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The Lost Cause of Libertarianism by Sven R. Larson

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The Lost Cause of Libertarianism

The roots of libertarianism are deeply planted in European political philosophy, but its modern iteration is predominantly the work of American writers. In the past 50 years, libertarianism has built influential think tanks like the Cato Institute, Foundation for Economic Education, Mises Institute, and Reason Foundation. 

Libertarians have influenced American politics over the past several decades, but it has not made as deep inroads in Europe. This is curious, given that people in the Old World pay the highest taxes in the world and are often subject to less freedom in many vital areas of life than Americans are. 

There are many reasons for this lack of influence, one being a different ideological landscape. Roughly speaking, Americans who are opposed to left-of-center ideologies are split between traditional conservatism and the free-rein philosophy of libertarianism, while their European peers tend more consistently toward traditional conservatism. American individualism is less attractive to Europeans—again speaking generally—with conservatism essentially making libertarianism redundant, perhaps un-appealing, in Europe. 

However, libertarians are themselves to blame for their lack of popularity. Over the past 20 years at least, their main emphasis has been on aspects of individual freedom that have limited appeal in Europe, especially among people with established non-socialist values. With an illogical, irresponsible fixation with drug legalization, American libertarians have put a fair amount of distance between themselves and traditional European conservatives.

Bluntly speaking, libertarianism has become a lost cause.

The rise of modern libertarianism

Modern libertarianism can trace its ideological heritage farther back than, e.g., socialism can. There is no historic name with more influence in libertarian theory than John Locke. He was far from alone in conceptualizing liberty as a political theory, joined as he was through the centuries by John Stuart Mill, among others. However, Locke stands out thanks to his deep interest in the relations between the individual and the state. 

As the Western world evolved from an agrarian to an industrial economy, the principles of economic freedom were put to work. The concept of laissez-faire became a libertarian battle cry. Its origin is debated; according to British economist John Maynard Keynes, the term was coined in a conversation between businessmen and French King Louis XIV. The monarch wanted to know how he, i.e., government, could improve the conditions for private businesses. Using the traditional royal pronoun, he asked:

“Que’ce que Nous pouvons faire pour vous aider?”

To which one of the businessmen is said to have replied:

“Laissez-nous faire.”

Whether or not Keynes’s account of the term’s history is correct, the anecdote captures the practical meaning of economic freedom. Its presence in modern political thought began in Britain in the 1920s, but it took until the early 1970s before it made inroads into the political mainstream. In 1971, John Hospers published his Libertarianism: A Political Philosophy for Tomorrow, and three years later came Robert Nozick’s Anarchy, State, and Utopia. 

Hospers became a leading American political figure in the newly formed libertarian party, running as its first-ever presidential candidate in 1972. Nozick, a Harvard philosopher, rapidly emerged as a thought leader for the libertarian movement. 

They were joined by two economists: Murray Rothbard and Art Laffer. Rothbard’s writings are still prolifically quoted by libertarian thinkers and activists, and Laffer became famous as the architect of the American tax revolution of the 1980s. 

After the Berlin Wall fell, modern American libertarianism inspired many political thinkers in eastern Europe, but its influence in western Europe was more muted. The notable exception was Margaret Thatcher, the dynamic British prime minister from 1979 to 1990, whose economic policies were clearly inspired by libertarian thought. Many of her policies were successful, including deregulation, privatization, and entitlement reform, but the one idea of hers that libertarians at the time took most credit for—the poll tax—was a failure, both economically and politically.

Libertarians abandon the economy

Toward the end of the 1980s, it looked like libertarianism had come to stay, in both America and Britain. At the time, its focus as a movement was almost exclusively on economic policy. So long as its emphasis remained there, it maintained its influence, even over a major American welfare-policy reform under President Clinton. So decisive was their influence that Clinton, a Democrat, in his 1996 State of the Union speech declared that “the era of big government is over.

Since then, libertarian influence in American politics has faded away, and it still has made no substantive inroads in Europe. The reason is found primarily in the libertarian movement, but also in how it interprets its very own political theory.

Libertarians are notoriously unfit for organized activity. Perhaps this is logical, given the core principles of the ideology; the old saying about “herding cats” is highly applicable. Nevertheless, more than any other ideological current in the political landscape, libertarianism exhibits a phenomenal penchant for splinter-grouping. Today, they are a big tent, shared by abortion advocates, drug legalizers, Rothbard-inspired anarcho-capitalists, and Ayn Rand objectivists. 

In the past 20 years, a tectonic shift has taken place, redirecting the libertarian spotlight away from economic freedom onto individual freedom. They have stopped advocating for reforms to big-government spending, campaigning instead for gay marriage and the legalization of narcotic drugs. 

At the forefront of this reorientation are America’s well-known libertarian think tanks. The Reason Foundation, through its monthly magazine, has long advocated the legalization of all narcotic drugs, from marijuana to heroin. As recently as in November, Reason foresaw with joyful anticipation more lenient Congressional policies toward marijuana. Yet the institute pays nary a glance of attention to economic policy.

The Institute for Humane Studies claims that “paternalism” and the legal status of narcotic drugs is a “dominating” issue in current political philosophy. They are joined by the Cato Institute as demonstrated by, e.g., these articles from 2018, 2019, and 2021. Their director of economic studies, Jeffrey Miron, never writes about welfare-state reform, but is a prolific proponent of legalizing narcotics. 

Trevor Burrus, a research fellow with Cato’s Levy Center for Constitutional Studies, wants heroin to be legalized.

There is no better symbol of the libertarian shift in focus than an article from the National Interest from October 2020, where Cato economist Chris Edwards explains that if this drug is made legal, governments can tax it and use the money to build up financial buffers, a.k.a., rainy-day funds. So crucial is the “advance” of individual freedom through drug legalization that the world’s most reputable libertarian think tank is willing to accept new taxes and more wealth amassed in government coffers to make it happen.

A Faustian bargain

A benevolent interpretation of this Faustian bargain would suggest that libertarians have immersed themselves so deeply in the fight for individual freedom that they simply don’t have time for economic freedom. A much more plausible interpretation is that libertarians simply live by the creed of their theory. Their choice of focus on the individual, as opposed to the economy, follows a lineage all the way back to John Locke. A fairly extensive body of libertarian literature suggests that his argument for property rights calls for a welfare state that redistributes income, consumption, and wealth among the citizenry. 

Locke firmly supports the so-called acquisitional principle of justice: so long as a person has come by his possessions legitimately, namely through original acquisition (a man tills previously unclaimed land) or through voluntary trade, then he has the right to those possessions. 

Unless, Locke explains, his possessions exceed two caps: 

  • The “enough and as good” clause, found in Section 27 of his Second Treatise on Government; and 
  • The “spoil restriction” (Second Treatise, Section 37).

These two restrictions on the accumulation of wealth are what some libertarians have taken as an endorsement of a welfare state. 

There are forceful arguments to be made in refutation of this conclusion, but it nevertheless serves as a convenient pass for the libertarian from having to bother with the hard issues of government spending and high taxes. Furthermore, since economic redistribution is the only state function that Locke proposes, according to this view, the field is open for the libertarian to focus on individual freedom instead. 

Leading intellectuals of the modern libertarian movement, no doubt schooled in Lockean philosophy, exhibit no interest in the welfare state. Murray Rothbard, his prolific writings notwithstanding, barely ever mentioned it, let alone produced any coherent analysis of its role in modern society. Art Laffer generally shares his lack of interest in the massive entitlement spending that dominates both the American and European welfare states. 

After its initial success on the tax-policy front, the libertarian movement turned its interest to individual freedom instead. This reorientation was the beginning of the decline of the movement. The reason is to be found in a deeper flaw within libertarian theory, one that cannot be fixed by even the most elaborate theoretical exercise. This flaw is put on full display in the libertarian fascination with the legalization of narcotic drugs. 

Legalization is conventionally motivated by the idea that the individual is always right in whatever personal decisions he or she makes. So long as no harm is done to anyone else, the decisions are morally just. 

Misunderstanding human nature

This is a naive, at best, argument that rests on two axioms which libertarians never spell out. 

The first axiom says that in order to always make the right choice, the individual must possess the unabridged ability to make completely rational decisions at every turn. Only God can possess this level of rationality, which means that man must have been created in the image of God—without having fallen for the temptation in paradise.

If the advocate of legalization does not believe man was created by God, but that we are the spawn of a spontaneous natural process, then how did we acquire unabridged rationality? If we possess it (which we don’t) it would be a statistically impossible aberration from every other example of the alleged spontaneous evolution of life. 

In short: man can only be as rational as libertarians need him to be, if he is either God or a statistical impossibility.

The second axiom behind the legalization argument is that there is no social harm from one person’s decline into drug abuse. This is plain wrong: when a person gets addicted to drugs and, as a result, cannot reliably participate in family or societal functions, he puts the responsibility to provide for his loved ones—and eventually himself—on his neighbors. He cannot produce value that, in turn, can be used for public goods such as infrastructure or law and order. He cannot serve on a jury, nor can he pick up a rifle and help defend his country against a foreign enemy. 

As more individuals succumb to drugs, the requisite duties to maintain an ordered society become the responsibility of fewer and fewer of their fellow citizens. 

Conservatives understand these limitations on human nature. They recognize our shortcomings, and our need for God’s guidance. God tells us about the irresponsible stewardship not only of property (Matt. 25:2-10 and 25:14-18; Ps. 112.5-9) but also of ourselves. We have a responsibility to use the resources our Creator has given us; it is our duty to add private value to the fabric of society (1.Thess. 4:11; 1.Tim 5:8-10 and 6:8-10; Lev. 19:15), and to repay the community for what it provides for us (2.Thess. 3:7-10). 

Libertarianism is failing because it completely misunderstands human nature. It assumes a form of rationality that is both theoretically and empirically impossible, then it derives from this flawed view a policy agenda the consequences of which are outright disastrous for a free society. 

Europeans have been better at resisting libertarianism than Americans have, although elements of the ideology have made their way into legislation in some countries. Hopefully, we will see less of it in the future; the libertarian idea of human nature is antithetical to the foundation of Western Civilization. 

Sven R. Larson is a political economist and author. He received a Ph.D. in Economics from Roskilde University, Denmark. Originally from Sweden, he lives in America where for the past 16 years he has worked in politics and public policy. He has written several books, including Democracy or Socialism: The Fateful Question for America in 2024.


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