The Libertarian Impulse

Agreeing to take Rand Paul "at his word that he's not a racist," Salon's Joan Walsh on Thursday followed her post of Wednesday by reasoning

I'm coming to regret using the term "racist" about the Tea Party. "Racist" is a personal insult, and it's almost as impossible to prove it as to disprove it. It's not a terribly illuminating term, either: If you call me a racist, you haven't really described anything I've done that's objectionable. You've just somehow designated me, and my so-far unchallenged arguments, outside the pale, so to speak.

"Racist" has come to be synonymous with a belief in black inferiority, and with holding other noxious stereotypes about black people, or other minorities. Someone could conceivably not be "racist" in that sense, and still hold political views that will ultimately perpetuate the second-class citizenship of people who aren't white; in most cases, African-Americans. I think they could. I accept that it's possible.

That's well stated and insightful as far as it goes. Rand's libertarian political views would not "ultimately perpetuate the second-class citizenship of people who aren't white." It would perpetuate the third-class (if that's semantically possible) citizenship of non-whites and the second-class citizenship of most of the rest of us.

And to an extent, they already have, given the deregulation of the financial industry by Presidents Reagan, Clinton, and Bush 43 (curiously, all elected to second terms). Salon film critic Andrew O'Hehir writes of a film he has seen at the Cannes Film Festival:

Charles Ferguson is here to tell the world that the crisis that wiped out trillions of dollars in wealth, threw millions of people out of their homes and out of work, and further widened the gulf between rich and poor was no accident. It was a crime. Ferguson, a former software entrepreneur and policy-wonk scholar turned filmmaker, is definitely no left-wing bomb-thrower or closet Marxist. But he plays one in the movies, you might say. His new documentary, "Inside Job" -- arguably the smash hit of Cannes so far -- offers a lucid and devastating history of how the crash happened, who caused it and how they got away with it.

Furthermore, Ferguson argues, if we don't stop those people -- preferably by removing them from power, arresting them and sending them to prison -- they will certainly do it again. "Inside Job" is as elegant, penetrating and well researched as Ferguson's Iraq war film, "No End in Sight," but it's a hell of a lot angrier. To the discomfiture of some antiwar viewers, Ferguson struck a nuanced position on the war itself: It might have been a reasonable idea, in theory, and might have worked out if it hadn't been managed by a coalition of ideologues, incompetents and idiots.

This story is quite different. There was nothing reasonable or decent or redeemable about the world of high finance, in Ferguson's judgment, by the time the 21st-century bubble reached its peak around 2006. As he illustrates with a damning parade of interviews, images and public testimony, the financial industry had ridden 20-plus years of manic free-market deregulation and neoliberal fiscal policy from one crisis to the next, surfing a rising tide of greed and corruption. (There are several people in this movie, prominent among them former George W. Bush advisor Glenn Hubbard and Harvard economics chairman John Y. Campbell, who will rue the day they agreed to talk to Ferguson.)

This "manic free-market deregulation and neoliberal fiscal policy," though arguably resulting as much from the greed of politicians eager for money from the industry as much as ideological conviction, is really only a variant of libertarianism. As Gabriel Winant notes in a devastating take at the same site (it's Salon day here), "Libertarians like Paul are walking around with the idea that the world could just snap back to a naturally-occurring benign order if the government stopped interfering."

We went that route the past few decades and have seen the result- in coal mining, off-shore oil drilling, and most of all, in the financial services industry. For racial equality, the impact has been- or was- similarly depraved, as Winant notes in a concise explanation of libertarianism:

Libertarians like Paul are walking around with the idea that the world could just snap back to a naturally-occurring benign order if the government stopped interfering. As Paul implied, good people wouldn't shop at the racist stores, so there wouldn't be any.

How has that worked out with the banks, six of them now in control of 63% of the nation's GDP? In an interview O'Hehir conducted with filmmaker Ferguson, the latter recounted an explanation given him by former New York Attorney General Elliot Spitzer of the difference between two industries:

Look, high technology is an industry where you create money by doing something different. In contrast, finance is really kind of zero-sum. It's a trading game, it's a gambling game. There's a relatively fixed pool of money, but there's a lot of money and the way you make more, as a banker, is by making sure that someone else makes less. It's really hard to keep that industry ethical without appropriate legal and regulatory controls. If Intel made microprocessors that blew up the computers they're in, Intel would go out of business. The same is not true for financial services. It was a very sobering moment, actually.

It is, obviously, in the financial industry that the impact of a libertarian governing ethos has had its greatest impact on American society. Spitzer points out that most money in finance is made when "someone else makes less." Allowing human nature to take its course, as Paul's philosophy would have us do, is naive, foolish and as Winant more elegantly explains (and Joan Walsh would understand)

that's why the best rap on libertarians isn't that they're racist, or selfish. (Though some of them are those things, and their beliefs encourage both bad behaviors, even if accidentally.) It's that they're thoroughly out of touch with reality.

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Correction: (May 29, 2010): The link to a "devastating take" should have been not to Joan Walsh's item, but to Gabriel Winant's piece, "The lesson of Rand Paul: libertarianism is juvenile."