Wednesday, June 03, 2015

Libertarians in Action

Libertarianism covers many movements according to Wikipedia, but what I mean by this term is what Wikipedia defines as anarcho-capitalism: the political theory that all problems of human society are best resolved by market forces. So they want nothing more than to abolish the state and leave the market to take care of everything: from schools to health care and from defense and police to the justice system. These ideas originate from the group of economists known as Austrian School, like Mises and Hayek. The Austrian School had important contributions to the development of economics, refuting the marxist theory that was very popular in Europe at that time. For example they developed the subjective theory of value opposed to the labour theory of value proposed by Marx. They also predicted that implementing Marx's ideas will lead people to misery and dictatorship, but few people listened to them. We had to learn it the hard way, after 50 years of communism. However, libertarians took these ideas to the other extreme, idealizing the market forces in every aspect of our life. This is even more bizarre to me since even Hayek, the most recognized economist of this school, acknowledged in his works that there are situations of market failures, or other motives like moral grounds which legitimate the existence and intervention of the state.

I met once such a group, they were organizing a seminar discussing libertarian authors. They were very passionate about their ideas and would not consider any counter-argument. I remember somebody cheering the situation in Somalia on a forum, saying that the collapse of the state there 10 years ago will let people develop better since there will be only market forces at play. My reaction to this was to propose them to go on an inhabited island and build there the society they dreamed of. Recently I found that somebody did try to do exactly this. Not on an island (it's hard sometimes to eat your own dog food), but on the internet. This guy created an online marketplace, called Silk Road, using only encrypted connections so people cannot be traced. He wanted to seal this market from any possible government intervention, following the true spirit of libertarianism. And guess what trade flourished on this market: drugs, of course. It took FBI a couple of years to penetrate and dismantle this network. You can read the fascinating story on how Silk Road raised and fell in Wired in two parts here and here. A few days ago the creator of this market was sentenced to life in prison without parole. He is not at large anymore...

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