Brink Lindsey joins their ranks.
Government excess, in other words, was not the fundamental problem. On the contrary, a large and activist government was all that stood between us and mass privation and suffering on a mind-boggling scale. Only government can mitigate the economic effects of the pandemic – in the same way it responds to other shocks that lead to other, less drastic slumps – by acting as insurer of last resort, using its taxing, spending, borrowing, and money-creating powers to sustain household spending and keep businesses afloat until resumption of something approaching normal economic activity is possible.
My view is that only entrepreneurial activity can re-organize the economy in response to the pandemic. The eventual post-pandemic economy will contain many new businesses, while others will have disappeared. Government impedes this process by creating friction and favoritism. It won’t help to give the Federal Reserve the powers that in China belong to the Communist Party.
Later, Lindsey writes,
the modern libertarian movement, which has done so much to shape attitudes on the American right about the nature of government and its proper role, is dedicated to the proposition that the contemporary American state is illegitimate and contemptible.
Lindsey plans two more essays in this vein. I hope that in at least one of them he will get beyond vague allegations.
So far, his essay reminds me of the Progressive narrative of the financial crisis of 2008, in which an “atmosphere of deregulation” supposedly unleashed the financial sector, but the specific causal mechanism is never spelled out. That is because the financial deregulation that actually took place were only intended to make that sector more competitive. Meanwhile, risk-based capital regulations were an effort to tighten up safety and soundness regulation. Ironically, it was those regulations that steered the financial sector toward mortgage securities.
Reality necessarily falls short of Progressive utopia. Rather than admit their own failures, Progressives externalize them. That is how they come to believe that libertarian ideology is a powerful and malignant force.
In his future essays, Lindsey should spell out the specific reductions in state capacity that libertarians imposed. In what ways have the powers of the President been limited? How have the un-elected officials of the bureaucracy been curbed? Which areas of economic life has government been kept out of? What government functions have been abolished or crippled for lack of funds? Under which Administration was government spending reduced?
Every day the news brings us stories of Progressives on the march, tramping out of college campuses and into the larger society, bringing their cancel culture and their contempt for capitalism and freedom with them. Meanwhile, Trump-era Republicans reject free trade and fiscal responsibility. Is this the time for libertarians to berate themselves?
Careful self-criticism is welcome. But coming when liberty in America is at the lowest point in my lifetime, reading an essay that merely echoes the Progressives’ anti-libertarian slogans and slanders left me disgusted.
I agree with your critique. Let’s improve his essay.
a. One part is about the gov’t economic response. Not persuasive so far.
b. The other is about the gov’t health response, “especially in contrast to…South Korea, Taiwan, Hong Kong, Australia, New Zealand, and Germany.”
Arnold, you wrote the excellent Fire The Peacetime Bureaucrats. What if we reduced Lindsey’s essay to this question: How do Libertarians get more Game 1 players in Gov’t, even as we don’t want that Gov’t to get too big?
b). Why not include Italy, Spain, UK, France, etc. The USA is basically middle of the pack as far as I can tell. There is nothing special about being a leftist welfare state that gives you State Capacity on the virus.
Or why not break America up into the New York Metro Area and everywhere else?
Meta, I agree. USA middle of pack. Lindsey should have noted that.
But my (sincere) question: do those “high performing” countries have more of what Arnold would call Game 1 players in Gov’t?
(Particularly Germany, since it’s adjacent to France/Italy with very diff outcomes).
Ah, the Niskanen Center. About as libertarian as de Maistre.
During the Progressive Era, progressives created government-enforced cartels such as the Interstate Commerce Commission, the Federal Reserve Bank, and the Federal Trade Commission. They extended cartels to agriculture and to the automotive and airline industries with FDR’s New Deal, and to healthcare with LBJ’s Great Society Medicare and Medicaid programs. The Great Society also created a welfare system that, in effect, attempts make poor people comfortable in their poverty and cuts off their paths out of poverty. Through it all, they created a myriad of regulatory agencies that even the federal government can’t keep track of.
Today’s Progressives look at the misery and disfunction that they and their forbearers have wrought and declare: “Unfettered Capitalism has failed.” Unfortunately, more and more people on the Right are buying this explanation.
“Rather than admit their own failures, Progressives externalize them. That is how they come to believe that libertarian ideology is a powerful and malignant force.”
Richard — Your comment is a brilliant unpacking of Dr. Kling’s proposition!
He never defined government.
Brink isn’t a libertarian. He was never a libertarian. He was enabled by a prominent libertarian think tank and now he’s off helping the other embittered former pretend libertarians besmirching Bill Niskanen’s good name.
“But coming when liberty in America is at the lowest point in my lifetime…” Is it at a lower ebb than it was before the successes of the civil rights movement?
Reading the article it may be worth noting that Sweden’s GDP actually grew 0.1% in the first quarter of 2020 and daily deaths there peaked a while back and are gradually declining. The USA GDP of course contracted 3.5% over the same period. With 481 deaths per million population, Sweden looks good compared to New York (1,580 dpm), Michigan (599) and about the same as Maryland (476) but of course much worse than Sweden’s fellow no-government enforced lockdown state South Dakota (83) perhaps because of having a larger nursing home population.
It was the populist Bill Clinton ( https://www.sesp.northwestern.edu/docs/publications/4304122885b877cf54815e.pdf ) and a Republican Congress who managed to reduce the federal government by over 300,000 employees during his administration and bring the budget into balance at least for a little while.
Trump has been an abysmal failure at reducing federal spending. But at last check the USA is still in 20 free trade agreements including CAFTA and NAFTA, and with Israel, Singapore, Peru, Australia, and others. Over half of EU-US trade is still not subject to customs duties. Current USA tariffs on China average 19.3% which is less than the average EU VAT rate of 21.3%. If the USA had a similar VAT and eliminated the tariffs would you feel better?
At any rate, if Republicans are against free trade, they are failing miserably at doing anything about. USA taxes, regulations, and common law courts still act as a powerful subsidy for foreign exporters and strongly encourage offshoring. Libertarians apparently find this all hunky-dory.
Brink Lindsey is a brilliant author. “The Age of Abundance” and “Human Capitalism” are both A+ works. Proudly displayed on my bookshelf.
But, I had to recently mute him on Twitter. Nothing interesting and a lot of vitriol.
Hopefully, he decides to come back to planet earth at some point.
Great to have you back Arnold.
Agree with sentiment above here.
I also have two questions:
1. Are there any outcomes that would lead you to conclude that the “government excess” was less of a failure than you had expected? Perhaps some measures of inflation, unemployment, social unrest at some future time period? (Mind you, we won’t see the counter-factual of the natural/necessary economic re-arrangements that are now not occurring)
2. In the absence of the excess intervention (but let’s say, with a proposal such as your loan idea), what changes would you have expected in terms of: a. length of social distancing as implemented by people (not as mandated by the state); b. Societal disarray
Lindsay should read Bryan Caplan,
https://www.econlib.org/state-priorities-not-state-capacity/
If he then reflected on how hard it would be to get the government to have the right priorities, he might attenuate his “romance of government.”
“They handily shut down their entire “non-essential” economies. In a matter of weeks, they casually disemployed many tens of millions of workers, shuttered millions of businesses, and virtually sealed their borders to trade as well as travel. ”
—-
Not exactly true.
The hospitals went on strike is what happened, most of them government owned, true. The airlines are open now but lack passengers willing to travel. A good deal of the unemployment was a voluntary agreement between employer and employee as no one wanted to get the virus.
Brink Lindsey is a brilliant author. “The Age of Abundance” and “Human Capitalism” are both A+ works. Proudly displayed on my bookshelf.
The notion of a hollowed out and defunded federal government in general and CDC in particular may be the closest thing to watching an actual myth be created before one’s very eyes in modern times. It’s reminiscent of the Mandela Effect, only for many people no matter how many times you show someone that it’s not true, they will still keep repeating it.