This is partly a note for myself, because my tweets auto-delete and I want to retain some thoughts that I just put up there for the future. I was responding to Noah Smith, who was excited that the Niskanen Center is telling people that markets are (necessary but) not sufficient for “real liberty.”
As I said: “This is the problem with the typical left caricature of libertarianism: it can be disarmed so easily. But critique is still essential! Libertarians KNOW that humans aren’t ultra-rational utility monsters and that extra-market institutions matter. And they have made those tenets the bedrock of a hyper-anti-democratic worldview. Far-leftists will continue in their smugness, regurgitating critiques that often were developed by neoliberals themselves. And center-leftists will continue saying “Good!!” and marveling at the appearance of a kinder, gentler libertarianism. And the right will continue to wage war on democracy, secure in their knowledge of human irrationality and the non-inevitability of markets.”
And then I put up a picture of one of my favorite Hayek quotes:
“The vast majority of people (I do not exaggerate) no longer believe in the market. It is a crucial question for the future preservation of civilization and one which must be faced before the arguments of socialism return us to a primitive morality. We must again suppress those innate feelings which have welled up in us once we ceased to learn the taut discipline of the market.”
But it would perhaps have been more apropos to cite a representative of the “new institutional economics” (The Ostroms, Ronald Coase, Oliver Williamson, etc.), to whom the Niskanen article in question is quite close in spirit. They are typically less obsessed with “The Market” than Hayek but, in a more subtle fashion, just as anti-democratic, determined to erode the legitimacy of the modern state as a vehicle for collective action to address public problems. Here’s Victor Ostrom, for instance:
“The larger the society and the more diverse the country, the greater the propensity for error… Individuals assuming themselves to be like all the rest, no longer look upon themselves as fallible creatures subject to limited comprehension, but as omniscient observers addressing themselves to problems in the society as a whole. Government them becomes an omnicompetent, universal problem-solver capable of responding to all of the problems of the society as a whole…Justice is conceived as social justice implying equal shares in social outcomes rather than equal standing in access to the games of life.”
This is also the theme of Nancy MacLean’s great new book about James Buchanan. (Peter Boettke, one of Buchanan’s key successors at George Mason and the current president of the Mont Pèlerin Society, is a major popularizer of the Ostroms’ work.)
The Niskanen Center article that Smith links, while seeming to be relatively laudatory of democracy, gives away the game about halfway through:
To resist the reification of the state is to depart from most mainstream political-theory accounts of democracy, even many that are supposed to be highly pragmatic. Most democratic theorists cannot help regarding the democratic state (or, in more populist, American form, simply “democracy”) as the common, conscious entity that “must” speak for the moral purpose of the whole, and that must, allegedly, be the final arbiter of disputes among other institutions. There is no such must, and no such entity.
There you have it: the modern democratic state, existing like all institutions as a “conventional,” convenient, “pragmatic” complement to the market, has no special democratically-invested authority to act in furtherance of collective projects, to possess public things, and so on. What at first seems to be a level-headed departure from “market fundamentalism,” fostering appreciation for “non-market institutions,” is in fact a profoundly radical “anti-mystification” attack on the typical meaning of “democracy” for most people nowadays. “Liberalism understood in the more realist, Hayekian way is the opposite of populism,” as the Niskanen article puts it.
The Niskanen Center makes its living trading on its image among outsiders as a group of “the good libertarians.” They support a carbon tax! Many of their key figures were ousted from the Cato Institute by the Kochs! They admit that the welfare state has its uses! But look deeper and you find an organization still deeply embedded in the right-wing think tank ecology (or Russian-nesting-doll structure, as Philip Mirowski might put it), — oh, and conceding to massive popular support for a carbon tax only in exchange for gutting other environmental regulations. In this sense, they’re the think-tank parallel of the “New Prophets of Capital” that sociologist Nicole Aschoff has identified, providing a slick veneer of humanitarianism that conceals the unabated metastasization of the neoliberal order beneath.
But it’s also important to recognize that some of the intellectual framework that furnishes this humanitarian veneer isn’t just deceptive or disingenuous but actually constitutive of a perhaps less prominent, but no less sinister thread of neoliberal thought (and organization) over the last fifty years or so.