Not going Galt

Henry’s post linking to Charlie Stross reminded me of one I was planning to do on the question – why has there never been a serious attempt at a real libertarian utopia? Most other utopian ideologies have inspired at least someone to attempt a practical implementation. On the face of it, libertarianism seems ideally suited to the belief in a fresh start, with no messy pre-existing claims. All sorts of ideas have been floated – island buyouts, sea-steading, co-ordinated moves to New Hampshire and so on, but none has gone anywhere. The only explanation I’ve seen, that libertarians are too independent and ornery to organise a utopia doesn’t convince me.

Thinking about the discussion we had though, it strikes me that there is a simple explanation: Actually Existing Libertarianism (see below) offers a better economic deal for nearly all libertarians than any feasible version of Galt’s Gulch. Once you do the math on going Galt, it’s not hard to see why no self-respecting libertarian would actually do it.

Let’s start with our oppressed libertarian, paying a 50 per cent tax rate, and waiting every year for Tax Freedom Day (July 1). Say that half this money is spent (highly inefficiently) on public services and the rest is given to the undeserving poor, bureaucrats and so on. I’ll make him (gender assumed advisedly) a computer programmer, so he can continue to earn his living from the comfort of his cruise ship, island or whatever. So, immediately he makes the break for Libertopia (island, ship or whatever), his disposable income doubles.

But then the problems start. The state may not do a great job providing services of all kinds, but those services have to be replaced. Libertopia doesn’t sound like a very appealing place for schoolteachers, nurses, and so on, so most public services would probably have to be supplied by external contractor. The cost of that would wipe out any savings from eliminating government inefficiency. So, the net gain in disposable income falls to 50 per cent.

More generally, you have the Stross problem. Suppose a starting population of 10 000. That’s too small to provide more than basic goods and services, so everything else would have to be imported in small quantities. As everyone who has spent time on an island (even one close to the mainland), or a small remote community, knows, that means everything costs more (often double) and most things aren’t available at all. Even if all the registered Libertarians in the US (about 250 000) moved en masse they would still be heavily dependent on high-cost imports. Almost certainly, that would more than wipe out the gain from tax freedom.

Finally, while our hero would never become disabled or unemployed, it’s bound to happen to some people. That means either budgeting for organised charity or putting up with lots of beggars. Randians might appreciate this daily testimony to their own superiority, but I suspect others would prefer that these losers move elsewhere.

All things considered, it seems pretty clear that Libertopia would yield its residents a greatly reduced standard of living, compared to what they could get from a government. Of course, the ideal would be a nearby government jurisdiction that would provide the large-scale industry needed for a ready source of consumer goods, a home for contracted-in service providers, support for losers and so on, but would not be able to tax the Libertopians.

But once you think that you realise that a partial approach to this outcome already exists, and has millions of inhabitants across the US. They’re called suburban Republicans. The suburbs benefit from urban centers, but resist paying for them, mostly successfully. It’s not exactly Libertopia, but it’s obviously close enough to be more appealing than going Galt.