Individualism, Morality and Money

Those who point to us as being selfish and greedy have reasons to do so. A few ideas are hugely misunderstood; not only by those critical of Libertarians, but also from within our Libertarian camp.

One misunderstood idea is individualism, the bedrock of Libertarian thought. Steve Davies pointed out in his speech History of Individualism that many of his young Libertarian audiences told him they advocated for small government, because they liked free market capitalism. He said the order was wrong, that an appreciation of individualism ought to come first, and the idea of a limited government and free market economy come only as a result of that belief, not the other way around. Championing for free market before individualism twists our Libertarian stance. When orders of importance are flipped, something moral gets amiss.

The online Mirriam Webster dictionary defines ‘individualism’ this way:

in·di·vid·u·al·ism noun ˌin-də-ˈvij-wə-ˌli-zəm, -ˈvi-jə-wə-, -ˈvi-jə-ˌli-
: the belief that the needs of each person are more important than the needs of the whole society or group
: the actions or attitudes of a person who does things without being concerned about what other people will think

Urg. Unbelievable! False, false, false! Can we boycott Merriam Webster dictionary?

Trouble is, we have people like Milton Freidman and Ayn Rand who, in my perspective, give reasons to non-Libertarians to strengthen their misunderstood argument that Libertarians are egotistical and heartless. (I do expect to hear people defend Friedman and Rand. On with the discourse.) For example, how do I challenge a person who tells me Ayn Rand is cold hearted and therefore Libertarians are too, when Rand says things like:

‘Do not hide behind such superficialities as whether you should or should not give a dime to a beggar. This is not the issue. The issue is whether you do or do not have the right to exist without giving him that dime. The issue is whether you must keep buying your life, dime by dime, from any beggar who might choose to approach you. The issue is whether the need of others is the first mortgage on your life and the moral purpose of your existence. The issue is whether man is to be regarded as a sacrificial animal. Any man of self-esteem will answer: No. Altruism says: Yes.

I agree that a person has the right to choose whether to give a dime to a beggar or not (give if you want to, don’t if you don’t want to; true charity is never forced), but just the way she puts it makes her sound cruel. It just doesn’t sound nice.

Then we have Milton Friedman. If you Google his name, one of the first things that comes up is this video interview with Phil Donahue, where Friedman speaks about “greed”: ‘The world runs on individuals pursuing their self interest’ he says, and I agree, but where I have qualms is that he equates self-interest with advancing one’s agenda i.e. greed, and the ability to make money with happiness. This might be true for some people, but it alienates and offends a great many people, like Liberals (in the American sense) and egalitarians, who end up bashing Libertarians as being conceited and greedy.

We are all massively connected. © Andy Lamb

We are all massively connected.
© Andy Lamb

It’s not just the way Friedman gives a spiel with high brows that rub me the wrong way. In this video he talks about the trickle down effect, which is now a standard US Republican answer to concerns about ‘while the rich get richer, what about the poor?’ The trickle down effect doesn’t happen. It doesn’t happen because we don’t have a completely free market, not at the micro level, nor at the macro level. Friedman endorsed government intervention at the macro economic level. Does this make him a non-Libertarian? (Debate: Was Milton Friedman a Libertarian?)

Another qualm I have is his stance on public education. He’s a fan of variety and diversity, ‘but it has to be a variety and diversity within a uniform set of standards, institutions and ideas.’ (Source) This confuses the idea of individualism. I think I figured out what the problem is. It’s his definition of individualism. In Friedman’s introduction to Road to Serfdom, he writes: ‘The argument for collectivism is simple if false; it is an immediate emotional argument. The argument for individualism is subtle and sophisticated; it is an indirect rational argument.’ (xii) The problem is that he divorces the rational from the emotional. I think a lot of people do this, like Ayn Rand and the objectivists. No wonder then, that the individualist argument is seen as heartless – because it disregards the human emotion.

Emotion and reason: They’re two sides of the same coin, they work in tandem. Maybe if we bring back the individualist debate, our Libertarian cause might be better understood.


  1. “The problem is that he divorces the rational from the emotional. I think a lot of people do this, like Ayn Rand and the objectivists.”

    Rand beleived the content of your emotions is rational, but regarded them as essential (in fcat I remember reading she was the only philosopher to integrate them as primary parts of her system).

    More importantly, “The trickle down effect doesn’t happen. It doesn’t happen because we don’t have a completely free market, not at the micro level, nor at the macro level.”

    Indeed, for example, I have often wondered whether we have a “trickle up” via inflation or a “gushing up”. How strong is the Cantillion Effect? How strongly does inequality correlate with monetary expansion? I ought to know.



    1. “Rand beleived the content of your emotions is rational, but regarded them as essential”

      Reminds me how Dr. Scott Peck said something like ‘one’s instincts – gut feeling- is often a few steps ahead of one’s rational understanding of the matter.’

      “How strongly does inequality correlate with monetary expansion?”
      My gut feeling tells me “a lot”….



  2. Methodological individualism is one of the three principles of Austrian School economics (the other two being the universal nature of economic law and the subjective nature of ECONOMIC value). However, the word “individualism” is often used to refer to “atomistic individualism” the destruction of all voluntary associations (secular as well as religious) of civil society between the individual and the state (as seen with the French Revolution – not with the American Revolution). This is not what libertarianism is about – not at all.

    Libertarianism is not hostile to voluntary cooperation, to the voluntary cultural institutions of civil society – quite the contrary, that is Jacobinism not libertarianism. Robespierre was no libertarian – he was a radical statist.

    As for Randian Objectivists – in my dealings with them I have found them unfailing honest and decent.

    I am old fashioned enough to judge people by how they behave – not by media (and academia) propaganda about how evil they are.



    1. When I spoke on the subject of Austrian economics, I observed that its adherence to methodological individualism provided a bridge between it and libertarianism, due to the similarities in how problems were approached. However, it should be noted that Schumpeter (a young, more Austrian Schumpeter) stressed the separateness of methodological individualism and political individualism:



  3. It’s worth noting that when it was clear the term ‘liberal’ had been hijacked, people like Sir Ernest Benn and Frank Chodorov, casting around for a label to describe what we now call ‘libertarianism’ decided upon ‘individualism’ – this capturing the fundamental essence of the philosophy – but even when Benn is writing (’20s, ’30s, ’40s) he still needed to defend it against the claim that it meant nothing but selfishness.

    I think there are various issues here. One is about communicating a persuasive political message, and how certain statements of the ‘greed is good’ variety, from Rand, M. Friedman, Hayek etc. can be either misunderstood or taken by our ideological opponents and fashioned into strawmen. To the extent that this is a problem, one must take trouble to avoid both, if the aim is to win people over. Of course, it’s not a problem when discussing amongst ourselves, as we are less likely to misunderstand.

    A second issue is that there are many libertarians who would not misunderstand, say Rand’s views in this speech, but would disagree quite fundamentally:

    She seems to have identified altruism to be diametrically opposed to capitalism. I would also say she seems to see the capitalist system as all-encompassing, whereas I would suggest there are many areas of existence outside the economic system, such as family life for instance, which she seems to be ignoring. This makes me think of a certain Fast Show sketch:

    Personally, both in terms of winning converts and at a deeper philosophical level, I am much more drawn to Bastiat’s assertions of the ‘harmony of interests’, which stresses that liberty benefits everyone. In this case, there is no clash between altruism and capitalism. I expect Rand has a particular definition of altruism, which may not be quite the same as mine, so the gap between her thinking may not be that big, but in this case, I would return to the first point and the need to put our arguments clearly.

    A final point I would add is that a certain faction of the right in politics, here and in America, espouse somewhat libertarian views in some areas, but not in others, so to the casual observer it can seem that these ‘libertarian’ politicians only care about cutting welfare but are otherwise content with the rest of the bloated state. (A similar state of affairs exists at the other end of the spectrum, where ‘social liberals’ argue for drug decriminalisation etc.) I think it is important that we are vigilant to stress the whole libertarian message, rather than the bits and pieces, which each end of the political mainstream occasionally put forward.



    1. Thank you for the rich content gentlemen. A lot to learn!

      Richard, how does Bastiat define ‘self interest’? Is ‘harmony of interests’ quoted by any theologians?

      Perhaps before discussing ‘individualism’ we might do well discussing the definition and morality of ‘self interest’, because in a way, I feel we’re contending against Christian values, mainly that ‘selflessness is a virtue’.

      Just because selflessness is a virtue, it doesn’t mean self interest is not.

      A psychologist Lawrence Kohlberg asserted that there are stages to moral development.

      Any child-development and psychology student would tell you, you can’t go to a higher stage of development without properly going though the former stages. So although ‘self interest’ is low on his moral hiearrchy (gaa, I can never spell this), it’s one of the basis of a person’s moral development, and all the more important because it’s low in the heirarchy.

      On a separate note, associating self interest to self love would bring us back to basics. You help others because you love yourself.

      By the way, in Kohlberg’s stages, part of the highest stage of morality resonates with Libertarian views.
      “Laws are valid only insofar as they are grounded in justice, and a commitment to justice carries with it an obligation to disobey unjust laws. Legal rights are unnecessary, as social contracts are not essential for deontic moral action.”



      1. I couldn’t quote any theologian on ‘self-interest’, but Bastiat’s position certainly wasn’t challenging Christian morality as far as he understood it, rather he saw a well-ordered universe, where working together in peace and liberty, (and in a free market all transactions are by definition voluntary and perceived to be mutually beneficial), we would all win.

        Much as this case can be made rationally, there is definitely a theological aspect to Bastiat’s thinking, insofar as he couldn’t believe that God would be so capricious as to design the world in such a way that we were all pitted against one another in a zero-sum game.


  4. Richard – you hit on a reason that Ludwig Von Mises disliked Schumpeter, because methodological individualism (in honest hands) does lead to free market conclusions. By the way Schumpeter’s work on the history of economics is astonishingly bad – for example A.L. Perry (the leading American economist of the 19th century) is not even mentioned. Why not? Because Perry followed the tradition of Bastiat – i.e. that methodological individualism leads to free market conclusions.



    1. “methodological individualism (in honest hands) does lead to free market conclusions”

      I disagree, insofar as economics should be ‘wertfrei’ (I feel happy using German terms with you following your speech!), unless you have covered this objection with your use of ‘honest hands’.

      As for Schumpeter’s ‘History of Economic Analysis’, it was unfinished at the time of his death, so maybe a little slack should be cut him. However, I would rather read Rothbard’s two-tome history ten times than Schumpeter’s once.



  5. Sir Earnest Benn was already in a position where supporting the free market was a tiny minority position – the young Conservatives and young Liberals agreed with the socialists that the state needed to be BIGGER in Britain (hence Hayek dedicating his “The Road to Serfdom” to the “socialists of all parties”). A mass movement such as the “Liberty League” of the American 1930s just did not exist here. That is why P.E. Moore (the ally of Irving Babbitt back in the United States and the tutor of T.S. Eliot) did not wholly share Eliot’s love of England – yes it was very peaceful here, but it was peaceful because it was philosophically DEAD – the struggle was already lost by the 1930s (the old Constitutional Club network and National Rifle Association is really a pre First World War thing) – 1945 was already decided.



  6. Perhaps we should agree to disagree about whether methodological individualism should lead to free market conclusions (I take the line that Mises took on this – in relation to “acting man”). On the superiority of Rothbard’s history of economics – I agree with you (he never finished either – it was supposed to go up to modern times).

    On Mises’ point about value-free – Mises assumes various values. For example the value of TRUTH – that an economist should tell the truth. This is so obvious to Mises (as a man of honour) that he does not even think about it. But it is a moral value – and without it the work of an economist is worthless (scientifically worthless). If an economist is like Paul Krugman(prepared to lie and cheat) what he produces is undermined.



    1. I’m not sure I do disagree, but I’ll leave it, as it’s a bit of a tangent. It’s a shame Rothbard didn’t write the last volume. I have a little glimmer of hope they’ll find it in a drawer somewhere, or maybe the Vatican archives have a copy!



  7. Great article. I think “voluntaryism” is a better word than “individualism”, not just because its meaning is less politicised, but also because the emphasis is on a lack of coercion, thus exposing the dictatorial nature of other political ideas.



  8. The forces of evil do not want the word “individualism” which, I admit, is a point in favour of the word. However, I like voluntaryism also – as it captures the nonaggression principle.

    Bastiat and self interest – yes, like all Classical Liberals, Bastiat believed in the harmony of rightly understood long term interests (i.e. he rejected the idea “the rich” and “the poor” have opposed interests).

    However, the Aristotelian ethical tradition (both religious and secular) is more complex that this. For example is it possible for a person to be good (to be a good person) ON THEIR OWN?

    For example, the Robinson Crusoe situation – but without Man Friday?

    And YES it is possible to be a good person on your own

    Such virtues as hard work (building useful) self improvement (via study and thought and so on) remain virtues even if someone is on their own – and will remain on their own till they die.

    It is about what sort of person they are – how they can become a better person.



    1. “is it possible for a person to be good (to be a good person) ON THEIR OWN?”

      Like when monks go live on their own in the mountains? When you’re one with the universe? No one judging you except yourself. That’s hard.

      Truth comes in the stillness of mind, not when you’re socially engaged, doesn’t it?

      Or you can put anybody in a certain environment (war, torture, abuse, extreme hunger, insomnia, etc) and anybody can become absolutely evil.



  9. We are indeed all capable of good and evil – vice and virtue, in relation to others and on our own.

    The daily struggle against such things as sloth is just as hard, in some ways, as resisting the temptations of rage (and fear) in war.



  10. The American Revolution was a defence of traditional freedoms against an interventionist government.

    The French Revolution was a radical effort to use the power of the state (a new state) to remake society according to how various factions interpreted the ideas of Rousseau.

    Thomas Jefferson thought the two Revolutions were basically the same – John Adams (and others) were astonished by such an extreme lapse of judgement in such an intelligent man.

    To put it simply…..

    The American Revolution is about the protection of private property rights (including religious ones – do not forget the “Black Cloaked Regiment” – the Ministers of Religion, not exactly a feature of the French Revolution). Whereas the French Revolution only recognises private property if it is for the social good (as interpreted by the various factions).

    Even such things as the calendar and the system of weights and measures was not safe from the French Revolution – all custom and tradition must be set aside in the face of the new “rational” state.

    Sir William Petty (he of mathematical planning) and Francis Bacon (he of “The New Atlantis”) would have been pleased.

    And the “Bowood Circle” of Lord Shelbourne (Jeremy Bentham and co) were pleased – apart from with the idea of “rights” (which Bentham regarded as “nonsense”).

    However, it soon became clear that the “rights” of the French Revolution were what the new government choose to give you – not natural rights derived from an understanding of natural law. Hobbesian materialism (and determinism) being the skull behind the smiling “freedom” face of the French Revolution.

    So the Benthamites (with their dreams of 13 departments of state controlling every aspect of life) could be content.

    And on into the 19th century it went – eventually to the ruin of British liberalism.

    An “enlightened state” the Prussian tradition (from the Great Elector to Frederick the Great and beyond) is what many of these people (in both Britain and France) were seeking. Although they put a Rousseau type “freedom” talk on everything – like coating an executioners axe with sugar.

    At least the Prussians were not hypocrites.



  11. I wish I has spoken more about politicians in my talk – the people who ruined British liberalism (such as Radical Joe Chamberlain and David Lloyd-George) and the followers of Richard Ely in the United States – such as “Teddy” Roosevelt and Woodrow Wilson. But one can do everything – if one shoves in too much information one leaves people confused.

    As for restoring liberty – well you will have your work cut out (and not just here).

    I was deeply upset by the failure of “Alternative for Germany” (a truly liberal party led by great respecters of the law) to break the 5% threshold in the last German elections – the vicious (and incredibly dishonest) propaganda campaign against them was sadly effective.



  12. In my view the emphasis on individualism can be misleading, as 1) most people don’t understand that they have to love themselves in order to love others, and 2) it conveys the wrong message, that libertarianism rejects society in favour of the individual.Surely, the most defining characteristic of Libertarianism is the rejection of state-led solution in favour of market-based or rather societal solutions, and that actually makes libertarians more social than most other political movements. The least social are the socialists because they don’t trust society to do anything.
    Perhaps the time has come to claim the term “societalism” as a unitary banner for those who don’t believe the state can or should sort out all of mankind’s problems?

    BTW: very inspiring to see that people here also look at libertarians in other countries. I hope to join the meeting next week.



    1. I’m sure if libertarians spent only a fraction of the time they navel-gaze over the correct label to wear in trying to explain what they stood for, there would be nobody misled. The thing about loving oneself is not really relevant. Self-ownership is more important than self-love. As for ‘societalism’, you are suggesting replacing something which may be misunderstood with something no one has ever heard before. I say, better stick to our guns. I’d rather stage a counter-coup on ‘liberalism’.



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