Like many Libertarians, I first found this philosophy through the writings of Ayn Rand while I was in college.  When I read it, the philosophy made lots of sense to me.  Over the years when people would ask me my political affiliation, I would say “I’m a Libertarian.”

I still think the philosophy makes tons of sense.  At the same time, I’ve become bothered about why Libertarianism doesn’t seem to work very well when put into practice.  After all, some of the most vocal “Libertarians” are among the worst polluters in the country, and that doesn’t seem to jibe with what’s in their or for that matter, my long-term best interest.

The same issue comes up when I think about economics

When I look at the world of economics, the same thing happens.  Economics is based on a thought process that I believe is a lie.  The world of economics is based on human beings acting rationally.  If there is one thing I know, it’s the human beings don’t act rationally.  And, it’s the reason that the only part of economics I think makes sense is what’s called Behavioral Economics and this theory is more psychology than it is economics.

Here’s a thought from Being Libertarian that helps focus the issue.

These are people who pretend to be protecting the rights of minority groups, like gays and blacks, but who are quick to label anyone from these minority groups as traitors, coons, and Uncle Toms if they fail to fall in line and preach their message. via Identity Politics and Libertarianism – Being Libertarian

Here’s my challenge.  I would love to see the world act in a rational manner.  But the truth is we look to avoid loss more than we look for gain.  We think that whatever has happened in the recent past is likely to be what’s going to occur in the future.  We always believe that it’s going to be different this time and it rarely is.  These are all beliefs I see repeated over and over, and they go in the opposite direction of rational behavior.

Back to my conundrum of Libertarianism

About two or three weeks ago I finally realized what my uncomfortable feeling is about Libertarianism.  I now believe that for the world to work in a Libertarian way where all get a chance to win we as humans have to act in a rational manner.  Rational behavior doesn’t seem to be the way the world works, and I doubt it ever will.

Sure, I think we’re over regulated.  I believe that we got ourselves in this position because too many people don’t have the ability to think long-term.  They believe that if they don’t get theirs, someone else will take it from them.  In a perfect Libertarian world, we wouldn’t need an EPA or SEC or many of the other alphabet soup agencies government has.  We have them because we don’t think about our personal and long-term business interest in a rational way.  We tend to look at either not losing or believing that what happened yesterday is going to happen tomorrow.  

And that’s the problem.  We have a moral dilemma, meaning we have a hard time defining what is in our best interest.  

Why don’t Libertarian business owners act in a different manner?

When I talk with Libertarian business owners, I often end up having a frustrating conversation. They mouth the right words, but when I look at their actions, they don’t walk their talk.  I always get some gobblygook about the first job of a business is to make money.  

I strongly disagree with this.  Peter Drucker has said for years, the reason a business exists is to create a customer.  I totally agree with that.  And, creating and having long-term customers is often at odds with what Libertarians do.

Take two of the most outspoken proponents of Libertarianism, the Koch brothers.  The are rabidly anti-government and have a strong belief that private enterprise takes care of things better than government 100% of the time.  At the same time, their company Koch Industries is among the most heavily fined companies by the EPA.  To me, this doesn’t jibe with being a Libertarian.  If they want customers to buy their products, it would make sense that they would want to have healthy customers.  Polluting water and air doesn’t seem to be at odds with a belief like that.

My issue

I still think of myself as a Libertarian.  I also am sad that too many of our Libertarian brothers and sisters don’t think about what’s best for us as a society.  Does it do any good for us to have millions of people in jail?  Talk to many Libertarians, and they want even more than we have now in prison.  What about immigration?  Hasn’t that been the lifeblood of American success? Does it do any good for us to have millions of people in poverty with no way out?  Again, too many Libertarians aren’t thinking big picture.  

There was a reason that Henry Ford paid his people $5 per day.  It wasn’t so he could support his workers.  It was so his workers could afford to buy his cars.  

What about today?  Do we see Libertarians supporting a living wage or do we see them supporting CEO’s making 325 times the average salary of the workers in their companies? Sadly I have to say more large company Libertarians support outsized wages for CEOs.

I’m not opposed to people making lots of money.  I do think that we need to start thinking about our own good in a larger context.  If we keep losing people from the middle class, we won’t have people able to participate in a middle-class lifestyle.  That’s bad for business and the slide has been going on for years.

Maybe it’s time for me to start thinking about a modified version of Libertarianism, one that factors in the realities of Behavioral Economics. 

What do you think?  Why don’t you let me know what you think in the comments below?


Topics: behavioral economics, Opinion, creating business value, Libertarian, rational thought

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