Policy Libertarianism vs. Structural Libertarianism

Just came across this post on differing libertarian strategies that I thought some of you might find interesting. Here’s the first part:

Libertarian thinkers can be plotted on many axes. Presently, the axis I am most concerned with is Policy Libertarianism vs. Structural Libertarianism.

Policy Libertarians (PLs) include the vast majority of the most visible organizations and writers in the modern libertarian movement: the Reason Foundation, the Cato Institute, the Ron Paul campaign, the LP, the Constitution Party, most libertarian economists (e.g. Milton Friedman), and single-issue organizations like Students for a Sensible Drug Policy. PLs, as their name suggests, focus their energies on inventing and advocating a list of policies that governments should follow. For example, you can find policy libertarians opposing liberal eminent domain laws, fighting for lower taxes and deregulation, supporting cultural tolerance, opposing invasive police searches, and advocating the rest of the familiar libertarian manifesto.

Structural Libertarians (SLs) are much rarer in modern times than PLs, although the opposite used to be the case. Structural libertarians include Patri Friedman, Mencius Moldbug, David Friedman, Murray Rothbard, all libertarian Public Choice economists, Lysander Spooner, and the classical liberals that libertarians have adopted as intellectual ancestors. SLs often have the same moral and policy beliefs as PLs, but they focus their energies on the alternative ways to structure a government and the effect that government structure has on its incentive to adopt good policy. At their most extreme, SLs barely sound like libertarians. Under a market-based government system (a common SL proposal), the architects of Singapore would likely find plenty of customers for a burbclave that is incredibly prosperous and clean, but where communists are sent to jail and litterbugs are viciously beaten with sticks.

The decline of the structuralists and the rise of the policyists is a phenomenon that should interest us. It is a by-product of general political trends in the modern western world. Simply: democracy has won. Democracy is considered to be righteousness and goodness and freedom, all else is tyranny. Didn’t the American colonists risk their lives and fortunes to institute democracy and overthrow monarchy? And wasn’t America the shining example on a hill, leading the rest of the world into a democratic century?

I’d recommend a click through to read the rest.

13 thoughts on “Policy Libertarianism vs. Structural Libertarianism

  1. For some recent Structural Libertarianism, check Bruno Frey’s FOCJ proposal. Polyarchic rather than democratic.

  2. An important distinction. I think I evolved from a “policy libertarian” to a “structural libertarian” last year when I realised that the strongest driver of policy is not politicians or ideas, but the underlying institutions. Unless we can balance democracy with a strong theme of jurisdictional competition, I fear that freedom will forever be eaten away by expedients. Yes.

  3. John you have always had a strong structural bent. The LDP policies, a lot of which you helped write, are quite riddled with suggested constitutional reforms. In fact given how many policies include constitutional reforms a whole new policy specifically on constitutional reform would almost write itself if the LDP wanted one.

    I’m not convinced that jurisdictional competition within a federation is the bees knees. I’d rather invest energy in other reforms such as TABOR, mandatory sunset clauses, citizens initiatives for the repeal of laws, appointments to the the upper house by sortition and other pro freedom democratic reforms. Of course I’d be happy to have more jurisdictional competition if we could get it.

  4. I don’t see how my reforms (if you must call them that) follow from your reforms (if you must call them that). However I do sence that some of my reforms (if you must call them that) could find cross ideological support. For instance Andrew Bartlett, a Green, has agreed with me on the idea of citizens initiated repeal. And local government is already subject to a form of TABOR so I don’t see that idea as that radical either. These ideas are all democratic to the core and you don’t need to be a libertarian to accept their merit. This is also true of jurisdictional competition, and I’m all for it but I don’t think it is the right place to invest political capital given where we find ourselves at in terms of our institutional evolution. For instance with hospitals I’d see more chance of the Feds taking over hospitals and then privatising them than us successfully arguing that the Feds should exit the field and leave it to the states. The later cuts against the current of history and requires a herculean exercise in persuasion. The former flows more readily with the current of history and would be easier to sell IMHO. In any case I think in this instance the vertical duplication of responsibilities is the bigger problem in terms of accountable government.

  5. Your reforms follow from my reforms because when you have competition among many jurisdictions you are much more likely to get some jurisdiction experimenting with successful liberal reform. When you get centralised government you are much more likely to get ever-growing government power and less experimentation.

    As I see it, centralised democracy is a force for big government and the only check on that almost-inevitable trend is greater competition between jurisdictions.

    I highly recommend Bryan Caplan’s “The Myth of the Rational Voter”. I really don’t think political evolution can be understood outside of the context of public choice theory.

  6. Do nations of comparable sizes with central governments of comparable power have similar outcomes in terms of liberty or do other factors play a role?

    I’m not disagreeing with the value of jurisdictional competition. My concern is with the viability of achieving it versus the viability of achieving other pro-liberty reforms given the same mobilisation of effort.

  7. In terms of public choice theory what are the circumstances under which you think the public would choose to limit the power of central government?

  8. My fear is that no lasting pro-liberty reform will be possible without greater jurisdictional competition. I fear that the only circumstances in which the “public” would choose to limit the power of government is if there is a strong and meaningful threat of losing resources to a competing jurisdiction, and there are many clear examples of what works and what doesn’t work at a government level.

    If my fears are well-founded, then centralised democracy will continue to lead to more government spending and more regulation. These aren’t quirks of the systems or dominant memes of the day, but a built-in consequence of the system. High tax & regulation will slow down economic growth, while over-spending will lead to over-borrowing. When these consequences combine in the right combination, you get a Greek-style problem.

  9. John,

    How familiar are you with the abuses of our constitution like abuse of the corporations power?

    We need to get rid of these, bind all levels of Government to restrictions such as just compensation and make each unit fiscally independent. I agree with Terje about the need to make it democratic, and thus saleable but also alterable if it is not done right.

    Fiscal independence is good as it will make true costs explicit. Although not entirely related, if we had a zero exemption, 40% GST and no other taxes, we would see the true cost of Government that we presently pay for (roughly). I’m for some provision for strictness on revenue types as to make the true costs of Government brutally clear.

    I’d want this in any system but it would also strengthen both what you and Terje want, thus reinforcing Terje’s reforms as you believe, given you think your ideas are foundational to his being effective.

    Since we’re talking about constitutional stuff, I don’t think anyone (i.e political group or academic) has really concentrated on Governance. Would we have better Governance if State and Federal Governments adopted more professional approaches used at local levels such as the city manager style of administration?

  10. John – my fear is that even with jurisdictional competition we have a problem. For instance we got federation in Australia. The states of America formed a union and then united to become a single nation. Germany became a nation. Today we see the rise of the European Union.

    The impulse towards the centralisation of power does not halt just because jurisdictions are in competition. In fact many of the political impulses towards centralisation are intended to overcome jurisdictional competition. The OECD talks of tax harmonization as do many in the EU. Power is moved to the centre for not much reason other than the removal of jurisdicational competition. The first impulse of the statist isn’t to remove our liberties but to centralise and entrench power. Removing our liberties comes second.

    So if in Australia we invest our political energies pushing power back to the states there is nothing to stop those powers being centralised again other than institutional barriers. More likely there is nothing to stop people pushing against our efforts and causing us to fail in the first place. But even if we succeed the barriers to subsequent recentralisation may not work. They will certainly be weaker the second time around because convention can’t stand as an institutional obstacle.

    Alternatively we can live with the centralised government system we have and reform institutions to make central government more benign. It is an open question as to which project requires the least effort and delivers the most benefit but I’m of the view that decentralising Australia is a cause with barely a shred of political support in Australia whilst democratising reforms that liberalise do stand a modest, although admittedly still slim, chance of success.

    As a specific example take hospitals. We could move hospitals and health back to the states. They might all liberate their markets and privatise their hospitals, or even some of them migh, but just as likely they may not. Alternatively the federal government could take it all over. They might then privatise the hospitals like they did with Telstra, the Commonwealth Bank, Qantas etc or again they may not. Both approaches entail a lot of effort and risk making things worse. On balance I see merit in hospitals being funded and controlled by a single tier of government even if we don’t get privatisation. It might be nice if that was the state tier but the federal tier seems far more achievable.

    Let’s consider the TABOR option. If we want the states to get more of the tax pie TABOR at a federal level is a means to that end. It could be implemented to cut the relative tax rate at the federal level operates and the states would be the vehicle by which the statists escape the federal cap. The statist impulse to power would then work to achieve your goal. However TABOR might achieve something even better which is a declining relative tax rate at the federal level and a continuation of modest state taxes.

    The alternative to something like TABOR is to convince people that the federal government should suddenly hand a heap of powers to the states in one (or maybe a few) major adjustments on both the tax and spend side of things. This doesn’t seem that likely to me. And it would entail a lot of debates and taking on of vested interests. To sell TABOR all we have to do is make it plain that the people can lift the cap at any future date (but probably won’t as in Colarado) and that there is no implied reduction in absolute real per capita spending capacity at the federal level. Beyond that we let time chip away at the relative size of the central government as it has in Colorado. TABOR seems like a much more credible reform option in my book. And in fact it has a precedent for success in Colorado whilst I’m not sure your approach has any precedent baring violent revolution.

    Take the citizens veto option. It enables the striking down of federal laws. If the statist wants laws that can’t be struck down they need to make them state laws. The statist shifts his focus back to the states which is what you want.

    Take sortition as an appointment mechanism for the senate. It undermines party patronage whilst creating a represenative body. No longer can working the party machine be the statists vehicle. The focus moves to achieving their aims via the states. You get what you want.

    Any where that you undercut the ability of the statist to control society you give her an incentive to work through other means. Juristictional competition gives her an incentive to centralise power. Institutional barriers within central government gives her an incentive to act locally. The idea that you can erect one barrier (juristictional competition) and the battle is mostly won is in my book naive. You have to look at the statists objectives and incentives and realise that they are always going to try and bipass your barriers. The question is merely which of your barriers are easiest to get around. I would argue that democratic barriers are the hardest to get around because the democratic impulse is deeply engrained in western societies and also in the rhetoric of the statist. Liberals should turn democracy against the statist.

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