Stephen Metcalf’s “The Liberty Scam” is a must-read, even though a number of critics have found some factual errors — Brad DeLong, for example, questions a quote attributed to John Maynard Keynes.

And a central conceit of the article — that a fellow who helped build the philosophical foundations of today’s libertarianism eventually disavowed libertarianism — is overstated, it seems. Robert Nozick’s views became more moderate, but I believe he continued to call himself a libertarian to the end of his days.

Nevertheless, I think Metcalf’s larger argument is spot on: The “liberty” promoted by libertarians is a scam. It’s a utopian fantasy that assumes individuals acting in rational self-interest will create an economically just society in which people are rewarded according to what they contribute, and a free market naturally will generate and distribute what goods and services people need.

The fly in the ointment is that humans rarely act according to rational self-interest. Indeed, consumerist capitalism depends on our not being all that rational and buying a lot of stuff we don’t actually need. And the accumulation of wealth so vast one has to contrive things to spend it on also has nothing to do with rational self-interest. Most of us are a twitching mass of desire, insecurity, and social programming, irrationally reaching out to whatever we think will soothe our existential angst.

But libertarians are people irrationally in love with a grand idea, and they refuse to see that their beloved not only doesn’t love them back, but is using them and probably turning tricks on the side. Predictably, true believers at Cato and Reason reacted to Metcalf with a petulant defense of their beloved’s charms while ignoring the core of his arguments. The Reason reactor, Matt Welch, asserts that libertarians do not approve of grossly overcompensated bankers being propped up by guarantees by the Federal Reserve, while being oblivious to the fact that such bankers are the inevitable result of cockamamie libertarian ideas about deregulating everything.

Nozick’s role in libertarian history was to write a book titled Anarchy, State, and Utopia. “Prior to Anarchy,” Metcalf writes, “‘liberty’ was a virtual synonym for rolling back labor unions and progressive taxation, a fig leaf for the class interests of the Du Ponts and the B.F. Goodriches. After Anarchy, ‘liberty’ was a concept as worthy of academic dignity as the categorical imperative.”

Nozick wrote his book in the early 1970s, the point at which regulations and progressive taxation had made the distribution of wealth in the U.S. as flat as it has ever been, before or since. And academics like Nozick were at the peak of their incomes, before or since.

Buccaneering entrepreneurs, boom-and-bust markets, risk capital–these conveniently disappeared from Nozick’s argument because they’d all but disappeared from capitalism. In a world in which J.P. Morgan and Cornelius Vanderbilt have been rendered obsolete, reduced to historical curios, to a funny old-style man, imprisoned in gilt frames, the professionals–the scientists, engineers, professors, lawyers and doctors–correspondingly rise in both power and esteem. And in a world in which the professions are gatekept by universities, which in turn select students based on their measured intelligence, the idea that talent is mental talent, and mental talent is, not only capital, but the only capital, becomes easier and easier for a humanities professor to put across. Hence the terminal irony of Anarchy: Its author’s audible smugness in favor of libertarianism was underwritten by a most un-libertarian arrangement–i.e., the postwar social compact of high marginal taxation and massive transfers of private wealth in the name of the very “public good” Nozick decried as nonexistent.

And the screw takes one last turn: By allowing for the enormous rise in (relative) income and prestige of the upper white collar professions, Keynesianism created the very blind spot by which professionals turned against Keynesianism. Charging high fees as defended by their cartels, cartels defended in turn by universities, universities in turn made powerful by the military state, many upper-white-collar professionals convinced themselves their pre-eminence was not an accident of history or the product of negotiated protections from the marketplace but the result of their own unique mental talents fetching high prices in a free market for labor. Just this cocktail of vanity and delusion helped Nozick edge out Rawls in the marketplace of ideas, making Anarchy a surprise best-seller, it helped make Ronald Reagan president five years later. So it was the public good that killed off the public good.

Metcalf also points out,

I like to think that when Nozick published Anarchy, the levee broke, the polite Fabian consensus collapsed, and hence, in rapid succession: Hayek won the Nobel Prize in economics in 1974, followed by Milton Friedman in ‘75 [1976], the same year Thatcher became Leader of the Opposition, followed by the California and Massachusetts tax revolts, culminating in the election of Reagan, and … well, where it stops, nobody knows.

Thus began the long, slow slide downward in the quality of life and real income of the American middle class.

But because the libertarian definition of “liberty” really is the fig leaf for class interests of the very wealthy, who these days can use their wealth to manipulate public opinion through mass media, the phantom promises of libertarianism are turning us all into the serfs of corporatism.

When Hayek insists welfare is the road is to serfdom, when Nozick insists that progressive taxation is coercion, they take liberty hostage in order to prevent a reasoned discussion about public goods from ever taking place. “According to them, any intervention of the state in economic life,” a prominent conservative economist once observed of the early neoliberals, “would be likely to lead, and even lead inevitably to a completely collectivist Society, Gestapo and gas chamber included.” Thus we are hectored into silence, and by the very people who purport to leave us most alone.

See also “The Failure of Rational Choice Philosophy.”