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The Trouble With Liberty


It’s a compelling story. But like many libertarian narratives, it’s oversimplified. If the biggest banks had failed, bankers wouldn’t have been the only ones punished. Everyone would have lost his money. Investors who had no idea how their dollars were being used—the ratings agencies gave their investments AAA grades, after all—would have gone broke. Homeowners who misunderstood their risky loans would have gone into permanent debt. Sure, the bailouts let some irresponsible people off easy. But not intervening would have unfairly punished a much greater number.

There’s always tension between freedom and fairness. We want less government regulation, but not when it means firms can hire cheap child labor. We want a free market, but not so bankers can deceive investors. Libertarianism, in promoting freedom above all else, pretends the tension doesn’t exist.

Case in point: A house in Obion County, Tennessee, burned to the ground in September because the owner had not paid the annual $75 fee for opt-in fire protection. As the fire raged, the house owner told the dispatcher that he would pay the cost of putting out the fire. The fire department still refused to come. The house burned down, with four pets inside. Libertarians point out that this is how opt-in services—as opposed to taxpayer-funded public services—works. If you don’t pay, you don’t get coverage. The firefighters can’t make exceptions without creating moral hazard. This makes sense in theory. In practice, not so much. The firefighters showed up to protect a neighboring property. The homeowner offered to pay not just the cost of the fire protection but the full cost of the spray. A court would have enforced that contract. But because the firefighters stuck to a rigid principle of opt-in services, a house was destroyed. Will this serve as a cautionary tale next time a rural resident of Obion County is deciding whether to buy fire insurance? No doubt. But will someone else inevitably not learn his lesson and make the same mistake? No doubt.

And that’s just the government side. Consider the social side of Libertopia. It’s no coincidence that most libertarians discover the philosophy as teenagers. At best, libertarianism means pursuing your own self-interest, as long as you don’t hurt anyone else. At worst, as in Ayn Rand’s teachings, it’s an explicit celebration of narcissism. “Man’s first duty is to himself,” says the young architect Howard Roark in his climactic speech in The Fountainhead. “His moral obligation is to do what he wishes.” Roark utters these words after dynamiting his own project, since his vision for the structure had been altered without his permission. The message: Never compromise. If you don’t get your way, blow things up. And there’s the problem. If everyone refused to compromise his vision, there would be no cooperation. There would be no collective responsibility. The result wouldn’t be a city on a hill. It would be a port town in Somalia. In a world of scarce resources, everyone pursuing their own self-interest would yield not Atlas Shrugged but Lord of the Flies. And even if you did somehow achieve Libertopia, you’d be surrounded by assholes.

To a Libertarian, nothing is worth sacrificing principle for—least of all political power. Yet Rand Paul has already made some concessions. The first sign of Paul’s domestication came when he appeared on The Rachel Maddow Show after winning the Kentucky primary. Maddow asked him whether he would have voted for the 1964 Civil Rights Act, which made it illegal for businesses to turn away customers on the basis of race. Paul said it all came down to a question of private versus public businesses. “Does the owner of the restaurant own his restaurant?” he said. “Or does the government own his restaurant?”

Paul got slammed, even within his own party. The Wall Street Journal’s editorial page, usually a staunch defender of libertarian positions, wrote that Paul was wrong “even on his own libertarian terms.”

Paul went into lockdown. He gave few media interviews. His public statements were tightly scripted. And his stance changed: He would have voted for the 1964 Civil Rights Act after all.

And he won. The lesson: If a libertarian wants to get elected, he’s going to have to bend a few principles, deal with reality as it exists. The same is true if he wants to legislate. Since the election, Paul has challenged Republican orthodoxy by suggesting he’s willing to cut military spending. He’s talked about expanding the House Tea Party Caucus to the Senate. But he also drifted from his “no pork” pledge by hinting he would accept federal earmarks for Kentucky in the end. (Paul said he was misquoted and subsequently pushed for an earmark ban.) During an appearance on CNN on November 9, he ended the interview rather than name a spending cut. The test will be whether Paul is willing to slash government in ways that irk his party—by cutting back Social Security, say, or trimming Medicare. Luckily for him, that kind of showdown will happen only if Republicans regain the Senate.

Ron Paul might even get the Fed to cough up a few extra receipts. But no one is under the illusion that he will “end” it. (If he tried, Republicans would smother him just as quickly as Democrats would.) It took 35 years for Ron Paul to reach the center of American politics. And it could take another 35 before he or someone like him is back. It’s certainly a libertarian moment—but it’s not liable to last too long. Libertarianism and power are like matter and anti-matter. They cancel each other out.


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