Why
are there no libertarian countries? If libertarians are correct in
claiming that they understand how best to organize a modern society, how
is it that not a single country in the world in the early twenty-first
century is organized along libertarian lines?
It’s not as though
there were a shortage of countries to experiment with libertarianism.
There are 193 sovereign state members of the United Nations—195, if you
count the Vatican and Palestine, which have been granted observer status
by the world organization. If libertarianism was a good idea, wouldn’t
at least one country have tried it? Wouldn’t there be at least one
country, out of nearly two hundred, with minimal government, free trade,
open borders, decriminalized drugs, no welfare state and no public
education system?
When you ask libertarians if they can point to a
libertarian country, you are likely to get a baffled look, followed, in
a few moments, by something like this reply: While there is no purely
libertarian country, there are countries which have pursued policies of
which libertarians would approve: Chile, with its experiment in
privatized Social Security, for example, and Sweden, a big-government
nation which, however, gives a role to vouchers in schooling.
But
this isn’t an adequate response. Libertarian theorists have the luxury
of mixing and matching policies to create an imaginary utopia. A real
country must function simultaneously in different realms—defense and the
economy, law enforcement and some kind of system of support for the
poor. Being able to point to one truly libertarian country would provide
at least some evidence that libertarianism can work in the real world.
Some
political philosophies pass this test. For much of the global
center-left, the ideal for several generations has been Nordic social
democracy—what the late liberal economist Robert Heilbroner described as
“a slightly idealized Sweden.” Other political philosophies pass the
test, even if their exemplars flunk other tests. Until a few decades
ago, supporters of communism in the West could point to the Soviet Union
and other Marxist-Leninist dictatorships as examples of
“really-existing socialism.” They argued that, while communist regimes
fell short in the areas of democracy and civil rights, they proved that
socialism can succeed in a large-scale modern industrial society.
While
the liberal welfare-state left, with its Scandinavian role models,
remains a vital force in world politics, the pro-communist left has been
discredited by the failure of the Marxist-Leninist countries it held up
as imperfect but genuine models. Libertarians have often proclaimed
that the economic failure of Marxism-Leninism discredits not only all
forms of socialism but also moderate social-democratic liberalism.
But
think about this for a moment. If socialism is discredited by the
failure of communist regimes in the real world, why isn’t libertarianism
discredited by the absence of any libertarian regimes in the real
world? Communism was tried and failed. Libertarianism has never even
been tried on the scale of a modern nation-state, even a small one,
anywhere in the world.
Lacking any really-existing libertarian
countries to which they can point, the free-market right is reduced to
ranking countries according to “economic freedom.” Somewhat different
lists are provided by
the Fraser Institute in Canada and
the Heritage Foundation in Washington, D.C.
According
to their similar global maps of economic freedom, the economically-free
countries of the world are by and large the mature, well-established
industrial democracies: the U.S. and Canada, the nations of western
Europe and Japan. But none of these countries, including the U.S., is
anywhere near a libertarian paradise. Indeed, the government share of
GDP in these and similar OECD countries is around forty percent—nearly
half the economy.
Even worse, the economic-freedom country rankings are biased toward city-states and small countries. For example, in
the latest ranking of economic liberty by the Heritage Foundation,
the top five nations are Hong Kong (a city, not a country), Singapore
(a city-state), Australia, New Zealand and Switzerland (small-population
countries).
With the exception of Switzerland, four out of the
top five were small British overseas colonies which played interstitial
roles in the larger British empire. Even though they are formally
sovereign today, these places remain fragments of larger defense systems
and larger markets. They are able to engage in free riding on the
provision of public goods, like security and huge consumer populations,
by other, bigger states.
Australia and New Zealand depended for
protection first on the British empire and now on the United States. Its
fabled militias to the contrary, Switzerland might not have maintained
its independence for long if Nazi Germany had won World War II.
These
countries play specialized roles in much larger regional and global
markets, rather as cities or regions do in a large nation-state like the
U.S. Hong Kong and Singapore remain essentially entrepots for
international trade. Switzerland is an international banking and tax
haven. What works for them would not work for a giant nation-state like
the U.S. (number 10 on the Heritage list of economic freedom) or even
medium-sized countries like Germany (number 19) or Japan (number 24).
And then there is Mauritius.
According
to the Heritage Foundation, the U.S. has less economic freedom than
Mauritius, another small island country, this one off the southeast
coast of Africa. At number 8, Mauritius is two rungs above the U.S., at
number 10 in the global index of economic liberty.
The Heritage
Foundation is free to define economic freedom however it likes, by its
own formula weighting government size, freedom of trade, absence of
regulation and so on. What about factors other than economic freedom
that shape the quality of life of citizens?
How about education?
According to the CIA World Fact book, the U.S. spends more than
Mauritius—5.4 percent of GDP in 2009 compared to only 3.7 percent in
Mauritius in 2010. For the price of that extra expenditure, which is
chiefly public, the U.S. has a literacy rate of 99 percent, compared to
only 88.5 percent in economically-freer Mauritius.
Infant
mortality? In economically-more-free Mauritius there are about 11 deaths
per 1,000 live births—compared to 5.9 in the economically-less-free
U.S. Maternal mortality in Mauritius is at 60 deaths per 100,000 live
births, compared to 21 in the U.S. Economic liberty comes at a price in
human survival, it would seem. Oh, well—at least Mauritius is
economically free!
Even to admit such trade-offs—like higher
infant mortality, in return for less government—would undermine the
claim of libertarians that Americans and other citizens of advanced
countries could enjoy the same quality of life, but at less cost, if
most government agencies and programs were replaced by markets and
for-profit firms. Libertarians seem to have persuaded themselves that
there is no significant trade-off between less government and more
national insecurity, more crime, more illiteracy and more infant and
maternal mortality, among other things.
It’s a seductive
vision—enjoying the same quality of life that today’s heavily-governed
rich nations enjoy, with lower taxes and less regulation. The vision is
so seductive, in fact, that we are forced to return to the question with
which we began: if libertarianism is not only appealing but plausible,
why hasn’t any country anywhere in the world ever tried it?
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