When I founded The Future of Freedom Foundation twenty-five years ago, the debate that was raging within the libertarian movement was between the purists and the gradualists. The debate centered on whether libertarians should stand for the immediate repeal of socialist and interventionist programs or whether they should endorse reform measures that would supposedly get us to the free society gradually or incrementally.
Since our very first year in 1989, I was among the purists, as was Richard Ebeling, who was serving as FFF’s vice president of academic affairs. Sheldon Richman, another purist, would join FFF as a regular writer a bit later and would later author for FFF three of the most uncompromising books in the history of the libertarian movement: Separating School & State: How to Liberate America’s Families; Tethered Citizens: Time to Repeal the Welfare State; and Your Money or Your Life: Why We Must Abolish the Income Tax. The fact that Richard, Sheldon, and I were purists shouldn’t surprise anyone given that FFF’s mission has always been to present an uncompromising moral, philosophical, and economic case for libertarianism.
Most of the debate in the movement centered around school vouchers but it certainly wasn’t limited to vouchers. There was an array of reform proposals in other areas, such as health care, Social Security, and drug laws, in which the purists were debating the gradualists.
The voucher debate
In our very first year, I threw down the gauntlet to the gradualists in an essay that appeared in the September 1990 issue of our monthly journal Future of Freedom, which was called Freedom Daily at that time. In my essay, which was entitled “Letting Go of Socialism,” I criticized school vouchers, Social Security reform plans, and reform plans relating to government subsidies to businesses.
I argued that all three of these reforms were nothing more than statist devices that would accomplish nothing more than to make life under the socialistic welfare state more palatable and that they would most definitely not advance the cause of freedom.
That article generated a response entitled “Say ‘No’ to Intolerance” from the most famous free-market libertarian economist in the world — Milton Friedman. Imagine my surprise at being criticized by someone who was one of my libertarian heroes!
Friedman made one primary argument in favor of vouchers. He argued that vouchers were a way to get from here to there — from a system of public schooling to one in which government played no role in education at all, which is the libertarian ideal. Vouchers, he said, were a transition device — one that would lead us to freedom of education.
That was the primary argument — if not the only argument — that libertarian gradualists made for vouchers and other reform measures — that they were gradual or incremental steps that would get us to the free society.
Purists, needless to say, vehemently disagreed. The way we saw it was that these reforms were nothing more than statist devices that were being advanced by libertarians and that at best they would simply make life more palatable under socialism and interventionism.
Periodically over the years, FFF would revisit the debate. For example, in the September 1997 issue of Future of Freedom I launched a 6-part series entitled “Compromise and Concealment: The Road to Defeat.” That was followed by an essay in the November 1997 issue by Wendy McElroy, another purist who was now writing for FFF, entitled “Contra Gradualism.” Also, see my 2000 essay “Vouchers Are Just Another Welfare Scheme.” Or my 2005 essay, “Reform or Repeal.”
The verdict is in: gradualism has failed
The problem for the purists, however, was that while we could argue from principle, we could not prove that the gradualists were wrong from an empirical standpoint because their reform measures had not been in existence long enough to gradually bring us the free society.
For many years now, that raging debate between the purists and the gradualists has lain dormant.
It is now time to bring the purist vs. gradualist debate back to the forefront, declare that the debate is over, and pronounce that the purists have won.
Because the principal justification that the gradualists have used for 25 years to justify their reform measures has disintegrated. We now know for a fact that reform measures do not lead to freedom and instead only fortify the socialism and interventionism of the welfare-state way of life in America.
In 1989, the same year that FFF was founded, the city of Milwaukee established the nation’s first modern-day school voucher system.
It has now been in effect for 25 years, the length of time that FFF has been in existence.
Twenty-five years after Milwaukee’s voucher system was established, there are those who claim that it has been a failure, and there are those who claim that it has been a success.
Regardless of how one comes out on that issue, however, everyone must agree on one central point: Twenty-five years of vouchers have not gradually brought us freedom of education.
On the contrary, the state’s control over education is stronger than ever. In fact, vouchers have actually enabled the state to extend its control into the private-school sector, which is precisely what we purists said would happen. Perhaps even worse, most voucher proponents dropped their gradualism argument a long time ago and now even argue for vouchers on the ground that they will improve the public-school system. See my 2007 essay “Milton Friedman Was Wrong on Vouchers.”
Where do 25 years of vouchers with no achievement of educational liberty leave the libertarian gradualists?
It leaves them with no justification whatsoever for continuing to promote and advance school vouchers.
What are vouchers if not just another socialistic welfare-state program? A voucher system enables the state to forcibly take money from people in order to give what amounts to an education dole to certain families with children. That’s what libertarians complain about with respect to the entire welfare state — that it’s immoral to forcibly take money from one person and give it to another person. But that’s precisely what vouchers do.
Before, gradualists could maintain that there was no problem with libertarians’ embrace and support of socialist reform measure because, they said, vouchers would gradually or incrementally lead us to educational liberty. It was just a transition, they claimed.
But we now have conclusive proof that vouchers do not gradually lead to the end of state involvement in education. We have had 25 years of vouchers in Milwaukee, and everyone agrees that vouchers have not led to educational liberty—i.e., to the separation of school and state.
Vouchers might well have made the situation better for the serfs but that is not freedom. And what matters to libertarians — or what is supposed to matter to libertarians — is the achievement of a free society, not a better life on the welfare-state plantation.
After 25 years, the verdict is in, and the libertarian purists have won the debate.
So, all the libertarian gradualists have to now do a lot of soul-searching, given that their justification for supporting school vouchers has disintegrated. Do they continue supporting vouchers simply because that’s what they have done for 25 years? Do they just act like everything is the same as it was 25 years ago, when they were arguing that vouchers were a transition to educational liberty? Do they continue to maintain allegiance to what is clearly a socialistic measure? Do they continue to preach the virtues of this socialistic program to young people and others?
Or do they finally join up with us purists and help us to make a frontal assault on the entire socialistic welfare state, including public schooling?
Indeed, how can any libertarian in good conscience support a socialistic program that he knows for a fact is not leading toward the free society but is instead just one more statist measure piled onto a multitude of other statist measures in the modern-day welfare state?
Social Security reform: Conclusive proof of gradualist failure
Would you like another example?
Consider the second example that I used in my September 1990 article “Letting Go of Socialism” — Social Security.
For 25 years, the gradualists have argued for a reform of Social Security that involves combining the current system of Social Security with a new system in which people supposedly have a “choice” on what to do with their own money. Under this reform plan, which proponents call “privatization,” seniors would continue to receive Social Security payments and young people would continue to be taxed to fund such payments. The federal authorities would permit young people to opt out of the old system (even while be forced to pay taxes to fund it) and “choose” to invest retirement funds in a range of government-approved investment vehicles.
Since their Social Security reform plan has not yet been adopted, libertarian gradualists can theoretically argue that this socialist-interventionist reform plan, unlike vouchers, will definitely lead us to the free society — that is, a society in which people are free to keep everything they earn and decide for themselves what to do with it.
Except for one thing: Chile, a country that drives the stake into the heart of the “transition” justification that gradualists have relied upon for the past 25 years to justify their allegiance to their Social Security reform plan.
In 1981 Chile adopted the Social Security plan that American libertarian gradualists would like to impose on the American people. The Chilean Social Security reform plan is commonly known as the Pinera Plan, named after a man named Jose Pinera, who served in the Augusto Pinochet regime in Chile.
1981! That’s around 33 years ago!
Why is that significant? Because after thirty-three years, there is still no transition to a free society in Chili — that is, to a society in which people are free to keep everything they earn and decide for themselves what to do with it.
On the contrary, Social Security is more deeply embedded in Chile than ever before. Why, not even the free-market advocates of Chile’s Social Security plan ever call for its elimination. As a matter of fact, they are instead trying to spread Chile’s Social Security reform plan to other countries around the world, including the United States.
Now, if you love statism — if you love socialism — if you love interventionism — then by all means embrace and support Chile’s Social Security reform plan for our country. But just don’t pretend though that it is freedom or that it’s going to bring you freedom because it’s not. As we purists have maintained from the beginning, the notion that socialism and interventionism will lead to the free society is ludicrous.
How Social Security reform came to Chile
How Chile ended up with its Social Security reform plan is quite fascinating. I just got through reading a book entitled The Economic Transformation of Chile: A Personal Account by a man named Hernan Buchi, who served as vice-secretary of economics and other positions in Pinochet’s military regime.
Pinochet, of course, was the military general who headed up the military coup in 1973 that ousted the democratically elected president of Chile, Salvador Allende, a self-described Marxist, from office and installed a military dictatorship in his stead, in partnership with President Richard Nixon’s administration, which was operating primarily through the CIA.
Since Buchi had received his post-graduate degree at the University of Columbia rather than the University of Chicago, technically he was not part of what is known as Milton Friedman’s “Chicago Boys,” a group of economists who were followers of Friedman’s free-market philosophy and who went to work for the Pinochet regime after the coup. But as a practical matter, everyone considered Buchi as a Chicago Boy given that he shared the same free-market philosophy as they.
The most fascinating part of Buchi’s book for me was an episode that unfortunately he didn’t spend a lot of time on. Buchi wrote that at some point — I’m not sure exactly when — he was visited by a Russian economist who was a libertarian!
And guess what this Russian libertarian economist said to Buchi.
He pointed out to Buchi that a free society — that is, a libertarian society — necessarily entails the right of people to keep everything they earn and decide for themselves what to do with their own money.
What that Russian libertarian economist was telling Buchi and, effectively, the other Chicago Boys, was that their Social Security reform plan was statist to the core — a grave compromise of libertarian, free-market principles — a violation of the principles of libertarianism and the principles of a free society. He was essentially saying that the Pinera Plan for Social Security reform in Chile was nothing more than a combination of socialism and interventionism packaged in the rubric of “privatization,” “choice,” and “free-market oriented” policies.
So, how do you think Buchi responded?
Buchi writes: “There may be a point in this argument, but not within current political reality. Today, for better or worse, people have already removed these matters from their realm of decision and believe that creating a good retirement system is a government responsibility. This is an undeniable political fact that every government must deal with.”
There are three important points to make about that statement:
One, Social Security is a socialistic program. Buchi obviously knows that. He is a free-market economist. Moreover, in another part of the book he references Otto von Bismarck, the man who got the idea of Social Security from German socialists and then introduced it into Germany’s system.
Two, the reason that Pinochet and the CIA initiated their military coup was to end Allende’s experiment with socialism in Chile.
Three, the reason that Pinochet was rounding people up, torturing them, raping them, murdering them, and disappearing them was to eradicate socialists and socialism from Chilean society.
Is Buchi saying that because the Chilean people favored Social Security, the Pinochet regime had to maintain its existence, albeit in some reformed fashion?
How could that be? The very purpose of the coup was to override the wishes of the Chilean people. Remember: Allende, who had openly admitted that he was a socialist, had been legitimately elected, first by receiving a plurality of the votes from the Chilean people and then by being elected by the members of the Chilean congress when the election was tossed into the hands of congress under the Chilean constitution.
The coup trumped that electoral outcome precisely because Pinochet and Nixon didn’t want socialism in Chile regardless of how the Chilean people felt! Or as Nixon’s National Security Advisor Henry Kissinger put it, “I don’t see why we need to stand by and watch a country go communist due to the irresponsibility of its own people.”
Keep something important in mind: Buchi, Pinera, and the Chicago Boys worked for a dictator. What is a dictator? It’s a ruler who does whatever he wants to. If a dictator wants to enact a law, he doesn’t have to go to the legislature because there is no legislature. So, no cajoling or buttonholing of the members of congress, and no bribes and no deals are necessary. Once Pinochet shut down the Chilean congress, he eliminated that part of the democratic process that is used to enact laws. No gridlock at all.
He also didn’t have to concern himself with the judiciary because the Chilean federal judges fully and completely deferred to his dictatorship. There was a never a possibility that Chile’s federal judges were going to declare any of Pinochet’s decrees illegal. They were too scared to even contemplate such a thing.
So, as the dictator of Chile, Augusto Pinochet was El Supremo. Whatever he decreed was the law.
In fact, the decrees that he issued were actually called “Decree Laws.” That’s because whatever decree he issued automatically was the law. That’s the power of a dictator.
Buchi didn’t explain was why he and the other Chicago Boys didn’t simply present General Pinochet with a decree that abolished Social Security completely. I mean, I’m no fan of dictatorships but the fact is that here was the opportunity to instantaneously bring a genuinely free society to Chile — well, at least in an economic sense but certainly not in a political sense given the existence of the dictatorship. All they had to do was have Pinochet sign the Decree Law that said: “From this day forward, Social Security is abolished.”
In other words, the Chicago Boys had the opportunity to do what Leonard Read, the founder of The Foundation for Economic Education, referred to as “pushing the button.” Push the button and the socialist programs would immediately disappear. The Chicago Boys could have presented Pinochet with a Decree Law that pushed the button by abolishing Social Security and, for that matter, public schooling, national healthcare, and other socialist programs that had existed under Allende.
The Chicago Boys didn’t do that! Instead, they settled for a conservative reform of socialism! And worse still, a statist reform that has left Social Security (and public schooling, national healthcare, and other socialist programs) more entrenched than ever in Chilean society. Remember: 35 years of a Social Security reform plan and still no “gradual” transition to the genuinely free society to which that Russian libertarian economist referred.
So, what was “the reality” to which Buchi referred? I don’t think he was referring to the Chilean people because Pinochet obviously didn’t care what the Chilean people wanted. His mission was to eradicate socialists and socialism from Chilean society, which is why he initiated his coup.
In my opinion, the reality was that Buchi and the other Chicago Boys understood that Pinochet himself would never approve of any plan to abolish Social Security because he himself believed that it was a proper role of government to provide people with their retirement. If I’m right, then there obviously would have been no good reason to upset this dictator by presenting him with a Decree Law that abolished a program that he fervently believed in. Better instead to simply present him with a reform.
If that’s true, do you see where that leaves Pinochet? It leaves him with the socialist infection — the very socialist infection that he was doing everything he could to eradicate from Chilean society with round-ups, torture, rape, murders, and disappearances of tens of thousands of people who believed in Social Security, national healthcare, public schooling, and other features of socialism.
If I’m right, then realizing this, what could Pinera, Buchi, and the Chicago Boys do? They couldn’t exactly say to Pinochet, “Nuestro general, favor de perdonarnos, pero tenemos que avisarle que tiene Ud. la infecion socialista porque Ud. favorece este programa de seguridad social.” They had to realize that if they told Pinochet that he himself had been infected by the socialist virus, as reflected by his commitment to Social Security (and public schooling, national healthcare, etc), they might well have to deal with the adverse reaction of a dictator who wielded the power to send anyone he wanted to the torture chambers, rape rooms, and concentration camps.
So, it seems to me that the Chicago Boys decided to keep silent with respect to the genuine libertarian approach to Social Security — the approach that the Russian libertarian economist had posed to Buchi — and that they instead settled for a reform that kept governmental involvement in people’s retirement intact.
Interestingly, Buchi writes: “Things may be different in the future, but in the meantime utopian libertarian scenarios are bound to remain just that. The military government did not impose reform by force. Granted, the law creating the new system was enacted in the same way that all laws were generated during that period, but joining the system was voluntary.”
No force? Voluntary? Really? Who is Buchi fooling?
What would have happened if a Chilean citizen had said, “I have decided not to participate in your socialist-interventionist Social Security reform plan. I am a libertarian. I am going to do what a Russian libertarian economist said constituted a principle of a free society. I am going to keep my own money and decide what to do with it.”
I’ll tell you what Pinochet would have done to that person: He would have had him carted away to a military dungeon or concentration camp to be tortured, raped, murdered, or disappeared, or, if he was lucky, to be “reeducated” by Pinochet’s military drill sergeants.
That’s not voluntarism. That’s the opposite of voluntarism. And it’s also the opposite of freedom.That is precisely what the initiation of government force is all about.
And what about Buchi’s reference to “utopia”? Doesn’t utopia imply a perfect society, a type of society that is unattainable?
Perhaps Buchi is unfamiliar with the economic history of the United States, a country where there was no Social Security and income taxation for more than 100 years — a country where Americans were free to keep everything they earned and decide for themselves what to do with it. (See my 2009 essay “Liberal Delusions About Freedom.”)
Nineteenth-century America wasn’t a utopian society. It was simply a society without income taxation and Social Security — and public schooling, Federal Reserve, fiat money, national healthcare, economic regulations, immigration controls, and other socialist programs that were a part not only of Allende’s regime but also Pinochet’s.
Uncompromising commitment to principle:: The only way to achieve freedom
In the September 1990 issue of Future of Freedom, in addition to my essay “Letting Go of Socialism,” we published an essay by Leonard Read (the founder of The Foundation for Economic Education) entitled, “Sinking in a Sea of Buts,” in which Read argued for purism and against gradualism. If you have never read that essay, I highly recommend it. It had a powerful effect on me when I first discovered libertarianism.
The words of Leonard Read in that essay, which was published in 1970, remind us why libertarians should be purists, not gradualists:
Whenever anyone urges the gradual repeal of laws he believes to be wrong, he has lost the thought and force behind the case for repeal. Instead, postponement is actually advocated; and postponement, as eternity, has no calendar days, no deadline—it is a never-never proposition. Gradualism has yet another flaw. It implies that what is declared to be wrong isn’t all wrong; otherwise, why abide it for a moment? It’s like saying that we should bring the thief slowly to justice else the baker and the haberdasher will lose the malefactor’s trade too suddenly.
When events in society are going wrong—and they appear to be—nothing less than exemplary action can set them aright, a difficult role. Any exemplar must be prepared for disfavor and unpopularity, simply because his principled positions are and of necessity must be an affront to the mores, a break with the prevailing wrongs. Freedom appears to be submerged in a sea of buts. It is entirely realistic to expect these buts from persons who do no thinking for themselves. The exemplar, however, never degrades a principle with a but. To do so is commonplace, not exemplary.