economy politics

Cliff Asness: ‘There Is Not A Purely Libertarian Solution To The Coronavirus’

"We need, and I don’t think I’ve ever said this before, fiscal help."

By Cliff Asness

I’m a somewhat (very mildly) well-known libertarian. I do indeed believe government should be mostly small and that individuals can and should be mostly trusted to make their own decisions. I think liberty should always get the benefit of the doubt.

BUT I AM NOT A LIBERTARIAN ABOUT THE CORONAVIRUS and the enormous health and economic dangers it entails (economic dangers do become health dangers to the vulnerable).

There are always people who believe in extremes. Libertarians verging on anarchists, democratic socialists verging on communists, conservatives and leftists verging on fascists.

But I believe that most libertarians (I have been granted the authority to speak for them by the secret council) are not anarchists. Particularly in viral foxholes. Certainly I am not.

In normal times government indeed has a role in fixing market imperfections. There are indeed free rider problems, monopolies, externalities, sadly necessary wars, sometimes the commons are truly tragic, and fraud and theft are always crimes best not left to private armies.

Reasonable libertarians don’t deny this or that government is sometimes needed. We simply think both the left and the right often see their own favored problems with the market as much more severe than reality. That these things exist doesn’t mean they’re behind every rock.

We think many non-libertarians grossly under-appreciate markets and the miracles they perform, and often (even usually) create cures that don’t solve, and sometimes even worsen the problems they are trying to fix with the best of intentions.

Most (again, I’m an authorized spokesperson) libertarians see a role for the government (which, remember, is just the rest of us, the government doesn’t really pay for things the taxpayers do) in helping those in desperate straights in normal times.

We need a safety net. This does NOT mean permanent Bernie-esque “rent control for all” or free college for the bourgeois. But “libertarians against any safety net” is a much smaller club than straw-man loving critics assert.

Many libertarians (certainly me) favor solutions to these problems that look more like the government paying for things not running things (e.g., paying for private health insurance for the needy not government run healthcare).

This whole throat clearing CMLA pre-amble brings me to today. While we should be careful not to permanently lurch to bigger and more intrusive government (as often happens post crisis as the measures become forever), THERE IS NOT A PURELY LIBERTARIAN SOLUTION TO THE CORONA VIRUS.

Btw, CMLA stands for “cover my libertarian ass” as some fellow travelers will not like that last ALL CAPS sentence.

We need to tell people to practice extreme social distancing. In many cases we do need to ENFORCE that not simply ask people politely. Yes, I’m losing libertarian bonafides here. I’m ok with that. We are all walking negative externalities right now that the market just can’t fix.

Idiots quoting how much more the flu kills than Corona so far need to be shouted down. This is like claiming that the flu kills lots of people but nobody has died yet from the comet about to hit the earth, so don’t be a “comet fear monger.”

The comet might miss us (and Corona might be milder than we fear). But when you’re on an exponential curve saying “it’s not so bad yet” is a disastrous argument.

Other idiots who still (these are dwindling but are still around) think going out to dinner or not canceling things is “showing we won’t let this panic keep us down” have to STFU. This panic should keep us down (or at least at home).

Here I’m still a libertarian. I’m not willing to force these idiots to stop saying these things. I won’t go un-libertarian on the first amendment even now. But they really need to STFU. It’s not quite fire in a crowded theater for me but it’s getting there.

Last comment about idiot statements. It’s fine to note that the elderly are, by far, in the most danger. That’s just a fact. But those noting it often have a tone of “and therefore it’s not so bad.”

If you think that then you’re horrible. I for one have a 76 year old mother living on a friend’s donated kidney. I’m not ok with a pandemic that only ravages the elderly and the weak. Social distancing is not for you it’s for them. Don’t be an asshole.

So, on to the economic suggestions that kind of hurt me to admit. We need to help. We need to do more than we’re doing or seem to plan to be doing. This isn’t just risking a normal recession.

This is people not able to work while their bills keep accreting and we tell them to stay home. That’s not normal and can’t be fought with normal tools.

We need, and I don’t think I’ve ever said this before, fiscal help. We need fiscal relief for individuals and small (and maybe large) businesses. The Fed action was fine, and those who dismiss it are wrong, we should use all possible tools.

But, it’s not nearly enough if the worst happens. We can go back to arguing about the Obama stimulus and Keynesian economics in general later. But, right now, it seems, even to me, we have to try it.

So, after this is up for a while, I’m intending to leave Twitter again, as it brings out the worst in me, and when the Corona danger is passed I’m going to fully revert to my (non-extremist non-straw-man) libertarian ways.

I will definitely be back to arguing that whatever measures I’m supporting now should be temporary not permanent. I will still argue that Piketty and Saez are mostly full of it and Bernie is out to lunch. BUT THAT IS AN DISCUSSION FOR LATER.

I’ve always hated the argument “there are no atheists in foxholes” as just because you believe in God when terrified doesn’t mean there is one (it also doesn’t mean there isn’t one!).

Similarly, because there are, or should be, no pure libertarians in viral pandemics, it doesn’t prove a thing other than straw-men about libertarian extremists, who are actually pretty rare, are silly. It certainly doesn’t say the government should always be huge and intrusive.

Oh, and on a far less important (though excruciating for me) note, value is performing worse in the market panic this month than it did when the market went straight up, which was pretty damn bad (including “value” trades in the macro world now really suffering).

This will (imho – all standard legal disclaimers apply as I really know very very little and you should never listen to me) come back stronger than ever.

Value will come back (same disclaimers apply). The people we lose in the pandemic won’t. Thanks for listening.


8 comments on “Cliff Asness: ‘There Is Not A Purely Libertarian Solution To The Coronavirus’

  1. Professor H: Thank you for posting this- This really resonated with me.

  2. To me this is the libertarian white flag of surrender. I sent this to a friend of mine who is a committed libertarian (although ironically he is almost a total ward of the state) and he said that, yes, he agrees…extraordinary times call for extraordinary measures.

    To my way of thinking, if an economic theory or model cannot deal with extraordinary times, then it has no business being held up as a desired model during ordinary times.

    To me, this is just one more case of privatize profits, socialize losses.

    Thanks for posting this.

    • Best comment of the day.

      It’s laughable that even while he is asking for the federal government to step in and save the day, Mr. Asness spends most of his time criticizing his ideological opponents and defending libertarian dogma. Well, at least he admits that once the crisis is over he will be back to haranguing about the evils of big government.

      • Cliff is a lot of things, but one thing I’ve learned over the past several years is that he’s not insufferable as he’s sometimes made out to be. I’ve grown to like him quite a lot, actually, and his discipline to extricate himself from Twitter was admirable. In any case, I applaud him for taking the time to write this. I think it’s well done.

  3. Mr Asness: your Libertarian card has expired. When this crisis is over, you will not get it back.

  4. This guy should actually get familiar with Libertarianism and what libertarians do. If he studied stocks the way he studies Libertarian systems he would be broke. Here’re the facts:

    -The SECOND thing in their P3 platform is prepping for families and communities, thus by passing economic emergencies
    -Libertarians in Hunan China were warning of a problem in November in their YahooGroups
    -South Korea is having half the problems thanks to libertarian management techniques from a process involving officals, health care, and private suppliers 5 years ago, like immediate testing. Libertarians in US also revealed that the US government had inadequate masks and respirators from a regulatory turf war despite libertarian warning. Anti-libertarian city councilors in New York City and Italy were telling people to go in crowds, there was no danger. Essentially, far-leftist government led to and is spreading the Coronavirus, especially by blocking citizen and health care worker action (denying masks to nurses, medicines to entire states, etc.) . Coercive Government has shown it has NO helpful role in this.
    -Libertarian leaders were advisng the public to wear masks, social distance, and (if not buy and hold) leave the market in January.
    -Libertarian teams are popping up over the globe showing how to make masks, providing volunteer help, etc.
    –MD;s are benefiting from numerous tools brought about by libertarian deregulation campaigns from low-cost masks to better peer review to the internet to better hygiene and error protocols in hospitals.

    Ignoramus commenters are worse with their anti-libertarian bigotry and praise of official incompetents. The system of proactive Libertarians are among the many heroes in this mess IMHO.

    I’ve listened to people say libertarians are done since the 1950’s. In the meantime their method has brought down the USSR, given us the internet, revived peer review, and spread markets and democracy The Libertarian world community started with one far-sighted teenager in 1969 and is now millions of homes advancing civilization and proactive conscious capitalism in every country. Maybe the OP should get involved.

    • Lol. Do you have any idea who it is you’re talking about with “this guy”? It sure doesn’t sound like it. If not, I suggest you familiarize yourself. Cliff’s a “somebody”, so to speak. And he’s a Libertarian. It doesn’t sound like you know who he is. Like Ron Burgundy, he’s “kind of a big deal”.

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