Kilroy Was Here
June 15, 2004
The Vote Market
Peter Levine explores the ideas of pragmatic libertarianism:

1. I’m open to pragmatic but not philosophical libertarianism: If you come at me with a coherent and radical version of libertarianism, I will resist it. In contrast to libertarians, I believe that human beings may make claims on others for economic support; that some of these claims are morally obligatory; and that governments may enforce such claims through taxing and spending. I don’t see a tax as an immoral “taking” of sacrosanct private property. This is only one place where I part company with abstract libertarian theory.

However, libertarians have also developed a whole set of pragmatic arguments to accompany their core philosophical beliefs. They say that governments tend to fail at their own explicit purposes, are often captured by special interests, and promote upward economic redistribution; and that markets work better. Libertarians often assert that these arguments must apply in all (or almost all) circumstances. They rely on fundamental theoretical reasons that derive from economics, not philosophy—for example, the idea that markets efficiently deliver what everyone demands. I think, in partial contrast, that market solutions often work in particular domains and are worth testing. In practice, this means that I am open to, and interested in, libertarian arguments that take the form, “A market will solve problem x” (where x is something like poverty, crime, or environmental degradation). Pure philosophical libertarianism, however, says, “We shouldn’t structure the ground rules of society in order to solve problems of this type; we should simply respect private individual liberty.” I disagree with this formulation, but that doesn’t prevent me from learning practical lessons from libertarianism

One way I think that 'pragmatic libertarianism' can acutallyoccur in our society is to have two different markets provide checks and balances to each other: the market of dollars vs. the market of votes.

The market of dollars can be more efficient, but can suffer from abuse and resentment.

The market of votes, in the form of representative democracy, can use a market-based system to check these abuses.

At some point, the market of dollars ceases to exchange goods and services and starts to exchange power-especially when wealth inequality grows past a certain point. At this point, the dollar market may actually limit liberty.

The market of votes can allow us to check these abuses and to force the market out of stable strategies that have unacceptable consequences.

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