Cato’s executive VP has a post up noting the frustrating frequency with which one encounters the view that markets and free trade are good and desirable except for this or that special case—often some pet project or regulation that benefits the person making the exception—and defends holding fast to “dogmatic” principle, lest all these exceptions swallow the rule.
I’m certainly in sympathy with the general Hayekian point here. The case for markets generally turns on the way they facilitate the economic discovery process: If you look at a snapshot of any given market, it’s going to often—beguilingly often—appear that a little judicious regulation could improve matters, because the market’s chief virtue is the way it harnesses information we (and regulators) don’t and can’t have access to. (What’s the harm in banning exploration, when you’ve already mapped the known world?) So I agree we ought to be extremely wary of such interventions, as there are good reasons to think that we will systematically underestimate the costs of fettering markets, and maintain a strong presumption against intervention in all but the most clear-cut cases. If there’s a class of interventions that will usually do harm, but in a few instances genuinely help, it may be best to just abstain across the board and forgo those potential benefits if we’re not very certain of our ability to accurately distinguish between them.
But… I am a little uneasy with the way DB decides to frame the point:
One of the values of a political philosophy–sometimes dismissed as “ideology” or “dogma”–is that it gives us a rule, a set of principles, for deciding such questions.
Because, of course, the question remains: which set of principles? Libertarian principles have their own built-in exceptions too, after all. People should be allowed to do as they please but for when they harm others. It’s wrong to use coercive force except in self-defense. Free speech is sacrosanct unless it’s fraudulent (and in a few other well-defined cases). Most goods are best provided by private enterprise, but some public goods (typically at least national defense and the legal framework that constitutes the market itself) are the responsibility of government. Other libertarians (Richard Epstein, I think, though as I recall not DB last time we argued the point) might add: Business contracts should not be regulated except as necessary to prevent monopolistic collusion. Each of these, moreover, contains an empirical “gap,” for it may not always be obvious (say) which kinds of actions “harm others” in the relevant sense.
We can adduce general reasons for adopting general principles creating a presumption of non-intervention, but it remains an open question which sorts of exceptions are embedded in those general principles, or how strong the presumption they create ought to be. The precise contours of “the whole libertarian system” cannot be fixed by reference to what scholar X thought in year Y—or what David Boaz thought last week—because either the internal logic of the system itself or new empirical findings may yield new “exceptions” or undermine the justification for others previously held necessary. (We can stipulate some fixed definition of “the libertarian system” of course, but can’t foreclose the possibility that some very similar but distinct set of principles—the schmibertarian system, say—will be more defensible.) If we accept the argument for caution on this front, it is still nevertheless an argument subject to narrowing or broadening in the face of new arguments. And if it’s the case that some general principle governing interventions will do better than a series of ad hoc judgments, whatever reasons we have for thinking so may yet have to contend with similar reasons for thinking that an alternative, if perhaps closely related, general principle, embedding a different set of exceptions, will do better still.