Working-Class Libertarianism

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I would like to begin with a personal story about my encounters with what I call liberaltarianism, and then use logic to analyze the experience.

A number of years ago, I had a heated debate with a libertarian in the New York State Libertarian Party discussion group on Facebook. I argued that the public education system is unfair to children from working-class families because they are trapped in failing schools, and that privatizing K-12 education would lead to the development of private schools seeking customers among working class youth, schools that would free them for better career opportunities. My argument was clearly that government is bad for the poor, especially because it destroys opportunities for poor kids. The villain here is the government, and the victims are the poor.

But the person with whom I was debating believed my argument was that public schools are unfair to poor children because the rich can afford private schools and the poor can’t. He believed I was saying that the rich should not be allowed to have private schools, and that the rich are the perpetrators of the problems of poor children; in other words, that the rich are the villains and the poor are their victims. I was never able to make this person understand what my argument actually was, and he did not choose to understand it; so we did not address each other’s arguments, never having been able to agree on what proposition was actually being debated. He came away from the debate calling me a socialist. I replied that socialists do not advocate privatization of primary education; but even in the end, he seemed not to grasp what I was saying.

The villain here is the government, and the victims are the poor.

Now I would like to analyze this anecdotal evidence. I consider myself a libertarian. I am not a socialist. I am not even a liberal, or a leftist, or left of center. Yet when I make arguments in which I argue that capitalism is good for the poor and good for the working class, or equivalent arguments that government control helps the well-connected rich exploit the political system and that libertarianism would be bad for some rich people, I somehow give the impression that I am a socialist. I believe there is a missing concept, the concept of the liberaltarian, that would clear up this confusion. And I believe that logic is the correct tool for understanding this crucial missing concept.

What is a liberaltarian? Thinking back as far as Cato Institute scholar Brink Lindsey’s original efforts to create a liberaltarian movement, I cannot recall a great answer to that question. In respect to definitions, we are in uncharted territory. A liberaltarian is a type of libertarian, so we must first ask the question, what is a libertarian? There is also no one answer to this perplexing question, but let me suggest one: a “libertarian” is “someone who advocates extremely free capitalism.” Along these lines, I would extend the definition to say that a “liberaltarian” is “someone who advocates extremely free capitalism because it will be good for the poor and the working class.”

In math and logic, one often begins with a set of definitions and then uses mathematical or logical deduction to analyze them and see where they lead. Also, in logic, when one encounters an entity that meets all the necessary and sufficient conditions in a definition, one says that the thing meets the definition as a result of logical necessity. Phrased differently, logic says “if P then Q, P, therefore Q,” with P being the necessary and sufficient conditions and Q being the entity that is identified. In other words, if it walks like a duck, and it talks like a duck, it’s a duck. Let’s use that approach here.

I am not a libertarian for the sake of the rich. Most millionaires and billionaires are neither libertarians nor Objectivists.

Logically, we can see that, if these definitions are true, then a liberaltarian is a type of libertarian. A liberaltarian does advocate extreme capitalism, which puts him or her within the area covered by the definition of libertarian. However, on the flip side, we can see that not all libertarians are liberaltarians; some, perhaps most, libertarians will be opposed to liberaltarianism. For example, we could define a “right-wing libertarian” as “a libertarian who advocates extremely free capitalism because it will be good for the rich.” A right-wing libertarian, then, would have a completely different mindset than a liberaltarian, although, according to the logic of my definitions, they are obviously both legitimate varieties of the broader category “libertarian,” since they satisfy the necessary and sufficient condition to meet the definition, namely, they both advocate extremely free capitalism. In this sense, some Tea Partiers and self-described “conservatarians” would be types of libertarians, although libertarians with restrictive views on social issues that may be opposed to the “free” part of “extremely free capitalism.”

Let me clarify that I do not intend to imply that all members of the left really care about the poor, or that no members of the right care about the poor, or that all of them love the rich; I use the terms “left” and “right” here only to define differing attitudes towards the justification for capitalism.

Note something else about the definitions and what they imply. I have not said that a liberaltarian advocates capitalism “because it will be bad for the rich.” Instead, I have only said “because it will be good for the poor and the working class.” Here, I think, is where much of the confusion about liberaltarianism comes from. Are the interests of the poor opposed to the interests of the rich? Logically, one could be a liberaltarian, or a right-wing libertarian, and come out on either side of this debate.

For example, if I said that “I am a libertarian who advocates extremely free capitalism because it will be good for the poor but won’t generally be bad for the rich and won’t hurt anyone at all, other than those few rich people who unfairly exploit government favors from their politician friends,” I would fit the definitions of both liberaltarian and libertarian. But if I said “I am a libertarian who advocates extremely free capitalism because it will be good for the poor and will actually be very bad for most rich people, who have learned to thrive in our heavily regulated world and usually exploit the state and government funding to milk the taxpaying middle class and to oppress the general public,” I would also fit the definitions of both liberaltarian and (somewhat counterintuitively, but nonetheless logically) libertarian.

Thus, within liberaltarianism, there can be two further subcategories, the liberaltarians who don’t want to hurt anyone and want to help everyone, and the liberaltarians who hate the rich and want laissez faire capitalism in order to tear down privilege and power and hurt the rich. We might call the former pure liberaltarians and call the latter left-libertarians. Similarly, a right-wing libertarian might not want to hurt the poor, or he might favor extreme capitalism because he wants to hurt the poor (and yes, there really are some psychologically crazy people who could be like this).

it is unclear why we would identify with the wealthy, other than for delusions of grandeur.

Let’s do a clearer logical demonstration. Call the advocacy of extremely free capitalism P. Now call a motivating concern for the poor and the working class Q. And then call being OK with the rich A, and a hatred of the rich B. We can say that every libertarian has P, and every liberaltarian has P and Q, by definition. But the libertarian movement in general, and the right-wing libertarians, seem confused about A and B. They believe something that is incorrect as a matter of deductive logic, that a liberaltarian is, by definition, P and Q and B, thereby ruling out A. If this is true, then anyone who cares about the working class must necessarily hate the rich. But as I have shown, there is a logical analysis according to which a liberaltarian is merely P and Q, so that you can add A.

Let me be crystal clear. I do not hate the rich, nor am I opposed to the rich as such. But I am not a libertarian for the sake of the rich. Most millionaires and billionaires are neither libertarians nor Objectivists. Still more obviously, most libertarians and Objectivists are not millionaires or billionaires, and lack the productive moneymaking ability to become such. So it is unclear why we would identify with the wealthy, other than for delusions of grandeur. On the other hand, if we stop focusing on the people who are already rich, and instead focus on the freedom of the poor and the middle class to become rich — in other words, the freedom to make money — then we see precisely what I mean by the interests of the poor being served by capitalism.

According to deductive logic, one can be a liberaltarian and not hate the rich or oppose the interests of the rich (if there is such a thing as “the rich” or “the interests of the rich” in the sense of a cohesive group), so long as one’s primary concern is that capitalism is good for humanity as a whole, and will lift all kinds of people into prosperity. This seems to me a position that is worth not only defining but also adopting.

rdquo; A right-wing libertarian, then, would have a completely different mindset than a liberaltarian, although, according to the logic of my definitions, they are obviously both legitimate varieties of the broader category For example, if I said that




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Why Libertarianism Will End Poverty

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As a fan of Friedrich Nietzsche, I have a fondness for clever, memorable aphorisms, on the model of his “All that which does not kill me makes me stronger,” which is one of my personal mottos. Another such aphorism (though not by Nietzsche) is: “Socialists believe that no one should own anything; libertarians believe that everyone should own something.” What this gets at, among other things, is the idea that both socialists and libertarians have an answer to the problem of poverty, but our answer differs sharply from theirs. This is an important point to hammer home to voters.

The leftists and socialists say that they want to help the poor and that the libertarians and conservatives are the enemies of the working class and we don’t care about the poor. This naturally drives working class voters to vote Democrat when they should be voting Libertarian. I can’t speak for conservatives, and I can’t speak for other libertarians either. But, speaking for myself, I can say that I do care about the poor, and my brand of libertarianism, which comes from a liberal-tarian or neoliberal strain, is very intently focused upon ending poverty.

Both socialists and libertarians have an answer to the problem of poverty, but our answer differs sharply from theirs.

My idea is to tell voters that libertarianism will end world poverty. That is a bold claim, and I expect most voters will reply: “Why? And how?” One answer can be found in my own reinterpretation and application of the business management philosophy called Six Sigma.

Six Sigma is a technique developed in the manufacturing industry and is widely credited with the high quality of electronics devices that are manufactured today. A mathematical approach to business management and products manufacturing, its basic idea is that hard math and statistics should be used to manage a business and control the work product of a factory. The key mathematical equation used by Six Sigma practitioners, which I would like you to understand, is: Y = f(X) + e, where X represents input, f(X) represents the process that is applied to the input, Y represents the output, and e represents the errors and imperfections inherent in human existence.

The core teaching of Six Sigma is that most business processes are inefficient and wasteful, and that vast amounts of money can be saved by redesigning the process to eliminate waste. The Six Sigma method analyzes the X and the f(X) in order to find the most efficient method of achieving the desired Y. The method uses math and science to find the best process to achieve efficiency, quality, and success. Six Sigma assumes that with the same input X, e.g. with the same amount of work, labor, effort, and raw materials, the output Y can be very different — if the process, the f(X), is different. What matters is the f(X), not the X, because you need a good process to get the most output out of your input.

Six Sigma is not mere abstract theory. It has been used in practical reality, for example by Motorola, Bank of America, and major car manufacturers in Detroit. The data suggest that when a Fortune 500 company implements Six Sigma, and when it does so correctly, and especially when it uses it on manufacturing processes and factories, average net profits increase by as much as 1 billion dollars a year.

The lower class and middle class bear a tax burden far worse than the taxes actually paid by the rich.

Now, let me get to the main argument in this essay. We can consider a national economy to be akin to a business or a factory. The work that people do, and the natural resources and raw materials that go into their work, are the input. The money they make and the consumable goods and services they produce are the output. And the political system, be it libertarian capitalism or socialist left-liberalism, is the process that takes inputs and creates outputs. My argument is that the process of heavy government intervention in the economy, pioneered by the New Deal and implemented by Obama and the Democrats today, is very wasteful. If Motorola could save a billion dollars by more efficient processes, then the United States of America could probably save trillions of dollars by a more efficient politico-economic process. And the trillions of dollars of added wealth would end up in the hands of the people, of the working class. I fully believe that if all the economic waste were eliminated in the USA, and if the rest of the world implemented free market economics, then the added wealth would be enough to end poverty, so that the vast majority of humans would achieve a middle class or upper class standard of living.

Why would capitalism be a more efficient economic system than Democratic left-liberalism? The answer to that question lies beyond the scope of this article. In my recent nonfiction book Golden Rule Libertarianism, I take 100 pages to explain why a system of money and prices and free choices among competing businesses is the best way to coordinate the diverse economic activity of billions of different producers and consumers in a division of labor economy. The arguments in my book can be called the Hasanian answer. There is also the Randian answer, the Rothbardian answer, the Milton Friedman answer, etc. Let’s take the Hasanian answerfor granted, for the sake of my argument, and leave the details for a different discussion.

Why would libertarianism put money in the hands of the poor and middle-class, as opposed to the rich? As a factual matter, the government spends trillions of dollars taken from the taxpayers, so if you end the tax-and-spend leftist policies, then that money will remain in the taxpayers’ hands, to be spent by the people. Of course, leftists claim that the rich are the ones who pay taxes, and that tax-and-spend helps the poor. In fact, however, the lower class and middle class bear a tax burden far worse than the taxes actually paid by the rich. This is because of the low tax rates for long-term capital gains and dividends, where the rich get their money, and the ability of the rich to hold their money in offshore tax shelters, which enable them to avoid paying taxes; and also because of the many taxes that target the poor, such as the property tax and the sales tax, and social security withholding. The high tax brackets for middle-class salaries also hurt. One thousand dollars is a ton of money for a working-class person or a middle-class person, whereas 1 million dollars is meaningless to a billionaire. So taxes hit the lower class with an impact far greater, proportionately, than their impact on the upper class. Tax cuts help the working class and middle class and often have minimal direct benefits for the rich.

A libertarian Six Sigma approach would eliminate the waste in government spending, creating huge savings for the American people. Government in the United States, including federal, state, and local governments, is the biggest spender of the people’s money, and the examples of bureaucratic failure, waste, and incompetence in government spending are too many for anyone to list. There are bridges to nowhere, statues built for no reason, railroad lines that nobody wants to use . . . mountains of waste, range upon range, all costing the taxpayers trillions upon trillions. The government is necessarily inefficient, because the government does not need to compete against anyone, and people are forced to accept what the government does. By eliminating waste at all levels of government, we could probably save $4 trillion of Americans’ hard-earned money annually — one quarter of government expenditures. Then, if you let people be free to be productive, and you unlock the money-making potential of every worker, especially the highly intelligent and creative people, and if you give them broad freedom to trade with others without regulatory controls, I believe that another $4 trillion would be added to GDP. $4 trillion plus $4 trillion is $8 trillion.

The US GDP was $16 trillion in the most recent estimate, and it is plausible to think that if we replaced a flawed f(X) with an efficient, waste-free f(X), then Y could increase by 50%. This is in line with what Six Sigma improvements have achieved for businesses that replace bad processes with good processes. In terms of Six Sigma using math and science to discover the correct process for a business, which is a core tenet of Six Sigma, I think that the work done by Milton Friedman, who completed an exhaustive, thorough scientific research using hard data and statistical math to show that capitalist-leaning economies generate more wealth than socialist-leaning economies, is true to the Six Sigma approach of statistical analysis. So my application of Six Sigma would take it as a given, proven by the libertarian economists, that the libertarian process is the right one to use to redesign the economy.

Libertarians are not the enemies of the poor and the working class; we are their best friends, with their best interests at heart.

Let us consider the number I mentioned: $8 trillion recovered due to libertarian policies. America has about 300 million citizens. Let’s assume that the poorest 90% comprises 270 million people. If we eliminated economic waste and saved or created $8 trillion, and divided that among 270 million people, then each poor or middle-class person would get an additional $29,600 a year. That would give a reasonable amount of money, enough to live a decent, happy life. This distribution would not be accomplished by means of a welfare system but by the normal, efficient practices of a capitalist economy, including simply letting people keep the money they would otherwise pay in taxes. And if we eliminate most regulations on the economy, almost everything will be cheaper to buy, allowing poor people to achieve middle-class buying power. Our policies would create new wealth for the poor to claim as their own private property. In other words, we could end poverty by using reason and logic, instead of the mushy illogic of the Left.

I conclude by repeating the point with which I opened: libertarians are not the enemies of the poor and the working class; we are their best friends, with their best interests at heart. The leftist, Democratic poor don’t understand this, but we would be well advised to teach it to its natural audience, working class voters. Remember this aphorism: socialists believe that no one should own anything; libertarians believe that everyone should own something.




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