The Case for Optimism by Jeff Deist, Ludwig von Mises Institute

This article is adapted from a speech delivered at the 2014 Costa Mesa Mises Circle, “Society Without the State,” held November 8, 2014.

I promised you some optimism today. Perhaps one of the most optimistic libertarians ever was Murray Rothbard, a happy intellectual warrior if ever there was one. And he was very enthusiastic about the revolution of libertarian ideas, because he understood fundamentally that liberty is the only manner of organizing society that is compatible with human nature and human action. And it was this optimism, this unshakeable belief that we’re right and the statists are wrong, that drove him to produce a staggering body of work in defense of personal liberty. Now let me stress that Rothbard, despite his reputation as an uncompromising intellectual, saw his efforts as pragmatic, not utopian. He understood quite clearly that utopianism was the hallmark of the state’s intellectual champions, not the state’s detractors. He understood that utopianism and statism, not liberty, produced the great monsters and the great wars of the twentieth century.

Most of all, he understood that the true utopians are the central planners who believe they can overcome human nature and steer human actors like cattle. To quote Murray: “The man who puts all the guns and all the decision-making power into the hands of the central government and then says, ‘Limit yourself’; it is he who is truly the impractical utopian.” In Rothbard’s eyes a libertarian world would be better, not perfect. So while our revolution is indeed intellectual, it is also optimistic and pragmatic. We should talk about liberty in terms of first principles, and how those principles make for a better society precisely because they accord with the innate human desire for liberty. Let the statists explain their grand schemes, while we offer a realistic vision of a world organized around civil society and markets.

Now, all of us who are liberty-minded have heard at least some version of the “unrealistic” accusation, “Oh, libertarianism would be great but it’s unrealistic,” they say. It’s one thing to talk about anarcho-capitalism in a dorm room discussion or philosophy lecture, but such a society is too impractical and idealistic for the real world. States have existed for as long as human societies, you’ll never get rid of them. Some might even go so far as to claim that a market exists for government “services,” seeing how states seem to keep cropping up in human history.

But let’s examine this. If you believe the state is harmful rather than benevolent; if you believe that the state threatens individual rights and property rights, rather than protects them; if you believe that the state decreases our chances for peace and prosperity; if you believe, in sum, that the state is an overwhelming force for ill in our society, a force that makes all of us far worse off, why in the world is it unrealistic to work toward its elimination?

Notice that the charge of being unrealistic, impractical, or overly idealistic is never applied to medicine or crime prevention. Nobody says to the cancer researcher, “you should be more realistic, cancer and infectious disease will always exist. Why not just work on making the common cold a bit less severe?” Nobody says to the criminal investigator, “gee, organized crime and violence are just part of human nature, it’s useless to try to prevent them. Maybe you should just focus on reducing bike thefts.”

So why should we be apologetic or timid or less than fully optimistic in our fight against the state? We should not. Like the cancer researcher, like the crime fighter, we should be bold, we should be optimistic, and we should be vigorous in our opposition to government. We should be every bit as certain as Murray Rothbard was in the eventual success of our mission.

I’m Optimistic Because the State Is Fiscally Unsustainable

Rest assured we will win. The state, at least as currently constituted in the US and most western nations, is dying under the weight of its sheer fiscal unsustainability.

I’m curious as to whether some of you have heard of Herbert Stein. You may know Ben Stein from “Win Ben Stein’s Money” and Ferris Bueller’s Day Off. Herbert Stein was his dad. Herbert Stein was an economist, and chairman of the Council of Economic Advisors, a kind of cheerleading squad, for presidents Richard Nixon and Gerald Ford. He’s not my kind of economist, and was only faintly free market, but he was still an economist. And apparently an interesting man: in his later years he briefly wrote an anonymous “Dear Prudence” advice column for Slate and print papers.

Herbert Stein came up with his own law, known as Herbert Stein’s law. It goes like this: “If something cannot go on forever, it will stop.” It sounds simple. He used it to describe economic trends like balance of payments deficits. He meant that no program was needed to stop something that would stop by itself, something that could not be sustained. And clearly, the US federal government, the largest and most powerful government that ever existed, cannot be sustained. Not in the fiscal sense. No way, no how.

We’re not talking simply about the $17 trillion in Treasury bond debt the federal government owes its creditors. We’re talking about unsustainability on a much larger level. Economist Laurence Kotlikoff uses a concept known as the fiscal gap, which is much more accurate, and much more depressing, than tracking Treasury debt. The fiscal gap basically measures the present value of future tax revenues against the present value of future government obligations. So not just Treasury bond debt, but also Social Security, Medicare, welfare entitlements, etc. And Kotlikoff came up with a fiscal gap of more than $200 TRILLION. Let me repeat that: $200 TRILLION. Now we don’t have time today to discuss the details of the federal government’s fiscal situation, and how this fiscal gap came to be. But rest assured the reality is wildly worse than virtually anyone in government or the mainstream press will admit.

Understand that there is zero political will in Washington to cut the big ticket items like Social Security, Medicare, welfare, and defense. Zero. Remember the howls during the sequestration debates? Witness the outrage when Congress merely considers cuts in the rate of growth of certain programs! There is zero political will in Washington for huge tax increases, which wouldn’t help anyway. Politics will not solve this problem. Our federal government’s fiscal reality cannot be fixed, politically or economically. We cannot grow our way out of it. The numbers behind Kotlikoff’s fiscal gap simply cannot be overcome, they can only be put off — and made worse — by endless monetary expansion.

It may seem almost funny, but this reality should give us cause for optimism. We know the current arrangement cannot continue, so we — as liberty minded people — have a tremendous opportunity to recognize this and begin building the future. We don’t have to labor under the delusion that everything will continue as usual, that the system will work if only we reform it or tinker with it or elect the right people. We can be

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