The thing with criticisms of libertarianism is that people fail to understand that it is a political project - a desire to break the state and rebuild a free society - not an exercise in economic choice-making. Hence this:
...if Johnson had been president in 2008, he would have allowed the U.S. financial system to collapse and the country to fall into depression. And if he became president now, he would do his best to strangle the tepid recovery we are enjoying and turn it into another severe recession.
Perhaps but the author is trapped inside and can't see the label on the jar that says "Government Jam - contains no freedom". As with other proponents of national account mathematics as a replacement for economic thinking, this author cannot see that the supposed "solutions" from the US government (and for that matter our government here in the UK) merely stir the 'Government Jam'. Voices will say that lessons have been learnt and that the banks will be controlled but is this not simply to repeat past errors?
Firstly, why is it said that banks cannot be allowed to fail? Are these institutions of state or businesses? If they are the former then why were they allowed to operate outside the direct control of the state? And, if the latter, why are the rules different from those applying to other businesses? If we believe in a free system, then businesses - including banks - must be allowed to fail. Those who argue otherwise do not support or believe in freedom and might as well just toddle off and join the Marxists.
Secondly, when did we decide that the government's job was to "run the economy"? This viewpoint now dominates economic thinking - or rather what passes for it within the corridors or power (and the organs of crypto-fascists like Bloomberg). Again, if we believe in freedom then it is mistaken to believe that government can "run the economy" without curtailing that freedom. And, moreover, the idea that something as complicated as the US economy can be "run" by anything or anybody is hubris. Yet the view that the economy is an institution as opposed to a system still corrupts our thinking:
Speaking in purely descriptive and functional terms, the distributive institutions of society are what makes any given bit of money “your money.”
The flaw in this argument is the same flaw that drives the economic policies of national and international governments and organisations - that the economy is an institution to be managed not a system to be used.
Thirdly - and finally - this entire argument echoes this famous dictum:
"All within the state, nothing outside the state, nothing against the state."
Without the state there can be no freedom. Without freedom there can be no prosperity. Therefore the state must be everything. Today this is achieved through dominating consumption through public spending and through the exercise of regulatory control rather than through the more brutal methods preferred by the man whose words are quoted above. But the object is the same - a directed, corporate state under the control of technocratic experts.
In the end libertarianism is a political project setting itself against the established institutions. And it does so because those institutions corrupt the effective operation of the free system. For sure, the proponents of state orthodoxy claim that we are not to be trusted with free enterprise, free trade and free speech (merely moderated shades of these things).
If you reject this system of the world - controlling but failed once and failing again - then you must argue either for the forcible end of free markets or for the advance of liberty. There are some - proponents of the idea that all the money is government's bounteously scattered upon the infantilised masses - who want a totalitarian state of courageous proportions.
Libertarianism is a political idea not an alternative approach to the failed economics of the establishment. If people fail to appreciate this and treat it as just another set of policy options then they are missing the point. The banks should be allowed to fail because to bail them out is an act of corruption, the protection of the wealthy from the consequences of their mistakes. Government's exist as protectors - guarantors if you will - of rights and freedoms not as managers of the economy.
I remain sceptical of this creed - it tips a little towards an anarcho-capitalism I'm sure can't work - but I'd rather take the risk of heading this way than remain in the seemingly inevitable spiral towards state control that current policies imply. I do not wish to live in a world where liberty and choice are limited by government - doled out like sweeties as a way to keep us content but removed whenever those choices or liberties threaten the institutions where power sits.
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