Warren Buffet opposes lower taxes on dividends and supports collectivist politicians. George Soros espouses all kinds of statist nonsense. Alan Greenspan, until retirement touted as the most powerful libertarian in government, now seems to think that insufficient regulation was responsible for the current Great Recession. Hasn’t anyone noticed that the industries suffer-
ing spectacular collapses because of bad risk management are two of the most heavily regulated industries in the country – banking and insurance? Think that’s a coincidence?
Today the rich and powerful take communism with their caviar and liberalism (the modern, debased kind) with their limousines. This is depressing. Shouldn’t productive, successful people be natural libertarians, or at least small-government Republicans?
I recently witnessed some encouraging evidence that many of them are. These natural lovers of freedom, personal responsibility, deregulation, and low taxes were to be seen at a regular, though informal and slightly drunken, meeting of a book club in, of all places, San Francisco. All but one of them were strangers to me, and meeting them was a bit of an adventure. By the way, if they aren’t already public figures, I expect some of them will be, and since I was dropping in on their private get-together, I will use their initials rather than their names.
We were to rendezvous at the downtown residence of one of the clubmen. Most of us arrived at the lobby of the St. Regis at about the same time. The doorman recognized the regulars and eased our way across the marble floor. I jumped into the elevator with this clutch of likely looking young men, wondering when I would start to feel as if I were wallowing in pretentious middle-brow mud. The first thing I learned was that I am older, declasse, and unfashionable – in fact, ignorant of fashion.
I learned this by looking down at our feet. Half of those guys were wearing outlandishly long, pointed shoes. Some of them were wingtips and some of them were loafers, but the style was de rigueur. I almost laughed out loud, because, well, to this provincial bumpkin they looked like dressed-up, filed-down clown shoes. But the laugh was on me: fashion is mostly arbitrary, and I was out of it. Everyone except C., the ostentatious original in the group, had a very expensive looking way of dressing down. When I dress down, which is always, I’m a half step from Goodwill. It isn’t reverse snobbery; it’s a sad symptom of being lazy and cheap.
To prep for the meeting of the book club, they had to choose a book. This they did by a lively exchange of email that went on for a week or so before the appointed meeting date. I got into the discussion halfway through. They thought about Orwell’s “1984” but didn’t want to break their no-fiction rule. Someone made the following proposal, which seems to have
Hasn’t anyone noticed that the spectacular collapses from bad risk management are in two of the most heavily regulated industries in the country – banking and insurance? Think that’s a coincidence?
been ironical: “While I’m sure many of you wanted to read the Communist Manifesto for our next book club, I figured we get enough of that in the typical Obama press conference.” They decided that Stephen Pinker’s “The Stuff of Thought” was too much work and not enough fun. But when they finally made their choice, it was a work of the year 1850, Frederic Bastiat’s “La Loi” [“The Law”], a classic proto-libertarian text.
Ever the snob, I read it in the original French; but the guys politely overlooked my Euro-geekery, and from the elevated perspective of the huge suite atop the St. Regis, it was easy enough to overlook it. Lush Persian carpets muffled the pointed feet, and additional comfort was provided by a collectible $200 magnum of Sea Smoke pinot noir, which had been “lying about collecting dust for a few years.” They were venture capitalists, merchant bankers, management consultants, entrepreneurs, and mostly Stanford graduates. Late twenties to mid-thirties. All single. Two engaged to be married and one who should be. I put the participants’ average income in the small millions, even with me there to drag it down.
They were practical men, not the niggling ideologues who too often exemplify the curious subspecies that we call”libertarians.” Still, their words evinced a thirst for freedom that put them way outside the political norm. In the email string, one of them had written this about a conversation with an industry expert:
With no provocation from me, he digressed from a discussion of the current health-care reform proposals to lamenting what is happening in terms of regulation, taxation, inability to accumulate wealth during his prime earning years, etc. He concluded his digression (mostly in jest) by saying he is contemplating moving his family to Switzerland. I thus find a bit of optimism with the new day. Perhaps Atlas will shrug and there is hope….
J., who wrote that, expressed all of his views with a passion that, I think, spilled over from a large pot of anger (anger that was perhaps not always inspired by the subject at hand, but that’s the sort of thing that makes the world go ’round).
As I might have predicted, Bastiat inspired J. to fire off some powerful tirades. C. looked for radical implications, as in “what should we do?” Could we move to a tax haven? Start a new country? Go underground? M. drew scorn by hinting at the merest compromises to principles of liberty. But, as S. softly guided the debate back to Bastiat, I thought that these were men who could make smart compromises in the interest of liberty, especially economic liberty.
It was my own first reading of “La Loi,” and I did my homework before attending the meeting. Bastiat, I knew, was the author of the famous “petition on behalf of candlestick makers,” a masterpiece of irony that condemns the sun for unfairly competing with candlestick makers and other purveyors of light, and pleads for government assistance and regulation. “La Loi,” I found, was an interesting mix of original and unoriginal ideas.
It starts with a natural rights argument that was well known in America long before 1776. “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.” Sound familiar? It’s a fair summary of the first few paragraphs of “La Loi,” written about 75 years after the Declaration of Independence.
So Bastiat’s first proposition about his subject, the nature of law, is radically different from Rousseau’s ideas about a “social contract,” because it places individual rights above all other considerations. There is no compromise; the law should only protect life, liberty, and the pursuit of happiness. It must never “plunder” or “despoil.” (Here I’m translating Bastiat’s French word “spoliation,” a word he uses often throughout this long essay. The law must never take from one person to give to another. And it must never forbid the individual’s protection of himself.
I, my 45 Colt, Sig 380, and S&W 357 magnum appreciate Bastiat’s complaint against the laws that have turned self- defense into a crime (“legitime defense en crime”). But there’s ample evidence that Bastiat is wrong when he turns from natural rights to a cost-benefit analysis of crime suppression. He supports basic criminal law with the assertion that the collective must see to it that crime doesn’t pay. “When does all this plunder [of man against his neighbor] end? Only when it becomes more painful and dangerous than work.” (“Quand donc s’arrete la spoliation? Quand elle devient plus onereuse, plus dangereuse que Ie travail.”) In fact, many people refuse to commit crimes that they could easily get away with, while others go ahead and commit crimes that are very likely to be punished severely. The typical bank robber, for example, can expect infrequent success, small rewards, and harsh punishment. But I guess that Bastiat can’t go as far as David Friedman. Bastiat needs criminal law and cops and robbers.
His notion of why crime should not pay resembles Justice Holmes’s “bad man” theory of law, also known as the prediction theory of law. Holmes abandoned natural-rights theories on the basis of an idea that bad men didn’t give a hoot about natural rights and had to be shown that the law would make being bad a poor gamble. In other words, the law should be a prediction of consequences, and the consequences should discourage bad behavior. This unfortunate theory eventually led to the proudly named Legal Realism movement, which devolved, in time, into such post-modern perversions as Critical Legal Studies. The Critters will “prove” to you that the law is entirely indeterminate. But they won’t stop there. Liberated from the notion that law should be based on principles and applied without prejudice, they urge their students and colleagues to remake the world in the interest of an egalitarian goal – an end that can be sought without compunctions about the means. In other words, they would legitimize legal spoliation even when it isn’t authorized by specific laws as long as it obtains for someone something that the enlightened Critters thought he deserved.
Bastiat does much better when he is considering the practical benefits of limiting the government. Here, his arguments are charming and true: there will be less strife, less corruption, less of all the civic horrors, if the role of government is minimized, because the spoils to be derived from managing or manipulating the government will be minimal. The procedures of a severely limited government would not be as interesting, in certain ways, as the freak-show cage fight that government now resembles, and people with less than titanic rectitude would no longer be as likely to be fascinated and corrupted by it.
Related to these thoughts is a sort of conundrum I have noticed: as the role of the state gets bigger and the fruits of political victory get juicier, the quality of politicians and statesmen (a big word for these operators) declines. The smartest and most productive people tend to shun government, even though that’s increasingly where power is to be found. Bastiat offers some clues to why this is.
As far as I can tell, Bastiat was the first to describe collectivist government as the public tit (“mamelle”), an image that has persisted ever since. He extends the conceit nicely, more nicely than anyone else. He makes sure we don’t end by thinking, “Hey, what’s wrong with a public tit? Sounds yummy.” He reminds us that the Great Mammary does not fill itself with milk – we are at both ends of the tit, and for most productive people, a lot goes into the ducts (“les veines lactifires) but only a little comes out of the nipple. It’s an easy lesson, and the fact that most of us haven’t learned it can only indicate that most of us have never read Bastiat.
Well, the book club read him, and although its deliberations ended in frustration, it was not with the author but with his subject – the mammillary state. The discussants were discouraged by reckless government bailouts and exuberant calls for more regulation of commerce and industry. I, on the other hand, felt encouraged to have met such vigorous and well-placed natural libertarians.
There is something in French called “l’esprit d’escalier,” which can be crudely translated as “the wit of the staircase.” The phrase evokes an image, and a little story. One imagines an intellectual salon, convened in the luxurious second-floor apartments of a Parisian mansion. Eventually the party breaks up and the participants start to descend the stairs. Just then, one of them pauses and discovers, too late, all the things he should have said. That is the wit of the staircase. I found that it was my own unfortunate form of wit when the book club, which was the nearest thing to a salon that I had ever seen, concluded its meeting.
For I had failed to say what I should have said. I should have reminded these likeable, potentially influential people that they could at least do as Bastiat had done. Their choices weren’t restricted to being oppressed or hiding from oppression; they could also take it as their task to advocate liberty, clearly and persistently, to other people. More than 150 years after Bastiat wrote, his words are still inspiring and thought-provoking. I’m confident that the members of a certain elite book club in San Francisco will follow his example. There are worse ways to live your life, C. And J., I can’t think of a better way to exorcise your angst.