Liber(tarian)alism?

Writing at TPMCafe, self-professed libertarian and Cato employee Brink Lindsey says that libertarians would be glad to ally with liberals if liberals would only abandon collectivism and embrace free markets. He goes over the reasons why libertarians are ready to split from conservatives:

Fiscal incontinence, extreme assertions of executive power, an arrogant and witless foreign policy -- the Bush years have been a libertarian nightmare. And the larger conservative movement has changed in character as well. Small government and free markets are no longer the priorities they once were. Instead, most of the energy on the right these days is generated by immigrant-bashing and dangerous fantasies of a new Cold War with Islam. Such xenophobic impulses are repugnant to anyone with any kind of liberal temperament.

So far so good. What do liberals have to do to lure the libertarians into their camp? Lindsey explains:

Hostility to market-based economic growth remains a common mindset among people who call themselves liberal. A few examples: the belief that growth is leading to inevitable environmental ruin; indiscriminate opposition to globalization and trade liberalization; a knee-jerk aversion to profit-seeking enterprise...I [want] to see a rejuvenated and unapologetic liberalism that can reclaim the center of American politics. But I don't see any way for that to happen as long as support for market-based economic growth -- the most progressive force in the history of the world -- isn't a central part of the liberal program.

Actually, I agree with a lot of this. Liberals have suffered hugely from their decades-long flirtation with socialism. When Lindsey calls economic growth "the most progressive force in the history of the world," he is not exaggerating in the slightest. And capitalism of some variety is necessary to create that growth - period. Therefore, liberalism should be a fundamentally capitalist philosophy.

But does that mean liberals should adopt the libertarian view that government intervention in the economy is bad? Absolutely not!! I cant stress this enough. Libertarians ignore two of the most important forces in economics - negative externalities and public goods. Private individuals or companies will never act to curb air pollution or to build a nationwide highway system. It just has never happened. Economic growth relies on proper government action to correct market failures. For some reason, libertarians still fail to recognize this fundamental and obvious truth.

So, to sum up: liberalism should be about capitalism and economic growth. But liberals should champion the role of government as a provider and protector of public goods, from roads and schools to the air we breathe. If libertarians want to divorce conservatives and join up with liberals, they are going to have to learn a little economics and reexamine their anti-government dogma. Every marriage, after all, involves some give and take.