Reality is not kind to ideological fantasy.

Would better read: "Some people refuse to recognize reality ... even AFTER they collide with it." When their "free market" God fails, libertarians and economic "conservatives" say, "This isn't a free market.," i.e., the "free market just wasn't free enough."

This article describes the fundamental flaw in Libertarian Ideology and its view of view of "liberty" and "freedom." It's referenced in Why Government and for What? that describes the implications of this reality on the need for government.

The dagger in the black heart of libertarian ideology is reality: the reality that systems have emergent properties, that is, properties of the whole that are not properties of the parts. This means that for a well-functioning society we must attend to both the individual and collective aspects of reality. Libertarians deny that there is even such a thing as the "collective," maintaining there are only individuals.

Sections of this article:
- About Libertarians
- Maturity Requires Balance between the Individual and the Collective
- Libertarians are Irrational because ...
- Emergent Properties and the Ultimate Irony of the Invisible Hand
- A Practical Failure

About Libertarians

The reality is that systems have emergent properties, that is, properties of the whole that are not properties of the parts. The whole is greater than the sum of its parts. This means that for a well-functioning society we must attend to both the individual and collective aspects of reality.

Libertarians (and economic "conservative"s) deny that there is even such a thing as the "collective," maintaining there are only individuals.

Sam Seder. who often debates libertarians on the Majority Report, observed (Majority Report, 11/20/13 toward the end of the members-only half): "That's a nice philosophy, but that's not how the world works."

This is true, except for calling it a "nice philosophy." It's not "nice" at all. That's because the Libertarian Menace is far more dangerous than the Communist Menace ever was. The reason: with less regulation and lower corporate taxes, there's more corporate profit and money behind libertarianism; therefore the inevitable result is corporate domination of government. We're practically there already and it's fascism.

Beyond this reason, socialism, and even communism, can be democratic. The very idea of "democracy" is anathema to "conservatives" and libertarians who say "Democracy is two wolves and a sheep deciding what's for dinner.

This is a false analogy, of course, because In the U.S. it's not simply about "majority rules". We have, in theory, a democratically-elected, representative, constitutionally-limited republic, with the "republic" part about protecting the minority. That's "in theory" because "conservatives" have no problem with not protecting minority rights ... because "freedom!".

Some libertarians do complain about fascism, but because they profess to hate government control there's a false attribution that libertarians are for "freedom" and "liberty." For example, The Burning Platform has this and quotes, of all people, uber-libertarian Ron Paul.

The explosive disclosures of government criminality, mass spying, cover-ups, lying to Congress by government apparatchiks, and conclusive evidence of a surveillance state completely out of control ... should have removed all doubt there is really one ruling party and the rest of us are nothing but pawns in their game. We live in a corporate fascist warfare/welfare surveillance state run by ultra-wealthy unelected men with evil intentions.

"We’ve slipped away from a true republic. Now we’re slipping into a fascist system where it’s a combination of government, big business and authoritarian rule, and the suppression of the individual rights of each and every American citizen. When it comes to any significant differences on foreign policy, economic intervention, the Federal Reserve, a strong executive branch, a welfarism mixed with corporatism, both parties are very much alike. The major arguments in hotly contested presidential races are mostly for public consumption to convince the people they actually have a choice." – Ron Paul

Very nice words, but it ignores that the inexorable outcome of right-wing, libertarian, "free market", monopoly/oligopoly capitalism is exactly that it lets corporations grow so powerful that they control government.

The Burning Platform article makes the case that the Republican and Democratic parties are much the same, arguing that "the proof of a single ruling party has never been clearer." To some extent that's true ... Obama is no socialist. Clinton and Obama are both clearly well to the right of any legitimate view of the "center" in politics.

But it seems totally unaware that the libertarian movement is in even greater service to a corporate fascist state than is the Republican Party and, to a lesser extent, the Democratic Party. In fact, libertarians like Ron Paul and Rand Paul ally themselves with the Republican Party, and not at all with the Democratic Party, which they totally oppose. So any assertion that the two Parties are the same is obviously absurd.

For example, the Koch brothers are well known for their view support for and interest in "advancing libertarian ideas". On Wikipedia:

"In addition to funding think tanks, the brothers support libertarian academics;[15] since 1992, Charles has funded the Charles G. Koch Summer Fellow Program through the Institute for Humane Studies, which mentors young, self-described libertarians.[16] Charles also organizes twice yearly meetings[17] with Republican donors.[13]

Libertarian ideology is about the individual making decisions solely for individual benefit doing a self-focused cost-benefit analysis. Juveniles and libertarians alike neglect responsibilities to the long-term and to the whole, adopting a childish, teenage, foot-stomping, "I want to do what I want to do when I want to do it" attitude.

Maturity Requires Balance between the Individual and the Collective

But maturity requires balancing between the individual and collective extremes, just as in a family we must balance between individual needs and family needs.

A call for "balance" seems bland and uninspiring in comparison to often violent support of capitalism on the one hand and communism on the other. This is a major barrier to achieving balance, but balance is required to create a society that works.

If we want a creative and sustainable society, to some extent we must all be both capitalists and socialists ... and, yes, I know this is a politically incorrect thing to say.

Libertarians are Irrational because ...

The fundamental flaw in Libertarian Ideology is that, all too often, individually-logical decisions are collectively irrational. That's because human thinking is subject to the Fallacy of Composition: When we act as if what is true for a part is true for the whole.

Examples:

- Spectators: A trivial example illustrates why I don't go to some concerts: When a spectator can't see as well as he'd like, he can stand to improve his view, but this blocks the view of others, so they also stand to get a better view. When everyone's standing, no one can see better than before, and most are less comfortable because standing takes more energy than sitting.

- Health Insurance: Adverse selection requires an insurance mandate, even though individuals may logically decide they don't want it, because they feel they are healthy and it's not worth the cost. This leaves the less healthy in the system, resulting in a spiraling increase in the cost of insurance and decrease in the number covered. This is exactly what's been happening. This effect, due to asymmetric information, makes health insurance different from other products [see Single-Payer Health Insurance].

- Immunization: This carries risks for the individual, but everyone deciding on an individual basis to not risk immunization leaves society more at risk for the spread of epidemics

- Antibiotics: Individuals and corporations can benefit from the liberal use of antibiotics, but the evolution of infectious organisms the antibiotics are designed to kill evolve to develop resistance to them, making the drugs less effective. "People infected with antimicrobial-resistant organisms are more likely to have longer, more expensive hospital stays, and may be more likely to die as a result of the infection."

- Ocean Fishing: Each fisherman putting out more boats for ocean fishing logically increases their profits, but depletes and even destroys fish stocks. This is known as the "tragedy of the commons." A libertarian, who actually thinks the market will take care of this despite all evidence to the contrary, calls me an Economic Ignoramus and I respond: Response to 'The Commons: What Tragedy? by Wilton D. Alston'. Also see From Growth to Overshoot & Collapse.

- Corporate Offshoring of Production & Jobs: Each corporation can logically decide to offshore production to cut costs, but it undermines wages, purchasing power, and the economic security of the nation (see the offshoring example at the Fallacy of Composition). Note that much of what's called "free trade" is really the "transfer of the factors of production" and not at all simple "trade," which is an exchange of products & services.

- Regional Incentives/Subsidies to Corporations Promoting Growth: Regions make the individually-logical decision to offer subsidies, tax breaks and other "incentives" to corporations to get them to move to their region. These are even offered by so-called "conservative" regions like Colorado Springs, which should not need them because of the beauty of the region ... so much for "conservative love of the "free market." When all or many regions compete on this basis, taxes decline and regional income is insufficient to pay for needed infrastructure and infrastructure backlogs grow.

This competition and the attractiveness principle tells us that: Given free migration, no place can long remain more attractive than any other place (where "attractive" is the composite of factors that attract). That is, people move here until Colorado Springs becomes as unattractive as any other place. Colorado Springs: A Broken Region explains with links to more in-depth analysis.

These are only a few of the cases where, all too often, individuals and entities make logical decisions, but experience failure because the system fails. These individuals and entities suffer through no fault of their own! The inability to see systemic effects is so powerful that there's a name for it: the "fundamental attribution error." This is blaming individuals for their failures, instead of attributing their behaviors and failures to how the system produces them. When this is mentioned, libertarians deflect from this reality by maintaining it's only an excuse to absolve people of individual responsibility for their plight.

There are many more examples; but, in general, why is this? It's because the statement, "the whole is greater than the sum of its parts," is more than a saying. It captures reality, the reality that systems have what are known as "emergent properties", properties of the whole that are not properties of the parts. Primacy of the Whole explains this major systems principle. Not understanding this is responsible for virtually all of our social and societal problems.

Libertarian ideology is a form of blind fundamentalism. At Mental Models & Beliefs I have an excerpt from a paper by John D. Sterman, Professor of System Dynamics and Engineering Systems and Director, MIT System Dynamics Group: "All models are wrong: reflections on becoming a systems scientist."

And how are we to make decisions if all models are wrong? The concept that ... there is no ultimate, absolute foundation for our beliefs, is so deeply counterintuitive, so threatening, that most people reject it as "obviously false" or become so dizzy with doubt that they run screaming as fast as they can to someone who claims to offer the Truth. Much of the misery people inflict on others arises from the arrogant belief that only we know the True Path, and the resulting intolerance and fear of any who profess beliefs different than ours. Fundamentalism, whether religious or secular, whether the unquestioning belief in an all-powerful deity, the all-powerful state or the all-powerful free market, breeds persecution, hatred and war. (my italics and bolding)

The mental models of libertarians are enormously flawed. They have such a distorted view of reality that they are, quite literally, insane.

Besides adverse selection, there are other important economic principles and concepts which are largely ignored. These include negative externalities, positive externalities, path dependence, the tyranny of net present value (NPV) calculations, escalation, the attractiveness principle, system delays resulting in extreme market and economic instability, and cost-benefit analysis (when a corporation decides whether to spend to protect public health and safety; the corporation saves costs and increases profit, but the public loses the benefit). Those not understanding these concepts do not understand economics.

Links to web pages on these economic concepts and principles are: Explaining Liberal Principles and 'Free Market' Fundamentalism. These more completely explain the principles needed to understand the reality of the operation of dynamically complex systems ... systems with multiple feedbacks and long delays. Trying to mentally or intuitively determine how they operate is the equivalent of trying to use integral calculus to solve multiple, simultaneous, integral equations in our heads. Good luck with that. This enormous difficulty increases the apparent attractiveness of simplistic, fundamentalist, libertarian prescriptions that allow escaping the need to actually think.

These are liberal principles to which we must attend and why I say that "liberal is the new conservative," if we value quality of life and the well-being of the nation. It's necessary to understand them to realize that it's not about "big government" vs "small government", it's about government for appropriate and needed purposes to "promote the general Welfare" and tax for that purpose, as the U.S. Constitution provides. It's not either "free market" or "government". It's both-and. What's called the "free market" does not solve all problems as libertarians and economic "conservatives" maintain; to the contrary, it creates many problems.

Needed purposes include correcting for "free market" failures and weaknesses so that market forces can effectively and efficiently balance supply and demand. The idea that there even are such failures and weaknesses is heresy to "free market", anti-government ideologues who see the "invisible hand" as the "hand of God in action".

Here's an excerpt from A World of Ideas -- A Dictionary of Important Theories, Concepts, Beliefs, and Thinkers by Chris Rohmann, 1999

Burke, Edmund (1729 - 1797) Anglo-Irish statesman and political theorist, considered the founder of CONSERVATISM. ... Burke also embraced the LAISSEZ-FAIRE economics of Adam Smith, maintaining that "the laws of commerce ... are the laws of nature, and consequently the laws of God." (Capitalized words indicate other entries in this dictionary.)

 

Emergent Properties and the Ultimate Irony of the Invisible Hand

As described at the beginning of this article, emergent properties are properties of the whole that are not properties of the parts. For example, your personality is an emergent property of the parts of you; it's not embedded in any one part. Your mind is an emergent property of the interactions among the neurons of your brain and other parts of you; your mind does not reside in any one neuron or any other one part of you.

Perhaps the ultimate irony is the example of an emergent property described in Adam Smith's most-cited passage: "... he is in this led by an invisible hand to promote an end which was no part of his intention. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it."

Libertarians and economic "conservatives" love this quote, but they either ignore, deny, or lie about its implications.

That unintended societal benefit is an emergent property; the one on which libertarians hang their hats! It's the result of the whole, the (gasp!) collective, being greater than the sum of its parts. "Good-for-society" results can come from "self-interested behavior," but "can come" is far short of "will come" and Smith's "frequently" is far short of "always."

Unfortunately, the opposite can also be true: individually-logical actions can be collectively irrational. They can, and does, lead to price instability, speculative bubbles, inadequate investment in heath and education, pollution, a failing heath insurance system, extremes of wealth and poverty, enormous trade deficits, and infrastructure backlogs.

That's because many effects negatively impact the market's ability -- the "invisible hand's" ability -- to effectively balance supply and demand and create a well-functioning economy. These include delays, inelasticities, externalities, adverse selection, and path dependence. With these systemic failures we get many individual failures despite individual best efforts.

Another irony is that the libertarian "free market" is just the other form of socialism that's integral to capitalism: the redistribution of costs as opposed to the redistribution of income. Capitalists look at the equation, Profit = Income - Expense, and logically pursue policies and actions to increase profit; this means policies that socialize expenses, but not income. After all, for God's sake, they are, like God, "Job Creators." In fact, it's the customers who create demand who are the real job creators [see Nick Hanauer's Ted talk on this].

Economically, the opposite of libertarian & economic "conservative" "no-government" is "only-government" communism, not liberal. Liberal is the true center, not the "left." The nation's politics has swung so far to the "right" that the liberal center now looks like the "left."

Libertarians love to profess that they promote "freedom" and "liberty." But true freedom is about more than the ability to take action; it's more accurately about the ability to take effective action. Unless we consider systemic effects and failures, we cannot take effective action to address economic and social problems.

Because libertarians and economic conservatives for the most part ignore, or deny even the existence of, systemic effects, their proposed policies are incapable of addressing them. Even when libertarians and economic conservatives do acknowledge the existence of systemic effects and the problems noted above, they -- like 16th century Machiavelli -- maintain government will only make things worse in order to block government's ability to address them.

Their view of "freedom" is so limited that they would rather have someone who wants to exit a room be free to blindly run into its walls than to be truly free and able to find the door. See On Freedom and Freedom? Liberal vs. Conservative.

A Practical Failure - The Libertarian Concept of Freedom is a Failure

The Rise and Fall of the "Freest Little City in Texas" by James McCandless, 7/31/17
How a libertarian experiment in city government fell apart over taxes, debt and some very angry people.

For the last few years, Von Ormy has been in near-constant turmoil over basic issues of governance: what form of municipal government to adopt, whether to tax its residents, and how to pay for services such as sewer, police, firefighters and animal control. Along the way, three City Council members were arrested for allegedly violating the Open Meetings Act, and the volunteer fire department collapsed for lack of funds. Nearly everyone in town has an opinion on who's to blame. But it's probably safe to say that the vision of the city's founder, a libertarian lawyer whose family traces its roots in Von Ormy back six generations, has curdled into something that is part comedy, part tragedy.