[Previous post in this series: We Aren’t Actually Rational]
Almost every argument I have with libertarians who advocate a minimal state ends with me half-jokingly saying “We tried this already, it was called The Gilded Age.” This is because most of the time I discuss politics with propertarian libertarians they argue for a minimal state on the grounds it would maximize freedom and opportunity. They argue if the state is only allowed to be an army, settle disputes of contracts and enforce property rights then the result will be the maximization of freedom for everyone.* With less intrusive government, they continue, the economic increase at the top due to more risk-taking and innovation will “lift all boats” and therefore those at the bottom will be better off. They say the minimal state would maximize equality of opportunity as opposed to the social democratic (and socialist) emphasis on equality of outcomes. However these are actually two separate questions which are frequently muddled.
What happens economically when you institute ‘policy x’ is purely an empirical question, albeit like most economic issues it’s a messy empirical question, to be decided primarily by looking at what actually happens when ‘policy x’ is instituted. It is a separate issue altogether to say that ‘policy x’ will create ‘more freedom’ and the fulfillment or failure of that claim has much more to do with what you mean by ‘freedom,’ though it too is subject to empirical testing (as all claims about reality are). Here I’ll be addressing whether or not implementing market liberal policies, meaning the minimum state intervention libertarians argue for, actually increases equality of opportunity and next time I’ll look at the proposed increase in freedom.
There’s strong recent evidence that equality of opportunity and income equality are strongly correlated, with countries like the U.S. and the U.K. who have pursued market liberal policies in recent decades, and who have the some of the most unequal outcomes, displaying the strongest correlation (despite claims to the contrary). Conversely the social democratic Scandinavian nations have the greatest equality of opportunity. Moreover while income inequality has increased since the implementation of market liberal policies, these policies haven’t actually increased the rate of growth.** In other words, the implementation of market liberal policies actually haven’t even had the effects at the top necessary to “lift all boats,” let alone the effects of that growth being great enough to benefit the bottom, and the evidence suggests equality of outcomes and opportunity aren’t totally distinct but rather closer to reinforcing concepts.
Obviously libertarians can say that some other value is more important than equality of opportunity. They can say we ought to pursue market liberal policies because they value not being taxed, having a higher GDP or perhaps even the possibility to be one of the super-rich that just doesn’t exist in social democratic nations, but what you can not really argue with evidential support is that market liberal policies actually increase equality of opportunity. Likewise one could say the current rate of economic mobility is just fine but you can’t argue that equality of opportunity is increased by libertarian policies and also have the facts on your side.
[Next post in this series: Freedom and Coercion]
*I’m well aware that anarcho-capitalists don’t even accept the legitimacy of the minimal state but not only would such an environment not last, it would be a countdown to warlords (for one what’s to stop the guards from taking over the land or property they are defending?), but this has no bearing on my argument against the claims of the minimal statists so there’s no use arguing no-true libertarian
**Naturally you can argue that the slow down in growth and worker productivity was going to happen anyway, that without them growth would have slowed down even more and that the growth would have been even less beneficial to the average worker than it has been in recent decades. However, as Cosma Shalizi points out, at that point you are making a very implausible counter-factual story.