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An Economics that is Based in True Classical Liberalism? Toward a Humane Libertarianism

Updated: Jan 28

 

The 384-page book is about nudging all Travelers on the Spaceship (Earth) to consider (p. 4) “... the case for a modern and humane version of what is often called ‘libertarianism.’ It is not right wing, reactionary, or some scary creature out of dark money. It stands in the middle of the road—recently a dangerous place to stand—being tolerant and optimistic and respectful. It’s true liberal, that is, anti-statist, opposing the impulse of people to push other people around. It’s not ‘I’ve got mine,’ or ‘Let’s be cruel.’ Nor is it ‘I’m from the government and I’m here to help you, by force of arms if necessary.’ It’s ‘I respect your dignity and am willing to listen, really listen, helping you when you wish, on your own terms.’ When people grasp it, most like it. Give it a try.”


Well, a MetaEcon is willing to give it a try, until seeing the following quote claiming (p. 4):  “The sainted Tom Palmer of the liberal Atlas Network has it right. ‘Chances are almost 100 percent that you act like a libertarian. You don’t hit other people when their behavior displeases you. You don’t take their stuff. You don’t lie to them to trick them into letting you take their stuff, . . . or knowingly give them directions that cause them to drive off of a bridge. . . . You’re a civilized person. Congratulations. You’ve internalized the basic principles of libertarianism.’”


Perhaps some Libertarians use said frame --- but lots of ethical people do, and not all are Libertarians.  In fact, looking around the Spaceship, one sees Libertarians like prominent members of The Atlas Network as represented in the Koch Brothers who originally funded the Cato Institute, acting on unethical grounds (see Nelson 2021). Having read many papers and considered claims coming out of the Cato Institute for decades, such as claiming there have never been nor will there ever be social costs, well, said claim is not based in the ethics of a humane liberalism. The Koch frame has also led to doing everything possible, both unscientific & unethical, to destroy the Spaceship on which we Travel together around the Sun:  Water and air pollution, and climate change driven by releasing too much carbon dioxide, is a key operating frame of Koch Industries. The Atlas Network, which includes the Koch frame of mind, is saintly?


McCloskey needs to distance own-self from The Atlas Network and stay with Adam Smith, as in (p. 5): “The Blessed Adam Smith recommended in 1776 ‘the liberal plan of equality, liberty, and justice.’ The first in Smith’s triad is a hoped-for equality in social standing, which he favored. Contrary to the attitude of the country club, and contrary to the pride of some of the men wearing Adam Smith ties, and contrary to a leftist’s assumptions about Smith when she has not actually read a whole page of him with attention, Smith was an egalitarian. A man’s a man for a’ that.”  Ah, good, we MetaEcon say, but Adam Smith was not a Libertarian, and certainly is not represented by The Atlas Network.  MetaEcon have read Adam Smith.


The book is worth a go, but not for the sake of supporting Libertarianism.  It is worth a go because it makes clear the role of ordinary people in having a go at betterment, finding that which the other can go along with. The ethic is key in forming a Bouegeois Deal that the other can go along with, found by testing the widget in the Market for whether it is a kind of betterment.  But, it is not the ethic as represented in The Atlas Network, at least not convincing without the empirical support for it.


So, just what ethic is McCloskey framing?  A clue is provided by the declaration,  from the McCloskey Home Page https://www.deirdremccloskey.com/   “Not ‘conservative’! I’m a Christian classical liberal."  Ok:  That frame could work, in that it seems God (and McCloskey) is a MetaEcon https://www.metaeconomics.info/post/god-is-a-metaecon .  Dual Interest Theory (DIT) in Metaeconomics is used in the following to help make good, common sense of the McCloskey claims (for a start into DIT, see Metaeconomics for Dummies https://www.metaeconomics.info/post/teach-me-some-basic-economics-so-i-can-make-sense-of-the-blog ). Let’s see where it takes us.


McCloskey has a style of telling the essence of the story with Part and Chapter titles.  So, on Parts:  you should become a humane true liberal, in 17-Chapters; humane liberalism enriches people, in 6-Chapters; the new worry about inequality is mistaken, in 10-Chapters; and the other illiberal ideas are mistaken, too, 17-Chapters.  So, 50-Chapters: The book takes awhile.


Part One on becoming a humane true liberal: modern liberals recommend both golden rules, that is, Adam Smith’s equality of opportunity; liberalism had a hard coming; modern liberals are not conservatives, nor statists; liberals are democrats, and markets are democratic; liberals detest coercion; liberalism had good outcomes, 1776 to the present; yet after 1848 liberalism was weakened; the “new liberalism” was illiberal; the result of the new illiberalism was very big governments; honest and competent governments are rare; Deirdre became a modern liberal slowly, slowly; the arguments against becoming a liberal are weak; we can and should liberalize; for example, stop “protection”; and stop digging in statism; poverty out of tyranny, not “capitalist” inequality, is the real problem; humane liberalism is ethical.


Lots to unwrap here, but in DIT terms, McCloskey is pointing to the content of the shared other-interest that works to bring the Great Enrichment, especially since 1800.  Spaceship income per capita per day has increased by 3000 to 10000 percent, and, McCloskey lays the claim it is because of liberalism, a special kind of “good” Libertarianism, a humane liberalism. The humane part arises in a shared other-interest that evolved to give new content to the Bourgeois Deal. Said content was about giving liberty and freedom to ordinary people to have a go at betterment, the latter tested in the Market with minimum to no involvement by the Government.  The Great Enrichment was driven by it.  And, sure, if liberalism is truly ethical, truly humane, as DIT makes clear, it works. 


McCloskey also claims that said kind of liberalism was operating well starting in the mid-1700s until 1848, or so, and, not so much since. Spaceship travelers, instead, were subjected to communism and socialism and religionism, all with too much authoritarian control, poverty the result of tyranny in same.  Such “isms” reduce restrain the  liberty and freedom to have a go, taking too many places too far from the humane liberalism which started in full bloom around the time of Adam Smith. As DIT clarifies, Adam Smith fully realized that the Great Enrichment was about good balance in the joint wealth & sentiments, incentives & ethics, as clarified in a joint read of On the Nature and Causes of the Wealth of Nations & The Theory of Moral Sentiments (see Lynne 2020). And, as Deirdre admits, even she was a slow learner to the fact that Adam Smith had figured it correctly.


Part Two on humane liberalism enriches people:  liberty and dignity explain the modern world; China shows what economic liberalism can do; commercially tested betterment saves the poor; producing and consuming a lot is not by itself unethical; trickle up or trickle down is not how the economy works; the liberal idea, in short, made the modern world.

In a nutshell: “What made us rich was not accumulation or exploitation, but Franklinian innovation—new ideas for blast furnaces, anesthesia, spectacles, computers, German universities, French reinforced concrete, Italian radios, British radar, American assembly lines. A new political liberty to have a go and a new social encouragement to take advantage of it, innovism, made us rich (p. 114).”  So, it is about Innovism, not Capitalism. Got it. And, sure, it all works as long as Optimal Inequality (see https://www.metaeconomics.info/post/adam-smith-on-income-and-wealth-inequality ) and not some random trickle down magic is at play. 


A humane liberal Scrooge needs to develop an empathy-based ethic on compensation, not only favoring the Scroogianm at the top but also the Cratchitnism at bottom, finding what Cratchit can go along with.  A Bourgeois Deal with an ethic looking to Optimal Inequality, fueled by Innovism, well, yes, that ensures the Great Enrichment. McCloskey only mentions the extremes of inequality and the damage Scrooge can do 1-time, and never mentions Scroogism, while hammering on the Socialist 99-times and Socialism 225 times.  So, how about the humane liberalism of Norway and Sweden? It works.


Part Three on the new work about inequality is mistaken:  forced equality of outcome is unjust and inhumane;  Piketty is mistaken;  Europe should resist egalitarian policies; Piketty deserves some praise; but pessimism about market societies is not scientifically justified; the rich do not in a liberal society get rich at the expense of the rest; Piketty’s book has serious technical errors; the ethical accounting of inequality is mistaken; inequality is not unethical if it happens in a free society; redistribution doesn’t work.


No: The new work on inequality is not mistaken.  Piketty largely gets it correct. Inequality must be about adequate incentives while reducing resentment.  Optimal Inequality is about incentives & ethics, else it produces political (economic) chaos: Just look around.


Part Four on other illiberal ideas are mistaken too:  The last 17 Chapters are a bit redundant, in being a compendium of interviews and other short releases published in popular outlets.

McCloskey (p. 312) finishes the book with: “Yes, I know, you will lean toward rejecting all these factual findings because they are ‘right wing’ or ‘libertarian.’ I ask you merely to stop imagining alternative facts that suit your politics. I ask you to listen, really listen, and to consider.” Well, yes, a MetaEcon asks McCloskey to do the same. 


Consider DIT in Metaeconomics to help make common sense of it all, to give analytical content to the frame of a humane liberalism. DIT clarifies that the best ethical content of the shared other-interest is an empirical question on the path to finding the best point on the political spectrum, a balance in the joint right & left, libertarian & communitarian: A bird cannot fly with just one wing. And, bottomline, it is not at all clear that the new kind of Libertarianism that McCloskey envisions leads to the best form of the ethic that works best for ordinary people: It is an empirical question. So, use DIT to guide the search and go find the answer, please, and report back when you find the sufficient reason for the best ethic you found using serious and systematic inquiry based in joint consideration of both the science & humanities (human sciences).


References


Lynne, Gary D. Metaeconomics: Tempering Excessive Greed. (Palgrave Advances in Behavioral Economics).  New York: Palgrave Macmillan, 2020.

Nelson, Anne. Shadow Network:  Media, Money, and the Secret Hub of the Radical Right. 2nd ed. New York: Bloomsbury Publishing, 2021.

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