Category: Uncategorized

By Richard Ebeling

Originally published on January 4, 2019 for the American Institute for Economic Research

The tense and seemingly polarized political environment in America today has raised the issue of whether there is some way to reduce the ideological and government-policy conflicts by finding some middle way between the “extremist” positions of “left” and “right.” The fundamental question in all of this is: Can and should liberty be compromised in the pursuit of such a middle-of-the-road alternative?

Senior staff members of the Niskanen Center have issued what amounts to a manifesto making the case for such a middle way in an article titled, “The Center Can Hold: Public Policy for an Age of Extremes” (December 2018). The authors are Brink Lindsey, Will Wilkinson, Steven Teles, and Samuel Hammond.

They basically argue that neither the libertarians nor the progressives and democratic socialists have the only or full and correct answer to America’s or the world’s social, political, and economic problems. There are elements of truth, reasonableness, and experience within both of these “extremes,” and the lesson to be learned, they argue, is to construct a compromise between the two.

Strengths and Claimed Weaknesses of Liberal Capitalism

On the one hand, they say, the market economy has now long demonstrated that it delivers the goods in the long run, sponsoring and creating incentives for work, saving, investment, and most especially the dynamic innovation that improves the material conditions of humankind. Markets and competitive prices are essential for the working of the free economy, but there are limits and problems inherent in the market system, they insist, that only government can effectively and justly correct.

In their view, business needs the restraining and overseeing hand of government policy to correct environmental and financial-market problems that cannot be prevented when the market is left on its own. What must be created, they say, is “a framework of rules designed to link the pursuit of private profit to the service of the public interest” because “it is essential to a properly constituted market where firms can’t make excess profit by pushing off costs onto others.” (See my article “Ten Years on: Recession, Recovery, and the Regulatory State.”)

In addition, capitalism is said to have a tendency toward excessive market concentration when free from government rules and regulations on the size of firms. “If you want competition, therefore,” they write, “you need an active governmental bias in its favor.” A paternalistic governmental hand is needed in the educational sphere as well — not only in the sense of government schooling, but governmental oversight of private and charter schools as well. Regulators must control who can open schools and when they are to be closed, because parents are too ill-informed without political assistance to know what to look for and to want in a school for their children. (See my article “Educational Socialism Versus the Free Market.”)

Furthermore, markets and society in general contain social legacies from the past, a past in which they may have discriminated against or excluded and harmed various minority groups. To break away from this negative intergenerational legacy, society and government must function with “a strong presumption of widespread opportunity and an openness to redistribution.”

Problems With Progressives and Needs for Government

This now gets us to the authors’ view of progressives and the political left. They declare a rejection of anything-goes, unbridled democratic decision-making under which majorities may do harmful and undesirable things to a minority, and which may have wider bad effects on society as a whole. And they tip their hat to public choice theory in that they warn of the dangers in which government regulatory and redistributive powers are used to provide concentrated benefits for narrow special interest groups at the expense of the majority in society, who bear the diffused costs of the gains for those smaller groups able to influence government.

“Democracy,” they say, “like the market economy, needs to be properly regulated to function effectively.” What is needed are “rules that correct for democratic pathologies, but without taking away from the people the right to rule themselves.”

They also discard the political left’s residual calls for old-fashioned socialist central planning and direction of economic and social affairs. They give a nod to Friedrich A. Hayek by stating that there is more knowledge dispersed among all the members of society than a handful of central planners can ever hope to fully and successfully master and apply. Instead, they want single-focused, direct regulatory or fiscal policies to move people and activities in the desired directions while leaving it to people in markets and society to adapt as they see best to reach the politically decided targets and patterns of human interaction.

The upshot of their critique of the “left” and “right” is to then offer a new package deal of their own: “the free-market welfare state.” They argue that societies with large social-welfare programs and wealth transfers “correlate positively” with free markets and “good governance.” Besides, as another economist they quote says, “The more wealth we have, the more government we can afford.”

Referencing the famous Austrian-born economist Joseph A. Schumpeter, they point out that capitalism is both creative and destructive. That is, competitive capitalism effectively replaces existing technologies, products, and ways of producing and marketing goods with new and better ones that all work to make human circumstances greatly improved over time.

But, in the shorter run, capitalism’s disturbances of the prevailing conditions of work and the social order disrupt how people make a living, the standard and quality of their lives, and their senses of community and shared meaning. People often resent and resist these changes to their lives by turning to political means that potentially restrain markets and sometimes weaken the democratic process.

Searching for a Middle Way for Policy

In the authors’ view, the only way to temper, if not to prevent, these antisocial tendencies is to counter them through the institutions of the welfare state that offer security-providing financial floors to prevent those negatively affected by market changes from falling too far, and through trying to otherwise prevent their fall through those anti-market policies that would hinder desired improvement from the wider social perspective.

For them, government is and should be viewed “as an insurance company with an army.” They point to what they consider to be the “comparative advantage governments have in pooling risk [that] produces enormous utility for society as a whole and is unlikely to ever be unwound, at least not without enormous levels of gratuitous suffering.”

All that needs to be done, the authors say, is that “government commitments are in line with available resources [as] an essential element of good governance.” Good government therefore “should interpret its role as defending programs like Social Security and unemployment insurance, ensuring their long-run integrity through prudent public finance.” (See my article “There Is No Social Security Santa Claus.”)

What is required is to put aside ideological perspectives and blind spots, to instead pragmatically judge each issue on its empirically observed merits of success or workability. If markets work, all the better. If they don’t achieve the social goals desired, then use the government to restrain, regulate, or replace the market, and to redistribute income and wealth so outcomes are more in line with desired social patterns of human affairs.

They call for an end to thinking about “politics as a war between liberalism and conservatism.… Rather, both sides hold a partial view of the good, which when balanced within a well-designed constitution can correct each other’s pathologies.… Our distinctive vision represents an attempt to learn from and incorporate what is best in a variety of ideological traditions,” they conclude. “With this approach, we hope to model the art of moderation … and [move] away from the toxic tribalism of our current politics.”

The Old German Welfare State Under a New Label

At one level, we have heard all of this before, more than 100 years ago. In the late 19th century, the beginnings of the modern welfare state were being introduced and implemented in Imperial Germany, at first under the guidance of the “iron chancellor,” Otto von Bismarck, in the 1880s and 1890s. Young American scholars who had gone over to Germany to finish their advanced degrees in one of the social sciences came back to the United States enthusiastic about the “progressive” direction of enlightened German social-welfare policy.

The manifesto authors’ experiential pragmatism, which sets aside notions of government based on “extreme” principles, was articulated, for instance, in a work about Imperial Germany written by William H. Dawson in the decade before the First World War: “No department of economic activity should on principle be closed to the State; whether it should or should not participate side by side with private enterprise, is a matter of expediency and the public interest.… The jurisdiction of the government is a matter not of principle, but of expediency.” What was known as the German Historical School advocated this pragmatic approach to government; it called it state socialism and said it represented a middle way between a totally free market and radical socialism. As Dawson explained, “State socialism is the mean between these two directions of thought; in it the two extremes meet.”

Another American, Frederic C. Howe (who later served in FDR’s New Deal administration), said in his book Socialized Germany (1915):

In the mind of the Germans the functions of the state are not susceptible of abstract deductions. Each proposal must be decided by the time and the conditions. If it seems advisable for the state to own an industry it should proceed to own it; if it is wise to curb any class or interest it should be curbed. Expediency or opportunism is the rule of statesmanship, not abstraction as to the philosophic nature of the state.… The individual exists for the state, not the state for the individual.…

This paternalism does not necessarily mean less freedom to the individual than that which prevails in America or England. It is a different kind of freedom.… This freedom is of an economic sort.… First in the list of such [redistributive] activities are the social insurance schemes which distribute to the community the burdens of sickness, old age, accident, and invalidity. These in themselves have freed millions of men and women from fear of the future, from loss of self-respect, and have kept them as producing members of the community.

So the Niskanen Center authors are merely calling for more of the same, more of what has been advocated and, in many places, implemented as a supposed alternative to the philosophical extremes of free market capitalism and centrally planned socialism. They, like others over the last 125 years, are the intellectual grandchildren of those in Imperial Germany who first created what these modern American authors call the market-welfare state, forms of which nations around the world have been living under for many decades now, including the United States. (See my article “American Progressives Are Bismarck’s Grandchildren.”)

The Paradoxes of Democratic Paternalism

To begin with, they want to have their cake and eat it too. That is, they want a political-economic system that combines what are fundamentally two irreconcilable principles: one that says human relationships should be based on the individual’s freedom of choice and peaceful association with others; and another under which a higher political authority restricts or manipulates what choices people may make and what forms their associations with others may take on, including a redistribution of the respective income shares received by all members of society from what they otherwise would have been if based on free exchange and contract without government interference.

The ethics and economics of the free society are grounded in the idea that individuals, all things considered, are better judges of their own interests and resulting choices than those in government, who know little or nothing about them as distinct and unique persons. The classical liberal or libertarian has never claimed that all individuals have perfect knowledge or wisdom to always make decisions that are free from error, mistake, or faulty judgement, but only that all people have a better sense of their own circumstances, their own lessons of life, and their own notions of want and desire, and a greater incentive to try to get the decisions right, than a politician or bureaucrat sitting far away not even knowing of those individuals’ actual existence or situations.

The political paternalist usually responds that individuals are guided in their choices not only by imperfect or faulty knowledge, but by emotions and passions that cloud their judgement about a more objective weighing of the risks and payoffs involved in alternatives between which they may choose, and too often fails to give sufficient weight to the gains in the future over the pleasures of the more immediate present.

Of course, it might be asked, if it is true that too many of our fellow citizens are bundles of emotional and illogical decision-making, then why is it that it is presumed that these same individuals can somehow transcend these frequent and seemingly inescapable human shortcomings and frailties to intelligently and wisely cast their democratic votes for those who are to hold political office and who then devise the policies meant to correct the very human-decision-making imperfections that somehow do not prevent the democratic process from being dysfunctional as well?

I need a jailer and a keeper because I cannot be trusted to be left free to make my own decisions and handle my own mistakes; but I am nonetheless informed, knowledgeable, and wise enough to select the political jailers and keepers who will make just the right institutional and policy decisions for me that I am unable to successfully make without such political overseers taking on that responsibility for me.

This is the great paradox of democratic paternalism. “The people” are supposed to rule in the sense of picking those who will hold political office and hire others to man the government bureaucracies, which will then micromanage their lives through the policy tools of the interventionist-welfare state. But those same people cannot be left alone to peacefully rule over their own daily lives, decide on the choices to make and the human relationships to enter into, or accept the competitive market outcomes of relative income shares reflecting the appraised value of each person’s contribution to the production processes that manufacture and then supply the goods that all of us as consumers decide to buy or not to buy.

Is this not just the Rousseauian myth that while individuals may err in their personal choices, the general will of the people as a whole may be trusted to make the right decisions for the community in general?

The Intermediary Institutions of Civil Society

But are there not needed collaborative efforts in society that are beyond market supply and demand, it may be asked in response? Are there not injustices due to the actions of people in both the past and the present? Must not there be some mechanisms to address these and related social problems, and does not this require middle-of-the-road solutions between laissez-faire and the all-controlling state?

At one point in their manifesto, the authors highlight the relevance and importance of intermediary institutions of civil society — family, church, neighborhood — but one sees no willingness to see the power and importance of them in handling many of the very types of problems that they turn to the government to handle and cure. The needs of those truly in serious personal and financial straits are more likely to be effectively met by those in local communities, by people who are drawn to a concern for their fellow human beings with a better appreciation and understanding of the immediate surrounding circumstances and the opportunities to alleviate the distresses and problems of those requiring such support.

There are also the benefits of potential competitive forces even in the arena of charity and philanthropy. When the government is taken out of the process, such charitable organizations must make persuasive appeals for financial and in-kind support from others in society. They must make the case that the problem being given their attention and the methods they consider best to employ will be effective in helping those to whom they have reached out. There is, to use F.A. Hayek’s phrase, a “discovery procedure” in the work of charitable and community good works no less than in the marketplace to uncover the better ways to solve the“social problem that seems to be afflicting various members of society.

Of course, this raises uncertainties not present when government preempts all or most of such activity through compulsory taxation and bureaucratic control. Will enough people be willing to give personal and financial support? Will all those considered to be needing such assistance be reached? But these are questions that are inescapable in a free society. The classical liberal or libertarian, however, argues that the most effective results are likely to emerge within a setting in which individuals are cultivated to consider their voluntary responsibilities to others in society, based on senses of ethical association with their fellow human beings.

Dehumanizing Humanity Through State Action

Long ago, the French social philosopher Bertrand de Jouvenel, in his The Ethics of Redistribution (1951), argued that transferring decision-making concerning welfare and other societal matters from the domain of the private sector to that of the state reduces both the financial and the psychological ability of people to be concerned with ameliorating the poorer conditions of some of their fellow human beings.

Preserving primary responsibility for such matters in the private arena of civil society enables the cultivation of an intergenerational awareness of duty and responsibility to freely give of one’s time and resources to the economic, social, and cultural needs of the human community that may fall outside of the profit-oriented market order.

But once this transfer of responsibility is made from the individual and the family to the political authority, it diminishes not only the monetary wherewithal for doing so, but it breaks the chain of learning proper senses of social obligation that normally have been passed on from parent to child by observing and experiencing such conduct within the household in which a person grows up.

Instead, there emerges more of a depersonalized indifference in the form of “I’ve paid my taxes, that’s the responsibility of the government and its welfare agencies.” If this seems like an exaggeration, a few years ago the German news magazine Der Spiegel (August 10, 2010) ran an article on how many German millionaires rejected the notion of private sector charity, arguing that to follow the still-existing American example of voluntary giving for social and philanthropic purposes threatened to undermine the welfarist duties best left to the government and its bureaucratic “experts.” These were not to be considered concerns of private individuals or families, but affairs of state. What can be more dehumanizing in matters of having a sense of shared community and interpersonal empathy and action than such an attitude? (See my article “A World Without the Welfare State.”)

The Welfare State’s Unlimited Tendency to Grow

Again, our authors would no doubt reply that this shows the need for a balance of private and public, so the former is not swallowed up by the latter. But where is the “objective” or consensus borderline between one and the other that is to be discovered and maintained? At a meeting of the Mont Pelerin Society as far back as 1956, the German free market economist Wilhelm RÖpke, who was himself a strong, though increasingly frustrated, advocate of trying to find a similar type of middle way, warned:

If it is granted that the modern welfare state is nothing but an ever-expanding system of publicly organized compulsory provision, then it follows that it enters into competition with the other forms of provision in a free society: One’s own, by saving and insurance, or voluntary provision by families and groups. The more compulsory provision encroaches upon the other forms, the less room will be left for individual and family provision, as it absorbs resources which might be devoted to this purpose and at the same time threatens to paralyze the will for individual provision and for voluntary mutual assistance.

Worse still, it is impossible to stop on the road once one has advanced far enough as the weakening of self-reliance and mutual assistance will give rise to increasing pressure for further public provision for the masses, and this in turn will further paralyze individual and voluntary mutual assistance.

If we look at the development in this way, we will find that it is quite wrong to regard the modern welfare state with its mechanical and compulsory mass relief as a sign of progress.… Anybody who is serious about human dignity should on the contrary measure progress by the degree in which we can today expect the masses to solve the problem of their rainy days from their own resources and under their own responsibility.

This, and only this, would be worthy of free and grown-up persons, not the constant reliance on the state for an assistance which, as we saw, can in the last analysis come only out of the pockets of the taxpayers themselves.… Is it progress if we classify more and more people as economic wards to be looked after by the colossal guardian “State”?

In a further discussion of the welfare state at another Mont Pelerin Society meeting two years later in 1958, RÖpke warned that “the modern Welfare State is, indeed, a development moving on its own momentum. In its concept, there is no limit to it. At the same time and for the same reasons, it is a one-way street. To extend the Welfare State is not only easy but one of the surest ways for the social demagogue to win votes and influence.” He forlornly concluded, “But to return on this road is next to impossible even if it is a case where no reasonable person can have any doubts that there are mistakes which have to be corrected.” (See my article “Freedom and the Fear of Self-Responsibility.”)

The Regulatory State and the Power of Special Interests

The same applies to the regulatory state, in that there is no logical limit to the extension of controls and compulsions other than the countervailing influences and powers of other special interest groups and bureaucracies all battling over the same resources through state action. The authors, in spite of their nod to public choice theory, fail to follow its logic to its inescapable conclusion.

That conclusion is that unless there is a constitutional and cultural insistence on a separation of economy and society from the state, the latter will always be tending to encroach upon the former, as RÖpke warned. Why? Precisely due to the pressures of the concentration of benefits on selected groups benefiting from regulatory governmental policies, and from the bureaucracies overseeing the general interventionist system.

Those likely to gain from government interventions of various sorts have strong incentives to be informed and willing to incur costs to obtain the regulatory restraints on competitors or the financial redistributions that government actions can bring their way. Those who direct or who are employed in the government departments, bureaus, and agencies have strong incentives to always see their own personal interest improved through greater regulatory and redistributing authority and larger budgets paid for through taxpayer dollars. At the same time, politicians have the motive to promise more and more government “free stuff” and entitlements to gain the support of coalitions of interest groups in exchange for campaign contributions and votes on election day. (See my article “Out-of-Control Government: How, Why, and What to Do.”)

The checks on these forces from other directions in the political process under our current system do not arise from some natural limits to growth in government, but merely the temporary successes and frustrations of some coalition-forming vested interest groups versus others in the play of democratic politics.

There are no wise and deliberative avenues to ensure more rational and far-seeing interventionist-welfare-state policies in place of the current democratic free-for-all, as the authors of the Niskanen Center manifesto call for and believe can be attained. Of course, there could be an attempt to go beyond democratic politics to a stronger and more independent state, but even moderate authoritarianism has been found to have its own corrupting and poisoning practices, which the authors would, no doubt, find equally unacceptable.

Marginal Choices in Markets vs. Politics

Students in economics classes are taught the meaning of “the margin.” That is, in everyday life many, if not most, of our choices are incremental — a little bit more of this at the cost of a little bit less of that, until some preferred or optimal combination is chosen by the individual, given the limited means and opportunities before them from which they may select.

If this is possible for individuals in their daily choices and decisions in the marketplace, then why not in the political arena as well? We forgo a little bit of personal or market freedom here to have some collective government-policy benefits there. It must not be forgotten that political choices have qualities inherently different from those made by people in the market arena.

First, market choices tend to be individualistic; that is, that you want to spend some of your money on an ocean cruise and a new flat-screen television does not prevent me from putting instead more of my earned income into a savings account for future retirement or donating to what I consider a worthy charitable cause.

The marketplace is the real institutional setting of pluralism, diversity, and inclusiveness. Numerous individual preferences and values are simultaneously served in the competitive market process. Thus, a diverse set of desires by many different people and groups are satisfied at the same time; and the set includes many minority segments of the population who, if they are willing and able to spend the minimal amounts necessary to make it marginally profitable for some producers and suppliers to fulfill their demands, can have those demands satisfied, as can majorities of buyers desiring other things.

This adaptability and availability does not exist in the same way in the arena of political choice and decision-making. Majorities (or coalitions of minorities able to form a majority on election day) get what they want at the expense of the losing minority voters; the winning choices are coercively imposed on all others in society until potentially changed in the next election cycle; and citizens are compelled to pay through taxes for government programs and activities about which they may strongly disapprove, thereby divesting them of the financial means and personal freedom to pursue the goals they would have preferred instead if not for the imposing power of the political authority. (See my article “Political Planning Versus Personal Planning by Everyone.”)

Civil Society and Overcoming Past Injustices

At the same time, there are no more powerful means of achieving many of the ends about which the authors express their concern than the institutions of civil society and the unregulated and unhampered working of the competitive market process. History has shown enough times over the last 200 years that the greatest threat of anticompetitive conduct by private enterprises arises from the use of government to prohibit or restrain domestic and foreign competition. Prevent political privilege and favoritism through government policy, and few concerns will remain in the long run about monopoly or concentrated economic power in production or marketing. (See my article “Capitalism and the Misunderstanding of Monopoly.”)

There certainly have been injustices to individuals and social groups in the past, and sometimes they have been shockingly egregious in their forms and consequences. But history cannot be rewritten or undone. Cruelties and injustices committed many decades or even centuries ago cannot be reversed. If nothing else, many of the real victims and perpetrators of such circumstances are long gone; justice cannot be meted out to actual guilty parties when they are long dead.

To turn over responsibility and power to government to right past wrongs inevitably makes many in society pay for sins they never committed and rewards others who are not the ones abused or hurt at that earlier time. Guilt becomes not individual, but collective and group-based. In the name of a cry for social justice regarding crimes and indignities committed in the past, many innocents are to be made to pay for the wrongful actions of those with whom they may have no direct or indirect connection by birth, place, or time. It is to make the sins of a nameless father in the past fall upon living individuals who are categorized by current ideological prejudices and political pressures as the sons and daughters who are to pay in some form. This is a recipe for political demagoguery and dangerous societal divisions that uses past injustices as a rationale for redistributive plunder in the here and now.

Here too, the only solution to the fact that some descendants of those mistreated in the past may be the disadvantaged of the present is to depoliticize such concerns and instead appeal to and draw upon the good will and charitable sentiments of others through the free associations of civil society to find ways of improving the circumstances of the presently disadvantaged. To do otherwise is to transform society into a politicized tribalism in which each sees the government as a tool in a zero-sum game in which some segments try to gain by politically disadvantaging others. This creates neither justice nor tranquil social outcomes. (See my article “Free Markets, Not Government, Improve Race Relations.”)

Liberty Compromised Is a Humane Society Lost

However disappointing and frustrating it may be for the Niskanen Center authors, there is no just, workable, or sustainable middle way of the form and type they dream about. Sometimes the choices we face are categorical (either/or) and not incremental. If freedom is to be preserved, the political order and its institutions need to be thought of as just such a categorical choice, and not one of marginal trade-offs between liberty and coercion. Once the latter road is taken, every step slowly but surely sees freedom diminished and compulsion increased.

In other words, liberty in its personal, social, and economic aspects cannot be compromised without threatened and actual loss of its essential qualities and a losing of the moorings that protect humanity from the paternalistic and overbearing and tyrannizing state. It also means the loss of the institutional and cultural settings in which social problems can be dealt with in ways far better and more effectively than when these matters are misguidedly transferred to government decision-making

This was emphasized by the Austrian economist and social philosopher F.A. Hayek in his last major work, Law, Legislation, and Liberty, in volume 1 (1973, p. 57):

When we decide each issue solely on what appear to be its individual merits, we always over-estimate the advantages of central direction.… If the choice between freedom and coercion is thus treated as a matter of expediency, freedom is bound to be sacrificed in almost every instance.… To make the decision in each instance depend only on the foreseeable particular results must lead to the progressive destruction of freedom. There are probably few restrictions on freedom which could not be justified on the grounds that we do not know the particular loss they will cause.

“That freedom can be preserved only if it is treated as a supreme principle which must not be sacrificed for particular advantages was fully understood by the leading liberal thinkers of the nineteenth century, one of whom even described liberalism as ‘the system of principles.’ Such is the chief burden of their warnings concerning ‘What is seen and what is not seen in political economy’ [Frederic Bastiat] and about ‘the pragmatism that contrary to the intentions of its representatives inexorably leads to socialism’ [Carl Menger].”

Classical liberalism and libertarianism are the political philosophies of compromise, justice, and inclusiveness, a true middle ground of human relationships in society. But it is only because it reduces the political to the minimum needed to preserve individual liberty, private property, and freedom of association while leaving free persons to find their own balances between desired and diverse ends and to coordinate and make compromises on their conflicting purposes through the institutions of the competitive market process and the voluntarism of civil society.

By Richard Ebeling

Originally published on October 1, 2021 for The Future of Freedom Foundation

The seemingly singular concern of modern political debate, dispute, and disagreement is the issue of how and in what forms government will command and control and restrict and regulate the actions and interactions of virtually everyone in society, as well as redistribute the income and wealth of some for the benefit of others.

Open the opinion pages of practically any mainstream newspaper or magazine, or peruse any of the mass media internet websites, and the message is almost always the same: the world is going to hell in a hand-basket, and it is all because those in political authority are not using their governmental powers to remake society in a more “fair” or “socially just” way, and all because people are being left free from the direction and dictates of those who either should or do know how to make a “better world.”

It really does not matter which of the major political parties is either in power or out of power, or whether they go by what is mislabeled as “left” or “right,” or “progressive” or “conservative.” They all presume and take for granted the need and necessity for forms and degrees of political paternalism. What they are arguing over, most of the time, is not whether government should interfere with the peaceful, private, and socially voluntary interactions and associations of others, but for what purpose and through which methods shall the heavy hand of government manage people’s affairs.

Regulatory arm of government is everywhere

This is not an exaggeration. The federal government has over 450 departments, bureaus, and agencies whose duties are almost always defined as changing the actions of individuals or the outcomes of interpersonal activities of many in either the marketplace or the general societal setting. There can be no doubt about this when referring to the Social Security Administration, or Medicare, or Medicaid, or the Food and Drug Administration, or the Labor Relations Board, or the Federal Trade Commission, or the Bureau of Alcohol and Tobacco, Firearms and Explosives, or the Centers for Disease Control and Prevention, as well as the Cabinet-level Departments of Labor, or Commerce, or Agriculture, or Education, or Health and Human Resources, or Housing and Urban Development, or Energy, or Transportation, just to name a few of those that many people may have at least heard of.

But what about the Commission for Fine Arts, or the Coordinating Council on Juvenile Justice and Delinquency Prevention, or the Office of Disability Employment Policy, or the Elder Justice Initiative, or Farm Credit System Insurance Corporation, or the Federal Financing Bank, or the Federal Laboratory Consortium for Technology Transfer, or the Grain Inspection, Packers and Stockyards Administration, or the Hour and Wage Division, or the Indian Arts and Crafts Board, or the Interagency Committee for the Management of Noxious and Exotic Weeds, or the Marine Mammal Commission, or Migratory Bird Conservation Commission, or the Millennium Challenge Corporation, or the Multifamily Housing Office, or the Northern Border Regional Commission, or the Office of Elementary and Secondary Education, or the Office of Investor Education and Advocacy, or the Office of Postsecondary Education, or the Office of Special Education and Rehabilitative Service, or the Open World Leadership Center, or the Parent Information and Resources Center, or the President’s Council on Fitness, Sports, and Nutrition, or the Risk Management Agency, or the Rural Business and Cooperative Program, or the Substance Abuse and Mental Health Services, or the Taxpayer Advocacy Panel, or the U.S. Agency for Global Media.

I have mentioned a few that stood out to me when looking over a list of those 450 departments, bureaus, and agencies, only because they seemed to highlight the reach of the federal government in matters having little or nothing to do with the fundamental responsibility of a government to protect the life, liberty, and honestly acquired property of the citizenry, while otherwise leaving all other matters to the personal and voluntary affairs of the people themselves.

Looking over that list of hundreds of branches of the federal government also makes clear the absurdity and total misinformation of those who daily insist that America is a wild land of unregulated “laissez-faire,” where anything goes, with government being some small, poor, and starved appendage to an “out-of-control” free market. If one adds to this list all the departments, bureaus, and agencies of the state and local governments that either extend or overlap with this network of federal intervention and planning of social affairs, a far easier question to answer might be to specify the corners of every American’s life into which one or more levels of government do not intrude and intervene.

Twisting the meaning of “freedom” 

The word that is especially missing from practically all discussions concerning the role of government in society is “liberty.” The word “freedom” is used frequently enough, but alas, that is because the meaning of freedom has been so twisted and distorted that it is now used to indicate and designate all those aspects of human life over which it is expected that government will “free” people from want or worry.

Is that not what is meant by “free” healthcare, or “free” education, or “free” housing, or “freedom” from hunger, or “freedom” from “hurtful” words, or “freedom” from any of the other uncertainties or insecurities of everyday life? This is because in the late nineteenth and early twentieth centuries, the word “freedom” changed its meaning due to the efforts of a good number of socialists, welfare statists, and interventionists of various stripes.

A distinction was made between “negative” and “positive” freedom, with the former meaning the freedom “merely” from the aggressions of others against one’s life, liberty, and private property. But of what value is such “negative” freedom if one is unemployed, or starving, or without a place to live, or unable to acquire an education and the skills to earn a “decent living wage?”

What people needed and wanted was “positive” freedom, meaning (usually) the financial capacity to purchase or acquire those things that “really” make you free from want and worry? That is, being guaranteed a job, and being able to obtain an education, and being assured a “decent” place to live, and having the income to have a fair and just standard of living.

But since the necessities and the amenities of life do not fall from the sky or grow on trees to merely reach up and pick off, “someone” has to first work, save, invest, and produce virtually all the goods and services that enable all those “good things” to be available. What happens if some have the financial and other means to have standards and qualities of life better and above others to which it is, then, claimed they all have a “right” if they are to be “really” free? Then those who have “more” must be taxed or regulated in ways that transfer and redistribute some of what they have or have access to, to those others in society who do not.

“Positive” freedom to take what belongs to others

Thus, a society is not a truly “free society” unless all have access to and use of those same standards and qualities of life that some have while others do not. Income inequality beyond some usually undefined, but presumed relatively narrow, range then “measures” the extent to which a society is not free.

Freedom, therefore, does not mean absence of coercive actions by some against others. No, freedom means, instead, absence of physical (or even psychological) wants without which human life feels “hurtful” and “oppressive,” or “unfree.” But if those in the latter category are to have the necessary “freedom,” others must provide the means for them to have it; if those who have “more” will not voluntarily give to those who have “less,” well, then, that is what government compulsory redistribution of income and wealth is all about. Those “better off” will be compelled to be their brother’s keeper.

It is this notion of a “positive” freedom to have the means and capacity to have and do things that are considered “good” and “just” that has resulted in the proliferation of “rights.” If “freedom” means not only my “right” to be free from being mugged or raped or murdered by someone but also includes that broader definition of access to and use of wanted or desired things, then I also have a “right” to health-care, to an education, to a decent place to live, to a fair and living wage, to a retirement pension, to a guaranteed job, and the “right” not to hear “hurtful” words or expressions said by others.

Liberty as absence of political coercion

I would suggest this change in the meaning of the word “freedom” is an important reason behind the diminished use and reference to human “liberty.” Most people still understand what is meant if someone says, “I am at liberty to peacefully say what I want, write what I want, read what I want, live as I want, voluntarily associate with whom I want, try to earn a living the way I want, attempt to give meaning and happiness to my life as I want.”

It is generally understood that when someone says things like this, what is meant is that no one may use or threaten force to prevent or interfere with the individual’s own personal decisions and choices concerning such matters. The individual may not be coerced or compelled to act in any way that is not of his own voluntary and peaceful choosing.

Still today, it would sound and seem awkward to most of us if someone said, “I am at liberty to pick your pocket, at liberty to force you into a contract that I want you to sign, at liberty to make you supply me with breakfast, lunch, and dinner, at liberty to threaten you if you do not pay my rent, cover my medical expenses, provide me with an education, at liberty to violently make you only use words that I like to hear or read.”

Such threatened or violent acts would be considered by almost all of us as the opposite of being free. How can you be free if a person can steal from you, or force you into associations and relationships and activities that you do not want to participate in of your own voluntary accord? The use of the word “liberty” in the way expressed in the previous paragraph would be understood as a misuse and mockery of what the idea of liberty generally still does and should mean.

Collectivists misstate the meaning of liberty

This explains why “liberty” has increasingly fallen out of use in political discourse, discussion, and debate. Once one introduces the question of liberty into the discussion, it implicitly raises the issue of whether there are areas of life into which neither private persons nor political paternalists should be considered to have the moral or legal authority to interfere with the choices and actions of peaceful individuals.

It is why those political paternalists and ideological collectivists express contempt for and disregard of any and all those who in some way call themselves friends or advocates of “liberty.” The paternalists and collectivists understand very clearly that nine times out of ten when someone holds up the banner of liberty in this way, they are insisting that there are aspects of individual and social life that government has no ethical and political right to tread upon.

That is why all such people, in their eyes, must be ridiculed, condemned, and delegitimized. Anyone who talks about liberty is an “extremist,” a “nut-job,” a “Nazi,” an anti-social “terrorist.” I want to be clear. There are kooks, nut-jobs, and “crazies” out there. But it is intellectually dishonest to tar and feather everyone who refers to “liberty” with such negative connotations.

Let me explain what I mean. Over the decades, especially during the Cold War years, I met real, true-believing communists who bemoaned that Stalin was no longer with us, or who thought Chairman Mao had been the last great hope for mankind, or who had wanted to visit Cuba to have the opportunity to see and maybe shake hands with Fidel Castro.

I also met European-style “democratic socialists.” They also truly believed that a collectivist society would be a morally superior one and advocated degrees of central planning and redistribution of wealth. But they also sincerely valued democratic government and the preservation of civil liberties. And during those Cold War days, a good number of those European democratic socialists strongly opposed the Soviet Union and the tyranny behind the Iron Curtain of Eastern Europe.

I think that these democratic socialists were (and are) wrong in thinking that if a fairly comprehensive system of central planning and egalitarian redistribution is imposed on a society, that in the long run, either democratic government or civil liberties will survive. In this, Friedrich A. Hayek, in my view, was absolutely right in the arguments he offered in The Road to Serfdom (1944).

But it nonetheless remains the case that it was, particularly during the Cold War, a mistake and unfair to accuse and lump together every European democratic socialist as just another communist by a different name. Some of them were, as shown from the history of that time by the number of “socialists” who spied for or in other ways intentionally collaborated with Moscow’s “line” on international issues. But most European democratic socialists were not communists in the Soviet model, nor did most of them want to see the imposition of that model.

In like manner, it is an ideological and political subterfuge when the political paternalists, “democratic socialists,” and “progressives” in America today take the scandalously easy way out by classifying any and all friends of liberty as being the same as the nut-job with the swastika tattooed on his forehead, or the person who lives in the “middle of nowhere” Idaho and declares his two-acre property to be the independent nation of Mr. Billy Ray Bob, and who has never met a neighbor he did not threaten to shoot.

Misrepresenting liberty to avoid honest debate

Anyone who knows anything about the history and ideas of those who advocate for liberty — that is, individual liberty, private property, voluntary association, non-violent freedom of trade and exchange, and constitutionally limited government with equal rights for all under impartial rule of law — is cognizant of the fact that to lump such people with the nut-jobs is merely a smear campaign to discredit the intellectual opponents of collectivism, socialism, the interventionist-welfare state, and the latest versions of these that go by the names of “identity politics,” “systemic race theory,” “cancel culture,” or, more generally, “political correctness.”

It is a way to avoid doing honest battle in the arena of ideas. To not have to debate and defend their rejection of the philosophical and political principles upon which the country was founded in such documents as the Declaration of Independence and the U.S. Constitution. To get away “on the cheap” by simply tarring and feathering their opponents as “racists” or “sexists” or “homophobes.” It also enables them their usual denial that any and all actual Nazis are their National Socialist ideological cousins and not any relation of the classical liberals and free marketeers who oppose all brands of collectivism.

The meaning of liberty was expressed concisely by Thomas Jefferson, when he said, “The policy of American government is to leave its citizens free, neither restraining them nor aiding them in their pursuits.” Thomas Paine clarified what this meant when in his “Plan for a Declaration of Rights” (1792), he said: “Liberty is the power to everything that does not interfere with the rights of others; thus, the exercise of the natural rights of every individual has no limits save those that assure to other members of society the enjoyment of the same rights.”

Liberty’s meaning and limits were stated by Jefferson, again, when he said, “Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often the tyrant’s will, and always so when it violates the rights of the individual.”

Living your life as you peacefully choose

Liberty understood in this way not only is inconsistent with but is the polar opposite of any political system that professes or presumes in any way to interfere with the peaceful and honest individual’s decisions, choices, and actions to live his life as he considers best, most fulfilling, more likely to lead to his greatest happiness and contentment as he defines it.

He may live as hermit or as “social butterfly.” He may choose to find some niche in the social system of the division of labor to earn his living in voluntary exchange with others with the goal of maximizing his earned income so to have the financial wherewithal to purchase as many of the tradable items that he thinks will satisfy his desires, no matter of what type they may be. Or he may choose to find some line of work that will enable him to earn the minimum income he considers needed to leave most of the rest of his time “free” for the quest of trying to become a great artist, or a world-renowned novelist, or just to be a beach bum watching life go by while sitting under a palm tree.

He may spend every dollar he earns on his personal pursuit of the crassest carnal pleasures, or he may choose to live modestly and give away most of what he earns to various “good causes” as he defines and values them. He may exhibit the most refined and cultured view of things, or he may demonstrate the most vulgar of tastes. The individual has the liberty in a free society to do any of these things, as long as he does so peacefully and honestly.

In his famous 1819 lecture, “The Liberty of the Ancients Compared with that of the Moderns,” the French classical liberal, Benjamin Constant, expressed it in the following way:

Ask yourselves, Gentlemen, what an Englishman, a Frenchman or a citizen of the United States of America understand today by the word “liberty.” For each of them it is the right to be subjected only to the laws, and to be neither arrested, detained, put to death or maltreated in any way by the arbitrary will of one or more individuals. It is the right of everyone to express their opinion, choose a profession and practice it, to dispose of property, and even to abuse it; to come and go without permission, and without having to account for their motives or undertakings. It is everyone’s right to associate with other individuals, either to discuss their interests, or to profess their religion which they and their associates prefer, or even simply to occupy their days or hours in a way which is most compatible with their inclinations and whims.

Liberty versus compulsory paternalism

This is why our modern-day collectivists of any and all shades of intrusion and control ignore or denigrate all references to and calls for liberty. Appeals to liberty challenge and threaten all their rationales and demands for more and greater government control and command over the social, economic, and political affairs of human beings, no matter who they may be, and where or how they live.

To directly attack the idea of individual liberty in any and all its aspects requires them to justify and defend the notion that they or those they want in positions of political authority should be able to force honest and peaceful people to live, work, and act in ways not of their own choosing. It obligates them to rationalize dictatorship, because that is what such intervention means, that they or some selected others should have the power to command and control and plan people’s lives, whether or not some or many of those people would rather continue to follow their own freely chosen paths for their time on Earth.

It cannot be denied that too many people either believe or can be swayed into believing that others need to be paternalistically watched over, directed, controlled, and indoctrinated to act and think in “better” ways. We would not be in the societal dilemma we are in, if not for too many of our fellow human beings being susceptible to such arguments and inclinations.

Classical liberal and free market “Austrian” economist Ludwig von Mises long ago warned us of these human temptations. As he said in his important work, Liberalism (1927):

The propensity of our contemporaries to demand authoritarian prohibition as soon as something does not please them, and their readiness to submit to such prohibitions even when what is prohibited is quite agreeable to them shows how deeply ingrained the spirit of servility still remains within them. It will require many long years of self-education until the subject can turn himself into the citizen. A free man must be able to endure it when his fellow men act and live otherwise than he considers proper. He must free himself from the habit, just as soon as something does not please him, of calling for the police.

We see this same willingness to call for the police as soon as something does not please some people, as I suggested earlier, regardless of whether the interveners wear the often-confusing labels of “Democrat” or “Republican,” “progressive” or “conservative,” or “left” or “right.” The differences between them usually come down to the aspects of life they want the government to manage and control, and very rarely an argument for a general non-interventionist policy of liberty.

This is why the idea and the meaning of liberty is so very important to understand, and why everything possible needs to done to remind people of its value, both in terms of the individual’s right of free action and its implications on the needed and necessary limits on government if a society is to be rightly understood as free. And why all must be done to see to it that the word “liberty” is not misused and abused in the same manner that the word “freedom” has turned out to be.