Summary Of What It Means To Be A Libertarian And Aftershock

Both Charles Murray’s 1997 book “What it Means to be a Libertarian” and Robert Reich’s “Aftershock” are based on the premise that America has fallen short of its potential. For Murray, America has become mired in regulation and social welfare programs, robbing citizens of the opportunity to take responsibility for themselves and society. Reich writes that rising income inequality between the richest one percent and the rest of the country has led to economic stagnation. This essay will explore the authors’ views of the role of government in social policies, including how these views would bear on popular topics such as the Affordable Care Act and school vouchers, and evaluate the potential for their policy proposals to be successfully adopted.

Murray adheres to libertarian principles, insisting that only greater freedom in the form of reduced governmental regulations and services would enable Americans to thrive. Reich says the state should enact wide-ranging social policies to achieve a fair distribution of the nation’s resources. His social justice perspective is more closely aligned to the nation’s history and policies than Murray’s libertarian perspective.
To frame his argument, Reich selects a compelling starting point: September 2009 when the Great Recession is technically over but unemployment is 9.8 percent (U.S. Department of Labor, 2015). Murray (1997), writing more than 10 years earlier, does not have a fresh crisis for his call to action. His more subtle argument is that governmental programs have blunted American initiative:
As of the 1990s America should be a place in which virtually everyone has enough income to provide for bad times, old age and medical care; a place where virtually everyone takes for granted that he must support the children he brings into the world.
(p. 126)
Murray’s solution to what ails America would be to return government to its primary role of protecting freedom (p. 4) and its secondary role of providing public goods (p. 11). America went wrong when it began providing social insurance and related programs, creating dependency among people who would otherwise fend for themselves (p. 126). Murray’s position that freedom is at odds with the welfare state may be hard for many Americans to understand. Financial security made possible by social programs can be seen as a form of freedom from bankruptcy and worry. For Murray, however, freedom’s companion is responsibility: “If you live in a genuinely free society, you get to shape your own life. You also bear the consequences of your decisions” (p. 30). To ensure that people will take responsibility for their own future Murray recommends clipping the government safety net by eliminating all social programs (p. 130). This would include programs that have become universal such as Social Security retirement benefits. Once people realize they are responsible for providing a secure retirement for themselves, they will become motivated to take action by saving more for the future. Murray argues that citizens taking greater responsibility for their own lives will contribute to societal prosperity; a nation of savers will create resources to benefit the entire economy (p. 132).
In later writings, Murray proposes an alternative welfare state, perhaps a nod to criticisms that complex social policies cannot be unraveled overnight. Under this scenario, every citizen 21 years of age and older, excluding those in prison, receives a $10,000 annual check from the government to buy health insurance, invest for retirement and provide a cushion against poverty (Murray, 2006). The core responsibility remains the same: Citizens would have to spend and invest wisely. With or without this government seed money, people will make mistakes. Chance events will bring misfortune. He writes that “there can be no such thing as a society free of human suffering” (Murray, 1997, p.127). Even a conservative view of social welfare policy would condone government intervention in dire cases. Gilbert and Terrell (2013) call this a residual approach, a reference to temporary assistance when the efforts of other social institutions such family, churches or civic organizations have fallen short (p. 12). For a libertarian such as Murray, even this is too great an involvement for the state, for two reasons. The first is incompetence. Early in its history, U.S. government worked well because the “old functions of government were straightforward” (Murray, 1997, p. 145). In recent decades, however, the state has failed at remedying complex social problems that cannot be solved with a checklist: “Healing an abused child is not a known task. Teaching self-restraint to teenagers is not a known task” (p. 145). The damage, he writes, goes beyond incompetence. Every time the government adopts a policy to mitigate a social problem, it displaces private individuals and organizations that Murray argues would do a better job (p. 58). Murray points to Alexis de Tocqueville’s 19th century praise for America’s voluntary associations to suggest that modern-day versions, such Rotary and Kiwanis, would take the place of government in caring for the poor (p.136). Social welfare is the responsibility of citizens acting individually or collectively, but not under the auspices of the state. For Murray, the two are mutually exclusive.
Reich takes a nearly opposite, institutional view of social welfare as described by Gilbert and Terrell (2013) in which the government has an integral role in assuring citizens’ basic needs are met.

They also point out social welfare in America has both residual and institutional elements (p. 12). Reich expresses this mix with the idea of a pendulum; America experiences periods when “we see ourselves as ‘in it together,’ and periods during which we view ourselves as being pretty much on our own” (Reich, 2010, p. 4). America’s pendulum has strayed too far in the latter direction, creating income inequality not seen since just before the Great Depression. The remedy, Reich writes, is a renewed commitment to what he calls the “basic bargain.” By this he means the workers should get enough of an income to sustain demand for the very goods and services they produce, thereby maintaining the overall economy (p. 31). The state’s role is to manage this bargain with social policy. For example, he calls for an expansion of the Earned Income Tax Credit, lower tax rates for full-time workers making up to $160,000 and higher tax rates for those making more (pp. 129-130). Capital gains should be taxed at the same level as earned income, thereby requiring the wealthy to pay much higher taxes (p. 131). College loans payments should be based on earnings and the loans forgiven after 10 years, so that those who pursue lucrative careers support the education of those who train for

lower-paying jobs that serve society, such as teaching positions (pp. 136-137). Reich’s proposals embody Gilbert and Terrell’s core values of social justice, and in particular equity. For Gilbert and Terrell (2013), equity is fairness with a sense of proportionality (p. 76). In Reich’s worldview, the wealthy should pay more in taxes because they have more. He faults Wall Street traders for having “yearly bonuses that exceeded the life-time earnings of most middle-class Americans” (Reich, 2010, p. 105), suggesting that there is such a thing as too much wealth in comparison with the largest segment of the population. Reich sees the government as the arbiter of equity, using social policy to maintain fairness in the distribution of the nation’s resources.
In regards to social policy, Reich and Murray are even further apart than the traditional positions of conservatives and progressives. While Murray (1997) shares some positions with conservatives, he does not think the state should have a limited role in social policy; he thinks it should have no role (p. 130). Reich and Murray may appear to agree on certain issues, but a closer examination shows these points to be occasional intersections on divergent perspectives. The Affordable Care Act would be a case in point. Though it was adopted in 2010, some fourteen years after Murray wrote his “What it Means to be a Libertarian,” his objection to this type of law is made clear in the book. Murray would view this as the government using its police power improperly to force people to acquire health insurance. Taking an undesirable job just to get health insurance or buying a policy on the open market to avoid a fine would amount to a loss of individual freedom. Affordable Care Act regulations that determine the minimum standards for a health insurance policy would be a breach of economic freedom for individuals and insurance companies. Subsidized health insurance for many lower and middle-income families would erode their responsibility, inviting them to take health risks because they know the medical care wouldn’t cost too much. Murray would call this an example of risk homeostasis, which he cites as another reason government programs become ineffective (p. 62).
The liberal Reich finds fault with the Affordable Care Act, but for very different reasons that help illustrate his perspectives on government and the markets. Reich favors more, not less, government in health care. He does not have the same faith in the market as Murray. He notes that markets “don’t exist in nature” and can be shaped for certain results (Reich, 2015). His plan for reducing inequality calls for Medicare for all Americans, essentially a single-payer health system that covers the poor and subsidizes health care for the middle class (p. 137). By retaining private, for-profit insurance companies as major players in U.S. health care, the Affordable Care Act also retained high administrative costs and the profit expectations that compete with consumers’ expectations of quality. Reich predicts the new health care law will ultimately fail to rein in costs and lead to inequality in health outcomes between the rich and poor (p. 138). Reich points to the vast influence of wealthy health insurance and drug companies as the reason President Obama could not achieve more expansive health care reform (p. 111). In this case, the same elements of America’s unequal society that Reich faults throughout “Aftershock” led to a less-than-perfect health care law that Reich would say is likely to perpetuate inequality.
Reich and Murray also seem to agree on the potential benefits of education vouchers but that, too, is only on the surface. Murray (1997) would give families identical vouchers that approached, but did not necessarily cover the cost of education. He acknowledges that education is, to some extent, a public good and therefore should be at least partly funded by the government. Families would have to bear responsibility to cover the remaining costs for whatever public or private school they preferred. Murray assumes that churches and other private organizations would provide schools for the poor by charging them no more than the government allowance. Those with the means would be free to use the government allowance to supplement their own funds for more expensive schools (pp. 96-97). Reich (2010) would view this approach as perpetuating inequity in education. Instead, he favors a progressive system of vouchers with poor families getting enough to cover the full cost of education. Wealthy families would get much less on the grounds that they need less, again an example of Reich’s focus on the proportional nature of equity in social policy. Reich’s approach would use market forces, but it would make poor families more sought after as they would have the most valuable vouchers. Schools would have an incentive to provide services that poor families need to make their children successful (p. 135). This is in keeping with Reich’s view that market forces should not be allowed to find their own level but be harnessed for the benefit of society.
Murray would view this approach to education vouchers as government going too far beyond its vital functions. He writes that Americans are weary of government efforts to fix social problems. At the time of his writing, polling found that 75 percent of Americans “do not trust the federal government” because they find it incompetent (Murray, 1997, p. 144). Reich would agree that Americans have grown increasingly frustrated with government, but not because of incompetence. Reich says the government was indeed working, but not for the middle class. Conventional wisdom, Reich writes, wrongly ascribes tax revolts that began in the 1970s to a conservative tide. Instead, people began to question the fairness of taxes as government services declined. They were not objecting to taxes, per se; they wanted the services that come with paying taxes (Reich, 2010, p. 58). Middle class families have seen their own incomes stagnate while the wealthy enjoy higher incomes and lower tax rates (pp. 55-56). This leads them to conclude that the “game is rigged” (p. 101), a reference to the political influence of the wealthy. This is another indication for Reich that the pendulum has swung away from solidarity, which Daniel Beland (2010) describes as a concept in which social policies are based on the presumption that citizens have obligations toward one another (p. 13).
The idea of mutual obligations appears in Murray’s writing as well, but outside the context of government. As stated previously, he assumes that, in the absence of a welfare state, individuals will respond to the suffering in their families and communities. He puts his faith not in social insurance but in social capital. Like Robert Putnam, Murray views the power of social networks to build trust and cooperation as critical to the function of society. Both men also overestimate the power of social capital. Putnam (1995) notes that “for a variety of reasons, life is easier in a community blessed with a substantial stock of social capital” (p. 67). He does not address the poor or disadvantaged who may live outside the network where information and emotional and financial support are shared. Murray’s confidence in the ability of social networks to solve daunting social problems has already proven misplaced. As Gilbert and Terrell (2013) write:
The first major spurt of governmental welfare in the United States resulted from the recognition that the family, religion, and economic institutions and the instruments of voluntary mutual aid and local government were unable to address the enormous social distress caused by the Great Depression. (p. 12)
Unlike Murray, Putnam does not rule out a role for government in social capital development and cites as examples the benefits of community colleges and tax deductions for charitable contributions (Putnam, 1995, p. 75). Some of Reich’s social policy proposals, particularly those to make families more stable, could also support social capital. Putnam sees the entry of women in the workforce and the increasing mobility of society as damaging to the development of social capital, given the time it takes for networks to form (p. 74). Social policies that make it possible for a one-income household to maintain an adequate standard of living would free up time – whether the husband’s or the wife’s time – to engage in civic activities. Reich’s concept of wage insurance to help people avoid ruin and economic dislocation would also contribute to stable communities, which Putnam considers an important condition for the development of social capital (pp. 74-75).
With Reich and Murray so far apart politically, we return to their only point of agreement that America has lost its way. The question becomes then: Who has the most compelling vision for what America could be? Murray (1997) is at his best expounding on basic ideas of freedom and public goods, which are important concepts to consider in spending priorities. His exploration of the link between mindfulness and responsibility on human contentment are valuable insights. However, his more detailed recommendations for eliminating specific government agencies are weakened, in part, by his hostile claim that, “By and large, the things the government does tend to be ugly, rude, slovenly – and not to work” (p. 147). This generalization does not seem logical. For example, he suggests the government should be responsible for national defense, presumably on the grounds that it is a straightforward function as noted earlier. National defense in the nuclear age at a time of rising terrorism is complex and politically charged, surely not as straightforward as issuing Social Security checks. Nor have Murray’s sweeping statements about the superiority of the private sector held up to the test of time. He cites Moody’s and Standard and Poor’s as proof that the private sector can establish meaningful standards for business (p. 68). Just over 10 years later, the nation discovered how poorly these agencies were rating financial products (Lowenstein, 2008). He oversimplifies the plight of the unemployed, writing that in a state without a social safety net, “to be a young man and out of the labor force is once again to be a bum” (Murray, 1997, p. 133). This stance ignores the possibility for automation and globalization, which are driven by private-sector decisions, to leave hard-working, healthy people out of the labor market. Getting laid off doesn’t make one a “bum.” Such inconsistencies and unanswered issues cast doubt on his overall approach.
Reich’s proposed remedies for rising inequality are based on certain assumptions as well, particularly overconfidence in the legislative process and the self-interest of the wealthy. As Reich himself states, for his policy proposals to work, the wealthy would have to understand that they, too, will eventually be affected by the long-term effects of inequality. To appease an angry citizenry, Congress may pass laws that cut into profits or raise tariffs (Reich, 2010, p. 144). As income inequality gets more attention, politicians might be motivated to adopt some redistributive policies, but would they go so far as to tax capital gains as ordinary income knowing that it would hurt campaign donors the most? If the Affordable Care Act, which addressed a nationwide crisis, can be diluted, Reich’s other proposals may face the same fate. He also believes the bank bailout and stimulus package that followed the 2008 stock market crash staved off another depression without fixing the underlying problem of inequality that led to the crisis (p. 19). Use of stop-gap measures and watered-down versions of Reich’s proposals may fail to bring about the level of income equality he seeks.
Still, Reich offers a more pragmatic and coherent approach than Murray.

Reich gives his argument more validity by exploring the conditions before and after the Great Depression, which are known, as the basis for his proposals. Specifically, he uses the analysis and ideas of Marriner Eccles, governor of the Federal Reserve Board during Franklin Roosevelt’s presidency, to show how social policies enacted after the Great Depression succeed in reducing income inequality (p. 44). Reich also builds his recommendations largely on longstanding programs such as Medicare and the Earned Income Tax Credit, which have been successful in their goals of providing health care coverage to seniors and higher incomes to the poor. Gilbert and Terrell (2010) point out that modern societies have come to expect the government to have a significant role in social welfare (p. 13), making it difficult to imagine the country abandoning social welfare programs as Murray suggests. By drawing on lessons of the past and the structure of current social policies, Reich can reasonably argue that Americans have shown a willingness to relinquish some of Murray’s beloved freedom for a measure of social

justice.