DeLong on classical liberalism Tom Smith

DeLong explains why classical liberalism/libertarianism is wrong.  I agree with much of what he says.  The problem is, and it's a very basic mistake and I don't understand why people keep making it, is that just because private incentives sometimes don't work to achieve some public good, or that because markets can have big booms and busts for example, that there necessarily exists some state intervention that can do something about it.  Nor does it mean it's "worth a try" if you don't really know what you are doing. There are diseases.  The body's unbelievably sophisticated system of homeostasis frequently and ultimately always fails to keep us alive.  This does not mean every disease has a cure we know about or even could ever know about.

I agree with most of the criticisms in the comments.  Blogs are great.  They make it so much more difficult to pontificate when you're wrong.  I wonder hopefully if the internet and all that makes it any less likely we'll end up fiscally stimulating ourselves to death.

Comments

[Dan Simon]

I agree that DeLong's critique of libertarianism is pretty superficial--basically, he's arguing that various macroeconomic policy maneuvers seem to do things that lots of people think are good. That's an argument for why democratic countries that tend to agree with DeLong shouldn't be libertarian, but not an argument for why individual libertarians should stop being libertarian.

I much prefer John Kay's critique. His basic point is that in practice, markets aren't an alternative to regulation at all, but rather are the end result of a complex fabric of social, legal and political regulations without which they would never exist. A "libertarian" who endorses the limited-liability corporation, intellectual property law, a national currency and any number of other foundational elements of modern economic life, isn't against "regulation" or "statism", but rather in favor of statist regulations that happen to favor certain people and groups, and to produce certain economic results. They're entitled to their preferences, of course, but not to their self-righteous claim of adherence to principled purity.