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Spitzcovksy: Is libertarianism the same in the 21st century as it was in the 20th century? Are the pillars the same, or is there an update to be done?
Palmer: ...Liberalism has a long tradition around the world with deep roots in many countries. I think the updating insofar as there is one, is meeting new challenges, coming to understand the historical developments that I think have shifted liberal thinking but in a way that makes it more true to itself. But most importantly, is the understanding of the rule of law, and how central that is to a free society. When I spent time in the Soviet Union, people said “oh—we’re going to get rid of communism, it is a catastrophe,” and people said “privatize, privatize, privatize.” But what we found out was if there is no legal system, then privatize into what? There was no rule of law, no property law, no court system that could adjudicate property disputes, no lawyers to help the right contracts and leases and deeds, and all the other things that make a market economy possible.
William Niskanen, the late chairman of the Cato Institute, called it “the soft infrastructure of the free society.” And I think we’ve come to have a much greater understanding of the importance of the role of the rule of law in the free society. Not that others didn’t know that, but now we see how central it is. And in many of the parts of the world, it’s not a question of just taking down the government—the government does too much, but it also does too little. It does too little securing the rights of the citizens, providing basic security for the people, and providing a legal system that can adjudicate disputes, in a way that is reasonably fair, that everyone can accept. So in that regard I see liberalism in the 21st century as having a greater focus on the rule of law, and building those institutions, rather than combatting totalitarian communism, fascism, and Nazism, which were big challenges in the 20th century.
How about economy and liberalism?
Well I think one of the things that we have discovered is that the key question we need to face is, not ‘what causes poverty?’ but ‘what causes wealth?’ and why are some groups excluded from that process? So you find it all around the world. Lant Pritchett from Harvard University, who's been doing development economics for many years, embracing more liberal views all the time, he put it very neatly when he said “mostly in the world, there are not poor people. There are people living in poor places.”
Take someone from Haiti, the poorest country in the western hemisphere, that person gets to the United States or Canada, within a few years they’re not poor anymore. They can acquire things, their children are going to school, their income rises, and all of the good things that come with that. It’s not that they were poor people. They lived in a poor place. So we need to ask the questions “what is it that keeps these places poor?” Now that’s also not just country by country, where we have aggregate data. We can look at Haiti or Mexico, or Bolivia, or the U.S.—whatever—but within countries as well, and I think that is evident both in the United States and in Brazil, that you have an uneven distribution of the institutions that make possible economic prosperity and wealth. So if you look at the favelas in Brazil, one of the problems is the state doesn’t provide security for the person, there’s no legal system there, so they’re governed by warlords, and drug dealers, and life is difficult under those conditions. You lack security and property and people don’t plan for the long term as a consequence.
Well, there is something similar in the United States. Because we’ve seen the labor market in the U.S. has become increasingly state-controlled. Go back to 1960. Only 5 percent of occupations required a government license or permission; it’s now officially over 23 percent. You want to be an electrician or a plumber, if you want to shampoo hair in the state of Tennessee, if you want to arrange flowers in the state of Louisiana, you need a permit from the government, so you have to go to flower arranging school. If you want to be an interior decorator in many states... These are all guild restrictions that make it very hard for people to break into the labor market.
And then they add another element which is the really broken criminal justice system in the United States, which incarcerates such a large percentage of the population, nothing to be proud of by any means. But then it stigmatizes them for life. Why? Even after someone gets out of prison, after allegedly having paid some debt back, having a criminal conviction means you can’t enter any licensed profession. So they can’t become electricians and plumbers and truck drivers and hairdressers and so-on. They’re kept out of the labor market. So the groups I work with are focusing on these questions of where the state is restricting access and not allowing people to enter the market economy and produce wealth and prosper as a consequence.
You mentioned the importance of the rule of law in the concept of liberalism. What is your assessment of the present wave of populism we have around the world—from the left and from the right?
There is left wing populism and right wing populism—what they have in common is the same ideology. They hate each other in the way that two criminal gangs hate each other. The Bloods and the Crips in Los Angeles—they have the same philosophy, but they do fight each other for control of territory. But leftwing populism and rightwing populism both share in common a rejection of the ideas of a society governed by law, of rules, of deliberative democtatic processes. They want to substitute the idea of will and power as being central to political life. Now those two groups will come into conflict, but their biggest enemy, the one that they both hate, is liberalism. The idea of a society where people can live together despite having all kinds of differences—religious, philosophical, sexual orientation, ethnic, all those things, a free society has a place for everybody. Everybody who is willing to respect the rights of others can live in that society.
[Populists] don’t like that. They think there is an authentic, “true people.” And that “true people” has one will, and that one will is usually expressed in one leader. Well, we heard that philosophy in the 20th century, “one people, with one state, and with one leader,” because they had one will. In my opinion, populism is a resurrection of the ideas of the 1930s. They were discredited. I thought they were dead in 1945 and now we find them again, with many of the same philosophical figures motivating the leaders...when you read the texts—I read a lot of books by rightwing and leftwing populists—you find the same figures, and they are the philosopers of fascism.
And how to face it?
...One element that is very important is to reject the politics of hatred. That’s what they thrive on, to hate the other person, to hate the other political party. And I think it is very important not to do that. To learn to listen to one another. And to say “how can we work this out and live together peacefully?” The populists don’t want that. They want one party to be triumphant. Ernesto Laclau, one of the big populist theoreticians, an obscure Argentine fascist and peronist and marxist—he called himself a “post-Marxist” in his academic career in England—in his book On Populist Reason, he says that you create a “frontier of exclusion within the society, between the true people, who claim to be the whole population, and those who are designated the enemy.” And the enemy can vary from country to country...There’s some enemy out there that “we” have to defeat. And a liberal response is to reject the “enemy” mentality, to say “we don’t want to have enemies, we would like to learn how to make friends.” And that is what the institutions of liberalism are about.
Market economy is about exchange that’s mutually beneficial. Indeed even the Greek word Katallasso—it’s a wonderful word at the root of the idea of exchange. It means both to exchange, and it means to convert an enemy into a friend. And that’s what exchange does. And then there are deliberative processes: debate, discussion, free media—no one is told to “shut up.” People have the right to express their views. And then we have debates that are carried out over coffee tables, that are carried out over dinner tables, and that are carried out in legislative chambers in a way that is respectful of the other side. I think that is fundamentally the response, but it will take a different form in every country...
