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The Economics of Intolerance

EconomicsPosted by Nico Metten Thu, July 16, 2015 12:37:28
Libertarianism is advocating to maximize the liberty of individuals. The idea is that every person should have the right to be left alone as much as that is practically possible. Originally, I was under the impression that Libertarians must be people who have a lot of faith in human beings. That is because, one of the major arguments against liberty seems to be that a lot of people are simply not fit to make their own decisions in every aspect of their lives. They need to be forced or at least guided with some mild pressure to make the right choices. While libertarians will be quick to admit that people are not infallible and not all of them are decent, they nevertheless believe that even a superior elite group, or a single genius, cannot get the right personal choice better for the average or even below average person than the person can for themselves. They also believe that there are only a small amount of potential or real trouble makers. The vast majority of humans are basically good, trustworthy people. This to me, seems to be a very positive and optimistic view of humans.

Over the years however, I came to notice that libertarianism does seem to attract some people who are not particularity positive about humans in general. Their attraction to liberty seems to be two things. Firstly, they are attracted to the idea of liberty allowing them to reject others so they do not have to deal with a lot of humans that they do not like. In other words, it is the ability to dodge others, to be intolerant of those that they do not like, that is attracting some people to libertarian ideas. And secondly, they seem to have come up with the idea that economic forces will be an even stronger restrain on people's behavior than the state. In other words, they paint the picture of a libertarian society being mostly homogenous and conservative.

Their arguments never made much sense to me and I am going to explain why. I am going to argue that a libertarian society will most likely be very colorful and multicultural.

Let us start with the first argument that liberty is about the right to discriminate. It seems clear that we can only have absolute unrestricted liberty in a world of superabundance. But since we live in a world of scarcity, it is inevitable that our liberty will be limited by the liberty of others. What is the best way of maximizing the ability of people to be left alone in a world of scarcity? The libertarian answer to that is to grant people certain property rights. Only with these property rights, it seems possible to practically leave people alone at least to some degree. With property, I am at least able to do what I like with a small part of the real world, most importantly with my own body and life. Without property I would not be able to make any decision without asking all other people interested in the same property for permission first. Therefore, it seems correct to assume that property really does maximize liberty.

From this, the intolerance crowd will follow, “see, liberty is all about discrimination, therefore a libertarian society will see more of it”. Well, not so fast. Just because in principal you can do something, does not mean that it is always a good idea. Yes, it is absolutely true that liberty entails the right of people to exclude others from their property or business activity for very shallow reasons. But then liberty gives you the right to do all kinds of things. You could restrain from showering and being polite to other people. But from that does not follow that this is a good survival strategy. I would suspect that it is probably not.

People who stress the ability to intolerance through property overlook the fact that property is not absolute liberty. It is merely a strategy to maximize liberty in an otherwise scarce world. As such it also demands a lot of tolerance. While it is true that you can use your property in any way you like, it is part of the property deal that you absolutely respect other people to do the same with their property. That means that you can for example prohibit people from burning the Koran on your property, but you also must not interfere if your neighbor is doing something like that on his. This might not be an easy thing to do. Liberty therefore clearly demands tolerance from people.

Our well being as individuals very much depends on the cooperation of us with other humans on this planet. And the larger the amount of people we are cooperating with the better, in other words the larger the market in which we take part, the better off we are. This is causing a few problems to intolerant people. First, if you really do not want to be confronted with things that you find hard to tolerate, you will have to do more than just own a small piece of property. You will have to find a way to legitimately control your whole neighborhood. There are of course ways of doing that. But no matter how you do it, whether you are buying up all the properties in your neighborhood or join a gated community, the costs for this lifestyle will be higher than for people who are more relaxed about their neighbors. And the more intolerant you are, the further away from other people you will have to move, or the higher walls you will have to establish around you. This however drives up the costs to cooperate with others. This is the reason, why so many people are living in crowded cities. Having a large amount of diverse people around you, opens up a lot of possibilities. That means it is economically costly to pursue an intolerant lifestyle. Sure in a free market, everything will likely become cheaper as productivity rises. But the relative economic disadvantage compared to people who are tolerant remains.

And there is more economic disadvantage. Say you are running a company and you are a racist. In that case you are excluding a lot of potentially helpful people from your business. That should cause you disadvantages compared to a competition that is more open minded. There is a reason why racist societies force people to be intolerant by law. Left on their own, most people quickly start realizing that hatred is not a very attractive philosophy.

What about the claim that a libertarian society will likely see more conservative lifestyles. I don't find this completely convincing either. I think conservatives are right in one aspect. Cooperation on a free market demands responsibility. So some of the irresponsible behavior we see being produced by the welfare state will likely go away. On the other hand however, markets are known to produce a lot of wealth. And particularly creative people are doing well on free markets compared to rigid bureaucratic structures. If people are more wealthy they are less dependent on others approving of their lifestyle. In other words, free markets tent to benefit individualism.

This can be seen historically. For example, to my knowledge it was not so much feminism or the welfare state that made women independent from their husbands. It was the industrial revolution. Factory owners often paid for facilities where mothers could leave their children while at work. That way they had access to their labor, which was needed. Or mothers were earning enough to pay for child care themselves. So it was the wealth production of free markets that allowed women to break out of conservative family structures.

I cannot see much basis for the idea that liberty is about intolerance or that a libertarian society has to be conservative. This seems to be wishful thinking from some libertarians. If that is true, then the question arises, are they really libertarians or are they people who see libertarianism as a means to achieve very different ends? And if the latter is true, are they trustworthy to stick with liberty even if liberty appears to produce different results?

I think a good test to answer these questions is state immigration controls. Are libertarians willing to support getting the state out of the way of the free movement of people or not. It seems to me that people who are arguing in favor of state immigration controls give away that they really are more interested in their conservative/racist idea of a society than in liberty. And they seem to sense that it really needs the state to produce this result. If we get the state out of the way, we will likely see an increase in multiculturalism. The economic incentive of people to mix seems too large.

Since this is not a result that these libertarians expected, they are quick to proclaim that really this is all due to other state policies like non-discrimination legislature or the welfare state. But this is an odd argument in many ways. While these policies are indeed anti-libertarian and have to go, there does not seem to be much evidence that supports the idea that they have a big influence on immigration. At least no were near enough to support the idea that without them, we would not see a lot of movement of people from all over the world. And regardless of how many people will end up moving, it seems false to argue that the state cannot be rolled back unconditionally, as that would lead to problems. That argument can be used to prevent any rollback, as almost any abolition of a policy will cause some trouble for some people. So if this argument sticks, we will be stuck with the status quo forever. No, if the abolition of one policy causes problems with other policies in place, then we just need to abolish more state until the state is no more.

For all these reasons I personally remain skeptical of people who are interested in liberty because it promises them intolerance. Of course it is good when people are interested in libertarianism and want to call themselves libertarians. Any common ground is a basis for debate. However, I don't know how much I can trust them when it comes to the fight for liberty. I also don't believe this image of liberty is helpful to spread the message. We are sharing this planet with a lot of people. And we will have to find a way to live peacefully with them. Our standard of living is also very dependent on a maximum of collaboration with others. I therefore consider tolerance to be an important value. Intolerance simply does not seem to be a good survival strategy. But tolerance can be difficult. It needs to be learned. That will take some training. Telling people that it is perfectly fine to be intolerant is therefore not very helpful.


  • Comments(6)

Posted by Nico Metten Sun, July 19, 2015 12:26:39

"We have PC rules because a lot of people think this policy is sensible"I think it was a tiny elite who imposed forced integration against the will of the majority.”

How? Especially in the US you still have freedom of speech. I just saw a very recent video of a bunch of KKK members, protected by the police publicly protesting for the Confederate Flag. There are some anti-discrimination laws. They can be a pain and are certainly not libertarian. These laws will have to go. I am not defending those. But they don’t have a big influence on multiculturalism. Quite to the contrary, the government has a lot more and harsher policies in place to stop multiculturalism than to aid it.

“Many people have lost their jobs or suffered harassment simply for expressing their opinions.”

You cannot expect people to like you when you spreading nasty stuff about other groups. That is a normal social phenomenon and it has nothing to do with the state. A lot of people simply share my view that these types of attitudes do not aid a peaceful life together. Because socially, you often reap what you saw. If you behave hostile, you will get hostility back.

“Also, forced integration is quite costly in general, as David states below. Recently, a black co-worker casually told me she was moving from her neighborhood. I asked her why and she reluctantly told me: "Too many black people." The issue for her, of course, was not skin color, but bad behavior.”

So what is your point? How is that forced integration? She did not like her neighbours and moved. Did the government try to prevent her from moving? Were her property rights violated? That is what I mean. Intolerance comes with a cost. This cost is imposed by the market not the government. At the end of the day, we live in a world with a lot of different people. And we have to deal with that fact. Intolerance is not the best strategy in this kind of world.

“Most of us -- including the PC folks -- reject millions of people for what might seem like trivial reasons to others.”

Yes, we constantly have to discriminate people. I am not against that. That is part of life. From that does not follow however that every form of discrimination is a good thing for a harmonic living together. Tolerance is a value. We should aim to be as tolerant as possible. Telling people that they have a right to be intolerant and should therefore not even try to be friendly and cooperative to certain people is not helping. And again, that attitude also comes with an economic price.

“Why should rejecting others due to phenotype as opposed to other reasons be subjected to greater criticism and intolerance?”

Because it is causing conflicts between large groups of people. These type of tensions can lead to very severe destructive conflicts. There is a lot of historic examples how severe this can get. So it is a good idea to socially sanction people who are trying to spread this hatred against whole groups of people. At the end, trying to run away from the multicultural world we live in is not a healthy strategy. Discriminating individuals for personal reasons on the other hand is less problematic. That does not cause political conflicts.

“It seems you are defining tolerance in a PC manner. Tolerance does not mean opposing racism or championing a multicultural society; tolerance means respecting the liberty of others, i.e. not imposing pro-active costs.”

No, tolerance means exactly to be tolerant of people that do things you don’t like. And it goes beyond restraining yourself from violating other people’s rights. Liberty is just one aspect of society. There are many more aspects to it that go beyond that. But I am fine with respecting other people’s liberty. Conservatives also deserve some tolerance. I am not trying to make it illegal to have an intolerant attitude. What I am against is this notion that libertarianism leads to a segregationist, conservative society. Form all we know, it does not. This is a cultish ideology and the advocates of this ideology are often willing to use the state to impose what they think is the market result. That is absurd and that is why I mistrust them.

“The so-called "tolerant" people impose their intolerant PC laws in the name of "tolerance”.”

That is a state imposed cost, not a market cost. On a free market, tolerance is cheap, while intolerance is not.

“However, if the PC laws were removed, or had never been imposed in the first place, how likely is a multi-cultural society if millions hate the idea and were not prohibited from saying so or acting on their preferences?”

Very likely, for economic reasons, as I explained.

“They certainly vote with their feet. For example, I attended a majority (approx. 85%) black high school in the late 1970s/early 80s in Philadelphia, Pennsylvania (USA). But the only reason it was mostly black in a nearly all white neighborhood is because most whites had fled the school. This was quite typical during an era of forced busing (the black children were bused to the white neighborhoods) and forced integration.”

And yet, the whites were able to flee. So where is the big effect of forced integration? I am not in favour of forced integration as I said many times. But I do not see how this policy is having a big effect on multiculturalism. Multiculturalism exists, because of economics pressure of people to move and because some people like it.

Posted by Lee Waaks Sun, July 19, 2015 03:37:00

Thank you for your post Nico. You are a capable writer and I'm glad you addressed this topic even though we disagree.

"We have PC rules because a lot of people think this policy is sensible"

I think it was a tiny elite who imposed forced integration against the will of the majority. But regardless of what the real numbers are, PC laws are very illiberal and can be costly to speak out against in an era of so-called "tolerance". Many people have lost their jobs or suffered harassment simply for expressing their opinions. Also, forced integration is quite costly in general, as David states below. Recently, a black co-worker casually told me she was moving from her neighborhood. I asked her why and she reluctantly told me: "Too many black people." The issue for her, of course, was not skin color, but bad behavior. A critical, but small mass, of badly behaved people, can ruin a neighborhood. That is one reason why forced integration can be costly (and sometimes dangerous). But having a preference for a phenotype is one just preference among many. Most of us -- including the PC folks -- reject millions of people for what might seem like trivial reasons to others. For example, many handsome, wealthy men reject nearly all homely or fat women but are usually not condemned for this. Is this intolerance? I don't think so. Why should rejecting others due to phenotype as opposed to other reasons be subjected to greater criticism and intolerance? It is only because of PC that it is the case.

"Violating other people’s rights because the majority wants it, is hopefully not an option in a real libertarian system."

Of course the state should not violate anyone's rights. But forced integration is a violation of liberty, too. Why should we ignore the costs imposed upon those who would prefer to reject others for their phenotype, etc. to a much greater degree than they do now but can't due to PC laws?

"No, people who want to exclude others are not tolerant. Tolerance is not defined that way. If it were to include that concept, it would be a useless word."

It seems you are defining tolerance in a PC manner. Tolerance does not mean opposing racism or championing a multicultural society; tolerance means respecting the liberty of others, i.e. not imposing pro-active costs. Of course, libertarians should condemn those who use the state to impose upon blacks, homosexuals, etc. but we should not ignore the costs imposed by PC laws upon those who reject multi-culturalism.

"I don’t see any extra costs on the side of tolerant people."

The so-called "tolerant" people impose their intolerant PC laws in the name of "tolerance". This results in costs to those who are imposed upon. But I think you miss those costs because you assume that a multi-cultural society would be the natural libertarian order and is only prevented by those who use the state to impose costs on the now protected groups. However, if the PC laws were removed, or had never been imposed in the first place, how likely is a multi-cultural society if millions hate the idea and were not prohibited from saying so or acting on their preferences? They certainly vote with their feet. For example, I attended a majority (approx. 85%) black high school in the late 1970s/early 80s in Philadelphia, Pennsylvania (USA). But the only reason it was mostly black in a nearly all white neighborhood is because most whites had fled the school. This was quite typical during an era of forced busing (the black children were bused to the white neighborhoods) and forced integration.




Posted by Nico Metten Sat, July 18, 2015 11:53:51

“If it is the majority who reject the PC ideal then that will ensure there is no multiracial society in most places, if ever liberty is extended, as the immigrants will then be rejected. Then the cost of acceptance will then be far greater to most people than that of rejection.

You write as if it is something that is going to happen regardless of the values of the people.”

I doubt that the vast majority of people want that. We have PC rules because a lot of people think this policy is sensible. But yes, we will get a multicultural society whether the majority of people wants it or not. That is if we get the state out of immigration controls and have a free market. Violating other people’s rights because the majority wants it, is hopefully not an option in a real libertarian system.

As long as the world has places of very different productivity, the incentive to move to more productive areas is enormous. People are obviously willing to risk their lives to get there. A little bit of hostility by some locals won’t stop them. We know that hostility does not stop them, because we see a lot of people moving to places like Saudi Arabia. Saudi Arabia is not a PC country and immigrants are treaty almost like slaves. But that does not stop people from moving there. Without violating other people’s property btw.

The intolerant people have a problem. They need to control other people. The tolerant on the other hand don’t have to do much, other than associate themselves with others. And even the intolerant have an incentive to swallow their intolerance and rent out, sell their home or give a job to a stranger. Then, slowly the society will become more and more colourful. That is inevitable. The more colourful it gets, the less people will mind it and think it is normal. In a world of scarcity, intolerance is a costly option. And the more people mix up, the more costly it gets.

“There are costs on both sides but you seem to think the costs are just on one side, Nico.”

I don’t see any extra costs on the side of tolerant people.

“You also seem to think tolerance cuts only one way but it cuts both ways, Nico.”

No, people who want to exclude others are not tolerant. Tolerance is not defined that way. If it were to include that concept, it would be a useless word.

Posted by David McDonagh Fri, July 17, 2015 20:40:02

Thanks for your reply, Nico.

Whether people love it or hate it is utterly germane. If it is the majority who reject the PC ideal then that will ensure there is no multiracial society in most places, if ever liberty is extended, as the immigrants will then be rejected. Then the cost of acceptance will then be far greater to most people than that of rejection.

You write as if it is something that is going to happen regardless of the values of the people.

There are costs on both sides but you seem to think the costs are just on one side, Nico.

The higher costs depend on the values of the people today, and into the future and in different places.

Opportunity cost is finally subjective or personal but you seem to think it is objective or common to all. Money price in the shops is objective but never the cost imposed by the objective or common prices. Price can only ever be part of the overall cost. Prices usually fall between the values of the traders, thus trade is positive sum.

You also seem to think tolerance cuts only one way but it cuts both ways, Nico.

Some places may be as you want then to be, but maybe even more places will be quite the opposite. Both places can be quite liberal. It is not less liberal to reject or to accept other people. Both can be equally free. The greater cost is not clearly on one side either. It depends on what the people want.


Posted by Nico Metten Thu, July 16, 2015 23:49:07

“Some like a multiracial society but others hate it.”

That is not so relevant. Those who don’t like it will still have to live with it or pay the price. That is the point. It is costly to be intolerant. Sure some people will be willing to pay that price. You will see gated communities and communities in the middle of nowhere. But on the whole society will be very colourful.

Posted by David McDonagh Thu, July 16, 2015 19:27:39

Tolerance is maybe the main liberal idea but it is tolerance for debate, for tolerance of rejection by others, for tolerance of differences rather than the new Politically Correct [PC] idea of tolerance that we should never upset other people or that we should never discriminate, Nico.

Some like a multiracial society but others hate it. This fact would be clear if we had more free speech. There seems to be no prospect of change there. So the old classical liberal tolerance is quite vital. Privileged groups and attempted brainwashing for the masses to be under-privileged is not going to be useful; not to most people anyway.

Presumably, in the future, there will be towns that are all black, all white and others mixed to satisfy those desires. This may arise as the case whether we retain the state or get rid of it. Tolerance itself will not make the racists go away, nor will any PC training. I suspect that nothing will. This sort of diversity is here to stay.

Liberty allows choice. People will choose according to how they wish.

I think faith is a myth, by the bye. But it seems to be the case that only a minority of people turn to violent crime in any given generation. But crime is not the problem with those who want to reject alien phenotypes.

Those who like different phenotypes no doubt do see the racists as nasty but then, no doubt, the racists see the people who like to racially mix as nasty too. Tolerance is needed on both sides in the long run as neither side is right if liberalism is right. Liberalism allows choice in such matters.

Some towns will be conservative. Others might be otherwise. We can only guess.

I do not think that the liberty of others can destroy our liberty.

We can hate the choice of others so that the racist man can hate the miscegenation of the girl next door and she can hate his disapproval but though they might not like what they find in each other, both do remain free. Both have the liberal right to reject each other, each may even to have the idea that the other needs educational training, but as long as this training is not forced by the state then both can be liberals.

A liberal does not have to be PC and when a PCist goes in for PC laws he leaves liberalism behind. But as mere free speech, PC can be liberal.

You seem to err in thinking that all the tolerance is with those who like alien phenotypes, Nico. As said above, we need to be tolerant when others freely reject us and if we are not then we are, to that extent, illiberal.

Yes, we need not wash if we do not want to and we can be rude to others. We court rejection in both cases. But the rejected do usually survive.

Society always requires at least some classical liberal tolerance but not so the new PC “tolerance” for under-privilege, I think.

There is an adage that “good fences make for good neighbours” and that might be so when people do not like each other. Co-operation on the division of labour does not require, but friendship does require some discrimination. We do not need to love others in order to trade with them.

You overlook that those who live in gated communities will most likely think it is well worth the extra cost, Nico. Presumably, the cost of coming out of the gated community is going to be far greater than remaining in it for them. Costs are finally personal.

Similarly, to open up your firm to those you hate is not likely to be compensated by the fact that the firm becomes more successful as a firm as a result, if you no longer value it as it becomes. Rather it is a firm you might no longer want anything to do with. A less successful firm that you were at ease with might be far more economic for you if you happen to hate the alien phenotypes.

It is not only the racist societies that use the law against their opponents, is it? The UK today has PC laws against free discrimination. Both are thereby illiberal.

Mass immigration is owing to the cheapening of transport and the lack of free capital flowing around the world since 1914 as it was before then. Even many of those who hate alien phenotypes will still want to take advantage of the wage differentials we find between places like India and the UK today. This is yet another unintended consequence of the 1914 war.

Private property is the way we get on with others. Tolerance is a top liberal value, maybe the top one, but it is no more to do with training the racists to be PC than it is to do with training the PCers to be racists.

It is not true that conservatives are, or ever will be, on the way out. They will be a majority amongst any group, of about fifty in number, of five year old children and in an even bigger majority amongst the same number of almost any sixty five year olds.