Noah Smith, an economic commentator and Substack writer, once dismissed libertarianism as a relic of the past. But in a political climate increasingly defined by populist protectionism and authoritarian rhetoric, he's reconsidering. "There are worse monsters than the market," Smith recently wrote.

With Reason's Zach Weissmueller and Liz Wolfe, Smith explores the evolution of his thinking—from criticizing "thin libertarianism" focused solely on state coercion, to advocating for a more expansive, "thick" conception of liberty that accounts for institutional and corporate constraints as well. He also discusses how libertarians might shape political discourse despite being exiled from both major parties.

Sources Referenced

• "I owe the libertarians an apology," by Noah Smith


• Just Asking Questions with Derek Thompson: Democrats Must Change


• Just Asking Questions with Michael Beckley: China is Dangerously Weak


• Michigan Gov. Gretchen Whitmer on tariffs

Chapters

• 00:00 Reflecting on libertarianism and Donald Trump's rise


• 06:00 Revisiting financial regulation and the housing crisis


• 11:00 Thin vs. thick libertarianism


• 17:00 Censorship, coercion, and the role of private platforms


• 29:00 Tariffs, trade, and the antineoliberal left


• 37:00 The shifting power dynamics in the Democratic and Republican parties


• 45:00 Political homelessness and the libertarian intellectual wilderness


• 54:00 Industrial policy, mRNA vaccines, and the role of government


• 1:01:00 China, manufacturing, and national security


• 1:10:00 Argentina, Javier Milei, and libertarian governance in practice

Transcript:

This is an AI-generated transcript. Check against the original before quoting.

Noah Smith: I didn't understand what libertarianism had arisen in response to, and now that some of those things are coming back in the form of Trump, I see that libertarianism had more of a purpose than I realized.

Liz Wolfe: Were libertarians right all along? Just Asking Questions. Have you apologized to a libertarian lately? Today's guest has. "I owe the libertarians an apology," wrote pundit Noah Smith on his Substack. "It turns out there are worse monsters on the market."

"I've spent years making fun of Ayn Rand novels," Smith continues. "And yet, doesn't Trump's cronyism, disdain for private businesses, and relentless instinct for government control make him the perfect Ayn Rand villain?tag=reasonmagazinea-20"

We're here to interrogate this mea culpa. Noah Smith, welcome to the show.

Noah Smith: Thanks for having me on. 

Zach Weissmueller: So, Noah, you do have a deep archive of blog posts criticizing libertarianism. Now you're kind of sorry. Tell us why.

Noah Smith: When I was an economics grad student in the early 2010s, I really encountered a lot of people who were deeply libertarian. People would unironically just quote Robert Nozick and talk about how much they liked Ayn Rand. So it felt very near. Everyone fights the near enemy when they're intellectuals. If you live in a liberal city and you're inclined to argue with things, you'll argue with liberalism. I lived in a libertarian city/culture, so I argued with libertarianism.

At the same time, that was the Great Recession when it felt like our failure-you know, financial deregulation, and then our failure to intercede against a lot of the economic problems we were having, seemed to be causing a lot of issues in America and had really crashed the economy a lot. So it felt like a good time to beat up on libertarianism. I think those things combined were the reasons I criticized libertarianism so much.

But what I didn't know— I wasn't alive during the 1960s and '70s— I didn't see the ideas that libertarianism had been a reaction to. When you come up after the fact and you don't know the history of the thought there, I mean even the history of  libertarian thought, if you study it,  won't teach you this. It won't teach you the cultural milieu that people were responding to. Only studying history will teach you that—and even that only teach you part of it because history is very potted and sanitized.

You have to go to primary sources, see what people were talking about, what people were saying, and you have to read between the lines, and infer from what policies were being done. I mean, you look at Richard Nixon, you look at price controls and the Nixon shock and all these kinds of things. And you see libertarianism wasn't just responding to some lefty college kid challenging Milton Friedman clumsily at some town hall—which is from the famous video you can watch. It was also challenging a lot of the things Richard Nixon was doing.

I think that I didn't understand what libertarianism had arisen in response to. Now that some of those things are coming back in the form of Trump, I see that libertarianism had more of a purpose to be there than I realized, in terms of balancing out other ideas that were also bad, that had mostly been conquered and submerged by the time I started criticizing libertarians.

Liz Wolfe: What do you mean when you talk about the cultural milieu that libertarianism was reacting to? Which elements are you referring to?

Noah Smith: The New Deal arose in response to the Great Depression and response to the general underdevelopment of America. The New Deal started as an anti-depression measure but it took on all these long-term sort of projects like building the interstate highway system, making environmental regulations, and social insurance, and  all the edifice of big government that we've built. I think a lot of that edifice was great and should be kept, but if reformed and tweaked, and whatnot. But I think that what that meant is that we'd—we spent so many decades coming up with big government solutions to every problem that we had—that there was an impulse to come up with big government solutions to every problem we encountered.

And so, when you saw things like inflation, the oil shocks, there was this, you know, impulse to use fiscal stimulus, which had helped us in the Depression, helped us in some small recessions after World War II. So, like, let's do that again.

No—well, I guess we didn't really do much fiscal stimulus, but monetary stimulus—you know, that had been useful. And so then, that stopped being useful in the '70s. And I think that's the classic example everyone uses, but there's other examples too.

So, for example, the Bretton Woods system said that the dollar is the reserve currency—the dollar equivalent to gold. It was a fake gold standard, where it really was the dollar standard.

And yeah—so, when that started causing trade imbalances, you know, we responded with trying to control trade. And that was a bad idea. Instead, you know, free trade—relative to where we were—probably was a good thing for us.

And it maybe wasn't a good thing with regard to China in the 2000s. Maybe it hurt us on the margin. But then, in terms of, you know, helping us in, like, the '70s, '80s, '90s—like those—I think that free trade helped us a lot compared to where we'd–

Zach Weissmueller: When you're describing yourself as reacting to the city around you, in this case I assume it's kind of like the community of economics bloggers in the 2010s who's like the one sort of microculture that might skew libertarian?

Noah Smith: I wouldn't say bloggers. I'd say economists and econ grad students. Economists themselves. The discipline of economics has