Joel Kotkin: Libertarians can stay relevant by defending the middle class (2024)

They can drop the dogmatic theory and stand up for free-market pragmatism instead

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Joel Kotkin

Published Jun 08, 2024Last updated 5days ago6 minute read

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Joel Kotkin: Libertarians can stay relevant by defending the middle class (1)

In the era of Ronald Reagan and Margaret Thatcher, libertarian ideas about de-regulation and personal liberty were ascendant. Even if they had little direct power, the free market ideologues had access to the highest levels of government and business.

Today the libertarians are increasingly the odd man out. As Donald Trump rightly pointed out at their recent convention, to a chorus of boos, the libertarians have become a fringe group with little chance of influencing anyone. When he claimed they would be the party of “three or four per cent” of the vote, he was overestimating their influence. In 2020, the Libertarian candidate received a rollicking 1.2 per cent of the vote, less than half their paltry 2016 performance.

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Joel Kotkin: Libertarians can stay relevant by defending the middle class (2)

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This year, in which the electorate is restless and disgusted with their main awful party choices, the libertarians are playing a very small role. They are likely to be overwhelmed not only by the candidacy of Independent Robert Kennedy Jr., who was disdained at the convention despite making a strong case against the censorship regimes of President Joe Biden and Prime Minister Justin Trudeau. They may not also beat pro-Hamas candidates Cornel West and Jill Stein.

Consider their choice of presidential candidate, Chase Oliver, a far from well-known 38-year-old party activist who favours drug decriminalization and opposes gun restrictions, as well as military assistance to either Israel or Ukraine. Hard to see much of a groundswell for this mélange of positions. In Canada, the Libertarians are even more a small fringe group which one prominent, sympathetic conservative suggested was “in the wilderness with the Communist Party and a handful of other parties.“

Of course, the formal Libertarian Party has never been as important as the ideas generated by libertarians. But if the ideology has remained the same, economic conditions have changed dramatically. In the era between Ronald Reagan and Bill Clinton, Americans — like the British liberals of the 19th century — favoured free trade because they dominated the world economy. But today, the rise of mercantilist China has created a new superpower that sees free trade as a matter of strictly protecting its own markets while entering those of the United States unhindered.

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This imbalance has made pure free trade something of a “luxury belief.” There’s no burning desire, even among Republicans, for the leadership of former Speaker Paul Ryan and his notions of replacing social security, or any other “Fountainhead” politicos of his ilk. Under the influence of Trump and his MAGA hordes, there’s not much interest in libertarian theories. The Democrats, too, who under Jimmy Carter and Clinton embraced some open-market ideas, now have primary allies among the corporate superstructure as they revive state capitalism to a level not seen since the Depression and the Second World War.

To become relevant again, libertarians, particularly those outside the party, must move away from dogmatic theory and look to address the needs of their potential constituency among small businesspeople, artisans and skilled workers. Here, libertarian ideas about de-regulation and investment incentives could find a strong following. Adjusting to changing realities is what successful parties and ideologies do. The libertarians appear not to have learned this lesson.

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Worse yet, some libertarian activists embrace positions that threaten these constituencies. The libertarian record of support for permissive criminal law reforms is not exactly in sync with the views of the entrepreneur who naturally fears crime and disorder. As cities around the country reverse course, voters opt not for libertarians but moderates from both major parties.

Perhaps the most illustrative example of damaging one’s own base can be seen in housing. Libertarians naturally oppose zoning, but have joined forces with left-wing housing advocates to wipe out protections for single-family homes as a “free-market housing fix.” Rather than listen to their natural constituents — the very middle class that mostly supports conservative causes and that lives in single-family homes — libertarians have chosen to embrace the oligarch-funded YIMBY (“Yes in My Backyard”) movement.

In effect, as former longtime Cato Institute fellow Randal O’Toole notes, the YIMBY movement “betrays” middle-class suburban homeowners who chose to live where single-family homes were protected. O’Toole, who had been Cato’s land use expert since 2007, was fired in 2021 after the organization began “working hand-in-hand with left-wing groups that sought to force Californians to live in ways in which they didn’t want to live.”

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It’s clearly a destructive agenda — if you are a prospective homeowner. As the newly released 20th edition of the Demographia International Housing Affordability study demonstrates, severe housing and land use regulation is closely associated with housing affordability losses. This explains how two Canadian cities, Toronto and Vancouver, rank among the top 10 least affordable regions in the English-speaking world.

This is particularly evident in my home state of California, which has policies aimed at destroying single-family homeownership. Despite already havingthe highest urban density of any state, it suffers from the second-highest housing costs and rents of any state except Hawaii.

Libertarians also seem unaware or unconcerned about the ascendancy of monopoly power, particularly in the all-important information sector. They instinctively oppose any effort to regulate markets or deploy antitrust laws against companies that make up 80 to 90 per cent of key markets from operating systems to search, and which are morphing into a handful of zaibatsu (oligopolistic corporate conglomerations). This hands-off approach makes for a very difficult environment for smaller firms to compete.

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In the blind embrace of ideological consistency, libertarians lose the critical prerequisite for any kind of liberal society: a large contingent of independent small businesses and property owners. The founding fathers saw this and considered the over-concentration of property in a few hands as a threat to republican institutions. This insight was shared by such intellects as Edmund Burke, Alexis de Tocqueville and Adam Smith. As Burke, an admirer and contemporary of Smith, put it, what really matters is not ideology, but reality: “The circ*mstances are what render every civil and political scheme beneficial or noxious to mankind.”

To become relevant again, libertarians need to reach past their dogmatic attachments, and focus on expanding and liberating competitive free markets. An economy dominated by a handful of oligarchs, who exercise power over information on the major platforms, and simply buy up promising competitors might swell donations to free-market think tanks, but it does not nurture grassroots capitalism.

The future of market capitalism relies on its social base, particularly as the current form of monopoly capitalism is driving a large portion of the population, particularly the young, towards socialism. In the 2016 primaries, the openly socialist Bernie Sanders easily dominated among under-30 voters, a performance he repeated in the early 2020 primaries, even as the older cohorts rejected him decisively. By 2024, millennials will be the country’s biggest voting bloc by far.

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Capitalism’s future cannot be assured if it no longer works for the middle and working classes. The greatest opponent of free markets, Vladimir Lenin, understood that capitalism draws its primary strength from the operation of small players in local markets. “Small-scale commercial production is, every moment of every day, giving birth spontaneously to capitalism and the bourgeoisie … wherever there is small business and freedom of trade, capitalism appears,” he noted. “Capitalism begins in the village marketplace.”

Rather than follow ideology down an electoral blind alley, libertarians must take a more pragmatic view on defending capitalism. Free markets need to prove their current efficacy, not just in terms of stock earnings or the personal fortunes of a few. One cannot expect lifetime renters, people whose jobs have been sacrificed to the globalist gods and who have been confronted with lawlessness, to become ready devotees of laissez-faire.

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