Quora Answer: Why are Liberals not Libertarians

This was originally an answer I made to a Quora question, but it’s well worth sharing

Here is the original link:


My answer


The left does agree with libertarians on social views, but not so much on economic views.

I will answer this for Americans, since there are many more US Libertarians than anyone else. This is a long answer, but it’s hard to get the point across succinctly.

From the left’s point of view, Libertarian societies would lack the falling items:

No means of addressing large scale projects

By that I am referring to large scale projects that require large amounts of long-term investment, where profit is not always assured.

  • The Manhattan Project
  • The Space Race
  • You could make a case that a lot of blue skies research, such as nuclear fusion would be a big issue
  • The US Interstate project
  • China’s High Speed Rail project could be considered one, and although it is “private” the Japanese Shinkansen could be too (it is heavily government controlled still in Japan despite the breakup of JR).

The private sector will invest in expensive projects that do turn a profit (and example is a semiconductor fab), but often even then requires government subsidies to do so.

If something big like nuclear fusion ever happens, it will be after many billions of dollars in government spending.

The free market is less efficient at government at many issues

An example is healthcare.

Link between health spending and life expectancy: US is an outlier

The article notes that high administrative costs are heavily responsible. That means that the system of HMOs and independent hospitals is less efficient than say, the UK”s NHS where everything is centralized.

In the case of healthcare, let’s assume that there is an influenza pandemic. We have a low income restaurant worker who has fallen ill.

  1. They are living at the economic margins and cannot afford to take a day off. This is a good argument for a decent minimum wage.
  2. These jobs often do not have paid sick days. (Good argument for that).
  3. Labor laws are weak and can allow for people to be terminated for pretty much anything. (Good argument for making it moderately hard to terminate – perhaps not as hard as Southern Europe, but there should be some worker protections).
  4. Even if they lost their job, there are few/no unemployment benefits.
  5. Even if the person could go rest, they could not afford to see a doctor (hence why universal healthcare is a good idea).

What would happen? Such a person might simply go to work, try to conceal their symptoms in the hopes that they don’t lose their job, and spread their disease. This could infect their colleagues and patrons of that business. By contrast in a universal healthcare system, such a person would quickly see the doctor, be confirmed ill, and put into quarantine (which the Libertarians would not be willing to pay taxes to support, seeing it as bureaucratic waste). Even absent a pandemic, you can quickly see how this would be an issue even for seasonal flu.

In the case of employment law, keep in mind that the employer inevitably has more bargaining power. That’s a good argument for employee laws. This is not a contract between two equally powerful parties.

Another example may be natural monopolies. Imagine for example if the libertarian ideal of outsourcing everything to private companies were true. Roads and highways would be private.

First, there would need to be standardization of road signs, road width, traffic control, etc. That would take a big coordination problem. Second, what about billing? Look again at healthcare. One of the reasons why healthcare in the US costs more is due to the administrative costs. It is not efficient for people to wait in physical toll booths. Even electronic ones would cost a lot of money and add administrative overhead. Third, roads would only be built where they were assured to run a profit, leaving less dense and less wealthy neighborhoods to rot.

No solutions for addressing services

Issues such as transportation need to be run at a loss for the good of society. It’s no secret that the UK’s railway privatization has not led to the promised innovation. Costs rose dramatically for customers and often employees were not paid as well. Service was not as good as compared to the nations that kept their railways government controlled. The UK has fallen behind nations such as France in developing high speed rail.

Labor participation rates would be higher with services such as good quality subsidized childcare for women (more women would enter the labor force), and other services.

Typically after a disaster, people ask “Where’s the government?!” Notice that they do not ask, where’s my private insurance assessor. The government is the organization that provides immediate emergency debt relief.

If the private sector does not have the opportunity to gain profit, they simply will not do many services. A large part of the rebuilding after a disaster too would be done by government or simply won’t happen.

In the case of a private fire department, we are going to be seeing things like this:

Firefighters let home burn over $75 fee — again

What would happen if the winds caused a fire to spread? Even those who did pay who lived nearby might see their homes burn down. What about people who are economically disadvantaged? They might not be able to afford the most ‘fire safe’ of residences.

A dramatic example might be the military. Imagine if we privatized that. That would turn ugly very quickly. Hello 21st century equal of the Roman Praetorian Guard? This would mean that the state has lost its monopoly on military power. Such a mercenary force would quickly sell itself out to the highest bidder.

No solutions for addressing collective action failures and externalities

I have noticed that amongst Libertarians, there is a very vocal desire to deny global warming. The reason is because global warming requires a large scale collective solution from all nations across the globe.

Such a thing requires a strong government, regulations, investments into green energy that might not turn a profit in the short run (notice that it is only after decades that solar panels are falling in price), and so on.

See here:

How would a libertarian/classic liberal deal with the problem of global warming?

Note the complete lack of real solutions that might solve the problem that would be an antithesis to the libertarian ideal.

There are no solutions for externalities. Air pollution, water pollution, noise pollution, traffic, etc are a problem.

No solutions for collective action failure

Collective action failure is defined as something that is good for an individual in a short term to do, but something that is a disaster for society.

An example is overfishing. Overfishing would quickly lead to a collapse of fisheries. Preventing this would require strict regulation from a state and perhaps even an international (many fishing grounds are between many states) authority.

Problems such as soil management, forestry management, natural resource depletion, etc would all be very serious. We would quickly see many Tragedy of the Commons. My criticism of society is that government errs little on regulating in some cases.

No solutions for economic rent seeking

It’s inevitable that some industries will become monopolies. Many of these monopolies may have very high barriers to entry (Ex: capital costs, industry trade secrets, supply chain, etc).

They can simply seek rent by providing less than optimal service and charging high rates. The obvious solution would be for the state to impose anti-trust.

The Libertarian ideal is to let it happen, arguing that it is natural or that the state somehow created them (sometimes true, but the state needs to act in the public interest).

How do libertarian economies deal with the possibility of monopolies?

Libertarians are opposed to have 2 companies compete. Even duopolies can often lead to intense low margin competition (ex: Airbus vs Boeing).

Recognize that entrepreneurship alone has its limits

It is true that entrepreneurship can lead to great ideas … sometimes. The reality is that most small businesses fail. What happens then?

Strong welfare states lead to more entrepreneurship:

A Strong Welfare State Produces More Entrepreneurs

This is the exact opposite of what libertarians would argue.

Ironically entrepreneurship is in decline in the US.

American Entrepreneurship Is Actually Vanishing. Here’s Why

The article notes that it is a combination of “big guys” (which libertarians would oppose the use of anti-trust to break up), and high student debt (caused by universities getting less funding due to lower taxes). The article notes that getting funding outside of the technology industry is difficult and that angel investors are more risk averse than in the past.

The big irony is that some of the left’s proposals would actually lead to more entrepreneurship.

What about in the developing world? First, there’s far less money for research on blue skies innovation in a libertarian or developing society. I think it would be fair to call many companies not so much innovators, but systems integrators. Their main innovation was taking what was developed with public money, further refining it, and then selling it in a way that is user friendly. Perhaps the most visible example might be Apple, but there are many others. A lot of technologies were developed on the public money.

Second, although lack of regulations in some cases can lead to entrepreneurship, it has its own costs. An example, lack of food safety regulations in the developing world. There are guides out to talking about how to eat street food in the developing world without getting ill:

How to Eat Street Food Without Getting Sick – Legal Nomads


Seeing as Libertarians would oppose such regulations, the only thing that I could see is the reputation of the business preventing this from happening. The problem is, as a tourist, or someone new to an area, how am I supposed to know whose business is abiding by food safety laws?

In a developed nation, I know that there are regular health inspectors which would quickly close a business down if they were using methods likely to cause illness.

Libertarianism would lead to the creation of an aristocracy

A big part of libertarianism is the idea that taxation is theft.

The problem is that apart from funding the services I’ve discussed above, it also has the effect of preventing concentration of wealth.

A person born to a wealthy family has a ton of advantages. Their inherited wealth, their family network connections, and the fact that they do not have to worry about coming up with the funds to survive. They can use that money to go to the best schools, get good jobs after graduation, and very quickly the wealth would concentrate.

Ironically the wealthy themselves are not necessarily happier:

Secret Fears of the Super-Rich

Steeply progressive taxes and progressive inheritance taxes are a mitigating factor. The reason is that across many generations, wealth would concentrate. It currently is concentrating due to too low taxes on the wealthy.

The other is that high taxes can be applied against rent seeking, which would lead to a disincentive to encourage such activities.

Inequality is a huge social problem

To the libertarian, inequality is not a problem, perhaps even a social good. The reason is libertarians argue it makes people work to get on top.

The problem I see is that unequal societies have many problems:

It seems egalitarianism itself may be a social good. There is a book, The Spirit Level, which discusses this in greater detail.

Libertarianism can lead to perverse incentives

An example is the private prison industry:

Private Prisons: Change in Policy and Practice

One of the most perverse incentives in a privately run prison system is that the more prisoners a company houses, the more it gets paid. This leads to a conflict of interest on the part of privately run prisons where they, in theory, are incentivized to not rehabilitate prisoners. If private prisons worked to reduce the number of repeat offenders, they would be in effect reducing the supply of profit-producing inmates.

In a libertarian system, there would not be laws against corruption, etc. Libertarians would prefer that the prison system be privatized, as opposed to a public system (which they criticize as bureaucratic and inefficient).

Ironically the Nordic social democracies have low rates of recidivism:

Why Norway’s prison system is so successful

Norway’s Recidivism Rate one of Lowest in the World

Why Scandinavian Prisons Are Superior

The Danish Prison System

Actually, as discussed above, lower inequality would lead to lower rates of crime to begin with, so you won’t need as many prisoners in the first place. The Nordic nations though are the opposite of the Libertarian ideal. Strong states, high taxes, and egalitarian, at least compared to the Libertarian ideal (the Nordic nations themselves argue that their system is just a more efficient version of capitalism).

Now there are parts I agree with. I agree with the Libertarians on legalizing drugs.

There does seem to be debate on crime:

In the limited government of a Libertarian society, how is punishment for crimes handled?

The question is, what would happen to a poor person? They would not be able to afford restitution. Would they be forced into slavery? Would they be locked up? Would Libertarians even be willing to pay the government taxes for a prison system or the private company one?

Property rights and individualism can sometimes be too strong

One of the biggest parts of Japanese society is that the individual is subordinate to the collective good. Many European societies do believe this as well.

By contrast, to a libertarian, property rights are sacrosanct. That is not an exaggeration, by the way.

This can lead to problems, such as NIMBYs for large scale projects. High speed rail I think will be much more difficult in the US partly because of NIMBYism.

Now to be sure, very weak property rights (like in say, Zimbabwe) can lead to problems too, but right now too strong can be an issue too.

I think that a Goldilocks approach is probably the best:

How Intellectual Property Can Help or Hinder Innovation

A big problem is that there are times that people need to sacrifice for the collective good. War comes to mind, but even in civilian life that’s the case. Now to be sure, I think that there should be fair compensation for those who sacrifice in many cases, but there are times when it needs to happen.

Our society is also richer too by altruism. Ayn Rand viewed altruism with contempt. In their senior years, many senior citizens chose to use their spare time to volunteer.

Sense of meaning and purpose in life linked to longer lifespan

That may lead to a longer life expectancy.

Creation of an industrial policy

Libertarianism is ideologically opposed to that idea, preferring that a central government be dismantled as best as possible.

Yet despite that:

  • A strong state was very important for each of the nations that fought WW2 and played a key role in ending the Great Depression
  • Strong states can lead to stimulus, which leads to aggregate demand
  • After the war, the use of an industrial policy is what largely propelled the East Asians and European nations to recovery

I would argue one of the reasons why the East Asians managed to gain so much manufacturing is because the government “picked winners and losers”.

A great deal of infrastructure we see, semiconductors, aircraft, the Interstate Highway in the US, railways, etc are all “picked”. True, some of these were invented by the private sector, but often with public sector money and the scaling up is done with public money too.

That could not happen with Libertarianism.

Actually the neoliberal Anglo economies have lost their critical manufacturing sectors increasingly to the East Asians. That’s due heavily to a focus on short-term profits. The East Asians maintain an industrial policy. That’s the opposite of what we would expect if the Libertarians were correct – the interventionalist mixed economies should lose badly to the efficient private sectors. Instead the state owned nations invest far more in R&D, capital investments, worker training, and outright subsidize their industries, while keeping a weak currency to develop exports.


There are a great many reasons to reject libertarianism I am afraid, from the left’s point of view. I am not saying that government is perfect. Far from it. It is more that it is the lesser evil. Instead we should focus heavily on building a mixed economy and as for the libertarian criticisms, making government better (Ex: strong anti-corruption laws).

Libertarianism would lead to a Social Darwinist dystopia, rather than Ayn Rand’s dream of an efficient society. It’s been joked that Libertarians should move to Somalia, which Libertarians complain is a straw man – actually that’s probably what will happen if the military and police are privatized. They will turn into mercenaries then gangs. I was not exaggerating when I noted that it would look like the Roman Praetorian Guard.

If you look today at who has the top living standards, usually it is a battle between the Nordic Social Democracies. Some of the other nations, such as the Netherlands, Switzerland, etc, do well. Amongst the Anglo nations, Canada and Australia do well, and both are more egalitarian than American society. They are often derided by conservatives as “socialist”, an exaggeration – I’d argue they are leaning Social Democrat, but mostly capitalist.

I think that one of the reasons why the East Asian nations (Japan, South Korea, Singapore, and if you consider it a nation, Taiwan) recovered so quickly from WW2 and the Korea War was because they were practical. They did not get caught up in the USSR’s command economy or cult of personality (unlike North Korea), but they also did not go the opposite route. China is now following that. They have a highly interventionalist economies (notice the prominence of State Owned Enterprises in the Chinese economy) and are pragmatists. Many of the top industries in the world are State Owned or heavily backed by the state, like Singapore Airlines. Ironically its challenger Emirates Airlines is also State Owned.

Maybe we have something to learn from the Nordic Social Democracies and the East Asian nations like Japan. Likewise, they would be well advised to keep their egalitarian models (I’ve noticed they are moving up in Gini co-efficient).

Given these issues, I think that Libertarianism is at odds with the type of society that I would prefer to live in.

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