Libertarianism RIP
When historians want to mark the moment the hyper-libertarian economic philosophy died in America, they might take this morning's appearance by Ayn Rand's disciple, Alan Greenspan before the House Oversight Committee.
Mr. Greenspan said he had made a "mistake" in believing that banks in operating in their self-interest would be sufficient to protect their shareholders and the equity in their institutions. Mr. Greenspan said that he had found "a flaw in the model that I perceived is the critical functioning structure that defines how the world works."Mr. Greenspan, who headed the nation's central bank for 18.5 years, said that he and others who believed lending institutions would do a good job of protecting their shareholders are in a "state of shocked disbelief."
It is perhaps a marker of how far we have traveled in five weeks that when I proclaimed the end of the Uber-Libertarian on September 12, there was still a lot of push back from the community. For the leader of the libertarian philosophy to now proclaim he was wrong, seems to be the nail in that coffin. As Jacob Weisberg points out, libertarians have an excuse for every failing of the last few years, but they all ring false.
Utopians of the right, libertarians are just as convinced that their ideas have yet to be tried, and that they would work beautifully if we could only just have a do-over of human history. Like all true ideologues, they find a way to interpret mounting evidence of error as proof that they were right all along.To which the rest of us can only respond, Haven't you people done enough harm already? We have narrowly avoided a global depression and are mercifully pointed toward merely the worst recession in a long while. This is thanks to a global economic meltdown made possible by libertarian ideas.
Ideologues and their ideologies should put in think-tanks behind doors that can only be opened from the outside and for which there are no keys.
The first dictionary definition of an ideology is a body of doctrine, myth, belief etc. that guides an individual, social institution, class or large group. The fourth definition is theorizing of an individual or impractical nature.
'Myth' and 'impractical' are the key words.
October 23, 2008 1:24 PM | Reply | Permalink
Along these lines, one of my senators and none of my representatives responded to my e-mails on the bailout. I sent out an update today just to let them know that the Malibu I was thinking of moving to is a Chevy.
Have we turned the page on this disaster while the election rolls merrily along? Please do not let up on Congress. They have a tendency to assume we don't care what they do as long as we are silent.
October 23, 2008 1:25 PM | Reply | Permalink
For some time those leaders of lending institutions have been largely focused on lining their own nests and airing out their golden parachutes. Sure, it's a shame if the institution should fail... but you got yours!
Who, other than the noble Libertarian, *didn't* see this coming?
October 23, 2008 1:25 PM | Reply | Permalink
Welcome to reality, Alan. Better too late than never...I guess.
October 23, 2008 1:37 PM | Reply | Permalink
Respectfully, this interpretation of Libertarianism seems narrow to me. Investigating a bit further will surely lead you to discover there are left-leaning Libertarians as well as those who tend rightward.
We in the U.S., like most societies past, have a thoroughly mixed-mode ecomonic model in terms of individual-versus-socialized balance, as you seem to realize when defining Greenspan's economic philosophy has "hyper" libertarian - i.e. one that aligns more closely with a Wild West standard of total and complete deregulation. And again in the blog to which you link which disparages "Uber" Libertarianism.
However, I believe it is a mistake to make statements like "Libertarianism RIP" when it is rather the failure of a component of Libertarianism to which you write. Much like the Democratic and Republican platforms (yes even them), there exists within Libertarianism some bad ideas, and some that are worthwhile.
Libertarianism does not inherently = BAD. If so, where would that leave us? Authoritarianism = GOOD?
October 23, 2008 1:43 PM | Reply | Permalink
That makes as much sense as asserting that, since a person can freeze to death (cold=bad), that we should all jump in the fire (heat=good?). The best place to be is always going to be between the extremes - we just have to decide where.
October 23, 2008 2:44 PM | Reply | Permalink
Precisely.
October 23, 2008 3:33 PM | Reply | Permalink
The problem with Libertarianism is its been winning since Reagan sicced his version of it on us.
October 23, 2008 4:18 PM | Reply | Permalink
He can't say his own thinking was flawed. It's a flaw in the "model" as opposed to the model maker.
Ridiculous.
October 23, 2008 1:54 PM | Reply | Permalink
The McKinley era, 1896-, an era marked by conservative values and easy money and Gilded Age crooks came to an abrupt end with the catastrophe of the Depression (and a new political realignment in America producing a 30-year reign of Democrats from the New Deal to the Great Society.)
Curious how a free-market ideologue would rationalize/explain the cause and effect of his ideology during that 30-year era - not to mention its final, disastrous end.
October 23, 2008 2:00 PM | Reply | Permalink
The system was never broke, i.e. New Deal and Great Society. The system was broken into.
The irony is that the Republicans have touted their aim to destroy government from Day 1. How did we ever support a man to lead the government who mocked the phrase, "I'm from the government and I am here to help." There was never even suggestion that they would build up government services. They sought only to dsestroy them. Katrina was when they earned the banner, "Mission Accomplished".
How absurd. Are we still stupid?!? Are we to believe a genius like Greenspan cannot fathom the corruption of people? Seriously!?! He had no idea?!?!
October 23, 2008 3:28 PM | Reply | Permalink
I've never understood how libertarians, or any defenders of capitalism ( including me BTW)could reconcile their endorsement of capitalism with disparagement of regulation. Recently carried to extreme of the risible proposal of self regulation.
At least from Adam Smith if not, as Tawney would have had it from the Reformation , capitalist philosophers maintained the general welfare benefits from private enterprise(as opposed to the "tragedy of the Commons"). And usually coupled this with acknowledging that the desire to do well-aka greed- is among the handful of most powerful drives.
But surely a corrolary is that greed will trump most "moral" motives most of the time. A mathematician friend's mantra is 'you can't maximize independent variables'. Which we are all familiar with in the formulation "no man can serve God and Mammon".
When any moral or legal position has a cost the capitalistic choice is to....serve Mammon.
Most of my employers routinely acted illegally when it was sufficiently profitble . To such an extent that I was personally involved in price fixing, bribery, insider trading, and dishonest accounting. In multiple companies. And in nearly every case these activities were well understood and even joked about.
I do share the belief that the profit motive is extraordinarily powerfuland can result in many of the benefits that are claimed for it. But I go further and hold it is so powerful that no other motive stands a chance against it.
October 23, 2008 2:11 PM | Reply | Permalink
translation: "I really thought there was no limit on how high the decks of cards could be stacked. It was truly inconceivable that someone would turn on the overhead cafe fan by mistake. I believe I how found a flaw in our assumptions."
sub-translation: "I never really suspected just how big an asshole I really am. I am finally beginning to suspect that I may be one of the biggest assholes of all times."
October 23, 2008 2:18 PM | Reply | Permalink
c4,
The Perfect Storm; Bush/Cheney/Greenspan
October 23, 2008 4:13 PM | Reply | Permalink
Irony, thy name is Objectivism. Too bad Greenspan never got a clue about how leaders can bring the downfall of a system--even though he witnessed Ms. Rand's self-righteous and totally flawed justification for her affair with a married acolyte.
Greenspan=Condi; who knew, indeed?
October 23, 2008 2:47 PM | Reply | Permalink
Now, be fair.
ALL intellectuals come up with creative excuses for their hypocrisy in failing to apply their own standards to their OWN conduct.
Why would dear Ayn be any different?
I left many of my Objectivist beliefs behind when I turned 40 - but God knows that SEX is the one area where almost ALL of us find reasons for our actions, no matter how destructive.
October 23, 2008 6:25 PM | Reply | Permalink
Greenspan;
'I put my faith and trust in the goodness of people, their striving to do the right thing, the basic honesty all Americans possess.
I never learned anything from the Savings and Loan scandal, the leveraged buyout scandal; or from the actions of Phil Gramm, Ivan Boesky, Michael Milkin, the ENRON gang, Global Crossing, World Com, Adelphia, Tyco, Jack Abramoff, Bush/Cheney, Halliburton/KBR.
I'm as surprised as you are that self regulation
in the market and corporate America didn't work.'
October 23, 2008 3:48 PM | Reply | Permalink
First and foremost, there are no libertarians in our congress or executive branch that have made the decisions that have gotten us to where we are today. That the article presupposes the libertarian straw man is to blame ( & then summarily shoots him down) is what kills the impetus of the article before it starts.
Second, the article has decided on a singular ideological definition of libertarian thought that would be reject by most self-described libertarians. Not all libertarians are anti-state nor are they anti-regulation at the basic level. I find it funny that the author chose to blame an abstract absolutist position which no one in the history of our elected govt has ever held enough power to enact. Moreover, very few libertarians subscribe solely to the Objectivist ideas of Ayn Rand. The overwhelming majority of libertarians don't envision a their policies solely in ideological terms or lacking in historical references. (Greenspan is a Republican, btw).
Third, de-regulation of financial markets did not create true free markets. Free markets depend on all players having access to good information. De-regulation actually helped obscure information.
Fourth, European banks are being battered by this crisis as well. Does anybody really think that European financial regulators are closet libertarians?
I could go on and on....but you get the point. The article is intellectually worthless.
October 23, 2008 5:32 PM | Reply | Permalink
As an Objectivist I hope you're right about the death of libertarianism. And who better to lay it out than "the Undertaker." BTW, Greenspan threw Rand under the bus when he accepted the Fed chairmanship.
October 23, 2008 7:07 PM | Reply | Permalink
Actually.....
Ayn threw Greenspan out of the 'Senior Collective' well before Alan became involved in the Federal Reserve.
Just wanted to keep the historical record straight.
October 23, 2008 7:25 PM | Reply | Permalink
Who, other than the noble Libertarian, *didn't* see this coming?
Ron Paul, the msot libertarian member of Congress, did see this coming.
The LewRockwell libertarian crowd predicted these problems and hated Greenspan since he was put in the Fed chairmanship.
October 23, 2008 10:24 PM | Reply | Permalink
What?
You're trying to talk facts to this bunch of bobble-heads?
October 23, 2008 11:17 PM | Reply | Permalink
Lets take a fresh look at this BS about Libertarians not believing in Government Intervention. Libertarianism is but misdirection to cover their desire for control without restraints. Control should be theirs to maximize profits. Their goal in politics is to get others to cover their societal and actual expenses.
Patterns are a way individuals can view hints of the powerful's actions.
One should go back to the true mother egg of this band of ego trippers, Ann Rand.
One could say she introduced the concept of "Creative Destruction"!
It certainly fits in to part of the Republican strategies of burning all the "assets" in front of the Realists. We could also say it fits into Israel's plan, “Making a Clean Break: Defending the Realm" and the Neocon's plan for the MidEast, except this is on a global scale!
October 24, 2008 12:34 AM | Reply | Permalink
Libertarianism isn't a political philosophy, it's a religion.
October 24, 2008 7:21 AM | Reply | Permalink