Society and Culture

Does liberalism rest on an over-optimistic view of human nature?

In the early stages of the lockdown, James Kirkup of the Social Market Foundation wrote an article posing the question: “Will the pandemic kill off libertarianism?”. The need for a lockdown, he argued, refuted – or at least seriously undermined – the libertarian view of human nature as benign and reasonable:

“[L]ibertarianism […] suggests that when people are left to their own devices, they will, in the end, do sensible, collaborative and even kind things. […] Free marketeers …rest their argument for unfettered market interactions on the idea that these are dealings between rational actors.”

If this were the case, the argument goes, a lockdown would never have been necessary. We would have just naturally and spontaneously done the right thing. Voluntary social distancing would have done the job. Alas, we were not being reasonable. We just carried on as normal, which is why the government had to U-turn, and substitute draconian restrictions for voluntary guidelines. The reason, according to Kirkup, is that:

“we make our allocative choices not on the basis of neat, orderly mental spreadsheets weighing cost and benefit, but because of messy, complicated human frailty.”

Kirkup seems to see the UK as a disorderly classroom, supervised by a naïve teacher who initially believes that children are basically reasonable and kind, and then learns the hard way that this is not the case. In his interpretation, libertarianism relies on an over-optimistic view of human nature, which is why it doesn’t work in the real world.

I don’t accept Kirkup’s critique, because I don’t recognise what he describes as “the libertarian view of human nature”. It’s certainly not my own view. I’m a grumpy pessimist, who finds positivity and cheerfulness annoying. For me, the case for limited government does not rest on the assumption that we are all perfectly rational and benign. It rests on the assumption that whatever “messy, complicated human frailties” we may have as individuals are amplified, not neutralised, by politics and political decisionmaking.

Of course we often make rash, impulsive, ill-judged and ill-informed decisions. But these tendencies do not go away if we make decisions collectively – they get worse.

I have met plenty of people who are, on an individual level, perfectly sensible and perfectly capable of running their own lives, but who also gladly embrace the most irrational and destructive political ideas. We are so much more irrational when we argue about politics than we are when we make individual decisions concerning our own lives.

Take one of my favourite bugbears: socialism. Socialism has been tried multiple times, and it has ended in catastrophic failure every single time. There really shouldn’t be an argument here. This matter should be settled. Yet it is anything but. Socialism doesn’t just remain popular – it remains especially popular with highly educated, knowledgeable and intelligent people.

The right-wing press likes to mock the fact that socialists are often fairly affluent and lead lifestyles that are awkwardly similar to those of the despised bourgeoisie. They call them “champagne socialists” and “Moet Marxists”. But I have a somewhat different interpretation of the “rich socialist” phenomenon: for me, it shows that in their personal sphere, socialists can be as entrepreneurial as anyone. They are perfectly capable of prospering and thriving in a market economy. But they would nonetheless happily abolish it, and all the freedom and prosperity that comes with it. They are individually rational, but politically irrational.

There are lots of similar, if less extreme, examples. Plenty of people happily buy goods and services from all over the globe, but then vote for protectionist policies. Plenty of people have productive business relations and/or friendly personal relations with immigrants, but then vote for anti-immigration policies. Plenty of people are thrifty and forward-looking with their own personal finances, but when it comes to the public finances, they have the political preferences of a drunken sailor. Plenty of people complain about how terrible it is that their children cannot afford to move out, but then vote for NIMBY policies and oppose every housing development.

Or take the way technology has affected different areas of life. In almost every respect, the internet, and more recently, our ability to access it on the go, has been a huge blessing. It has led to countless innovations and productivity improvements, it has reduced transaction costs, and it has made a lot of things easier and more convenient. Yet in one area, it has been poisonous: politics. It has led to the formation of echo chambers and filter bubbles, in which people seek endless confirmation for what they already believe, but never come across a dissenting viewpoint, unless it’s in the form of an online pile-on, or a shouting match between enemy tribes.

Are we as bad at risk assessment as Kirkup claims? Possibly – but we are infinitely worse at it when we act collectively. We ban perfectly safe genetically modified food, even though it would be good for our health, our wallet, and the environment, because of a combination of atavistic fears, agrarian romanticism, and social conformism. We support movements like the Greta cult, which would shut down most of the economy, because we mistake a moderate and manageable problem – climate change – for the apocalypse. We obsess over the non-issue of chlorinated chicken, rather than focussing on the benefits of a trade deal with the world’s biggest economy. In our daily lives, we make trade-offs all the time, weighing the risks and benefits of different courses of action. In politics, we refuse to even engage with the logic of trade-offs, because we insist on treating everything as a moral absolute.

I could go on. What does this all tell us about what the relationship between the state and the individual should be, or how the state should act during a pandemic? Not very much, unfortunately. Collective action problems are a thing, and a pandemic is a dramatic example of that. Some things can only be done collectively, and that, unfortunately, involves politics.

And that’s fair enough. I’m not an anarchist, I accept a role for the state, and I don’t have a definitive list of what exactly that role should involve. All I’m saying is: let’s not kid ourselves that a bigger and bossier state is somehow an antidote to our character flaws, or a logical conclusion of a more “realistic” view of human nature. It is quite the opposite: politics brings out the worst in us. If you think the individual can’t be trusted, wait until you meet the public.


This article was first published on CapX


Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

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