Whose views are bankrupt, exactly, when this misleading, unsupported bluster is the best Weisberg can come up with? To clarify, the libertarian position is not that market actors can never be irrational; it is that when actors in a free market behave irrationally and misunderstand risk, they suffer the consequences of their foolish behaviour. If they persist in their foolishness, they go bankrupt, leaving wiser heads to prevail. The main effect of government interventions is to prevent these necessary corrections from taking place, and to encourage foolish behaviour where the market discourages it. If Weisberg can present flaws in this reasoning or evidence that undercuts it, he should do everyone a favour and do so. Barring such a demonstration, he only helps our cause by attacking it so feebly—as the mostly negative reader comments accompanying his article testify.
 

A Mainstream Libertarian Responds

          Weisberg’s attack also helps our cause by providing us with an opportunity to reiterate the main points of our case in response to his article, as I have done above and as D. W. MacKenzie has done in more detail on the Ludwig von Mises Institute’s website. (See “Has Libertarianism Ended?”) Even more significant for the spread of our ideas, however, is a response from Richard A. Epstein that appeared on mainstream Forbes magazine’s website, entitled “Strident and Wrong.”

          Epstein is a well-known professor of law at the University of Chicago and the author of many books, including 1995’s Simple Rules for a Complex World, and most recently, this year’s Supreme Neglect: How to Revive the Constitutional Protection for Private Property. By his own description a classical liberal rather than a more radical libertarian, Epstein has nonetheless recently begun a weekly column for Forbes.com entitled “The Libertarian.”

          Epstein is polite but devastating in his critique of Weisberg: “No fair and balanced account of the current meltdown can dwell exclusively on the failure of government to regulate credit-market derivatives. It must ask deeper questions about the antecedent events that brought credit markets to their knees. Weisberg offers no such account.” Summarizing the “government decision to subsidize home mortgages generally through low interest rates” and the “special Fannie and Freddie guarantees,” Epstein emphasizes that “[t]hese foolish decisions prompted market actors to react just as libertarians fear: to profit privately from public foolishness.”

          Epstein is careful to state that as a limited-government libertarian, he is not opposed to all government regulation. Minarchists like him, he writes, “have a presumption against government regulation, which can be rebutted by showing long-term social improvements. We know not only about the virtues of competitive markets, but of the challenges posed by asymmetrical information, public goods, prisoner’s dilemmas and market cascades.” Importantly, though, minarchists “are equally adamant that bad regulation can wreck credit markets. And we insist that governments must mend their lending habits to reduce the odds of credit trains going off the rails yet again. We also strenuously oppose using the credit crisis as a lever for introducing all sorts of senseless gimmicks to disrupt labor and product markets.” He sums up his piece by stating that Weisberg pathologically “overrates market failures and underestimates government ones,” a pattern libertarian readers will recognize as all too common.
 

The Rise of the Independent Voter

          The intemperate response of the American government to the current crisis—a mind-boggling $700-billion bailout bill, among many other smaller, but still huge, bailouts—is certainly a sign that the libertarian future is not right around the corner. But the American public’s reaction to the bailout plan was far from uniformly favourable. When framed as a government “investment” to keep “markets secure,” one poll showed that only 57% supported the bailout (with 30% opposing it). When another poll actually used words like “bail out” and “taxpayers’ dollars,” 55% opposed the rescue package.

          Along with significant opposition to this massive government expenditure and power grab, there are other signs that suggest America is moving in a libertarian direction. John P. Avlon, a senior fellow at the Manhattan Institute and the author of Independent Nation: How Centrists Can Change American Politics, recently wrote on the Wall Street Journal’s website that independent voters “are now the largest and fastest-growing segment of the American electorate.” Roughly 40% of American voters now identify themselves as independent.

          But what do these independent voters believe? Is there any consistent ideology that unites them, or are they just a motley crew? According to Avlon, there are some consistent trends: “Independents tend to be fiscally conservative, socially progressive and strong on national security.” Fiscally conservative and socially progressive—this sounds a lot like the quasi-libertarian “bobos” (bourgeois bohemians) identified by Brink Lindsey in his Age of Abundance, which I reviewed here last fall. As for being strong on national security, Lindsey wrote that the bobos “would part company with all grand ideological pipe dreams in the realm of foreign affairs (including pacifism as well as neoconservative adventurism), insisting instead that American power is a positive force in the world but one that ought to be used cautiously.”

          In a recent Weekly Standard article entitled “We Blew It: A look back in remorse on the conservative opportunity that was squandered,” P.J. O’Rourke laments the poor job conservatives have done promoting freedom. He ends his piece with a funny and eloquent defence of the free market:
 

What will destroy our country and us is not the financial crisis but the fact that liberals think the free market is some kind of sect or cult, which conservatives have asked Americans to take on faith. That’s not what the free market is. The free market is just a measurement, a device to tell us what people are willing to pay for any given thing at any given moment. The free market is a bathroom scale. You may hate what you see when you step on the scale. ‘Jeeze, 230 pounds!’ But you can’t pass a law making yourself weigh 185. Liberals think you can.

          Conservatives have screwed up the free market brand. They have screwed it up by paying mere lip service to it, and they have screwed it up by wedding it to an intolerant, authoritarian sense of morality and a belligerent, imprudent foreign policy. But out of the ashes of conservatism will rise a better freedom movement. The swelling ranks of independent, quasi-libertarian voters do not want to tell you who you can marry or what you can do with your own body; they do not want to export democracy around the world at the point of a gun; and they do not think the laws of economics can be legislated out of existence.

          As I wrote at the outset, these are early days. Lindsey recognized in his book that the current bobo synthesis remains “an unspoken and unloved compromise rather than a well-articulated and widely embraced consensus.” In other words, there is still much work to be done. We must keep talking, writing, and arguing, nudging our friends and acquaintances to reconsider a point here, read an article there. Yes, free market ideas tend to get a raw deal during economic downturns, but things are very different today than they were in the past. Today, there is the Internet, itself both a free market for ideas and another piece of evidence for how beautifully markets work when they are allowed to. And at the risk of sounding triumphalist, the Internet changes everything. With increased exposure, ineffective criticism, and more and more independent voters who eschew the left-right divide, freedom is on the rise. No, it won’t happen overnight, but what will the world look like in five years? In ten or twenty years? Financial crisis fallout notwithstanding, my bet is that the future is libertarian.