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State Capacity versus Libertarianism

Summary:
In a recent blog post, George Mason University economist Tyler Cowen writes a tribute to what he calls “State Capacity Libertarianism.” I use the word “tribute” advisedly because Cowen doesn’t really make a case. Instead, he claims that libertarians should be State Capacity Libertarians, and settles for eleven assertions about what State Capacity Libertarianism is, while putting minimal flesh on the bones. This one post quickly received a fair amount of attention, notably from Nick Gillespie at Reason, Henry Olson at the Washington Post, and John Cochrane at the Hoover Institution. Cowen notes that he has tracked the libertarian movement for much of his life and so has observed its evolution. He writes, “Along the way, I believe the smart classical liberals and

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State Capacity versus Libertarianism

In a recent blog post, George Mason University economist Tyler Cowen writes a tribute to what he calls “State Capacity Libertarianism.” I use the word “tribute” advisedly because Cowen doesn’t really make a case. Instead, he claims that libertarians should be State Capacity Libertarians, and settles for eleven assertions about what State Capacity Libertarianism is, while putting minimal flesh on the bones. This one post quickly received a fair amount of attention, notably from Nick Gillespie at Reason, Henry Olson at the Washington Post, and John Cochrane at the Hoover Institution.

Cowen notes that he has tracked the libertarian movement for much of his life and so has observed its evolution. He writes, “Along the way, I believe the smart classical liberals and libertarians have, as if guided by an invisible hand, evolved into a view that I dub with the entirely non-sticky name of State Capacity Libertarianism.” (Bold in original). I don’t know what he means by “non-sticky” but, more important, has libertarianism so evolved? And is state capacity libertarianism superior to what Cowen calls “old-style libertarianism?”

No and no. The majority of modern libertarians are working within the broad framework of traditional libertarianism. Moreover, libertarianism, properly conceived, can handle almost all the modern problems that Cowen throws at it, whereas state capacity is fraught with danger.

You might argue that Cowen has covered himself by restricting the term to “smart” classical liberals and libertarians. But how would he, or we, determine who’s smart? By IQ? By accomplishments? Or would it be tautological: those who agree with Cowen are smart and the rest of us aren’t. I don’t know. So instead I’ll explain why I think Cowen’s charge against plain libertarianism is unfounded and why state capacity libertarianism is dangerous.

This is from David R. Henderson, “The Meaning of Libertarianism,” Defining Ideas, January 9, 2020.

Read the whole thing.

David Henderson
David Henderson is a British economist. He was the Head of the Economics and Statistics Department at the OECD in 1984–1992. Before that he worked as an academic economist in Britain, first at Oxford (Fellow of Lincoln College) and later at University College London (Professor of Economics, 1975–1983); as a British civil servant (first as an Economic Advisor in HM Treasury, and later as Chief Economist in the Ministry of Aviation); and as a staff member of the World Bank (1969–1975). In 1985 he gave the BBC Reith Lectures, which were published in the book Innocence and Design: The Influence of Economic Ideas on Policy (Blackwell, 1986).

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