Robert Frank and Libertarian Beliefs
I thought, however, that it would be worth exploring a different feature of his argument—his view of what libertarians believe, offered as part of his argument for why libertarians ought to support governmental income redistribution. Frank writes:
"Society’s income distribution, [libertarians] argue, should reflect as closely as possible what people would earn in unregulated private markets."
Off hand, I cannot remember ever hearing a libertarian make that argument. A better version, later in the piece, is:
"Enlightened libertarians believe that the best social institutions mimic the agreements people would have negotiated among themselves, if free exchange had been practical."
Libertarians differ widely among themselves on both the basis for views and their implications, so the quote is probably true of some libertarians and certainly false of others—unless it is taken to exclude as unenlightened any libertarian who disagrees with it. But it is worth asking to what degree Frank is correctly describing the implications of the more common grounds for libertarian beliefs. Consider three different alternatives, corresponding to three common approaches to political philosophy.
1. Natural Rights: Probably the most popular position among the hard core of self-identified libertarians, some of whom make opposition to the initiation of force the defining characteristic of libertarianism. For most or all of them, both of Frank's statements are false. Following arguments along the lines of Robert Nozick's distinction between desert and entitlement, they hold that what matters is not what you end up with but how you got it. Whether or not the rich would have willingly given money to the poor in a zero transaction cost world is irrelevant to the legitimacy of coerced transfers by the state.
2. Social Contract: The contract is a metaphorical one. What people would have agreed to if ... is a common basis for deducing it, which makes this a plausible basis from which to defend the position Frank is arguing for. The only problem is that it is not a position popular with self-identified libertarians, few of whom are Rawlsians.
3. Consequentialism: The argument is that libertarian institutions lead to results that most people would prefer to the results of alternative institutions. This is the position I have usually argued from; while I have some sympathy with the moral intuitions underlying the natural rights position I lack arguments to support those intuitions, so prefer to take other people's objectives as given and argue that my preferred institutions would better achieve them. Utilitarianism is one version of consequentialism, but not the only possible one.
From a consequentialist standpoint, Frank's position is at least plausible—how plausible depending on the degree to which one believes that free exchange in a zero transaction cost world would lead to the optimal consequences. It is worth noting, however, that there is no reason to expect it to lead to a utilitarian optimum, for reasons having to do with the difference between economic efficiency and maximum utility.
So far I have been considering the views of self-identified libertarians. The label may also be applied to the much larger number of people, perhaps as many as ten or twenty percent of the population, who support some increase in individual liberty and reduction in government power in both social and economic contexts. I expect that many of them would be sympathetic to the view that Frank expresses but that few would take it as an adequate definition of their position.
I do not know if Robert Frank, in writing what I quoted above, was thinking of statements of principle made by specific libertarians. If he is reading this, he may want to provide examples. My own feeling is that, while many libertarians would agree that his claim about what perfectly functioning markets would produce, if true, would provide some defense for government redistribution, few would regard it as a conclusive, or even adequate, defense—and that, of those few, most would be economists.