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Orders and Organizations

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What’s the single biggest way that collectivists misunderstand or misinterpret free-market liberals (such as Russ and myself)? The answer, I bet, is the failure to understand that opposition by free-market liberals to government action does not mean that we free-market liberals oppose all of the goals of the well-meaning proponents of government action.

More generally, it seems difficult for some people to grasp the fact that society and government are not identical — or, more precisely, to grasp the fact that civil society can and does often thrive outside of government influence and, indeed, very often (I would say most often) in spite of such influence.

A friend of mine who is a thoughtful and very intelligent man of the left asked me by e-mail — in response to this post [2] at the Cafe —

But don’t libertarians, or at least some of them, see themselves as part of a movement? I admit that I’ve always thought that was something of a paradox. But maybe even libertarians can’t free themselves from human nature, so much of which evolved, as you point out, when humans, and our ancestors, hunted and gathered in packs.  But, for that matter, isn’t much productive economic activity carried out collectively by corporate groups?

Good questions. Here’s my response:

There is a libertarian intellectual movement, of course.  And I admit that I feel deep gratification whenever I reflect that in some small way I work within a tradition enriched, and more or less consciously embraced, by people such as Adam Smith, Frederic Bastiat, Mencken, Hayek, Milton Friedman, Jim Buchanan, and Vernon [Smith].

There is also a libertarian political movement, but it is notoriously undisciplined. (I’ve gone to a total of two Libertarian-party gatherings. The first was in 1979 in New Orleans — dull. The second was in 1980 in NYC. At this latter event, the Libertarians decided very ostentatiously to support the Man-Boy Love Association. I thought this a bit much.)

I suppose that it is somewhat ironic that the classical-liberal and libertarian movement (perhaps a better word is “tradition”) does prominently deny the myth that there’s salvation in the political collective. More specifically, this tradition denies three myths that many people still doggedly believe: (1) that useful social and economic orders only result from of a conscious plan and effort — or can invariably be improved by such conscious planning and effort; (2) that the nation is economically and morally special – that each of us has a special connection (and should have a special connection) with each and every one of our fellow citizens that we don’t have with citizens of other countries; and (3) that personal pursuit of material gain is suspect or, at least, contemptible — that it’s always better to aim for “higher” purposes — to sacrifice ourselves for others or for some cause that is “larger” than the individual.

About your point regarding private firms: it’s true that nearly all private, productive economic activity takes place in organizations consisting of some, often very many, people. It’s true also that people often feel loyalty to the organizations they work for or or are otherwise closely associated with. But the motivating force of such organizations in a market economy isn’t chiefly these small-scale collective purposes (any one of which is often at odds with the collective purpose of some other organization). The motivating force is individual profit. And, importantly, people are usually aware of this fact, and so they’re not duped into sacrificing themselves for others. Gains from trade, rather than commitment to a nebulous higher cause, is the chief motive.

One of the important influences on my thinking about this broad topic is a 1962 essay by Hayek called “Two Kinds of Order.” If you ever run across this essay, I do recommend it.

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