Libertarianism’s Apocryphal Past
The Triumph of Hamiltonian Liberalism
My previous Salon essay, in which I asked why there are not any libertarian countries, if libertarianism is a sound political philosophy, has infuriated members of the tiny but noisy libertarian sect, as criticisms of cults by outsiders usually do. The weak logic and bad scholarship that suffuse libertarian responses to my article tend to reinforce me in my view that, if they were not paid so well to churn out anti-government propaganda by plutocrats like the Koch brothers and various self-interested corporations, libertarians would play no greater role in public debate than do the followers of Lyndon LaRouche or L. Ron Hubbard.
An unscientific survey of the blogosphere turns up a number of libertarians claiming in response to my essay that, because libertarianism is anti-statist, to ask for an example of a real-world libertarian state shows a failure to understand libertarianism. But if the libertarian ideal is a stateless society, then libertarianism is merely a different name for utopian anarchism and deserves to be similarly ignored.
Another response to my essay has been to claim that a libertarian country really did exist once in the real world, in the form of the United States between Reconstruction and the New Deal. Robert Tracinski writes that I am “astonishingly ignorant of history” for failing to note that the “libertarian utopia, or the closest we’ve come to it, is America itself, up to about 100 years ago. It was a country with no income tax and no central bank. (It was on the gold standard, for crying out loud. You can’t get more libertarian than that.) It had few economic regulations and was still in the Lochner era, when such regulations were routinely struck down by the Supreme Court. There was no federal welfare state, no Social Security, no Medicare.”
It is Tracinski who is astonishingly ignorant of history. To begin with, the majority of the countries that adopted the “libertarian” gold standard were authoritarian monarchies or military dictatorships. With the exception of Imperial Britain, an authoritarian government outside of the home islands, where most Britons were denied the vote for most of this period, most of the independent countries of the pre-World War I gold standard epoch, including the United States, Germany, France, Russia and many Latin American republics, rejected free trade in favor of varying degrees of economic protectionism.
For its part, the United States between Lincoln and FDR was hardly laissez-faire. Ever since colonial times, states had engaged in public poor relief and sometimes created public hospitals and asylums. Tracinski to the contrary, there were also two massive federal welfare programs before the New Deal: the Homestead Act, a colossal redistribution of government land to farmers, and generous pension benefits for Union veterans of the Civil War and their families. Much earlier, the 1798 act that taxed sailors to fund a small system of government-run sailors’ hospitals was supported by Thomas Jefferson and Alexander Hamilton alike.
State and local licensing rules and trade laws governed economic life in detail, down to the size of spigots in wine casks, in some cases.
It was precisely these state and local regulations that the Supreme Court struck down, in Lochner v. New York (1905) and other cases, to promote the goal of creating a single national market. At the same time, sharing their racism with most white Americans, federal judges in Tracinski’s “libertarian” America permitted the most massive system of labor market distortion of all: racial segregation, which artificially boosted the incomes and property values of whites.
The single national market that Lochner-era courts sought to protect from being Balkanized by state and local regulations (other than racial segregation) was walled off by the highest protective tariffs of any major industrial nation. The US government between Lincoln and FDR engaged in a version of modern East Asian-style mercantilism, protecting American industrial corporations from import competition, while showering subsidies including land grants on railroad companies and using federal troops to crush protesting workers. This government-business mercantilism was anti-worker but it was hardly libertarian.
High tariffs to protect American companies in Tracinski’s alleged Golden Age of American libertarianism were joined by racist immigration restrictions that further boosted the incomes of white workers already boosted by de jure or de facto racial segregation. The 1790 Naturalization Act barred immigrants from becoming citizens unless they were “free white persons” and had to be amended by the 1870 Naturalization Act to bestow citizenship on former slaves of “African nativity” and “African descent.” Although the Supreme Court in 1898 ruled that the children of Asians born in the U.S. were citizens by birth, Tracinski’s libertarian utopia was characterized by increasingly restrictive immigration laws which curtailed first Asian immigration and then, after World War I, most European immigration.
Calvin Coolidge, the subject of a hero-worshiping new biography by the libertarian conservative Amity Shlaes, defended both high tariffs and restrictive immigration. Here is an excerpt from President Coolidge’s second annual address in 1924:
Two very important policies have been adopted by this country which, while extending their benefits also in other directions, have been of the utmost importance to the wage earners. One of these is the protective tariff, which enables our people to live according to a better standard and receive a better rate of compensation than any people, any time, anywhere on earth, ever enjoyed. This saves the American market for the products of the American workmen. The other is a policy of more recent origin and seeks to shield our wage earners from the disastrous competition of a great influx of foreign peoples. This has been done by the restrictive immigration law. This saves the American job for the American workmen.
In 1921 then Vice President Coolidge wrote an article entitled “Whose Country is This?” in Good Housekeeping, in which he declared:
“Biological laws tell us that certain divergent people will not mix or blend. The Nordics propagate themselves successfully. With other races, the outcome shows deterioration on both sides.” (Amity Shlaes’s hero evidently believed racist pseudoscience about dangerous and inferior “half-breeds.”)
Protectionist, nativist paleoconservatives of the Patrick Buchanan school might have reason to idealize the United States as it existed between 1865 and 1932. But libertarians who want to prove that a country based on libertarian ideology can exist in the real world cannot point to the United States at any period in its history from the Founding to the present.
This article originally appeared on Salon.