Four years ago I considered myself a socialist. I voted for Bernie Sanders and supported policies that would raise the minimum wage, make college and healthcare free, and more. Today I am convinced that these well-intentioned policies have a variety of negative unintended consequences (see Thomas Sowell’s Basic Economics) and that capitalism is generally better able to address the problems these policies are meant to address, as I’ve argued here. Capitalist solutions also have the benefit of being non-coercive, the value of which I’ve elaborated on here. In addition to these other factors, libertarianism is also superior to socialism in that it is pluralistic: socialists are free to construct socialist institutions within a libertarian society, while the reverse is not true.

Socialism is not inherently immoral in the sense of being a system in which people share means of production. Roommates and families share cooking appliances, furniture, plumbing and other means of production, and it is possible for this to be of benefit to all involved. Socialist systems are only immoral to the extent that they are enforced through violence, as is the case under socialist political systems which manage or redistribute the means of production according to democratic or dictatorial decree. A socialist political system would entail something akin to the expropriation of property deemed to be means of production, a policy necessarily containing ambiguities and immoral consequences. Whether or not personal computers used by writers to produce books or articles, or a personal food garden are means of production to be expropriated is unclear. Whoever the authority making these decisions would be would subject many others to the consequences of their fallible judgments. Even if many offered their possessions up willingly, there would undoubtedly be some who would prefer to keep them, and these cases would require violence or the threat of it.

So, the only moral forms of socialism are those in which people can voluntarily participate. Businesses that are employee-owned and -run are of course fair game and nothing in a capitalist system prevents their creation. Any group of people are free to create a business, create or purchase means of production, and operate cooperatively. What does contradict libertarianism is the idea that the means of production should only be managed democratically or centrally, as would be true in the case where a coercive government plays a part in managing them.

In a capitalist society there would still be constraints on all businesses, including those operated according to socialist principles. Most businesses fail, and this would no doubt be the case even when all employees own the means of production, or when income is redistributed equally throughout the organization. It is possible that these sorts of companies would have a distinct advantage over those operated more traditionally, in which case a libertarian society could also be a socialist one, in which most or all organizations would be what we call socialist. People would still be free to join or create organizations that were not socialist, of course, but under this theoretical future no one would want to because the relative disadvantages would be clear.

While it is of course impossible to predict the future, I would guess that significant proliferation of most forms of socialist organization would not occur in a libertarian society for economic reasons. The case of Jamestown illustrates the problems with voluntary socialism of a redistributive kind. According to Michael Huemer in The Problem of Political Authority (p. 193):

[Jamestown’s] founding charter stipulated that each colonist would be entitled to an equal share of the colony’s product, regardless of how much that individual personally produced. The result: the colonists did little work, and little food was produced. Of the 104 founding colonists, two-thirds died in the first year – partly due to unclean water but mostly due to starvation. More colonists arrived from England, so that in 1609 there were 500 colonists. Of those, only 60 survived the winter of 1609-10. In 1611, England sent a new governor, Sir Thomas Dale, who found the skeletal colonists bowling in the streets instead of working. Their main source of food was wild plants and animals, which they gathered secretly at night so as to evade the obligation to share with their neighbors. Dale later converted the colony to a system based on private property, granting every colonist a three-acre plot to tend for his own individual benefit. The result was a dramatic increase in production.

Hundreds of lives in this local case and undoubtedly millions on a larger scale throughout history might have been saved by a better understanding of economics. Individuals tend to work harder and smarter when they can benefit from that work (by having more food to eat or more food to trade) than when their work benefits them only through the positive feelings of having worked and contributed to the stockpile (if that!) and the fractional increase to be received in distribution. As evidenced in the example above, provided there are no other incentives for working, one may prefer to go bowling knowing that the fruits of one’s labor will be redistributed, and that one will still receive one’s “fair share” of others’ labor from the common store.

The Jamestown example is of course an example only of a specific type of socialism in which food is included among the resources redistributed, and there are many examples of employee-owned and -run businesses around the world which may serve as examples of ways in which socialist (in at least some sense of the word) cooperatives may develop and succeed. The example only serves to illustrate that the popular variety of socialist utopian vision involving complete redistribution of resources is unlikely to be feasible and could lead to disastrous consequences.

Capitalism, as I use the term, is the voluntary interaction of individuals for purposes of trade or cooperation. To the extent that someone opposes it, they are advocating for violent aggression. There are a variety of arguments for violent aggression, but the ones I am aware of have been refuted. There is a contradiction between socialism and capitalism only to the extent whatever system of socialism under discussion advocates the theft and forceful redistribution of property. Unfortunately, most popular forms of socialism advocated today are of this coercive sort.

My previous post Critical Rationalism and Libertarianism may provide helpful background knowledge for the present one. 

One of the most common criticisms of libertarianism is that it is not “practical”. The implication whenever people ask the question “then who will build the roads?” is that the lack of coercion under libertarianism might be nice in some theoretical sense, but that there are a variety of situations in which the use of force is necessary in order to solve specific issues. Another oft-cited problem is failures of markets, such as when the medical industry fails to develop new antibiotics because financial incentives do not align with encouraging their development. While there are a plethora of good responses to these individual criticisms, critical rationalism provides a general response that covers them all.

In David Deutsch’s The Beginning of Infinity, two truths are said to be worth carving in stone: the first is that problems are inevitable and second is that problems are soluble. Here, a problem is a conflict between two ideas. This sense of problem covers a wider variety of cases than the conventional sense of the word, which implies a subjectively negative situation. The fact that the infinite implications of any idea cannot be instantiated in any individual mind means that the vast majority of problems have not been consciously attended to.

So, restated using this definition of problem: conflicts of ideas are inevitable and conflicts between ideas are soluble. It’s important to recognize that the way in which problems will be solved in the future is usually impossible to know ahead of time, as most problems require growth of knowledge, which is inherently unpredictable. It is not a valid criticism of the possibility of something to say that it can’t be imagined how it would be accomplished, nor that no one has yet offered a solution for how it could be accomplished. The only valid criticism that can be made of something’s plausibility is that it is forbidden by the laws of physics. Everything else is, by definition, possible.

Unless one offers an explanation as to why it is physically impossible to solve the climate crisis, develop antibiotics, or build roads without coercion, they have not successfully criticized the possibility of doing any of these things. The same goes of course for doing any of those things well. What is often imagined to suffice as a criticism of libertarianism is the non-existence of a practical solution in the past or an intellectual solution in the present to some problem expected due to the lack of a government. Neither of these actually indicate impossibility, just as the possibility of landing on the moon was not impossible in a time when it had neither happened nor been comprehensively worked out theoretically.

It is one thing to say that it is possible to do anything that is currently done using coercion (paying for a variety of things through the levying of taxes) without coercion, but it is another to say that anything done through coercion could be done better without coercion. Popperian epistemology explains why the latter is true. There is no infallible authority to which to defer on any matter, so the best thing to do is to ensure that the means to detect and correct errors are protected and improved.

The current democratic system in place in the freest countries today is the best yet instantiated because it is far better at correcting errors than authoritarian systems such as dictatorships. Dictatorships prevent the correction of errors by placing one person (often one family) in the position of dictator without offering a means for removing them peacefully. Most dictatorships end in violence for exactly this reason. Democratic systems are an improvement because they allow for the removal of government officials without violence.

Democratic systems still leave room for improvement in the removal of organizations and this is exactly where capitalism excels. Capitalism is an evolutionist system in which entire systems (businesses, corporations, non-profit organizations, etc.) can be dissolved and created based on the demand or lack of demand from customers. Organizations only exist through their ability to offer some desired service or product to people through voluntary exchange, whereas a democratic government can maintain a monopoly on a variety of services through the use of theft (often referred to as “taxation”) and force generally.

It is important to note that capitalism is a system of evolution applied to organizations, not people. While people are certainly not exempt from genetic selection, capitalism offers a far better, fairer, and compassionate form of selection than the natural sort. Organizations can dissolve without having significant impacts on the well-being of individuals, as opposed to the inherently violent system of natural selection. Today the loss of a job can have a significant negative impact on individuals’ lives, but this is not a problem inherent in capitalism anymore than the inability to create cell phones was a problem inherent in capitalism before their development and spread. Non-profit organizations, charities, or unemployment insurance agencies are free to develop which may offer benefits to those without work and generally take over for a variety of government functions. But again, while specific solutions to various problems may be comforting or pragmatically relevant in the context of instantiating them physically, they are unnecessary when arguing for the possibility of solutions. What is important is that capitalism offers the freedom for individuals or organizations to offer up solutions and strenuously test them against competitors.

The sense in which organizations must adapt or die under capitalism, therefore, is only metaphorically violent. They must adapt to the needs and demands of consumers or be outcompeted by rival organizations, but this need not inflict suffering on the individuals that make up the organization. Businesses very often grow and then go out of business only after making all involved (customers, employees, etc.) better off than they would have been before. Voluntary organizations are required to meet important criteria in order to exist: they must be the best known option available for employees, customers, and/or members. Without meeting these criteria, they cannot continue to exist.

Governments and other coercive institutions are not required to meet these criteria because they receive revenue by force. Someone might have a better idea for how to provide protection to individuals from criminals, but under a government which holds a monopoly on force, individuals are not free to offer these services to customers. So government can force an inferior service on individuals at whatever price.

One of the biggest revolutions in my thinking due to critical rationalism (CR) has been in the realm of political philosophy. What political philosophy is implied by CR is somewhat controversial. Popper himself appeared to think that some form of socialism was compatible with CR, while also criticizing utopian conceptions of socialism such as Marx proposed. Many critical rationalists today are proponents of libertarianism, and I count myself among them. I contend that libertarian ideals are an implication of the CR worldview.

Libertarianism can be drawn as a conclusion of the Non-Agression Principle (NAP). The NAP may be stated simply: it is never moral to take aggressive violent action towards other people. Violence is only moral when it is in retaliation or defense.

The idea that ‘taxation is theft,’ a common libertarian catchphrase, can be drawn from the NAP. The NAP implies that taking someone’s property under threat of violence (arrest and imprisonment) without their consent is an agressive action that is neither retaliation nor defense. The NAP also implies that the only crime should be violent crime; enforcing a non-violent crime would itself be violating the NAP by taking aggressive action against the criminal. Crime without a victim does not violate the NAP.

If libertarianism can be derived from the NAP, the only task left is to derive the NAP from CR principles. CR’s claim is that all of our knowledge consists of unjustifiable guesses. Since our knowledge can never be perfect or justified, the only way to further the growth of knowledge is to criticize our current knowledge and attempt to make better guesses.

The most fundamental moral truth is that the means of error correction, criticism, must be protected. This is the most fundamental principle both because moral progress relies on criticism and because the only way we can know that the moral principles we hold are the best that we have access to is by subjecting them to criticism and seeing that they do not fail.

Since none of our guesses can ever be justified, and all of our proposed plans of action are themselves guesses, we can never justify our actions. This is a refutation of utilitarianism as a comprehensive moral system capable of justifying our acts. No moral calculation can justify any particular action, although it may serve as criticism for one. Utilitarians are not wrong to point out that an action that is expected to provide net negative utils (units of pain subtracted from units of pleasure) provides strong incentive not to take that action, but an expected net positive cannot justify an action. For instance, if two actions are both expected to result in the same util value, but one of them violates the NAP, the one that does not violate the NAP should be taken.

Admittedly, the above is a simple case and in the real world things are often more complex. The point is only that moral theories can serve as criticisms, but since an action can never be fully justified, irreversible harms should be avoided. Coercive actions are inherently anti-rational; they prevent error correction by not resolving a disagreement (problem) rationally.

Knowledge grows through conflict within already existing knowledge. When we have an argument with someone, our opponent may find a way to cause us to abandon some theory we previously thought was true. This may occur with all of our practical or scientific theories. It is possible that either or both parties of a conversation are wrong and the only way of discovering this is for both parties to engage in conversation with one another. In order to convince someone else of your position you must be creative; you must find new ways of communicating the idea you have to them so that they will understand what you are saying. It also requires creativity on the part of the person being convinced, otherwise they would not have been able to move to a new position.

Coercion prevents the resolution of a conflict in ideas by arbitrarily favoring one over another. The coercer’s position survives, but because a rational discussion was prevented between the coerced and coercer, it remains unclear whether that position is true or false, or whether the position of the coerced is true or false. Rational discussion and creativity applied to the problem might also have revealed that both positions are flawed and that some other position should be held.

People act on the knowledge they have. One might argue that people often act on intuition or emotion. This is true, but intuition and emotion are themselves forms of knowledge, sometimes knowledge that has developed over millions of years of evolution. Even if we concede for a moment the idea that emotions or intuitions are irrational, they are still affected by relatively intellectual thinking. If you come upon a snake in a field, you may feel intense fear, but this fear will dissipate when you recognize that it is actually just a rope. Your feelings change based on a change in understanding about the facts.

Knowledge often exists independent of any individual person. One type of this kind of knowledge is institutional knowledge. For example, no one person knows how to build a NASA space rocket, but the institution of NASA knows how to build space rockets. Any top-down prohibition or commandment that NASA leadership makes will be at least somewhat coercive in that it will override pre-existing knowledge that has been adapted for making rockets. Unless the institution has a healthy tradition of criticism that allows for pushback against misinformed commands, significant damage can be done in this way. Orders may actually destroy the knowledge needed in order to build rockets.

The economy is essentially an incredibly large computation and store of institutional knowledge that helps individuals know how to allocate resources. No one person knows everything about how the economy works. In a completely free market, no action is coerced. No one can be forced to do a job that they don’t want to and no one is forced to purchase something they don’t want. Knowledge grows or is sustained by these voluntary exchanges by providing information about supply and demand to consumers and business owners. If wages get too low, or prices for goods or services get too high, people will abstain or go elsewhere.

Libertarianism is not itself a solution to all of our problems, or a positive vision of utopia. But it is the best way we know of for organizing a society that is able to solve problems as quickly as possible. It is a system that helps prevent the destruction of the means of error correction by minimizing coercion and maximizing individual freedom to create revolutionary ideas.

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See Libertarianism and the Solubility of Problems for more on critical rationalism and libertarianism.