Saturday, March 30, 2013

Where is John Galt?

The recent Chinese hacking scandal brought to mind a libertarian Zeitgeist that was sweeping the web a few years back.

In '06 and '07, blind faith in emerging market growth and in the assumed superiority of emerging market governments became so contagious that even libertarians caught the bug. I remember reading reports from prominent libertarians who had scoured the Third World in search of Galt Gulches. Their optimistic report: nations like China and Argentina were evolving into safe havens from collapsing Old World powers like the US. Everyone in Asia was a Confucian Steve Jobs. Argentina had learned from the sins of Peron. If I had done a push up each time I saw a sentence giddily comparing "capitalist China" to “anti-capitalist” America, I'd be strong enough to cradle the globe after Atlas shrugged.

Never mind that China still had a command economy. The biggest risk was remaining in the US, and so libertarians who complained about government spawned real estate bubbles in America started fawning over all the government spawned building in China (a place famous for
ghost cities). People concerned about US currency debasement talked of seeking refuge in a place that famously suppresses the yuan; treating its citizens to riot-inducing inflation.

Reinforcing the idea of superior freedom and opportunity in the emerging world was the idea of
decoupling: The tired West would collapse under the weight of its colossal debt and old ideas, and the vibrant East would suddenly develop a middle class big enough and rich enough to support its continued rise; a rise largely independent of the West. The very people who praised globalism and the opening of more markets were suddenly declaring that the closing (or impoverishment) of Western markets wouldn't matter much. The people who laughed at the idea of Fortress Europe effectively endorsed Fortress Asia.

The key piece in the puzzle of emerging market freedom and prosperity was the Internet. Just as blue jeans supposedly helped topple the Soviet Union, the power of the Internet was going to plant tiny Adam Smith seeds throughout the emerging markets, leading these newly capitalist minds to start utilizing the best aspects of Western thought. Forget V for Vendetta; we were going to have B for Bandwidth.

When the 2008 crisis hit, the emerging world
didn't decouple. Most of it collapsed much harder. China didn't look to Adam Smith. They looked to Keynes; launching the largest stimulus in the country's history. And it turns out Argentina didn't reject Peron. Since 2008 Argentina's government has toyed with pension seizures, price controls, nationalization, and capital controls (even going so far as to use currency sniffing dogs to keep evildoers from carrying cash across the border).

It seems these libertarian optimists incorrectly assumed that the merger of a rising emerging world and an exploding Internet was necessarily going to have a libertarian bent. They seemed to think we were poised for a Libertarian Spring. But why should anyone have expected such an outcome? Couldn't Twitter just as readily be used to spread pro-government info.? Couldn't "tax the rich" also go viral? Wasn't uber-statist Barack Obama hoisted into the White House with a huge boost from social media?

Internet tools like Twitter and Facebook are used by people, and most people, wherever they reside, conveniently endorse receiving things paid for by other people. The free market that libertarians rightly celebrate continues to get a lukewarm reception in the marketplace of ideas. Even in the US, anti-libertarian moves likes increasing the minimum wage are
condoned by the majority, so it seems predictable that more pro-state ideas are going to be spread online than libertarian ones; just look at Occupy Wall Street and its Internet-generated offspring throughout the world.

To witness this phenomenon at work, visit reddit.com and click on the
Politics header. Not a subcategory (subreddit) like “Conservatism” or “Liberal.” Just click plain old Politics. What you will see is a long list of touchy-feely, MORE GOVERNMENT, PLEASE! sentiments dominating the headlines, despite the fact that reddit is outside the system, man!

It is hard not to notice a certain irony in China’s using the Internet—the state’s worst nightmare!--to violate the
non-aggression principle. I guess we’ll have to wait a bit longer for the Middle Kingdom to become the Switzerland of the East.

When it comes to popular uprisings--"springs"--, regardless of where they happen or which tools are used to fuel them, it is naïve to presume they will necessarily usher in profound new freedom. Let's not forget what happened at the end of the Prague Spring; the Soviet Union invaded and turned off the spring.


Atlas Tweets: https://twitter.com/greatMikePayne

1 comment:

Flatlander said...

Your pessimism is refreshing. I follow Jeffrey Tucker on Facebook, and love his take on the free market as the wellspring of liberty. However, he does tend to get giddily over-optimistic on how government has no chance against the POWER of the MARKET.