Radicals for Capitalism

Social Security was wreathed in the highest-sounding motives and had become such a foundation stone of post—New Deal America that to speak ill of it had become the definition of political suicide. The program was designed to create unity, to ease suffering, to bind us all into one people. The policymakers behind Social Security took it upon themselves to manage the future and savings of all Americans intelligently and rationally But what they set in place was a system that would eventually bind the coming generations to promises they could not reasonably afford. It was, in other words, the foundational political program of the twentieth century—well meaning, choice eliminating, and ignoring obvious secondary effects. And it was headed for failure.

A group of intellectuals and activists had long seen the need for an escape route from the Social Security system and had offered a solution two decades before most American politicians or citizens realized that a crisis was coming.The Cato Institute was a think tank for libertarian intellectuals and publicists, named after a pair of American revolutionary-era pamphleteers who wrote of inalienable rights and human liberty under the pseudonym Cato (an act of anonymous political speech— also largely restricted by modern government under the guise of campaign finance laws).

One way to rescue America from the potential fiscal wreckage of Social Security, said the libertarians at Cato, was to give citizens personal control over their own savings and their own retirement. Let them keep at least a portion of their own money to invest however they thought best (in a nod toward political reality, the modern Cato plan would allow government to limit the choices of what private investments citizens could make with Social Security money), rather than force them into a complicated and doomed pyramid scheme by which the next generation was mortgaged to make good on government promises to the previous one.

Another program central to Western government had essentially died in the waning years of the previous century. The notion of welfare as a permanent entitlement, the idea and practice that it was the state's obligation to take care of (and manage) the lives of the poor, had been replaced by short-term assistance with work requirements. The new regime in welfare, shepherded by Democratic President Bill Clinton, seemed tailor-made to answer critiques by scholar Charles Murray in his influential 1984 book Losing Ground. In 1997, Murray wrote a book that laid out the intellectual roots of his successful critique of the welfare state: What It Means to Be a Libertarian.

The conspirators behind this libertarian movement suspected that it would take a perceived crisis to make their ideas seem sensible. Leading libertarian intellectuals from Murray Rothbard to Milton Friedman (two men who disagreed on many things) knew that a prime mission for libertarian intellectuals and activists would be to prepare solutions for problems that would arise from government programs before those problems became obvious to most politicians or laymen. As Friedman put it, "We [libertarians] do not influence the course of events by persuading people that we are right when we make what they regard as radical proposals. Rather, we exert influence by keeping options available when something has to be done at a time of crisis."¹

Libertarians have ambitious goals for America. The movement's efforts include well-funded public policy research institutes, political opinion magazines, syndicated talk radio shows, training and funding centers for college professors, and America's most successful, long-lasting third political party.

Its eventual goals include the abolition of all drug laws (not just those against currently illegal narcotics and hallucinogens, but an end to prescription laws and the Food and Drug Administration as well), the abolition of the income tax, the abolition of all regulation of private sexual relations (from marriage to prostitution and everything in between), an end to public ownership and regulation of the airwaves, an end to overseas military bases and all warmaking not in direct defense of the homeland, an end to the welfare state, and an end to any legal restrictions whatsoever on speech and expression.

Libertarians' policy prescriptions are based on a simple idea with very complicated repercussions: Government, if it has any purpose at all (and many libertarians doubt it does), should be restricted to the protection of its citizens' persons and property against direct violence and theft. In their eyes, most modern government functions, if done by private individuals, would be seen as violence and theft. Libertarians' economic reasoning leads them to the conclusion that, left to their own devices, a free people would spontaneously develop the institutions necessary for a healthy and wealthy culture. They think that state interference in the economy, whether through taxing or regulation, makes us all poorer rather than richer.

Their ideas and policy prescriptions seem unbelievably radical in the current political context. But in many ways, libertarians argue, the United States was founded on libertarian principles. The Constitution defined a role for the federal government much smaller than what it practices today, and it restricted government to a limited set of mandated powers. This vision of America has been lost, libertarians argue, through a series of expansions of centralized federal power dating back at least to the Civil War (if not to when the Constitution replaced the Articles of Confederation), and including as cusp points Progressive Era reforms, the New Deal, and the Great Society

Although it hearkens back in spirit to the American Founding, the libertarian vision is not backward looking or reactionary. By extending individual liberty into radical areas of sex, drugs, and science (no restrictions on stem cell research, cloning, or nanotech), libertarianism is the most future looking of American ideologies. It sells the promise of a world mankind hasn't yet fully known, one with personal liberty limited only by preventing damage to other people or their property. It's a world that would be freer, richer, and even cleaner.

Because libertarian proposals tend to seem, as noted above, unbearably radical to most Americans, who are relatively satisfied with their government, libertarianism has been a shadowy movement through twentieth-century intellectual history. Only since the mid-1970s has it begun attracting money, numbers, and attention to the degree that it is clearly an intellectual and ideological force to be understood and reckoned with. In a postcommunist world where the tyranny and poverty that accompany supposedly benevolent attempts to create a paradise of economic and political equality have been made abundantly clear, after a century where governments have killed more millions than a sane mind can comprehend, in a new century where international power politics and medieval religious throwbacks threaten a world of unremitting chaos, where the inevitable fiscal doom of the twentieth-century's entitlement state looms ever closer, libertarian ideas have more appeal than ever.Advances in technology have made possible new wired worlds where governments might be unnecessary, new biological abilities have expanded our potential power over ourselves and our environment to almost godlike status.We may even be on the cusp of creating new societies off the surface of the planet itself. All that makes the history, ideas, and ideologues of this movement of unrestricted human liberty, both mental and physical, and unleashed human abilities, both scientific and social, more relevant than they've ever been.

This book tells the libertarians' story and functions as a shadow ideological history of the twentieth century. While the world has undoubtedly turned in some ways in a more libertarian direction—and in some ways directly because of the thinkers and activists whose story this book tells—in many ways the libertarian movement remains a radical underground whose true influence is yet to come.

Libertarians believe either or both that people have a right to be mostly left alone to conduct their own affairs inasmuch as they don't harm others, or that things will on balance work out best for everyone if they are. They define "work out best" to mean creating the most varied and richest culture and economy. In a sense, that very freedom is part of what constitutes "best"—people will flourish and be happiest to the extent that they are free to choose their own life plans and pursue them as best they are able. In that pursuit, the libertarian believes, people will discover new ways of living, new ways of meeting human needs and desires, even new ways of understanding what it means to be human, that will enrich us all.

Libertarianism combines appeals to practicality and the way the world really works, through its reliance on economic logic to dissect the efficacy of state economic intervention, and a burning call to a higher justice, with its sense that there are certain things one human should not be able to force another human being to do, even if it is allegedly for her own good. Libertarianism thus provides an ideological package that is intended to resonate with both mind and heart. Some libertarian thinkers claim to rely more on freedom's good consequences in judging it right; some rely on a more purely moral argument about rights and justice. In fact, most of them rely on a combination, sometimes smooth, and sometimes rough, of both ideas, since their vision of rights tends to be rooted in what is best for human flourishing. Rights and consequences get linked, then, in a happy congruence.

This book will explain what libertarians believe and why through the stories of the people who invented, advocated, and spread libertarian ideas. Without libertarian activists, libertarian ideas would likely disappear, and certainly find no traction in the real world. Many libertarian intellectuals included in this book are scholar-activists. What's the point, as libertarian economist and philosopher Murray Rothbard wrote, of setting forth economic and philosophical truth with no context for achieving victory for that truth? To the truly impassioned libertarian, educating the public in libertarian theory is vital.Yet "just as the theory needs to be carried to the attention of the public, so does the theory need people to hold the banner, discuss, agitate, and carry the message forward and outward to the public. . . . both theory and movement become futile and sterile without each other; the theory will die on the vine without a self-conscious movement which dedicates itself to advancing the theory and the goal.The movement will become mere pointless motion if it loses sight of the ideology and the goal in view."²

Liberalism in the nineteenth century meant simply the movement toward greater liberty. In the twentieth century liberalism has come to mean the expansion of state power in the pursuit of perceived social welfare, not necessarily liberation of the individual from outside control. The ideas and those who advocate them, which in the nineteenth century would have been known as liberal, are now "classical liberal."

Modern libertarians include both those carrying on that classical liberal tradition and radical heirs of that set of ideas who try to take those ideas as far as they might go: If private property is good, why have public property at all? If individual liberty is conducive to flourishing, then why should government regulate our use of weapons or drugs, or force us to pay for the indoctrination of our children in public schools, or steal from some in order to benefit others? The people and institutions whose story this book tells asked these questions, questions that barely seemed worth asking to most people, and helped cement them in our culture in the form of such vital movements—most only halfway measures by libertarian standards—as the medical marijuana movement, the press for homeschooling and vouchers, welfare reform, and the fight against eminent domain and campaign finance regulations that stifle speech.

Classical liberal values have shaped and defined modernity in many ways. Our role in life is no longer dictated by the status we were born into; to a large degree (though not entirely), legally protected guilds no longer define what we are able to do for a living; skin color and gender no longer restrict where we can live or work by the enforced order of men with guns. (For those who don't see the power of men with guns behind every law, libertarians say, just wait and see what ultimately happens if you refuse to obey one, even the most picayune one.) Churches no longer have power over secular life; the dream of total economic planning is over, the Berlin Wall has fallen, and the liberating wealth of capitalism is sought by millions to whom government policy had previously denied it in Asia and the Third World.

These are the ideas and animating principles from which libertarianism arose; the ideas of libertarian heroes such as Henry Maine, who celebrated the historical shift in human society from status to contract; the nineteenth-century free traders who wanted everyone to be able to buy and sell on mutually agreed terms with anyone, anywhere; the Scottish enlightenment figures who saw that a complex and valuable order could arise in human affairs without planners bossing everyone around.

Rather than creating a world of atomistic individuals, as its enemies have predicted accusingly, these classical liberal ideas have created a world in which networks of trust and interdependence are omnipresent and worldwide. Libertarian author David Boaz, an executive at the Cato Institute, explained what that means in practical terms: "My father's good reputation didn't extend much beyond the small town where we lived, and he would have had trouble borrowing money in a hurry even a few towns over, much less across the country or across the world. But . . . I have instant access to cash and credit virtually anywhere in the world—not because I have a better reputation than my father, but because the free market has developed credit institutions that extend around the world. As long as I pay my bills, the complex financial networks of American Express and Visa . . . allow me to get goods, services, or cash wherever I go. These systems work so well that we take them for granted, but they are truly a marvel. . . . The network of trust and credit relies on all the institutions of a free society: individual rights and responsibility, secure property rights, freedom of contract, free markets, and the rule of law.A complex order rests on a simple but secure foundation."³

The interconnected networks of the free market—which is the living apotheosis, in many ways, of the full libertarian vision—disciplined by free competition, motivated at its best by a desire for personal gain that generally translates into building long-term relationships based on trust rather than taking the money and running, while never even close to perfect in a world of imperfect humans, becomes, the libertarians argue, the closest to paradise that man can ever know

Libertarianism qua libertarianism has mostly failed to garner extended attention in American political and ideological history. One reason for this is the complicated overlaps, both intellectual and institutional, between it and better-known and more successful right-wing conservatism. Modern American conservatism was constituted from three often warring tendencies in its formative years in the 1950s—traditionalism (often religious, with strong European and Catholic strains), sometimes rabid anticommunism and cold warriorism (usually cheer-led by ex-communists), and antistate libertarianism. However, libertarianism remained only a tendency within the modern conservative right, and never the dominant one. Traditionalism, anticommunism, and then fealty to a Republican Party that was seen as the right's standard-bearer in real-world politics, almost always overwhelmed the libertarianism.

Clear connections still exist, both personal and institutional, between libertarians and the right. But libertarian institutions have a separate identity from their occasional comrades, friends, and sparring partners among conservatives. This book tells the story of that distinctly libertarian set of thinkers and institutions.There is not a one of them who wouldn't tell you you were wrong, and very sharply, if you called them conservative.

Five thinkers form the spine of the story this book tells, five people without whom there would have been no uniquely libertarian ideas or libertarian institutions of any popularity or impact in America in the second half of the twentieth century. Those five are—in the order in which they are discussed in this book—Ludwig von Mises, Friedrich A. Hayek, Ayn Rand, Murray Rothbard, and Milton Friedman. Four men and one woman; four Jews and one Catholic; four economists and one novelist; four minarchists (the libertarian movement term for those who believe in a government mostly limited to defense, adjudication, and perhaps a limited range of public goods) and one anarchist (who believes we need no government at all); two native-born Americans and three immigrants; two Nobel Prize winners and three who remained not only aloof from most professional and intellectual accolades but generated a heated hostility from cultural gatekeepers; three best-selling authors and two secret influences.

The Austrian emigre economist Ludwig von Mises could fairly be considered the fountainhead of modern libertarianism, not only because of the strength of his own ideas, his unreconstructed nineteenth-century liberalism, and his mostly unyielding free market economics, but also because of his important role in the education and shaping of other important libertarian thought-leaders. F. A. Hayek was an early disciple of Mises's (though never technically his student) in Austria in the 1920s, and received his first professional job through him. Rothbard was an eager student (though a non-degree-seeking one) at Mises's New York University seminars in the 1950s and strayed little from the Misesian catechism in economics. Even the imperious and independent novelist Ayn Rand chose him as her most-recommended free market economist (though she did not embrace him in every respect).⁴

In addition to his influence on the new generation of American libertarians that arose in the 1960s—one couldn't escape Mises no matter your angle of approach to libertarianism; the movement's flagship think tank the Foundation for Economic Education honored him and relied on his ideas; the Nathaniel Branden Institute, pushing Ayn Rand's philosophy, recommended his books, and Murray Rothbard, who tried to keep in touch with every libertarian he could, evangelized on his behalf everywhere, in person and in print. He was also considered a formidable figure in the contemporary conservative movement, earning himself a place of honor toward the front of George Nash's history, The Conservative Intellectual Movement in America Since 1945. But, as with Hayek, who felt compelled to write an essay explicitly spelling out "Why I Am Not a Conservative," Mises didn't really fit into the burgeoning and more conventionally successful traditionalist /anticommunist American right wing.⁵