Libertarianism Is Not Rugged Individualism

Just posted this over at LvMIC:

Libertarianism and Capitalism Don’t Mean Rugged Individuality

The political/economic blogosphere is abuzz over President Obama’s speech in Osawatomie, Kansas last Tuesday.  Former Labor Secretary and professor in public policy at the University of California, Berkley, Robert Reich, was ecstatic over the speech:

The President’s speech today in Osawatomie, Kansas — where Teddy Roosevelt gave his “New Nationalism” speech in 1910 — is the most important economic speech of his presidency in terms of connecting the dots, laying out the reasons behind our economic and political crises, and asserting a willingness to take on the powerful and the privileged that have gamed the system to their advantage.

What Reich, who never saw a tax increase or union demonstration he didn’t fall in love with, really means is that Obama’s speech was filled with nothing more than overly soaring, but vague language highlighting the importance of forced collectivism over individual liberty.  In an attempt to echo former President Teddy Roosevelt, Obama threw plenty of verbal shots at Wall Street to appease his base despite his continued desire to court their money for next year’s election.

One particular point during the speech stuck out however as it’s an oft used criticism of libertarianism.  In regards to those who are opposed to further government intervention and embrace true free market capitalism, Obama summed up the philosophy as:

We are better off when everybody is left to fend for themselves and play by their own rules.

And immediately replied:

I am here to say they are wrong.  I’m here in Kansas to reaffirm my deep conviction that we’re greater together than we are on our own. I believe that this country succeeds when everyone gets a fair shot, when everyone does their fair share, when everyone plays by the same rules.

Well I am here to say that Obama, along with his supporters in agreement, are not only dead wrong in this characterization but also clueless on how free markets work.  No one who recognizes the supreme importance of property rights, non-aggression, and freedom of contract really believes we are better off when forced to build our own houses and scavenge for our own food.  Capitalism is a market phenomena built around peaceful cooperation that rests upon an ever expanding division of labor.  More than anyone else, Mises wrote eloquently on the dynamics and effect of voluntary commerce:

The greater productivity of work under the division of labor is a unifying influence. It leads men to regard each other as comrades in a joint struggle for welfare, rather than as competitors in a struggle for existence. It makes friends out of enemies, peace out of war, society out of individuals.

Originally confined to the narrowest circles of people, to immediate neighbors, the division of labor gradually becomes more general until eventually it includes all mankind.

To claim that advocates of capitalism embrace “rugged individualism” is a blatant misunderstanding on the market process and its reliance on cooperation among capitalists, entrepreneurs, and workers.  It’s not an “every man for himself” struggle but one of limitless unification to fulfill society’s infinite desire.  Obama is absolutely correct when he declares that “the free market has never been a free licence to take whatever you can from whomever you can.”  Indeed, the free market is the most democratic of all social systems since it is built solely upon consumer preference.  Even the largest of corporations only acquire market share from appeasing customers.

On the other hand, the institution that holds a monopoly on the use of force and coercion that acts as the final arbiter of all societal conflict provides the perfect opportunity for power players to exploit free and open markets by making them not so open or free.  When Obama speaks of competition that is “fair and open and honest,” he presents a horrible contradiction by embracing policies that prevent such conditions from arising.  Even more astounding, he declares that Teddy Roosevelt fought to make sure “businesses couldn’t profit by exploiting children or selling food or medicine that wasn’t safe” as if consumers have no choice but to be duped into purchasing unsafe goods or laboring under bondage.

While Obama’s speech struck a chord with statist interventionists fully convinced on government’s ability to overcome the laws of scarcity, it was merely a repeating of the same type of subtle fascist rhetoric that dominated the progressive era more than a century ago.  Opponents of capitalism embrace the sanctity of guns and badges over peaceful and synergetic labor.  It is their policies that prevent the market from working efficiently.  Simply put, government intervention creates more general impoverishment than raising the standard of living.  And it’s because of this fact that the benefits of free markets must be stressed even more in the face of grand yet illogical speeches.


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I also wanted to point out that my my post "Is Quantitative Easing 3 Coming to the U.S." got picked up by GoldSilver.com a few days ago.  I certainly am becoming Mr. Popular these days.