Bud Parr

February 11, 2009

I grew up accustomed to bull markets and rising prosperity. Now I’d like to know whether they will ever resume. It would be nice if libertarianism”€”a family of ideologies with which I have a great tell of sympathy”€”could tell us the answer.  Unfortunately, the answers it gives are inconcsistent.  Libertarianism has two faces, which I call the comic and the tragic.

Comic libertarianism assures us that the future is bright.  Accelerating technological advancement is making more wealth available to more people than ever before.  The capitalist system”€”even in impure form”€” has unleashed the human capacity for innovation. Goods traverse the globe at miraculous speeds. Whatever the problems we face today, the doomsayers will be proven wrong yet again. We will more prosperous forty years hence than we can even imagine today.

Comic libertarianism has a rich tradition. Julian Simon and George Gilder are recent comic libertarians. Steve Moore 2000 book, It’s Getting Better All the Time“€”restated comic libertarianism in unalloyed form. Comic libterarianism may be in retreat today but it will surely come back.

The converse is tragic libertarianism. Tragic libertarians look fondly at the past (typically, the allegedly laissez-faire system of the 19th century) and disgustedly at the present. Dismissing recent gains in wealth as illusory, they thunder against our current system’s entrenched bureaucracies, rent-seeking special interests, the spendthrift politicians and counter-productive regulations. Fundamentally, they view the capitalist system as a delicate instrument (Murray Rothbard and Ludwig von Mises theorized about the “evenly rotating economy”) now being wrecked. We will be no wealthier in forty years, say the tragic libertarians, than we are now. We may even be further on the road to serfdom.

Tragic libertarianism also has a rich tradition. In her vast novel Atlas Shrugged, Ayn Rand worked out the assumptions of tragic libertarianism in fictional form. Murray Rothbard and von Mises were likewise tragic libertarians. With the financial crisis and the economic depression, tragic libertarians are now gloating.

Most libertarians have both tragic and comic moods. In times of prosperity, they exalt the capitalist system that has created so much wealth for so many. In dire times (such as today), they tell us that the chickens are coming home to roost. It is certainly possible, of course, that capitalism worked up to a certain point but that government interference is finally strangling it. In this view, the comic mood may have been appropriate in the past, while the tragic mood is appropriate today.

Surprisingly, however, very few libertarians have asked if and when the dirgiste system will actually fail. The greatest libertarians have tried, such as as Hayek did in Road to Serfdom and Schumpeter in his astonishing Capitalism, Socialism and Democracy.  For the most part, however, when the times change, libertarians don’t have an answer to the question: why now? Instead, they react to circumstances as the mood dictates.