One of the top right-wing illusions about reality (there are so many) is that high taxes and regulations are always bad for businesses, and reducing both will attract them. It comes from their apparent incapacity to think in contexts: what do those regulations do and for what do those taxes pay.
Ayn Rand famously preferred New York City to anywhere else on earth. Anarcho-capitalist Murray Rothbard lived in New York most of his life. His most important teacher, Ludwig von Mises, was a leading advocate of laissez-faire capitalism. After arriving in the US as a refugee from Nazism, Mises lived in New York. David Koch, who has more money than just about anyone on earth, and has funded libertarian causes for years, lives in New York City. And New York is characterized by lots of regulations and high taxes.
One wonders why these libertarians and such didn’t all move to Jerome, Arizona, or maybe Bird City, Kansas. None moved to some equivalent of Galt’s Gulch, where they could live “free” and with a minimum of taxes and regulations. They demonstrably prefer high tax and high regulation New York. Why?
Well, let a libertarian explain. Brian Doherty, an editor for the Libertarian magazine, Reason, wrote in 2007
In its concentration of grand human achievement, in its cosmopolitanism and grace, combined with a winning self-assured pugnaciousness, New York is the living embodiment of the openness, dynamism, and sheer human will that energizes the free markets that libertarians celebrate — and that makes New York the richest, biggest, wildest metropolis in human history.
And yet in 2007 the Mercatus Center, a Koch funded libertarian outfit nestled within a state funded university in a region made wealthy by government, published a study of the freest and least free states. Three were tied for first place: New Hampshire, South Dakota, and Colorado. New York was “the least free by a considerable margin, followed by New Jersey, Rhode Island, California, and Maryland.” In 2011, the most recent version of their study, the freest are New Hampshire, South Dakota, Indiana, Idaho, and Missouri. The ‘least free’ are Massachusetts, Hawaii, California, New Jersey, and again last, New York.
Does anyone recognize a bizarre pattern here? Many of libertarianism’s most important thinkers and funders prefer living in a place that violates nearly all of their strictures as to how a society should exist. New York state is the ‘least free’ of all states and New York City is characterized by high taxes and lots of regulations. They are key elements of New York life.
These libertarian leaders tell us that “freedom” is their most important social value and that high taxes and regulations are enemies of freedom. Then, they move to the place where, by their lights, in the entire US they are least free. Given their rhetoric it is a bit like West Germans choosing to live in East Germany when given the chance. Yet New York does not have to build a wall to keep people in. More often it prices people out.
There are two possible explanations to understanding the glaring incoherence between the personal lives of these ‘free market’ advocates and the ideology by which they want everyone else to live.
First, they do not understand freedom, and their actions prove it.
Second, they do not understand cities, and their arguments prove it.
I happen to think both explanations are true.
Libertarians and those like them love to extol the virtues of “negative freedom” That is, freedom from any outside limitation on one’s actions, at least in so far as they involve voluntary relations with others. As an ideal “negative freedom” is in profound error. We can see why when we reflect that the most perfect negative freedom would be living like Robinson Crusoe on a desert island, along with Friday. So long as each interacted voluntarily with the other, libertarian negative freedom would be 100%.
Very few people would wish to live that way and would almost universally regard themselves as freer in New York City. Even libertarians.
Cities such as New York, Boston, and San Francisco offer more opportunities to trade with the world, more amenities to enjoy while living there (which is also why tourism is such an industry in most). They have excellent universities either within them or near by. They are vital cultural centers for music, the visual arts, and writing. They are also centers of scientific and technological innovation. The Bay Area and Boston disproportionately gave us the computer industry. Missouri did not, nor did Texas nor did New Hampshire. It is not for nothing that these cities disproportionately attract the most creative and productive Americans.
These cities and others like them also largely dominate the states within which they exist, making them ‘unfree.’ Indeed, these ‘unfree’ states are far more urban than the supposedly ‘freest’ states – and the cities that do exist in those ‘free’ states are far more liberal and open to governmental regulation than are the less urban regions.
Which brings me to the second point: many libertarians are so blinded by their ideology that they miss the contradiction and the reasons for it.
As people interact more frequently with one another in ever more crowded contexts actions which were harmless in one context become harmful in another. Burning trash in early LA had no impact on anyone else because there were very few people there. But as more people moved there once water was cheap and plentiful, activities once harmless became harmful. The very proximity of people that enriches life also means activities once harmless can become harmful. They go together.
The pure property rights models libertarians love have a hard time dealing with issues like air quality, urban transportation, public safety, city parks, and the like. It is why they are irrational on the issue of global warming. The issue cannot be solved by pure market mechanisms, therefore it is not real.
The growing net of regulations need not detract from the economic and cultural value of a city. In fact it can increase them.
Here is another relevant point that I am surprised people claiming to be as economically minded as libertarians and their sympathizers completely ignore. Property prices reflect a region’s desirability. The more people want to live there, the higher the value of land and housing. The fewer who want to live there, the cheaper. New York is one of the most expensive cities in America. Boston and San Francisco are two others characterized by very expensive real estate. According to libertarians, even those living in big urban regions like the folks at Mercatus, they are dens of oppression compared to South Dakota or Missouri. Yet for some reason a lot more people want to live in these oppressive environments than in these contrasting oases of liberty, and they are willing to pay through the nose for the opportunity to do so.
Libertarians and their sympathizers tell us to “trust the market,” but here they ignore it completely. The market tells us that in terms of creating an environment people actually want to live in and will pay for the opportunity to do so, their ideologies are worthless. Some genuine insights exist there to be sure, but they have no monopoly on them and when taken in the libertarian package, the valid insights are submerged in a murky intellectual swamp.
Taxes and regulations are the price we pay for a quality civilization with a rich array of opportunities for its citizens. To use a Randian phrase, ironically it is the libertarians and their sympathizers who are moochers on this civilization, seeking to indulge in its riches while undermining those same values for everyone else.
Am I not contradicting myself as well?
At this point someone might say- “But Gus, you like living in smaller communities close to nature. Aren’t you also contradicting yourself?”
Without getting into this rather different issue very deeply, I’d say no I do not. Most importantly, I do not say people who differ from me on how they think their community should exist are wrong. But there is another point.
The communities I am attracted to are all college towns profoundly impacted by the culture of a decent university or regions deeply within the cultural orbit of big urban regions, particularly San Francisco, Seattle, and Boston. Places such as Taos, Silverton, and Nelson, BC, are centers for artists and writers. In Taos this has been true for close to 100 years. These smaller and more isolated art and cultural centers exist because they attract and are supported by people with urban values which they then (to my mind) enrich further due to where they live.
Were it not for the importance of wild nature to me, I’d be in a city.
Historically over time cities enlarge the mind, break down ethnic distrust, stimulate creativity, and in the process bind human communities ever more tightly, requiring taxes for public services and regulations to prevent toxic spillover effects onto others. They don’t do it perfectly and like anything else, they provide opportunities for human parasites to engage in corruption. But even with these problems today they far outshine less urban areas as magnets for business and for people to develop their capacities in ways they wish. And that is why the leading thinkers among libertarians are vastly disproportionately located in the kinds of American communities they claim are most oppressive.