Friday, March 28, 2008

Why Libertarianism Is Wrong, And Will Always Be Wrong

"Thatcherism is the system of political thought attributed to the governments of Margaret Thatcher, British Prime Minister from 1979 to 1990. Thatcher was unusual among British Conservative Prime Ministers in that she was a highly ideological leader — she once slammed a copy of Friedrich Hayek's The Constitution of Liberty down on a table during a Shadow Cabinet meeting, saying, "This is what we believe."
"Professor Hayek...has suggested that an individual owner of capital goods might aim at keeping the income he derives from his possession constant, , so that he would not feel himself free to spend his income on consumption until he had set aside sufficient to offset any tendency of his investment-income to decline for whatever reason. I doubt if such an individual exists" -
There's been an interesting discussion ongoing at Tim Worstall's for a couple of days, based upon a post of his at 'The Business' (the comment by Gillies which I have referred to can be found on this thread).
Without ragging on the gracious host of that blog, whose patience with sufferers of Claudian Tourettes is sublime, or his commentors, the lack of knowledge of economic history on display is startling.
The reason why German manufacturing overtook British manufacturing so quickly at the end of the 19th Century can be summed up in two words - free trade. Being one of the smart guys of history, Bismarck knew that Germany would become richer, faster, if its internal markets were tariff protected, and if energies were directed towards the gaining of income through exports. Every other significant German achievement of that era, and very many since, have flowed from Bismarck's decision to direct the economy towards rapid industrialisation, and the tariff was an essential tool of his work.
Bismarck did not concern himself with the bald tyranny of price. He adopted a larger view than was possible under a British system where the only consideration that ever mattered in any decision to invest was how much it would cost; never how much you would gain from doing so.
Those of Tim's commentors who touch on the role of education in creating the manufacturing gap are quite correct to do so. As has often been recorded, in the late 19th century there was a much higher ratio of Germans studying in the Technische Hochschule than of Brits studying sciences. The focus of excellence in British education at that time was knowing your Tacitus from your Themistocles, playing team games, discouraging homosexuality, reading G.A. Henty and being a good chap. It is indisputable that the sclerosis in British science caused by the evangelical present's harping towards the classical past hobbled British manufacturing; and that German excellence in science education was a direct consequence of a decision of the German state.
As one commentor has often observed, at that time and for decades after British engineering was led by men who had learned on the job as opposed to having studied their discipline, well, scientifically; 'practical men'. This led to a very conservative approach towards research and development which, allied to the uniquely British division between the proletariat and the rest, itself an inevitable consequence of adopting laissez-faire so soon after the Induistrial Revolution, aided the decline of British engineering.
By the time Bismarck came to power, the United Kingdom had already practiced laissez-faire policies for the best part of 40 years. You can tell a lot about a people from their language - it is telling that English has no direct equivalents to the German 'Schwerpunkt', being the ability to work toward a common goal, or 'Technik', the ability to take a product from the drawing-board to the showroom in as short a time as possible. Contrary to the beliefs of the most extreme libertarians, the British can show these traits when they have to; but under normal conditions, they are too addicted to the atomising influence of laissez-faire, and its politcal child libertarianism, to be able to sustain the effort.
Laissez-faire only works as a means of reducing cost. The only efficiency it ever promotes is financial; it does not encourage excellence in learning, design, research, and production. It does nothing to ensure that individuals are able to reach their full educational potential, or that the sum of human knowledge is advanced by one iota.
Libertarianism preaches that individuals have no relationship with each other beyond the economic, that, as Hayek himself said to Bernard Levin, that altruism does not exist, and that concepts like 'spontaneous order' will break out if humans are left to their own devices. Like Keynes, I would ask the libertarians where such an outbreak of spontaneous order has ever actually occurred.
Of course, it never has - anywhere. The Belgians have recently made a good fist of it by going without a government for nine months - but they've just elected another one. 'Spontaneous order' is utopian, it comes from and belongs in no place; and any philosophy which implies that altruism, the desire of man to do right by his fellows, does not exist does not itself pay the respect necessary to the values which have shaped history.
In this world The State, The Nation, whatever you want to call it, is, for good or ill, indispensable. That's a fact.


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