and left unite in opposing this revoltin' development.

Geoff said...

Reminds of the new movie Les Mis. I think those rebels on the barricade were libertarians :)

Matt Franko said...

Geoff,

I believe that took place before 1857... rsp,

Tom Hickey said...

What happened was the bourgeoisie hijacked the revolution and became the new privileged class exploiting workers. We are still litigating that.

Matt Franko said...

But Tom that could not have been a libertarian revolution as the word was not invented until 1857.... rsp,

Malmo's Ghost said...

I knew, primarily through my parents, a self described libertarian (far from a paleo-libertarian) who was one of the most remarkable persons I've had the pleasure of rubbing elbows with, Karl Hess. He was brilliant in every sense of the word (was a speech writer for Barry Goldwater), yet as down to earth as one could possibly be.

As with anarchists there are many, many shades of libertarians.Hess is one of the better ones. I'd take him and his particular philosophical ilk over Obama and his ideological obtuseness any day.

Tom Hickey said...

Cutting off the king's head in the public square was pretty "libertarian." :o

Anonymous said...

Off topic, but over in the UK today, there's been a bit of coverage of a 'job guarantee' as proposed by the Labour Party. It's a job guarantee in name only, but maybe a sign that there is some acknowledgement of a need for government job creation. See this Guardian article here:

http://www.guardian.co.uk/politics/2013/jan/04/ed-balls-welfare-work-scheme

and my take here:

http://alittleecon.wordpress.com/2013/01/04/when-is-a-job-guarantee-not-a-job-guarantee/

Matt Franko said...

It liberated his head from the rest of his body!

Tom,

Was there another word for what you are talking about before 1857 ? Or are you saying that it 'always was' libertarianism and these morons we have today co-opted the word/term?

rsp,

Tom Hickey said...

Virtually all indigenous peoples are technically "libertarians," and libertarians of the left model themselves on tribes.

Karl Marx was familiar with the work of Lewis Morgan on tribal culture and governance, although there is no evidence (upon which scholars agree) that any of his writing was directly influenced by it. But it was a confirmation of his idea about the natural state of human beings without the imposition of class structure through private property.

As a matter of fact, "the tragedy of the commons" argues that optimal development is possible only though capitalism requires enclosure for economic efficiency. This is the basis of propertarianismof different stripes, from neoliberalism to Rothbardian Libertarianism.

Matt Franko said...

" tribal culture and governance"

So if tribes had government, how could they be libertarians?

If they were free when they were neanderthals or whatever, then got together and formed tribal governments, if they were libertarians then why would they have done that in the first place? When libertarianism seeks to suppress govt?

rsp,

Tom Hickey said...

Libertarians recognize that a society needs governance. They want it to be consensual rather than hierarchical and coercive. When they attack "the state" and "government" they means top-down, centralized, coercive application of political power.

"Political power grows out the barrel of a gun" — Chairman Mao. Mao was not advocating it, just saying that this is the reality, and that if China wanted to take its place in the world, this is the reality it as to deal with. That would require developing a productive economy to replace predominantly agricultural one. And so it goes.

Malmo's Ghost said...

Governance and the state are not necessarily the same thing. They aren't necessarily mutually exclusive, but government with a small g can exist minus the state.

CyrilD said...

I'm a libertarian sympathizer. I've just started getting into MMT. Today I asked Jim Rickards (he didn't answer me btw)about the Fed's balance sheet. If the Fed is just giving much their bond revenues back to the Treasury then isn't it beneficial for the Treasury for the Fed to have more and more of their bonds? How big can the Fed's balance sheet get before there are problems? Rickards thinks the IMF will bail out the U.S. with SDRs down the road since the IMF has a clean balance sheet. But what are the negatives of the Fed having trillions on it's balance sheet? If they hold all the U.S.'s treasuries, is this a bad thing? I wanted to get MMT's take since I couldn't get Rickards to answer me.

Tom Hickey said...

Hi CyrilD, welcome to MNE. For starters I would recommend reading Warren Mosler's Seven Deadly Innocent Frauds of Economic Policy. It's a free download and also available at Amazon on Kindle and in print.

The short answer is that Fed operations affect liquidity not solvency. They change the composition of existing consolidated non-govt (domestic private and external) net financial assets in aggregate, which we symbolize here as $NFA. But Fed ops don't affect the amount of $NFA. There are slight exceptions. QE actually decreases the amount of $NFA by removing the interest that would have been paid to non-govt if the Fed had not purchased the Treasury securities, which we symbolize as tsys.

The problem is that now there is a shortfall in $NFA in that the consolidated private sector is saving-deleveraging along with a trade deficit, which means that the external sector is saving in USD, too. This means that there aren't enough $'s in the economy to purchase everything that can be produced at full employment, so firms are not hiring and unemployment is stuck at near 8%. This indicates that the govt's fiscal deficit is too small to offset consolidated non-govt saving desire.

QE does nothing to help this, and removing interest income is a step in the opposite direction. It's a ploy to influence the yield curve but the way there are doing it is inefficient.

The excess reserves held by banks don't spur lending either, since the so-called money multiplier is just an ex post accounting residual. Banks only lend when they have demand from creditworthy customers, and people aren't borrowing now but rather saving and deleveraging in aggregate.

Low rates are not inducing investment (firms spending) either, just financial speculation in risky assets.

What is needed is fiscal policy that increases effective demand and gets the economy going again.

For a detailed presentation of issues around the national debt, which really the national savings of $NFA, see Scott Fulwilller five part series here. The link is to part 5 but it contains links to the other four parts right at the beginning.

CyrilD said...

Tom,

Thanks for the information. I'll get on reading or listening to the links.

MMT is certainly more complex than the other understandings I have looked into. I tried for twenty minutes to explain to the Fox News loving Republican that the U.S. can't default if it's debts are denominated in dollars. He couldn't process that simple thing, so the rest of MMT he wasn't going to get. Lol

Unknown said...

Blogger Tom Hickey said...
"Libertarians of both right and left oppose giving government full control of money creation"

Not true.
Left Libertarians (libertarian socialists/ social anarchists) do not oppose government control of money creation.

The most detailed exposition of a anarchist society, Participatory Economics & Polity, features government control of the monetary system.

Unknown said...

Blogger DustinM said...
"Some libertarians just don't like the government doing those things."

This only applies to right libertarianism.

Libertarian Socialists, although opposed to the modern nation state, are not opposed to government in general.

They recognize that human society requires some form of government, the only question is which one and how to get there.

Tom Hickey said...

Vilhelmo, those who would give government full control of anything compromisers with hierarchical power unless the governing power is consensual rather than hierarchical.

Unknown said...

Tom Hickey said...
"Vilhelmo, those who would give government full control of anything compromisers with hierarchical power unless the governing power is consensual rather than hierarchical."

What would give government full control over what?

Left Libertarians are universally for consensual, democratic forms of government.
Many endorse decision-making principle known as self-management that states all persons should have a say in decisions proportionate to the degree to which they are affected by them.

Tom Hickey said...

I would say that left libertarians in general recognize that their is no invisible hand to provide a governing principle through the market as Libertarians (libertarians of the right) assume. They agree that there needs to be some governing authority to provide the rule of law, adjudication of competing claims, and preservation of human and civil rights. This means that libertarians of the left are opposed to hierarchical government, which inevitably imposes a power structure based on interests. They hold that the governing principle should be consensual, that is, popular democracy aka consensual government of the people, by the people and for the people. Libertarians of the left would not accept a republic as a substitute, since republics aka representative democracies can be captured by vested interests.

A huge difference between libertarians of the right and left is the assumptions about society. LIbertarians of the right reject that that society is anything but an aggregate of individuals, and the ideal is individuals acting freely within the bounds of non-coercion. Libertarians of the left hold that society is not an aggregate of individuals but a complex adaptive social system in which the relationships among individuals and groups are as determinative as individual choices. Among these relationships, one of the most significant is the power structure, which is reflected in class structure.

Unknown said...

@ Tom Hickey

I pretty much agree.

Tom Hickey said...

continued

Once there is class structure, then there is hierarchical government, or it will eventually arise due to asymmetry of power.

Left libertarianism is generally explained now in terms of the prevailing system, so Dennis Kucinich is found opposing the central bank like Ron Paul, but the AMI plan which Kucinich introduced as a bill would end money creation by private banks, whereas Ron Paul's plan would end government creation of money.

I tend to be persuaded by Bernanrd Leitaer that checks and balances work best and multiple money source for redundancy is optimal for preserving freedom from any party gaining monetary control and therefore political and economic control as well.

Trusting entirely on one source is investing so much power in that source that there will inevitably be a power struggle for control.

This is a systems problem and needs to be approached from a design and engineering POV.