© Josh Sager – March 2013

Personally, I have nothing against libertarians, as people, even though I often find myself thinking that their ideology is utopic and unrealistic. I think that most libertarians genuinely mean well and simply believe that society’s needs can be better met through the market than through government programs (ex. eliminating the FDA in favor or private vetting bodies). In issues of non-economic policy, I often find myself agreeing with many libertarian ideas (ex. legalizing less-dangerous drugs), and can honestly say that the libertarian ideology is one that has some very valid points.

Unfortunately, there are a few key flaws in libertarian economic thinking that makes the ideology unrealistic and non-functioning in many areas of policy-making. Primary among these flaws is a fundamental lack of understanding of how a society’s infrastructure develops and is maintained.

Libertarianism only Exists Once Society is Built by the Government

As far as I can tell, libertarian movements only form in societies which have already developed a national infrastructure; the existing government has already levied taxes on the population in order to build a system of roads and bridges, and public services. Whether in Europe, the Americas, or Asia, there is no recorded instance of a libertarian society developing on its own, outside of a society that set down its national infrastructure through democratic legislation, a monarchy or even an autocracy.

The fact that libertarian movements only develop after the state infrastructure has formed suggests that libertarian economic policy only occurs to people who live in developed countries and is not conducive to the initial formation of a state infrastructure. The huge free-rider problem inherent to the creation of a national infrastructure functions as a seemingly insurmountable hurdle for the creation of a purely libertarian country.

In societies that lack a national infrastructure because their government hasn’t built it yet (ex. underdeveloped countries and some developing countries), the idea that private enterprise can create said infrastructure is absurd to people. They are currently living in a society where the government is leaving things up to the private market, yet the market is simply not working out.

Once the government in these societies eventually builds the national infrastructure, some people forget that the private market failed them in the past and begin to believe that the way to make things more efficient is to let the private sector provide for society’s needs—it is these people who become libertarians.

Put plainly, an economic libertarian is simply somebody who takes the infrastructure of their society for granted once things are built up enough that they can function—the roads are built, regulations are in place, and basic public services are functioning. These people are wholly ignorant of what society actually looks like without government, so they create an idealized vision of this “small-government” society to cling and aspire to.

Here is a practical example of this effect: If you live in a society that is being ravaged by food-borne illness, yet no private-sector solution is developing on its own, then you are likely to support a public-sector regulatory body. The libertarian argument that the private sector can take care of food safety better than a government agency is demonstrably untrue, as they are currently living in a situation where the private sector is NOT taking care of their health. Eventually, once the government forms a regulatory body and people stop dying in large numbers due to food-borne illness, many people forget what life was like before the government got involved, and only see the costs of the regulatory agency. These people are the libertarians who will argue to everybody else that government food-regulation is oppressive and expensive, thus everybody would be better off if food safety were left up to the private market.

If society listens to these libertarians, food safety will almost-certainly become a problem again—when the public-regulatory infrastructure decays—and the government will likely have to step back in as the death toll mounts.

Why Don’t Libertarians Just Create their Own Societies in “Small-Government Paradises?

As most libertarians see the state as an oppressive and stifling force, it would make logical sense that they would flourish in areas without an existing national infrastructure and strong government establishment. Undeveloped countries in Africa, Eastern Europe and Asia—which lack a powerful government—would appear to be much better locations for libertarians then countries with more powerful governments. After all, it would be much easier for libertarians to simply move to small-government states then to force big-government states to change their entrenched policies (ex. rather than fight in American politics to reduce taxes/regulation to Somali levels, why not simply move to Somalia and save yourself the trouble).

If the libertarian economic ideology is to be believed, areas without large amounts of existing government would be the perfect places to exist as a libertarian: a lack of regulations on products would breed market competition, rather than centrally planned economic outcomes; a lack of a government-printed paper currency would give people the ability to deal in precious materials in economic activity (the gold standard); a lack of taxes on the population and producers would allow them to take home more of their profits, thus no money would be removed from the private sector by the government. In short, these “small-government” locations would seem to be a much better place for a libertarian then any “big-government” state like the USA.

Unfortunately for libertarians, these small-government areas do lack something that “big-government” countries tend to have: an existing national infrastructure. The societies in these countries have already put in the money to build the national infrastructure that allows business to function (through the “repression and theft” of taxation).

If libertarians were simply to move to small-government societies, they would have to pay for the creation of their own infrastructure (ex. private roads and railroads), and would not be able to utilize the already finished, publically-funded, infrastructure of the developed countries. In this, the libertarians are trying to have things both ways—they want to keep the infrastructure that was created by the “oppressive big-government taxation” on which to base their new libertarian paradise.

As the libertarian system cannot create the initial infrastructure necessary for a functioning society, libertarians simply cannot move to one of these “small-government” societies and develop it in their own image. Such societies don’t yet have the roads, laws, civil protections, and national defenses that make commerce stable and profitable, for the simple reason that government is too small. Without this infrastructure to support private profits, libertarianism falls apart and the private sector has no incentive to create the infrastructure in the first place (of course, once the government grows and builds the infrastructure, libertarians will happily move in, start complaining about taxation, and pushing to abolish the state).

Libertarians: You grew up in a society that had its infrastructure built up over centuries through the accumulated taxes/labor of previous generations. Your attempts to disassemble the government that made this infrastructure possible to the point where it can no longer function and then label the resulting society as libertarian is insulting to your ideology. If libertarian policies can most efficiently allocate resources and create utopic societies, then you should simply organize and prove it without having to rely on the crutch of our existing infrastructure—go to a small-government developing country, build your libertarian society and prove all of us disbelievers wrong. On the other hand, if you need to rely on our country’s existing infrastructure in order for your ideals to function properly (ex. using existing roads to get goods to stores because nobody is willing to pay for new ones), then I would ask that you take a good long look at your beliefs’ central tenants.