The Meaning of Libertarian Individualism

            One commonly employed cheap shot often directed at libertarians that supposedly goes a long way towards instantly refuting all of libertarian thought is to claim that libertarianism rests on the assumption that individuals are like isolated atoms, just pursuing their own interests, not influencing or being influenced by anyone else and not participating in social organizations. One gets the sense that people who make such claims have never actually read anything by a libertarian thinker or free-market economist. If they had, they would realize that the vast societal system of exchanges and market prices, as well as the division of labor which they enable and coordinate, are eminently social phenomena that are central to libertarian thought and free-market economics.

            

           Given this popular confusion over what libertarian individualism means, in this post I will discuss three important manifestations of libertarian individualism and show why they in no way assume or imply anything about ‘isolated atomic individuals’.

1. Methodological Individualism:

            Methodological individualism is a key tenet of libertarian thought. It is by no means unique to libertarianism; many other schools of thought adhere to it as well. Methodological individualism consists of a belief in the simple statement that it is only individuals who are capable of thinking, feeling, and acting, only they can have desires and only they can attempt to find and employ suitable means to attain those desires. Individuals can join together and interact with other individuals for certain purposes, forming a society, but this society or any of its subsets (such as nation, race, class, or family) is not capable of having desires of its own or choosing means to pursue them. It is simply not the case that society or one of its subsets has certain desires, and then splits itself off into hive-minded individuals whose purposes are to attain those desires for ‘society’.

            

           It should be clear that methodological individualism in no sense implies a belief in ‘atomic individuals’. It recognizes that individuals can sometimes, individually, decide to put the perceived interests of a collective (such as their family or country) above their own narrowly-defined individual interests. But it is always the individuals who are deciding that advancing the perceived interests of a collective is their desire, and it is always the individuals who are deciding upon and employing means to advance this desire. A collective is incapable of doing these things, because at the end of the day it is just a conglomeration of individuals. The clearest proof of this is the phenomena of immigration, where a person decides or is forced by circumstances to leave one national collective and join another one. How can collectives, who cannot think, feel, decide, or act, possibly be a good basic unit of social analysis when individuals have the power to leave them whenever they so choose?

2. Not much emphasis on any satisfaction that could be derived from contemplating abstract characteristics of collectives:

            This aspect of libertarian individualism is not methodological, but partly normative and partly based on psychological estimation. Most libertarians do not think that much personal satisfaction can be derived from contemplating abstract characteristics of collectives, separated from any individual goods which these characteristics might be associated with. For example, most libertarians would not agree with the statement: ‘I know that our country has enough military capacity to defend itself against threats, but I derive great satisfaction from knowing that my country is really strong militarily, hence I think that more taxation in order to provide more tanks, fighter planes, and atomic bombs is justified’. Or with the statement: ‘I accept that socialized health care will result in a general decline in living standards due to the extra taxation, a decline in the quality and quantity of available medical care, and relative allocational chaos in its distribution, nevertheless, I derive great satisfaction from knowing that my country is a ‘caring’ one, hence I think that socialized health care should be implemented”.

            

           In these two statements, the individual is, unrealistically, admitting that his proposed political measures are harmful to his and other people’s other interests, but that the satisfaction derived from contemplating an abstract collective characteristic such as a country being ‘strong’ or ‘caring’ trumps these negative effects. This statement construction allows us to isolate the abstract ‘collective good’ from considerations of general material prosperity for individuals.

Most libertarians would hold, normatively, that they do not derive satisfaction from contemplating such abstract collective characteristics and would estimate psychologically that most people don’t actually desire much satisfaction from such things either. Most people probably don’t derive that much satisfaction from contemplating abstract collective characteristics, but support policies that libertarians oppose because they disagree with the libertarian analysis of the effects of the policies. Thus, most supporters of beefing up the military probably think that more defense is actually needed or that military spending by government will boost the economy in some way, and underestimate the damage caused by taxation, inflation, and budget deficits. Similarly, most supporters of socialized health care probably think that it is a more effective way of distributing health care to citizens of a country than free-market health care, and also underestimate the damage caused by taxation, inflation, and budget deficits.

This aspect of libertarian individualism is partly normative because it is certainly possible for people to gain great personal satisfaction from contemplating abstract perceived characteristics of the collectives they belong to, and to support political measures based on that subjective evaluation. Most libertarians would not derive any satisfaction from such things though, and estimate that the vast majority of people would not either, and hence do not really factor it into their policy analyses. Whether you agree with this assessment or not, holding this opinion in no way constitutes an assumption of ‘atomic individualism’.

3. Opposition to coercive collectives:

            Another charge commonly levied against libertarians, related to the charge of ‘atomic individualism’, is that libertarians fail to realize that certain big projects or achievements can only be accomplished by ‘a nation’ (a political collective whose governing body has coercive powers considered legitimate), not by individuals. It is said that only ‘a nation’ could have built the Hoover Dam, could have sent a man to the moon, could have invented and developed the atomic bomb, etc… An observer unacquainted with the facts, armed with this theory, could just have easily maintained that only ‘a nation’ could develop the retailing juggernaut with giant superstores and distribution centres located throughout the world that is the contemporary Wal-Mart. However, he would be mistaken, for in fact Wal-Mart was built by individuals voluntarily joining together to pursue a common purpose.

            

            Thus, it is not big projects that only ‘a nation’ can tackle; it’s hard to get bigger than Wal-Mart. However, the theory of public goods and economic externalities does provide a rationale for why certain beneficial projects may not be undertaken through voluntary cooperation. I discuss this theory, and what it does and does not imply, in this post: http://thinkingabouthumansociety.blogspot.ca/2013/03/economic-externalities-raison-detre-for.html   

           

           For now, suffice it to note that it is conceivable that certain beneficial projects might not be undertaken through voluntary individual cooperation because a lot of their benefits take the form of positive externalities, benefits that accrue to other people not involved in the project for which the people involved in the project are not remunerated monetarily for. Most economic goods involve some positive externalities, but it is theoretically conceivable that economic goods which involve a significant amount of positive externalities will either not be produced or not produced in ‘optimal quantities’ through voluntary interaction. The main problem with the theory is that it is impossible to measure the existence or extent of positive externalities in an even marginally reliable fashion, and that the common proposed solution, provision of the good through government coercion, involves a host of other problems and may not even solve the externalities problem in the first place.

            

           The libertarian response to the issue is generally to try and find innovative free-market solutions to ‘internalize the externalities’ and point out historical occasions where so-called ‘public goods’ exhibiting potentially significant positive externalities have been provided voluntarily. Railroads (James Hill’s Great Northern Railway: http://en.wikipedia.org/wiki/Great_Northern_Railway_(U.S.)), roads (turnpikes in early American history: http://www.uctc.net/research/papers/018.pdf), and municipal infrastructure (St Louis Private Places: http://en.wikipedia.org/wiki/Private_place), all classic examples of goods with potentially significant positive externalities, have in the past been provided effectively through voluntary individual associations.

            

            Through these examples, we see that what libertarians oppose is not individuals joining together for some kind of collective action per se. Rather, libertarians tend to oppose collectives that are established and maintained coercively, rather than through voluntary agreement (unless you are a minarchist libertarian such as myself, in which case it is permissible for the basic political society providing law and order and defense against aggression to be maintained through coercion). Even if the purpose of the coercively established and maintained collective is to ‘solve an externalities problem’, this does not reduce the general negative effects of coercive actions, and thus libertarians try to find ways to solve any externalities problems through voluntary, free-market arrangements.

            

              Recognizing the serious negative effects of extensive social arrangements based on coercion and not accepting the positive externalities argument as a trump card justification for coercive arrangements characterizes this aspect of libertarian individualism. It by no means implies a rejection of the beneficial nature of (voluntary) collective action nor a belief in ‘atomic individualism’.