How I Became a Libertarian: I did not become a libertarian because I was persuaded by philosophical arguments — those of Ayn Rand or F. A. Hayek, for example. Rather, I became a libertarian because I was persuaded by my own experiences and observations of reality. There were three important lessons.
The first lesson was my personal experience of socialism.
The second was what I learned about the consequences of government
intervention from teaching a course on financial intermediaries and
markets. And the third lesson was what I learned about the origin and
evolution of government from my research into the sources of economic
progress in preindustrial Europe and China. (...)
The lesson for progressivism is clear: we don’t understand the economy
and the effects of intervention well enough to be able to improve
things. The economy is a complex system that adapts to intervention in
ways that are inherently unpredictable. The consequences are rarely what
we expect or desire. So, for me, the first pillar of progressivism
crumbled. We don’t know how to make things better through government
intervention. (...)
What did this different understanding of government mean for my progressivism? What government does is deploy force. In the good case, it deploys force to protect its territory against predation. In the bad case, to which things naturally tend, it deploys force to engage in predation. Government has existed for millennia; only a century or so ago did intellectuals — many of them economists — come up with the idea that government was a suitable instrument for solving society’s problems. It is a bizarre idea: why should the guys with the guns run the financial system or provide us with education or health care? The second pillar of my progressivism crumbled.
ConclusionI became a libertarian — a libertarian with a small “l.” That is,
I believe in limited government. Government is necessary to protect us
against predation by other governments. But government is not a suitable
instrument for other purposes, such as regulating economic activity,
funding scientific research, or engaging in social engineering.