The name of my Defining Ideas column is “The Libertarian.” The title of my recent book on constitutional law is “The Classical Liberal Constitution.” Clearly, I consider myself a proponent of limited government. So does Senator Rand Paul of Kentucky, who has moved the term “libertarian” to the fore of our national political debates. In a recent New York Times analysis, “Rand Paul’s Mixed Inheritance,” Sam Tanenhaus and Jim Rutenberg treat him as today’s exemplar of libertarian thought. But Paul’s ideology is a far cry from classical liberalism, which is conceptually and politically superior to hard-line libertarianism.
Libertarians fall into two distinct groups: strict libertarians like Rand Paul and classical liberals such as myself. “Classical liberal” is not a term that rolls off of the tongue. Consequently, “libertarian” is the choice term in popular discourse when discussing policies that favor limited government. Libertarians of all stripes oppose President Obama’s endless attacks on market institutions and the rich. The umbrella term comfortably embraces both strands of libertarian theory vis-à-vis a common intellectual foe.
The renewed attention to Paul exposes the critical tension between hard-line libertarians and classical liberals. The latter are comfortable with a larger government than hard-core libertarians because they take into account three issues that libertarians like Paul tend to downplay: (1) coordination problems; (2) uncertainty; (3) and matters of institutional design. None of this is at all evident from Tanenhaus and Rutenberg’s unfair caricature of the “mixed inheritance” among the “libertarian faithful,” which to them includes, “antitax activists and war protestors, John Birch Society members, and a smatter of truthers who suspect the government’s hand in the 2001 terrorist attacks.”
This unfortunate list mixes libertarians of all stripes into a convention of unthinking kooks. A more accurate rendition of the various strands of libertarian thought would hearken back to such great thinkers as Hobbes, Locke, Montesquieu, Hume, Smith, and Madison. Their incisive contributions concerned the relationship between individual liberty and the social order.
It is important to understand the differences in views between the strong libertarian and classical liberal position. Serious hard-line libertarian thinkers include Murray Rothbard and Karl Hess. Rothbard believes nonaggression is the sole requirement of a just social order. For Hess, “libertarianism is the view that each man is the absolute owner of his life, to use and dispose of as he sees fit.” There are large kernels of truth in both propositions. It is quite impossible to see how any social order could be maintained if there were no limitations against the use, or threatened use, of force to enslave or butcher other people, which Hess’s proposition of absolute self-ownership strongly counteracts.
Yet the overarching question is how does a group of people move from the Hobbesian “war of all against all” toward a peaceful society? Hess claims that stable institutions are created by “voluntary association and cooperation.” Again, strong libertarians are on solid ground in defending (most) private contracts against government interference, which is why Lochner v. New York (1905), reviled as it is by most constitutional thinkers, was right in striking down New York’s sixty hours per week maximum labor statute. Yet the hard-line libertarian position badly misfires in assuming that any set of voluntary contracts can solve the far larger problem of social order, which, as Rothbard notes, in practice requires each and every citizen to relinquish the use force against all others. Voluntary cooperation cannot secure unanimous consent, because the one violent holdout could upset the peace and tranquility of all others.
The sad experience of history is that high transaction costs and nonstop opportunism wreck the widespread voluntary effort to create a grand social alliance to limit the use of force. Society needs a coercive mechanism strong enough to keep defectors in line, but fair enough to command the allegiance of individuals, who must share the costs of creating that larger and mutually beneficial social order. The social contract that Locke said brought individuals out of the state of nature was one such device. The want of individual consent was displaced by a consciously designed substantive program to protect both liberty and property in ways that left all members of society better off than they were in the state of nature. Only constrained coercion can overcome the holdout problems needed to implement any principle of nonaggression.