Liberty and Moral Economy

My friend Sam wrote:

I was listening to the Revolutions podcast, where they discussed the Flour War in depth. In case you’re unfamiliar, this Wikipedia article talks about it. This is a clear example of the kind of growing pains that could be expected if a totally unregulated economy ever became a reality. The article has an obvious pro socialist or big government slant, which is unfortunate, but the events are what’s important. The free market was never given time to find its legs as people starved now. Hungry people tend to riot. To me, this is just an example of how mobs react when a change that will probably benefit them long term hurts them short term.

I guess my frustration is that many Libertarians and free market people push the idea that if government just got out of the way, business would create a utopia. It is my nature to find that this can go wrong. Any major change in how business is done will destabilize some part of the market. Those negatively effected, no matter how briefly, will demand a return to the way things were.


Hey Sam,

That’s a valid concern, but I’ve yet to encounter a libertarian who is working toward a utopia. In my experience, libertarians are more pragmatic. Of course, in saying this, I want to take care not to push libertarianism as the utopia of ideas in itself. The liberty movement could just as easily be corrupted if it becomes too much of a movement or tag and forgets to actually pursue liberty. But in general, libertarians base their economic ideas on a couple of definitions and their broader meanings.

Capitalism is defined as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state.” But a better understanding is that capitalism answers the question, “How and why do humans labor?” The answer is, “Individually and for some profit to themselves.”

Likewise, the free market is defined as “an economic system in which prices are determined by unrestricted competition between privately owned businesses.” But a better understanding is that the free market answers the question, “How and why do humans relate?” The answer is, “Individually and freely with constant competition.”

To understand these points is neither good nor bad. They are simply observations on reality. It’s like observing gravity. We can try to speculate on whether or not gravity is good, but when we drop that notion and focus on the simple fact that gravity is, we can then work with it. But in working with gravity, we’re faced with some inevitable and unbreakable limitations. When people say that we’ve “defied gravity,” they really just mean that we’ve understood it well enough to harness it.

That’s how I would describe the libertarian outlook. Promoting the free market or capitalism is not really about promoting a system (certainly not a utopia), but recognizing that humans will do what humans will do. It’s understanding that attempted restrictions on natural rights will simply force human nature to react in other ways. Tariffs create an unnatural bubble in the domestic market that leads to stagnation in innovation and unnatural price inflation. Taxes or outlawing specific products/services cause black markets for truly desired products (which are really the only ones that people try to outlaw or tax). In my experience, libertarians tend to understand human nature and so want to harness it and let it do what it does best. They tend to understand that you can’t remove all obstacles or suffering, so you’re stuck with choosing the best outcome overall.

But in order to decide what’s best, we have to determine what we mean by “best.” This is why I believe so strongly that socio-economic issues hinge on the nature of morality. Whether morality is objective and how we can come to know that which is objectively moral are two matters of utmost importance. I believe that the Declaration of Independence rings so true to so many after all these years because it was written by a group of Christians and deists who at least could agree on basic objective truths about natural rights. “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.” And I think Alexis de Tocqueville hit the nail on the head when he said in Democracy in America, “Liberty cannot be established without morality, nor morality without faith.”

But I definitely agree with you that people will tend to react at the first sign of trouble and try to undo a good change. I see this as a problem of education. Riots will come if people don’t understand. And people won’t understand if they’re held in ignorance. But I believe that such ignorance is usually not a matter of people not wanting to understand. At least, not at first. I think the source of ignorance is miseducation. Eventually, a callus of cognitive dissonance forms and it’s very difficult to undo that miseducation (though not impossible). Then it gets passed on and becomes a vicious cycle.

Unfortunately, many politicians look at this problem and decide that the solution is to simply dish out bread and circuses to keep the people distracted. “Then,” career politicians believe, “we can do the real work without the people getting in the way.” I take issue with this. It’s been my experience that when the people cry out, it’s because some underlying natural right has been violated. Unfortunately, too often that violation results from a misapplication of government, whether someone in government has taken the rights of another or has allowed someone outside of government to do the same because of cronyism. Tragically, when we attempt to fix those problems by keeping the public in ignorance and attempting to apply more government, the underlying violations of rights become so muddled that they’re nearly lost. Worse still, new violations often get added.

So when libertarians speak against big government, this is generally what they mean. We’ve simply covered up real problems, which has only obscured them and created new problems. Thus, we have to first resolve what is true, then determine the best way to work toward that. As an example, I don’t believe the government should have ever begun paying for roads. However, I don’t believe the government can suddenly stop now. It would have to be eased out of as new technology comes along that makes roads obsolete.

So I believe the main cause of liberty is to inform people about all of the above. Give people all the information. Educate them properly, not just on the basics, but on understanding how the economy works, on understanding the nature of morality. Nearly everyone has the potential to understand as much. So I support drastic changes to the way education is handled today.

Similarly, this is why I take issue with socialism. It pushes a victim mentality that creates fear in people that they might lose what little they have. It preys on ignorance to keep people from striving for more personally because it convinces them that they’re alright so long as they’re not worse off than others. Liberty, on the other hand, pushes an outlook of great potential. It says that most humans have the ability to overcome obstacles and do something great if unhindered by others (which also prevents them from hindering others). Whether they will do something great is another matter entirely.

So how does this pertain to the Flour War? Well, everyone there might have been better off if they had understood more about morality–that their rights can’t trump the rights of others. If they had understood more about their inability to truly control things, they would have seen the need from the start to open up the market and let the people provide for themselves by harnessing their human nature. If they had understood how control was the problem to begin with, they wouldn’t have tried to react with more control, but could have eased out of that system of control.

Either that or embrace the riots and revolutions. Really, we don’t look back on the American Revolution as a failure of the British Crown in keeping its subjects loyal. We generally agree that the colonies were being held to unjust laws and had a natural right to decide their own future apart from that injustice. Or in other words, “When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another …”

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