If voters can be taught the correct sophisticated mix of cynicism and pro-liberty sentiment, can they not be taught to support good policies, thus making democracy a well-functioning system of government? The E&O criticism strikes at the heart of an important tension in libertarian thought. Outcomes which might be described as "good libertarian" also require important public goods to be produced at the level of overall public sentiment; there's no getting around that.Does that sound familiar? It should because it is a consequentialist argument and it is very similar to the one Justice Stevens advanced in the Citizens United case. Stevens said, if you want free speech then you have to have the kinds of regulations that will create an environment (a public good) where free speech can flourish.
Is that true? I doubt it myself because I don't think bureaucracies are very good at bringing about these sorts of outcomes.
But I think this does strike at the heart of an important tension in libertarian thought and it is this: you can't be a libertarian and a consequentialist at the same time. Consequentialism will always diminish the people to tools to reach the desired outcome and thus diminish them from beings deservinf liberty to beings who need to be "educated" to make the right decisions. You can do that if you are Jeremy Bentham or Matthew Yglesias; you can't do it if you value liberty.
For those of us who value liberty, the only legitimate consequentialist argument is the negative one—we can remind people over and over again that the sorts of efforts Tyler Cowen and Justice Stevens like so much never work out so neatly in practice.