Simply Marxism homepage

Are Libertarians being Unrealistic Utopians?

Communists invariably are accused of calling for an unrealizable utopia. (See the booklet Some Forgotten Marxism for the contrary view.) However, you could make the same claim against free-market, limited-government libertarians.

Indeed, much of the evidence is in their own writing. You can see it in Hayek's The Road to Serfdom and also in the whole public choice literature on what they call government failure.

While Hayek sees the spread of collectivist views as the primary culprit, he also observes that people find it hard to refrain from running to the government for protection or assistance when they are knocked to the mat by the blind forces of the market place. Furthermore, he notes that there is a general public sympathy for this idea. Hayek exhorts us to endure the pain of market vicissitudes for the greater good, that greater good being an economy based on market forces. We should trust our economic fate to this mechanism over which we have no control. (See chapters 9 and 14 of The Road to Serfdom).

If anything were at odds with "human nature", such self-sacrifice certainly is. And it is certainly at odds with the market spirit of pursuing one's self-interest which is the force behind the guiding invisible hand of the market, where each of us by looking after number one delivers the best outcome for everyone else. So basically, the self-seeking behavior that drives the market also sabotages it.

This contradictory behavior is not confined to those putting up resistance to being crushed by the market. We also have so-called rent-seeking where running to the government is a part of the standard business model. Even the biggest capitalists are happy to play the game while politicians and bureaucrats further their careers by coming to their support. This messing around with the market is all explored in the public choice literature. It is denounced for its deleterious effect and dubbed "government failure".

If extensive government meddling is an inevitable result of the market at work and mostly a bad idea, it is appropriate to conclude that actually existing capitalism is the only capitalism on offer, and to add government failure to its list of shortcomings. It is endogenous to the system rather than some exogenous imposition by collectivist forces.

Simply Marxism homepage