Liberalism’s Incoherence

The guarantee of landline telephone service at almost any address, a legal right many Americans may not even know they have, is quietly being legislated away in our U.S. state capitals.

AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as “provider of last resort.” They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services.

The new rules AT&T and Verizon drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.

Disclaimer: I don’t know if Johnston is a liberal. I do know that this opening sentence personifies quite nicely liberals’ view of rights.

The liberal dichotomy—and corresponding hypocrisy—is typified by how they desire for everyone to have everything while simultaneously condemning everyone for materialism (talk about projection!). In this case, liberals would agree with Johnston’s assertion that basic telephone service is a right. This positive view of rights implies that someone will have to provide them with the service, even if it isn’t profitable.

This view of rights extends to everything—education, health care, internet service, wages, employee benefits, etc. Everyone should have everything they want.

Unfortunately, not everyone wants the same things, and so what people do with their newly-acquired positive rights is try to get whatever they can for themselves. This behavior is individualistically rational, and entirely predictable. It also tends to promote materialism, which is often condemned by liberals.

The modern condemnation of materialism is seen in the environmental movement. Consumption is condemned, as evidenced in the condemnation of burning fossil fuels, which is an essential source of energy, particularly in regards to the propulsion of automobiles. The solution to our current environmental problems is to burn less fuel in particular by driving less.

Interestingly, one reason why we drive so much is because it is cheaper to live in areas that are not as population-dense, thanks in no small part to federal subsidies. One contributing federal subsidy is that of mandated telephone service (seriously, how many people would live in the country if there were no communication infrastructure?). There are other subsidies besides this, like FDR’s programs to bring electricity to rural areas, or other programs to bring urban levels of infrastructure to rural areas.

And so, this is liberalism’s incoherence in a nutshell. First they demand all sorts of subsidies for everyone (like with phone service), then they get upset at people being wasteful. Solving the first “problem” begets the latter problem and also its solution. Ironically, they’d have what they wanted if they simply left everything alone. Of course, I’m assuming that they want a specific outcome, and not merely the power to control other people’s lives.

Can Progress be Attributed to Exchange and Specialization?

Somewhere in Africa more than 100,000 years ago, a phenomenon new to the planet was born. A Species began to add to its habits, generation by generation, without (much) changing its genes. What made this possible was exchange, the swapping of things and services between individuals. That gave the Species an external, collective intelligence far greater than anything it could hold in its admittedly capricious brain. Two individuals could each have two tools or two ideas while each knowing how to make only one. … In this way, exchange encouraged specialization, which further increased the number of different habits the Species could have, while shrinking the number of things that each individual knew how to make. Consumption could grow more diversified, while production grew more specialized (Matt Ridley, ‘The Rational Optimist’, 2010: 350).

The Rational Optimist: How Prosperity Evolves
Ridley’s bold claim is that human progress can be explained mainly in terms of exchange and specialization. Eric Jones, a scholar who has written extensively on the history of human progress, considers that Ridley makes the case very well, based ‘on the few knowns of early pre-history’. Jones also considers that Ridley gets the story of the industrial revolution ‘mostly right’ (Review in ‘Policy’, Spring 2010, 26 (3)).

The weight that we can place on exchange and specialization as explanations of human progress depends importantly on the extent to which advance of knowledge and innovation can be attributed to exchange and specialization. It is possible to go some distance in explaining technological progress as a consequence of specialization. As Bill Easterly points out in his NYT review, however, many breakthroughs come from creative outsiders who combine technologies generated by different specialties.

Ridley mentions that government actions of various kinds in different countries have often inhibited innovation, particularly the introduction of new products and new ways of doing things that threaten the survival of established patterns of production. The implication is that freedom is a necessary condition for progress comes through clearly in Ridley’s recent contribution to Cato Unbound:

‘I am saying that there have always been liberals, who want to be free to trade in ideas as well as things, and there have always been predators, who want to extract rents by force if necessary. The grand theme of history is how the crushing dominance of the latter has repeatedly stifled the former. As Joel Mokyr puts it: “Prosperity and success led to the emergence of predators and parasites in various forms and guises who eventually slaughtered the geese that laid the golden eggs”. The wonder of the last 200 years is not the outbreak of liberalism, but the fact that it has so far fought off the rent-seeking predators by the skin of its teeth: the continuing triumph of the Bourgeoisie’ (p. 252).

I can’t help thinking that this sounds more like rational pessimism than rational optimism. According to Ridley, the industrial revolution is largely a story about coal – and progress since then has been possible mainly because of abundant cheap energy from fossil fuels. He notes that his optimism wobbles when he looks at the politics of carbon emissions reduction and the potential this has to load economies with further rules, restrictions, subsidies, distortions and corruption (p. 347).

Cartoon by Nicholson from “The Australian” newspaper:

The optimistic note on which Ridley ends his book comes from his view that innovation is such an evolutionary, bottom-up phenomenon that it will continue as long as exchange and specialization are allowed to thrive somewhere in the world.

In the end, it would seem that the gains from innovation, exchange and specialization all depend on liberty – liberty is the key to human progress.

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