Libertarians v Fiscal Conservatives

This article points out two key difference between libertarians and fiscal conservatives.

First, let’s recognize what they have in common. Libertarians and fiscal conservatives originate from the same tradition of classical conservatism and a lassaize faire approach to political economy. In fact there is a great deal of ideological overlap where many individuals consider themselves both libertarian and fiscally conservative.

In the contemporary United States I think there are two key normative, not necessary, differences worth discussing.

The first key difference is the Non-aggression principle. Libertarians overwhelmingly support the NAP. Conservatives, I expect, have an importantly lower demand for the principle. The other important difference I suppose might exist between fiscal conservatives and libertarians is on the effective use of gradualism.

I have heard it said, although perhaps it’s not true, that Rothbard would end the state in a day if he was elected President. This could result from an zealousness of certain moral principles with the exception of pragmatism as a moral principle, from improper calculation, from an emotional opposition to the state, or from other factors associated with both libertarianism and disregard for gradualism such as higher risk preference and youth.

Ending the state in a day would be expected to lead to efficient long run outcomes, but it would be expected to cause inefficiency in short run pain and might also lengthen the duration of the short-run transitional period, perhaps resulting in lower total efficiency across all runs compared to a more gradual transition.

Economic conservatism, the superset of fiscal conservatism, emphasizes pragmatism and a gradual approach. Conservatism emphasizes slow change for at least two reasons. First is the notion of appreciation for the status quo as something which is earned, proven, or tried and true. A positive regard for the status quo is an exotic idea to many other worldviews and is perhaps the hallmark of social conservatism.

There is a southernism I love to use to illustrate the point which is, “If it ain’t broke don’t fix it.” I have my own corollary which is, “But it’s always broke.” The point here is to emphasize that regard for the status quo doesn’t mean thinking the status quo is perfect or that change is bad per se. Conservatives, as students of history, know that nothing man has created can ever be called perfect and that change over time is a force for good, but conservatives make these changes at a decidedly and intentionally slower pace. This is called gradualism.

Second, conservatives advocate gradualism on the notion of risk aversion. This notion of conservatism is the sort which scholars invoke when they call their data-driven estimates conservative. It is a humble and cautious approach to claims of truth which anticipates some degree of error and attempts to compensate for it by making an intentionally imprecise estimate.

Two questions emerge:

  1. How slow is slow?
  2. How risk averse are we?

The consistent conservative will answer that these questions are best answered by the market. I think the market speaks in part through the political process as well, but it’s a distorted signal that is hard to interpret. In short, we may be forced to develop our own estimates, and in some sense we are developing our own estimates anyway when we chose to adopt an interpretation of a market signal.

Based on the history of the LDC and post-Soviet transition crises, as I discuss here, I estimate it takes 10-20 years to gradually implement a fully liberalized economic policy regime.

Trust-busting the state and forcing it to compete is a level of liberalization that hasn’t been widely observed, but I estimate it would take about another 40 years to do that gradually.

For my 90th birthday I would like to have a competitive market for government please. That’s in 2079. It would be cool if we can get it done before then also.

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