A PDF version of A Penrose Stairway is available here.

A Penrose Stairway: Why the Free Market
and Limited Government Are Incompatible,

by Ronald N. Neff

Table of Contents for A Penrose Stairway

December 3, 2016


Chapter One

The Sirens’ Song —
Why We Cannot Let This Matter Rest


IBEGIN MY DISCUSSION WITH the conclusion of Jacob Hornberger’s series, where he presents an idea he attributes to an unnamed anarchist friend of his:

“Let’s call a truce. Let’s work to achieve freedom by getting down to the night-watchman state. At that point, we’ll decide whether or not to dismantle it.”

We free-market anarchists have been hearing this suggestion in various forms for decades. I recall Nathaniel Branden saying that if we got 70 percent of the way to a free society, he would be happy.

And even the principled Joe Sobran once said to me that if we could get to a truly limited government, “You can keep the change.”

I believe this approach is fundamentally flawed, both intellectually and tactically. I suggest that those free-market anarchists who have been seduced by this sirens’ song have not sequestered the idea of a free-market anarchism; they have not “compartmentalized” it; they have not folded it up and placed it in a cedar chest to be taken out for later use. In fact, they have retreated from free-market anarchism. They have not formed an alliance for the advancement of liberty; they have instead abandoned the case for it and in effect given the entire philosophy away to the exponents of limited government. They have lost sight of why it is important that we continue to make our case in as many forms and in as many venues as we can find. They have settled for what I call Vichy liberty.

Apparently, therefore, it is important to remind readers of why this subject should occupy their attention, why we must not “work to achieve freedom by getting down to the night-watchman state” first. Because it has the appearance of being reasonable and conciliatory, it is important that this suggestion be recognized for what it is: intellectual surrender. Once we have dealt with this sirens’ song of surrender, we can turn to a fuller discussion of free-market anarchism itself.

Allow me to review a bit of movement history.

In 1969 the libertarian movement consisted of Objectivists and their imitators; FEE-type libertarians and conservatives; YAF conservatives; the students of Robert LeFevre’s Freedom School and Rampart College in Colorado and of Andrew Galambos and his Free Enterprise Institute in California; and the radical libertarians clustered around Murray Rothbard in New York City (when, as he said, the movement could still fit into his living room), as well as a remnant of the Alliance of Libertarian Activists in California. All these components of the movement lived in uneasy alliance with one another — and occasionally in uneasy ignorance of one another. Free-market anarchism was eschewed by all but the radical libertarians, and many of them rejected the term “free-market anarchism” in favor of the tamer “anarcho-capitalism.”

Into this inherently weak coalition burst Roy Childs’s “Open Letter to Ayn Rand,” published in Jarret Wollstein’s periodical, The Rational Individualist, in its October 1969 issue. Its powerful arguments that government is inherently illegitimate caused an avalanche of letters to editors, articles, attempted refutations, and the conversion of hundreds — including Nicholas Strakon, later the editor of The Last Ditch, and me — from support of the limited, constitutional (night-watchman) state to free-market anarchism. The interest and stir Childs’s “Letter” created served as the economic base for the publication of Morris and Linda Tannehill’s Market for Liberty, an expansion of their booklet “Liberty via the Market,” showing how judicial, police, and defense services might be provided in a stateless society. Meanwhile, Morris Tannehill — a prodigious letter-writer — was circulating Childs’s essay “The Epistemological Basis for Anarchism: An Open Letter to Objectivists and Libertarians,” which was far more important than the “Letter” but which remained unpublished until The Last Ditch posted it on its website in 2003.

Efforts to refute Childs’s central “Letter” arguments appeared quickly, the most important of which (at the time) were privately circulated: Edmund A. Opitz’s “Where We Differ” and a lengthy essay by Charles Jackson Wheeler that later appeared in The Personalist, a philosophical journal edited by John Hospers, director of the philosophy department at the University of Southern California. Hospers pronounced Wheeler’s refutation absolute and final, but very few of us who had been won over by Childs’s arguments agreed.

Perhaps the most promising effort to refute Childs came at a libertarian convention in early 1971 in New York, when Childs debated Jeffrey St. John. St. John was known to libertarians outside New York City primarily as the author of an essay in The Objectivist; he was therefore thought to be a sort of unofficial spokesman for Objectivist polity.

The debate, available on The Last Ditch website in its section devoted to works by and about Roy Childs, was a rout and St. John retreated to conservatism.

Within a year, David Nolan — who had published a letter in Lanny Friedlander’s magazine Reason, vol. 2, no. 9 (circa December 1970) urging an end to the debate — published an article in the July-August 1971 Individualist calling for the creation of a libertarian party. The following year a political party was in existence with Hospers as its first presidential candidate. Hospers gleaned the party’s first and only presidential electoral vote, and his running mate, Toni Nathan, received history’s first electoral vote for a woman, a milestone feminists and other left-wing chroniclers of “women's issues” often ignore, if they are aware of it at all.

For the next ten years, new organizations and publications were popping up all over, and significant money flowed into the movement from the Koch brothers of Koch Industries. Most important of the new organizations was the Cato Institute. The personalities dominating the institute and the party sometimes overlapped and sometimes were at war. Denunciations of former associates were almost a regular feature of newsletters and monthlies. Important alliances were formed, and important friendships were shattered, among them the long-standing affection between Childs and Rothbard.

When the dust settled, still standing were Laissez Faire Books (alone among the competing book suppliers), the Libertarian Party, Reason magazine (under new ownership since the January 1971 issue), and the Cato Institute. Also standing, perhaps because it had stood aloof from the various quarrels and altercations, was Leonard Read’s Foundation for Economic Education (FEE), with its publications and book service. All others were lost, doomed, or marginalized. (By far, the greatest among the marginalized was Rothbard’s Libertarian Forum.) By this time the official Objectivist movement had completely anathematized the broader libertarian movement, refusing even to recognize itself as a part of it.

Both Cato and the party had made the same significant policy decision: neither would discuss anarchism. In Cato’s case, the decision was based on its desire to become a major think tank that would be taken seriously by policymakers. In the party’s case, the decision was a big-tent effort to maintain peace among the anarchists and what some of us called the “limited statists” for the sake of winning elections. In short, most libertarians began to work for reform, rather than for liberty. And make no mistake: limited government is a reform measure.

We see the results today: free-market anarchism itself, which triumphed in virtually every setting when it first appeared, is now completely marginalized in the movement. It is supported by no major publication (even within the relatively small arena of libertarian publications); it has no spokesman. The two publications lately associated with Rothbard (the Rothbard-Rockwell Report and The Free Market) became part of a tactical alliance with certain paleoconservatives, and, like Cato and the party, their principals, for the most part, buried the hatchet of anarchism for the sake of the alliance. Beginning in the early 1980s while he was still working at Cato, Childs himself began telling people that he was no longer an anarchist. And later, the website LewRockwell.com — although it continued to publish free-market anarchist essays and op-eds now and then — gave up its tax-free status in order to advance the (Republican Party) candidacy of Ron Paul for president.

But what other result was possible? The only strength free-market anarchism ever had against the Vichy libertarianism offered by the advocates of limited government, constitutionalism, and the night-watchman state was its arguments. The latter enjoyed the numbers, the money, and the key positions in the organizations and publications. Once anarchism stopped wielding its only weapon (its decisive weapon), it could expect no other outcome than the marginalization in which it now finds itself. As Rand had warned in a January 1964 Objectivist Newsletter essay, “When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side.”

If free-market anarchists join with their limited-government allies and aim for the night-watchman state and only when it is achieved discuss whether it is necessary — instead of working from the start for the radical liberty free-market anarchism proposes — the result will be and can only be that their radicalism will be submerged in the reform measures of limited government. Their concession means Vichy liberty.

We do not need to go to Ayn Rand to understand this. Hornberger himself has explained to us in several insightful essays why reform cannot achieve a radical end, and his observations are worth quoting at length:

In “The Libertarian Case against Vouchers” (June 12, 2015), he explains why supporting education vouchers will not advance education liberty:

[Voucher] proponents don’t cause people to question the very idea of government involvement in education. How can we ever achieve a free society if libertarians aren’t causing people to question illegitimate governmental apparatuses and instead coming up with reform schemes that keep such apparatuses intact? Indeed, why would we expect people who aren’t well-versed in free markets to embrace a genuine free market in education if libertarians aren’t willing to do so?...

The free market produces the best of everything. It would do the same with education. More important, educational liberty would be a gigantic step toward restoring fundamental moral principles to our land.

Is not the application of these observations to the debate between limited government and free-market anarchism obvious?

Once a night-watchman state is established, why would we expect people who weren’t well-versed in free markets or political theory to embrace a genuine free market in justice and defense if libertarians weren’t willing to do so? And if the free market produces the best of everything, why argue against its ability to supply necessary justice and defense services and products?

In his booklet “Why We Don’t Compromise,” Hornberger makes another excellent point. He is discussing the question of reform versus abolition:

Suppose 100 percent of libertarians called for a reform, rather than a dismantling, of the welfare-warfare state way of life under which Americans today live. What would be the chances of achieving the free society — that is, one in which a welfare-warfare state apparatus is no longer grafted onto our federal governmental system?

The chances would be virtually nil. That’s because no one would be spreading the idea of abolition. Everyone would be talking about reform.

Even if the idea of abolition were raised from time to time, nonlibertarians would inevitably say to themselves, “Why do we want to consider abolition when libertarians themselves don’t call for abolition?” After all, if those who have studied the market process decline to call for a free-market way of life, why would we expect others to do so?

Why, indeed? And if those who have studied the market process decline to call for a free market in justice and defense, why would we expect others to do so?

He offers another insight into the dynamic of compromise in the same essay:

[Gradualism] is not gradualism.... [By] entrenching the state more deeply into areas it should not be involved in, “gradualist” methods don’t gradually lead to freedom; they instead obstruct and impede it.

School vouchers provide a perfect example....

At the end of five years, let’s say that libertarian voucher proponents say, “Okay, everyone, time’s up! Our voucher program was intended to gradually bring about the end of all state involvement in education. Five years is a sufficiently long time for such gradualism. Time to terminate the voucher program and to separate school and state.”

What are the chances that ... schools are going to enthusiastically join such libertarians? The chances are virtually nonexistent. That’s because they, like the families who receive the vouchers, have grown as dependent on the voucher dole as the public-schooling establishment has become on school taxes. They are not about to call for the end of their dole.

In fact, voucher recipients are likely to lash out at the libertarian proponents of vouchers for failing to disclose to people that their ultimate aim with vouchers was to end government involvement in education. You see, voucher proponents learned a long time ago that they could not, as a practical matter, publicly state ... that school vouchers are a gradualist means of bringing about an end to government involvement in education. They found that if they disclosed that, it was more difficult to induce people to accept their voucher proposals.

Thus, voucher proponents decided to remain silent about their ultimate goal. In fact, many of them got so embroiled trying to get vouchers accepted that they themselves lost sight of what their ultimate goal was.

One final insight from Hornberger, and I believe the point will have been made. Again he is talking about education reform, i.e., vouchers, and he is taking libertarians to task for advocating them. The essay is “No Compromise Is the Only Way to Achieve Freedom” (December 8, 2014):

Let’s consider [this possibility] — that a libertarian statist reform plan [i.e., education vouchers] succeeds in making the situation better.

What then?

People are going to be ecstatic that libertarians have figured out a way to keep the entire socialist apparatus, such as public schooling, intact and improved. People [are] going to say “Thank you!” to those libertarians who saved their statist system and even made it work better.

There is no reasonable possibility that ... libertarians who support school vouchers (or any other statist reform scheme) are going to say: “Despite our success, we want to now propose the abolition of vouchers and the entire public-school system.” Instead, it is a virtual certainty that such libertarians would be basking in the praise that would be heaped upon them by statists and that they would immediately begin searching for more statist ways to save and improve the life of serfdom under which Americans are now living.

I suspect that the attraction of the suggestion of Hornberger’s friend is this: that when most people contemplate liberty without a government, they imagine that there will be little change in their thinking or in their outlook or in their intellectual impulses. They imagine that a free-market anarchism is just like a night-watchman limited government, but without the government, as though everything is the same, but with one less entity in the world. It is not so.

The idea of the free market is much more radical than most people imagine. Indeed, to quote Strakon speaking about the arguments of Childs in “Epistemological Basis,” “it is only when one begins working out their implications that their radicalism emerges fully.” Similarly, the idea of the free market is so radical that most of its defenders would probably be terrified if they ever saw one in its beauty and virility. Just the idea of banking without regulation, without a treasury department or a central bank, will instill a hearty dose of disquiet in the average person. Even Milton Friedman believed that a central bank was necessary to keep the money level stable — and what he advocated was more liberty than many people can accept. (I almost hear the detractors of free-market anarchism saying, “Even Milton Friedman thought that we needed government to ...”) Or think of a judicial system that must operate without the power of subpoena, i.e., the power to coerce people who have committed no crime to appear in a specific place and a specific time and perform specific actions. Almost before some readers finished that sentence, their minds were already formulating the question, “But how would you ...”

“How would you” is not an argument; it is a confession that one’s imagination is so obstructed that he is losing sight of the role of principles. In the first place, the person being asked is not usually a person who “would” do anything; it is not within his expertise.

In the second place, “how would you” presupposes that a free market is something to be designed, and that one person can design it for everyone else.

And in the third place, the idea is not “but how would you”; it is “should you”? To the “but how would you?” question, I am inclined to reply: “Should you continue to coerce people who have not committed a crime to come to a courthouse and swear to answer questions? No? Then think about how such a judicial system could work on your own and see what you can come up with.” The problem of modern libertarians — indeed, most people — is that they have spent so much time looking to reform the state, trying to get it to confer some benefit on society, that they have become incapable of imagining a free market without a government to direct it or “protect” it.

So many of the “problems” of society are addressed by the state’s coercion, that it becomes normal to seek solutions only within the halls of coercion. With such habits of mind it is no surprise that it is only coercive measures that occur to most people. Moreover, as I hope shall become apparent, once political solutions are sought for social problems, it will only be coercive solutions that can be found. Politics has no other solutions to offer.

The free market is not a weakling that needs protection; it is not a project that needs to be designed. We may think of it as a kind of powerful lion, and, like C.S. Lewis’s Aslan, it is not a tame lion.

Once one adopts free-market anarchism, the world and society begin to look quite a lot different. Over time, habits of mind will change. What initially seemed to be a minor problem in the logic of government, perhaps even a tolerable one, will come to be seen as a major contradiction, an affront to the intellect and a rejection of liberty itself. I cannot explain precisely how or why this is so; I merely report my own experience and that of the handful of free-market anarchists of my acquaintance. The gentle call to aim our efforts at “getting down to” a night-watchman limited government disguises what awaits us if those efforts should seem to be successful. The sirens’ song, after all, did not really lure men to a life of ease and pleasure, but to their deaths. The sirens were not just few pretty girls who sat naked on rocks and sang a little off-key; they were cannibals.

It comes down to this: if free-market anarchists agree to push for a night-watchman state, planning to take up the question of free-market anarchism later, the most they can hope to get is a night-watchman state. You get what you settle for. And in this case, not even that, for as I shall argue, its existence is not within the realm of possibility. It is not merely the central figure in a skirmish with free-market anarchists. It is in fact a durable and staunch lieutenant in an ongoing war against the Law of Contradiction.

Finally, I issue this call to free-market anarchists who work for reform — either the kind that involves policy-wonk reformism or the kind of reform that has as its fulfillment the Vichy libertarianism of a limited government:

Liberty — real liberty — needs the help of dozens and dozens of men who will think about this subject; who will debate various methods, strategies, and tactics that none of us has yet thought of and try them; whose genius, insights, and talents will not be squandered in the defense of the state, even a night-watchman state. There are plenty of people to serve that false liberty, that Vichy liberty. It is real liberty that stands in need of hearts and minds and hands. No libertarian who reads my words is needed to carry out the work of the limited state and its false liberty. Your work for it, your talent, and above all your vote are superfluous. The false liberty of the limited state and other chimeras do not need your voice to spin out their reforms. The state can get along without you. It has been getting along without you for centuries.

It is true liberty that stands in need of you, of your talents, of your intelligence, or your energy. And it can never be won as long as countless libertarians overlook the errors of Vichy libertarianism until such undetermined time as it is completely triumphant.

By that time, too many of you will be saying, “We have 70 percent of what we wanted. That’s good enough. You can keep the change.”

I therefore, in the spirit of comity, offer this modification: “Let’s call a truce. Let’s work to get rid of the state completely. At that point, if it looks like we need a government, we’ll decide whether we want to cobble one together.”

December 3, 2016


Chapter Two: Legitimacy

© 2016 Ronald N. Neff. All rights reserved.
Published in 2016 at The Last Ditch by Croatoan Books, a division of WTM Enterprises.

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