Home / Culture and Society / Against All My Liberal Beliefs, a Libertarian Economy Can Succeed

Against All My Liberal Beliefs, a Libertarian Economy Can Succeed

Please Share...Print this pageTweet about this on TwitterShare on Facebook0Share on Google+2Pin on Pinterest0Share on Tumblr0Share on StumbleUpon0Share on Reddit0Email this to someone

Maybe it was when my wife and I were getting our picture taken in front of the soon-to-open Lamborghini showroom here in Manila; and the fact that my nephew (who works as a programmer for Chevron here) told us that there was a Maserati showroom that would open up a little way down the street. Just three hours earlier, I was getting a haircut and pedicure (yes, pedicure) at a small barbershop a block from our family compound. And the cost of my haircut and pedicure? Just over four bucks.

Welcome to the Libertarian paradise, where libertarian economic theory can and does work, enabling achievements that would be frankly impossible in America.

The Philippines isn’t perfectly libertarian; as with perfect democracy or perfect communism, perfect libertarianism is not an achievable result but rather a philosophical goal. The barber shop is a good example: of the six people working there, three are openly gay, two are transvestites, and the manager is a woman whose biggest challenge, I’m told, is preventing catfights among the workers. One of the transvestites was giving my son a haircut at the time and it bothered my son not at all, but he did tell me that almost anyone back at high school in Washington would never have set foot in the place because of the peer-enforced cultural fear of LGBTs. But cultural tolerance of LGBTs is a libertarian tenet, is it not? Outside of certain religious lines in the sand (abortion and birth control), the Philippine people are about as tolerant of others as it gets.

As with their culture, the Philippine economy embodies many libertarian tenets. In the article referenced, I asked if libertarianism leads to a happier population. But now I am exploring the obvious success of a significant portion of the Philippine economy. For those readers of this article who live in a major city, look outside and count the construction cranes you see being used to build skyscrapers and high-rise condos. How many do you see? Four? Five? Maybe even ten? In Manila, there are at least a hundred construction cranes in use right now; I daresay probably more than in any entire American state! For instance, there’s a suburb of Manila called Fort Bonifacio Global City. It’s a little over the size of downtown Seattle (you know, the home of Boeing, Microsoft, and Starbucks, and where, in good years one can see maybe five construction cranes at one time) But Fort Bonifacio is a planned city of skyscrapers and high-rise condos and gorgeous landscaping, very clean and orderly, no homeless, a first-class city that would be the pride of any state in America.

And it was all built in the past ten years.

Think about that! Manila is a poverty-ridden city in a third-world nation where it’s not unusual at all for people to live on less than two dollars a day, yet this city constructed an ultra-modern suburb over half the size of Seattle, all in ten years. I think it’s safe to say that even the richest city in America, New York City, could not even hope to do this. Manila’s not the only example, or the biggest. In the past thirty years, Shanghai went from having zero skyscrapers to now having nearly twice as many skyscrapers as New York City. Like the Philippines, China has an economy (if not a culture) that is largely libertarian in practice, and they have been able to achieve something that is beyond America’s capability even though our economy is still so much larger than theirs.

So how is it that Shanghai and Manila are accomplishing feats that no American city could hope to match? I believe the first half of the answer lies with the free-trade economics philosophy championed by Ronald Reagan as I described in my article The Global Upside of Reaganomics, because free trade has allowed trillions in American capital (and tens of thousands of our factories, our precious manufacturing capability) to flow overseas, thus enabling third world nations to build beautiful, gleaming cities.

The second half of the answer is less palatable to the cultured tongue. As we were leaving Fort Bonifacio Global City, perhaps a kilometer away from that soon-to-open Lamborghini showroom, we returned to the reality of life in a third world nation: children walking among the cars in the street selling anything for a few pesos, homeless living in ramshackle huts made of cardboard and salvaged plastic sheets, you get the picture. It’s like the yawning gulf between the litter-strewn mean streets and the utopian mansion of the CEO in Blade Runner, right down to the urchins prowling the streets, numerous empty buildings rotting in decay, only more so. The tired, poor, and wretched refuse of a third-world nation provide an inexpensive and compliant labor pool for the rich and powerful to accomplish much more than they ever could in the socialized economies of the first world nations.

Again, it is as Republican Liberty Caucus head Dave Nalle said:

“True libertarians love the poor because a capitalist society needs a poor underclass in order to function efficiently. This is why we support open immigration”.

The economies of China and the Philippines are solid proof that libertarian economies can not only work, but can accomplish wonders beyond the capability of the more socialized first world nations. To my liberal eye, it is also proof that trickle-down economics never trickle down to the people. America could not hope to accomplish such wonders as modern Shanghai, as Manila’s Fort Bonifacio Global City, because (Republican efforts notwithstanding) since the New Deal, we’ve had a system that ensured that nearly all Americans got some of the benefit of our national prosperity. One must also wonder if these libertarian economies will continue to prosper once their markets, the rich Western nations, are no longer able to lay their golden eggs.

And that is the choice that America faces: to return to the Keynesian principles of the New Deal which enabled us to have not only the world’s mightiest economy but also the world’s highest standard of living, or to continue to embrace the Austrian school libertarian economic principles expounded by the GOP candidates. We might match or even exceed the same great feats of construction that mark today’s Southeast Asia, but there’s a price, and it would be paid in the coin of suffering and misery of an ever-increasing segment of the American population, the poor who would find out first hand just how deep poverty really is for those who live in third world nations, with those beautiful, gleaming skyscrapers in plain view, but forever out of touch.

Powered by

About Glenn Contrarian

White. Male. Raised in the deepest of the Deep South. Retired Navy. Strong Christian. Proud Liberal. Thus, Contrarian!
  • Danprkr

    Interesting. He does knock Libertarianism in the end by stating how bad the poverty is, but doesn’t give an comparators to what it was before. In his view we will have more poor with Libertarianism, but when you look for OBJECTIVE numbers on poverty in the the Philippines and Manilla in particular all you find are ‘self rated’ poverty stats. Which cause me to wonder have that many people actually had their situation get worse, or does the same situation just seem worse to them because they see the prosperity all around them, and they haven’t been able to grasp it for themselves? I’m not sure how you can objectively check that, but I do wonder.

  • Glenn Contrarian

    Danprkr –

    Has the situation of the poor gotten worse? No…and when you’re talking about people who live on maybe two dollars a day, it can’t get much worse. I know quite a few in this situation here, I give them little jobs here and there, and they do hard work with (usually) quality results because I always pay more than the going rate – it would be dishonorable for me to do otherwise.

    Don’t get me wrong – there’s many whose lives have significantly improved because of the progress that has been made…but there’s many, many more whose lives have improved not at all. It has to be seen to be believed.

  • I’m sure you realize that Keynesian economics is the policy the U.S. has been operating on since 1935 without a break and has led us to the brink of economic extinction, created a larger divide between the wealthiest and the poor than 1929, and left us all waiting for the LAST shoe to fall. The first trillion dollar stimulus was Reagan’s, but that was back when a trillion dollars was a lot of money.

  • Glenn Contrarian

    Bob –

    Did you know that there was once a president who took office in a time of economic disaster, and not long after he put into effect his stimulus package and the economy was almost back on track, a new conservative political force (that included some conservative Democrats) arose that essentially held Congress and the economy hostage until they got their way on austerity measures and taxes?

    Sound familiar? It’s not Obama and the Tea Party, though the similarities are great.

    The president was FDR, and the political force was the Conservative Coalition.

    If you’ll look at the numbers, by 1936 we were essentially OUT of the Depression…but just as the Tea Party has done in the past two years, the Conservative Coalition essentially forced Congress to accede to their demands for austerity and tax cuts.

    And what happened? We went back down into the Depression. The Great Depression was a double-dip, just as we’re facing now thanks to the austerity your boys would impose on the nation.

    AND ONE MORE THING, Bob – maybe you don’t remember, but back in the recession of the early 1980’s (when I was a Republican) we used to say that in order to fix the economy, we just need a good war. Why? Because YOU KNOW that WWII pulled us out of the Depression, right?

    Yes, you do know that.

    Now consider this, Bob – in economic terms, WWII was the largest taxpayer-funded government stimulus in American history…and it proved without question that a government stimulus DOES work to bring a nation out of a recession.

    ON THE OTHER HAND, can you show me any time in history that austerity measures pulled a nation out of recession or depression? Hoover tried austerity measures for three years after the 1929 Crash…and it didn’t work.

    Your turn.

  • Cannonshop

    Glenn, I doubt there has been a prior example of Austerity Measures actually being put into PRACTICE. You can’t make a comparison with something that has never actually been done.

  • Robert Lallier

    Sorry, Mr. Contrarian, you need to stop fighting Republicans and actually read some real libertarians. I think you’ve had a deconversion experience and just can’t get out of the headspace where you feel the need to attack the conservatives and Republicans for whose beliefs you may once have held some sympathy. There’s nothing worse than a reformed addict. Stop fighting straw libertarians and read some real libertarians, like Murray Rothbard, to see why your takes on the Great Depression and FDR are horribly distorted by error. Don’t argue with me here. There isn’t enough space and time on a web page full of opinions to learn much more than opinion. Go read. From what you’ve written it is easy to see whom you haven’t read. Yes, there are plenty of misguided conservatives and Republicans who believe war is an economic panacea and leads to “national greatness.” They are driven by quack economic ideas just as misguided as those of the political left. Many of them once were of the political left. Ronald Reagan and Newt Gingrich are not are not who you seem to think they are or were. They are not libertarians by any stretch of the imagination. If you want to argue with Republicans, that’s fine, but in the name of intellectual honesty, please stop conflating them with libertarians. Read the Austrian critiques of Keynes, and at least give their reasoning a hearing; don’t just accept from somone else that anyone who disagrees with that dead economist must be crazy. The Austrians have their reasons for disagreeing with Keynes and from what I’ve read here, you haven’t actually seen them. Austrian economics teaches that IP is not real property and in that light there is a wealth of free books online over at Mises.org from which you can choose to broaden your experience, if only you have the curiosity.

  • Glenn Contrarian

    Cannonshop –

    You’re really going to state that out of all the recessions that have taken place in modern history, you doubt that anyone’s ever tried austerity measures to get out of a recession?

    Stimulus packages don’t always work…but the example of WWII shows conclusively that government stimulus properly applied does work.

    There certainly have been recessions in modern history where austerity measures have been tried, and I am unaware of any that have worked. For instance, as I stated above, that’s precisely what Hoover tried for three years after the crash of 1929 – his Treasury Secretary was a big fan of fiscal austerity. I clearly remember finding this out as I researched history to debate Kenn Jacobine.

    And if you’ll look at the efforts of Europe not only now, but all through the past five years or so – they’re all trying austerity measures…and see how much good it’s NOT doing them. To be sure, there was a lot of waste that needed to be cut in Greece, but the austerity measures have not helped Spain, Portugal, Italy, Ireland, or Iceland…and it’s these struggling economies who may well pull Europe and America down into another recession.

    Cannonshop, the rhetoric about austerity measures sounds good – it really does! But in practice, austerity does not work. Here’s the major argument against them:

    Opponents argue that austerity measures tend to depress economic growth, which ultimately causes governments to lose more money in tax revenues. In countries with already anemic economic growth, austerity can engender deflation which inflates existing debt. This can also cause the country to fall into a liquidity trap, causing credit markets to freeze up and unemployment to increase. Opponents point to cases in Ireland and Spain in which austerity measures instituted in response to financial crises in 2009 proved ineffective in combating public debt, and placing those countries at risk of defaulting in late 2010

    And again I point you back to the biggest taxpayer-funded economic stimulus in American history – WWII. We finished WWII with the largest debt in American history (even larger than today’s in relative terms), but we nearly paid that off NOT by austerity measures, but by using that other great fear of Republicans – high taxes on the rich.

    It’s PROVEN that stimuli work, and high taxes are sometimes necessary…but it’s NOT proven at all that austerity measures work even though they’ve been tried many times.

  • David

    Read Theory of Money and Credit by Ludwig von Mises, along with his more famous work, Human Action.

    It would also be a good idea to read The Critics of Keynesian Economics and Failure of the “New Economics” by Henry Hazlitt.

    After those four books, you may be tempted to burn your copy of The General Theory of Employment, Interest and Money.

  • Glenn Contrarian

    Okay, Robert –

    Tell me exactly how – in economic terms – our taxpayer-funded ramping-up of our heavy industries for war was not an economic stimulus.

    I’m not talking about the war itself, but how strong the economic stimulus left our industrial and manufacturing capability after WWII.

    And while you’re at it, tell me why it is that even though the taxpayer-funded economic stimulus of WWII left America saddled with a debt relatively higher than even today’s, we were able to pay it off by raising taxes on the wealthy to well over TWICE the rate where it’s at right now?

    I suggest that if you’re going to call me on my claims, give references – I try to limit my claims to what I can prove using credible references…and I’m not often wrong. So if you can prove me wrong, then by all means please do so! But bring your references – credible ones, mind you.

    And you take issue about me conflating libertarians with Republicans. First of all, even in the past election 70% of the libertarian vote went for McCain. Second, Republicans have historically been enamored of certain (but by no means all) tenets of libertarian fiscal thought, and are today strongly influenced by the supposed need to slice-and-dice federal agencies and our social safety net in the name of austerity. Libertarians would strongly support such a move, whereas many liberals such as myself know history well enough to know where such austerity can lead.

  • Igor

    I’m surprised to see anyone cheered by the appearance of many high-rises, since they seem to me just to be places to accomodate the ever-increasing population that exploiters require to house new generations of city-bound peasants. Besides, they’re a blight on the landscape.

    I think that libertarianism can prosper and do well in small scale, such as villages or homogeneous farming communities. When I was a lad (a long time ago) my father sent me to work on a farm in southern Minnesota populated by old Swedes every summer. I don’t think Dad got anything for my (doubtless) peerless labor other than a chicken and some home-canned corn, but I learned a lot (even some Swede, since that was the only language spoken among peers in that community) including this creed “talk conservative, act socialist”, which I deduced by inference.

    Spoken Politics was relentlessly conservative among those people who would routinely band together and go from farm to farm at planting and harvest season, pooling their machines and their labor, every one of them working from dawn to dusk as equals, where the smartest guy on any subject was the boss on that subject. And if something was screwed up there weren’t recriminations and fights, just consensus determination to get things right.

    To me, that situation seems like a libertarian ideal. But the problem is that it doesn’t scale upwards: it can’t be applied to arbitrarily large societies where you have to develop administrative structures and you can’t depend on consensus and social opprobrium to guide people, or even “market forces”.

    Personally, I’m not going to signup for any political system based on instantiating a simple-rule philosophy of some diatribist such as those authorities mentioned herein. They are always devised to provide loopholes for crooks and thieves to slip through. IMO that’s the route of a very lazy person. IMO we as citizens have before us the complicated and demanding task of devising a system that gives every citizen a way topursue and achieve a large part of his desires. That includes the aspirations of the ambitious to get wealth in excess of most people and the the aspiration of the quotidian worker to have some security and satisfaction in his life. It doesn’t mean that you have one chance and then it’s finished, it doesn’t mean winner take all, it doesn’t reward the chiselers (any more than a chiseler should be rewarded to continue his mean life).

    Personally, I’m an Eisenhower Republican: keep the best and reform the rest.

    Society is NOT just a playground for the most aggressive and ambitious to duke it out for supremacy, laying waste to all around them, polluting the environment, the very air and water that we need for sustenance, and pitting armies of peasants one against the other.

    Our system CAN work for the benefit of all (we know that because it used to work better for all, or for most, certainly more than at present) but we need to reform the parts that are failing.

  • Glenn Contrarian

    Igor –

    Well said. To support the difference you noted about how libertarianism doesn’t scale upward, if you’ll check, the hard numbers show that those who live in blue states generally have higher levels of education, lower teen pregnancy rates, lower violent crime rates, higher incomes, lower birth mortality rates…the whole shebang.

    And it is NOT because they live in blue states – it’s because they live in states with larger population centers, and large cities necessarily bring the better universities, the major industries, and so forth…and it turns out that those who live in cities have a greater exposure to those from outside their own income brackets, their own color, their own culture…and so people in cities tend to be more liberal.

    How about that! The larger the city, the more liberal the population generally is. That’s why back in 2008 an open lesbian was elected mayor in Houston (or was it San Antonio). She probably could never get elected to a statewide office in uber-red Texas…but the cities themselves are not always so red.

    And the trend is not limited to America – all over the world, the greater the population center, the more liberal the population will generally be in comparison to the cultural mores of the nation as a whole.

  • Clavos

    It was Houston; San Antonio is anything but liberal and is a very small town (though they don’t think so).

  • A big small town — over 1.3 million in the city and over 2 million in the metropolitan area. But we get the point.