Tuesday, August 6, 2013

The real challenge of Libertarian populism

According to Wikipedia, the night-watchman state (a foundation of Libertarianism) is defined as:

A night-watchman state, or a minimal state, is variously defined by sources. In the strictest sense, it is a form of government in political philosophy where the state's only legitimate function is the protection of individuals from assault, theft, breach of contract, and fraud, and the only legitimate governmental institutions are the military, police, and courts.

The bolding was added by me.

I think the real challenge of Libertarianism is not issues like Libertarian populism but rather the requirement that a Libertarian state protect against fraud.  I think that this is a more important the weaker that government gets, the more critical each function becomes.  Yet modern corporations are increasingly being allowed to get away with Fraud (and with changing of contracts).  These are huge problems because if you are going to enforce contracts against the politically weak, you also need to enforce them against the politically strong or you really do get feudalism. 

Trials like that of the S&P ratings schemes (where they argued ratings were puffery) are critical because it may be the case that a reasonable person might well think that misrepresentation was a form of fraud.  Saying that "lies=marketing" seems to be a rather obvious attempt to evade the antifraud portion of the states function. 

In the same sense, changing the rules under which a corporation operates can be an extremely dodgy move.  Changing the rules can be okay, but the optics are terrible when a major corporation shifts the rules when an initial attempt to do something fails.  It doesn't matter that the main victim is Carl Icahn. who is hardly at risk of poverty. 

To me, this is really the central issue of the modern Libertarian approach.  It isn't impossible that you could have a Libertarian populism, but I think the backbone of this approach would have to be that the same rules apply to everyone (even if they have a lot of money). 

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