09/29/2011 06:32 pm ET Updated Nov 29, 2011

Jon Stewart's Liberal Challenge to Ron Paul

During the recent interview of Congressman Paul with Jon Stewart on the Daily Show, Jon asked Ron a question that gets to the crux of the divide between progressive Liberalism and libertarianism.

Jon's question was:

Does the failure of government to protect adequately make it a failure of government having that responsibility? Does their inability to do it effectively make it so that they shouldn't do it?

As the person who coined the term "Blue Republican" -- a moniker for former Democrats and Independents who are registering Republican for Ron Paul in 2012 -- I think much rests on the answer to it.

My answer is, "Theoretically, and in an ideal world, no: just because government has failed to do something effectively does not prove that it cannot do it or that it should not be asked to do it. But in the country in which we live, largely yes."


First, since allowing government to go beyond the intentions of the Founders a century ago, it's been in the hands of thousands of people with varying political views. Yet, it has consistently failed to deliver satisfactory protections of life, liberty and property to which Stewart refers. Eventually, a reasonable person admits that there's a systemic problem: that this institution, rather than a particular group of participants, cannot stop failing -- or at the very least, the results are questionable enough that we should consider another approach.

Since the New Deal, we've not gone a decade without the government's going to war or invading a non-threatening nation, causing civilian deaths, removing civil liberties or otherwise compromising our Constitutional Rights, or setting up a new program or department that, while doing some good, fails to satisfy the stated purpose for which it was created. That this is a problem with government as an institution rather than bad policy by one party is evidenced by the fact that each of the items in this list has proceeded under both Republican and Democratic presidents and congresses.

This is not to say that government programs never do good. But whereas all the good that large government programs and departments have done has been compromised or mitigated by some bad, the reverse is not true: most of the bad that government has done through war or reduced liberty is not justified by a clear corresponding gain.

So I would respond to Jon's question with one of our own: does the weight of evidence suggest that if we keep trying to have our government provide all of our economic and social protection, the net outcome (good minus harm done) -- will be as favorable as any other means we can reasonably devise? If not, we should bear in mind Einstein's definition of madness as continuing in the same behavior while expecting a different result.

In the interview with Dr. Paul, Stewart clarified the intent of his first question with another,

Wouldn't you rather have regulators that are accountable to voters than corporations, regulating themselves, accountable only to shareholders?

The question got huge applause, but it should not have, because both of its assumptions are false.

If it were the case that our social democratic system was one in which the regulators truly were accountable to the people through the ballot box, as Jon suggested, then perhaps there would at least be an empirical case against Paul's position. But it is not.

First, we don't vote for our regulators (or in most cases, we don't even know who they are), and increasingly, the regulatory bodies themselves, such as the Environmental Protection Agency and the Citizenship and Immigration Service, are empowered to make their own rules, with the force of law, without Congressional approval. Thus, in our current system, no one -- certainly not the electorate -- is watching the watchmen.

As Friedrich Hayek said in 1944, after watching the rise of Hitler a decade earlier,

The delegation of particular technical tasks to separate bodies, while a regular feature, is yet the first step by which a democracy progressively relinquishes its powers.

Second, we do not have a democracy in more than name at the federal level: you can periodically vote for one of two teams that agree on the continued existence of a military industrial complex, its use to kill people who don't threaten us, and the removal of our liberties as long as they honestly believe they are helping us. Also, both teams have constructed this system of government in which the regulators are not accountable to voters and, worse, directly enables and sometimes (such as during the current financial crisis) even encourages the egregious actions of corporations that are so quickly blamed on the "free market." These are the very egregious actions that decent Liberals like Stewart want government to protect us against.

Look at the worst corporate and civil rights abuses over the last century and see how many were enabled or actively encouraged by government's failing to enforce law and maintain a level playing field, bad monetary policy, a misguided social agenda, corrupt or even well-meaning politicians or central bankers. In any case, in such a hollow democracy, our protection against agreement within the political class is a Constitutional Republic that puts individual rights before the will of the majority as interpreted by our political class -- something that very few politicians other than Ron Paul defend.

Third, when Jon talks about "corporations accountable only to shareholders," he is not really describing the rapacious organizations that have, for example, been the cause of some of the greatest social and economic injustices in this country that we see today. Corporations in Ron Paul's favored society would not be allowed to violate the property rights of others, pollute their air or water, defraud them, lie to them or hurt them in any way. In Ron Paul's world of sound money where government does not bail out free-market failures, big banks would not have the licenses and privileges -- which can only be granted by government -- that allow them to generate wealth out of nothing on the backs of the middle class and poor. These are the same government-given privileges that enable these institutions to establish massive funds of shares in companies with no interest in them or their customers beyond the impact of changes in their stock price on their quarterly earnings. To cap it all, government then bails them out when they fail for fear of the consequences if it does not.

In contrast, in Paul's free market, when such institutions mis-sell products or make bad decisions, they are fined for fraud as appropriate, and if the fines or their bad business decisions bankrupt them, they are gone, able to do no more harm -- ever.

Which other presidential candidate will stand for that kind of corporate discipline? We have nothing like it today, nor have had for decades.

Moreover, in Ron Paul's America, there would be no buying of special privileges by corporations that enable them to get away with hidden shenanigans -- for the simple reason that those privileges would not be in the gift of the political class.

In contrast, in today's America of extensive government regulation by unelected agents, various people over many years provided information to regulators about what Bernie Madoff was doing. Regulators turned a blind eye. More recently, we have learned that insiders even supplied information to regulators -- in real time -- about how JP Morgan has been allegedly manipulating the silver market to make millions at the expense of small investors. These are two examples out of hundreds of the rich or connected being enabled in their crimes by government -- despite laws already on the books that would have sufficed to put an end to them.

Lest anyone believe that the current housing and financial crisis could have happened without distortive government policy, the one man in Congress who predicted it, Ron Paul, was able to explain in advance how and why the mistakes of government would precipitate it -- and what government could do (or stop doing) to prevent it. Meanwhile, all other politicians, on the side of the protections offered by social democracy, regulation or big government voted for the policies that brought us to this point. (It turns out that good intentions do not confer knowledge or expertise on legislators.)

Any one of Paul's free-market prescriptions -- not least ending the Fed's bias toward the banking and the financial sector, and just letting bad businesses go bankrupt -- could have made the American people less poor, not more so, and would have done more, not less, to punish the corporations that harmed them.

Does this mean there is no place for government? No -- and that is not Paul's position. Paul is a Constitutionalist -- not an anarchist. He sees the value of government in holding corporations and individuals accountable to the law -- and only the Law, rather than the preferences of appointed officials with political interests who happen to hold sway at a particular time. This Constitutional America is the very opposite of the corporatist dystopia that Jon Stewart fears: it is rather more like the world that Jon would like to see were the government to be doing its job and the people were able to hold it accountable.

Simply put, the Liberal challenge to Paul's brand of libertarianism that was embodied in Jon's question is common but not based in fact. Rather, it is the pitting of one idealization -- big-government social democracy that does what it claims and does more good than harm -- against another, anarchic one, which does not reflect Paul's vision as it does not admit the critical role of government in the Constitutional system that Paul favors.

Constitutionalists are quick to talk about the dangers of excessive government, but they need also to make the positive argument to their Liberal friends that a more limited government can actually be more effective in protecting liberal values: first, the potential for corruption increases with the size, power and wealth of the body in question; second, a more limited government is less likely to have an interest in favoring one private entity over another in any dispute and third, less government power means less incentive for private corporations to get into bed with politicians. These items speak to a point I have made consistently in my writing: Liberal values are sometimes realized best through other than traditionally Liberal means.

It's much harder for a citizen to hold government accountable for harming him, say by an error at the FDA, than it is for a citizen or the government to hold a private organization or corporation accountable for harm. The government can print up whatever money it needs for its lawyers, and can change laws -- even retroactively -- to protect itself and its agents. (Yes: the federal government does make retroactive law.) The optimal use of government is not to have it deliver all social goods without oversight or market discipline -- but to have the government stand apart to protect us when other entities fail to follow the law in delivering those goods or to keep the promises they make to those they deal with.

Paul means something very specific by free-market: the sum of voluntary transactions between individuals. Under the Constitution, the free-market is regulated by competition and the proper action of a government, which is to enforce law equally. The prerequisite for your government's being able to protect you against fraud, misinformation and other harm is that it does not participate in them.

Even the most leftish of leftists believe that there should be some protections of individual life, liberty and property against the possibility of a corrupt government. A vote for Paul in 2012 is a vote to go from having none of those protections to having some.

As Jim Clyburn said when he was the number three ranking Democrat in the House of Congress, "Most of what we do down here [in Washington] is not authorized by the Constitution." That state of affairs might be acceptable to some on the hard Left if not for the simple fact that as citizens of the USA, the Constitution, with its beautiful Bill of Rights is all the protection we have.

If the line-up of presidential candidates includes only one man in striking distance of the presidency who will do nothing to weaken the Bill of Rights, how can a Liberal vote for anyone else?

More to the point, the neglect of the Constitution by the political class, simply by virtue of the fact that it is the law of the land, is prima facie the substitution of the rule of Law for the rule of Men. Once you've allowed that, on what basis, even in principle, do you trust government over anyone else?

And if the line-up of presidential candidates includes only one man in striking distance of the presidency who will do nothing to weaken the rule of Law in favor of the rule of Men, how can a Liberal vote for anyone else?

If, when we voted for a politician, we woke up the next day in that politician's ideal world, a Liberal case against the broad thrusts of Paul's Constitutionalism might have some weight. But that is not what happens: we only ever get a move in the direction preferred by the winner. Therefore, the fact that Ron Paul's ideal world is not your ideal world is not a reason not to vote for him. Rather, vote for him because he is the only man who will not build on the accumulated transgressions against truly liberal values since FDR, but will try to undo them.

If you must, argue with him about the IRS, FDA and EPA. But don't you want to have that argument in a country that doesn't kill people, lock people up without trial, take money from workers to give to corporations (pace Stewart) and invade your privacy without due process? Doesn't every Liberal want that? What are our priorities?

The election in 2012 will be about the country's political direction -- not some hypothetical political destination.

Under President Paul, the first and farthest move would be in the direction of peace. Our troops would come home. Next on the list would be undoing the years of legislation that tears up the Bill of Rights, getting government out of your pocket, your bedroom and your computer. Then, there would be changes to monetary policy to end the transfer of wealth to the financial class and a roll back of the distortions of the monetary system on which the corporate recklessness with which Jon Stewart is rightly concerned depends.

What you will not see is a simple elimination of social programs. Paul has said that any deep social change should be based on allowing people to opt-out, rather than on a sudden abandonment of those whom the current system have made poor and dependent. He has expressly said that we have a responsibility to all Americans: and that means any large change demands a thoughtful and benevolent transition.

So if you are a real Liberal, vote for Paul not to live in his libertarian ideal -- even though it would be a thousand times more liberal than American today. Vote for him so that we can have the arguments about the FDA, EPA and TSA on the one hand, and health insurance companies, banks and energy independence, on the other, in a country where we all agree again on the few protections of life and freedom that give any government program any purpose at all.

Vote for him for all the fundamental values on which Liberals agree but no other presidential candidate will act on, and then once you have helped return our country to the one in which everyone agrees that the Bill of Rights is a good basis for discussion, rather than an inconvenient relic, feel free to spend the next four or eight years arguing with President Dr. Paul about the particular social goods you can't imagine anyone other than government providing.