TL;DR
- Liberty is not self-sustaining. It depends on a cultural substructure: people who trust each other enough to cooperate without coercion, who are willing to tolerate difference without demanding that the government suppress it, and who can forgive enough to give second chances rather than building carceral systems that warehouse human beings.
- When that culture erodes, fear fills the vacuum. And fear, in every era and political tradition, has one consistent political demand: give me a government strong enough to protect me from the people I am afraid of.
- A pluralistic, empathetic, forgiving culture is not a nice-to-have. It is the load-bearing wall of a free society.
There is a version of libertarianism that begins and ends with rights. The state should not tell you what to do with your body, your property, or your relationships. That argument is correct, and it matters. But it is incomplete.
Rights are legal claims. They are enforced by institutions. And institutions, as anyone who has watched one fail knows, are only as strong as the culture that sustains them. A constitution that nobody believes in is not a constitution; it is a document. Courts that nobody trusts are not courts; they are expensive theater. A free press that nobody reads because they have sorted themselves into information ecosystems where nothing outside their tribe registers is not doing the work a free press was designed to do.
The deeper argument for liberty is cultural, not legal. The question is not merely whether the government is small enough. The question is whether the people who live under that government have the habits of mind and heart that make the government unnecessary for the things that matter most: resolving disputes without violence, extending opportunity across lines of difference, building communities that care for the vulnerable without waiting for a bureaucratic mandate to do so.
This article is about that deeper argument. It draws on economics, psychology, sociology, and history to make a case that the libertarian case cannot close without: the virtues of a free society, kindness, forgiveness, pluralism, and empathy, are not decorative. They are structural. Without them, liberty contracts. With them, it expands. The causal mechanism is real, measurable, and documented. This is not a sermon. It is an argument with evidence.
What Trust Actually Does to an Economy
Start with the most concrete place: money.
Stephen Knack and Philip Keefer, in their landmark 1997 paper “Does Social Capital Have an Economic Payoff? A Cross-Country Investigation,” published in the Quarterly Journal of Economics, measured interpersonal trust across a set of countries using survey data asking whether respondents believed “most people can be trusted.” They then analyzed the relationship between those trust scores and economic growth rates. The finding was clear: countries with higher levels of generalized trust grew faster. Not marginally faster. Significantly faster, controlling for other variables including income, education, and institutional quality. (Knack and Keefer, “Does Social Capital Have an Economic Payoff?” Quarterly Journal of Economics 112, no. 4, 1997.)
The mechanism is not mysterious. Trust lowers transaction costs. In a high-trust society, you can make a deal with a stranger on a handshake and expect it to be honored most of the time. You do not need a lawyer for every contract, a compliance officer for every process, a security deposit on every arrangement. When trust is low, every transaction requires a defensive infrastructure: lawyers, audits, collateral, surveillance systems, enforcement mechanisms. All of that infrastructure is expensive, and it consumes resources that could have gone into making, building, and innovating.
Paul Zak and Stephen Knack extended this analysis in 2001, developing a theoretical model showing how trust affects investment behavior. In low-trust environments, people are reluctant to invest in long-horizon projects because they cannot be confident their partners will honor their commitments over time. Innovation, which requires sustained investment in outcomes that may not pay off for years, is particularly sensitive to this. The result is an economy that tends to be shorter-term in its orientation, less innovative, and more prone to the kind of rent-seeking behavior where the goal is to capture existing value rather than create new value. (Zak and Knack, “Trust and Growth,” Economic Journal 111, no. 470, 2001.)
What this means for the libertarian project is that the argument against an overbearing state is incomplete without attention to the cultural substrate that makes markets work. Hayek understood this, even if he was more often cited for his technical economics than for his cultural sociology. In “The Constitution of Liberty” and “Law, Legislation and Liberty,” Hayek argued that markets are spontaneous orders: they emerge from rules of conduct that people follow without having designed them. Those rules, respect for property, honesty in exchange, willingness to honor commitments, are not written in law. They are inscribed in cultural norms. When the culture erodes, the market erodes with it, and the state grows to fill the gap. (Hayek, F.A., The Constitution of Liberty, University of Chicago Press, 1960.)
This is not a hypothetical. It is visible in the growth of the compliance and legal industries in every developed economy over the past fifty years, industries that exist primarily to compensate for declining institutional trust. The United States now has more lawyers per capita than almost any country on earth. That is not a sign of legal health; it is a symptom of a trust deficit.
Tocqueville Saw It First
The most penetrating analysis of why culture matters for liberty was written not by an economist, but by a French aristocrat visiting America in the early 1830s. Alexis de Tocqueville came to study American democracy and returned to France with a book that remains the most acute diagnosis of what democracy requires and what threatens it.
Tocqueville’s central observation was that Americans solved social problems not by turning to the government, but by forming associations. When a road needed building, they formed a committee. When someone needed care, neighbors organized. When a moral cause needed championing, citizens gathered. He called this “the art of association” and described it as “the fundamental science” of a free people. Wherever he would expect to see a powerful lord or a government ministry taking charge in France, in America he consistently found a voluntary organization doing the same work faster, more flexibly, and with more direct accountability to the people it served. (Tocqueville, Alexis de, Democracy in America, translated by Harvey Mansfield and Delba Winthrop, University of Chicago Press, 2000, originally published 1835/1840.)
Tocqueville’s worry was not that Americans were ungenerous. His worry was structural and prophetic. He observed that in democratic societies, where individuals are formally equal but also isolated, there is a persistent temptation to turn to the central government whenever a collective problem arises. And every time individuals make that turn, the government grows and the habit of association atrophies. He described the long-term endpoint of this process as a soft despotism: not the dramatic tyranny of a dictator, but the quiet suffocation of a “tutelary power” that “likes to see citizens enjoy themselves, provided they think of nothing but enjoying themselves.” Its citizens, he wrote, become “a flock of timid and hardworking animals, of which government is the shepherd.”
The implication for our purposes is direct. If you want less government, you need more community. And community, genuine community, requires the dispositions that make it work: the willingness to engage with people who are different from you, to extend trust across those differences, to work out conflicts without immediately calling an authority to adjudicate them, and to forgive enough that a mistake does not permanently exile someone from the cooperative fabric.
A society that cannot extend trust across lines of difference will not form voluntary associations across those lines. It will instead form parallel, separate institutions, one for each tribe, and the inevitable conflicts between those tribes will eventually require adjudication by somebody with enough power to enforce a settlement. That somebody is the state. The more a society fractures along cultural lines, the more it requires a state powerful enough to manage the fractures. Pluralism is not just morally admirable. It is structurally necessary for limiting government.
The Psychology of Fear and What It Demands
The psychological mechanism that converts cultural fracture into state expansion is well documented. Jonathan Haidt’s research on moral foundations theory is the most cited contemporary framework, but the underlying phenomenon has been observed across the social sciences for decades.
Haidt identifies a set of moral “foundations” that evolved to solve different adaptive challenges in human social life. Among the most politically powerful is what he calls the Loyalty/Betrayal foundation: the evolved psychology of group solidarity, the sharp intuition about who is “in” and who is “out,” and the strong moral weight that attaches to maintaining group cohesion against external threat. This foundation evolved for good reasons. Small-group survival in ancestral environments genuinely depended on it. But in a diverse, pluralistic modern society, this same psychology becomes a generator of exactly the kind of fear-based politics that expands state power. (Haidt, Jonathan, The Righteous Mind: Why Good People Are Divided by Politics and Religion, Pantheon Books, 2012.)
When people cannot imagine living alongside those who are different, the out-group becomes a threat rather than a neighbor. That threat demands a response. And in modern democratic politics, the demand takes a recognizable form: elect someone who will contain, control, or expel the threatening other. The specific target changes across historical moments, but the political logic is constant. Minority religious groups, ethnic communities, sexual minorities, immigrants, political dissidents: all have served at various times as the figure around whom a frightened majority organizes its demand for state action.
The sociological research on how this process accelerates is clear and sobering. Freedom House’s annual democracy reports have documented, across dozens of countries over decades, that the erosion of civil liberties almost always begins with a targeted minority. The pattern is consistent: a government that strips due process from one group, justifying the violation by the threat that group supposedly poses, has weakened the institutional architecture that protects everyone. Civil liberties are universal by nature. When they are carved away from the most vulnerable, the carving does not stop there. (Freedom House, Freedom in the World Annual Reports, freedomhouse.org, ongoing.)
The Anne Frank House’s educational research on scapegoating mechanisms documents how economic distress and social anxiety reliably produce demand for a named enemy to blame. This is not unique to any particular political tradition. It appears across the left and the right, in rich and poor countries, in religious and secular societies. What varies is the target. What is constant is the mechanism: fear of the out-group, demand for state action against the out-group, expansion of state power nominally directed at the out-group, and eventual erosion of protections for everyone. (Anne Frank House, Scapegoating as a Political Mechanism, annefrank.org, educational materials, updated 2022.)
The libertarian response to this pattern is usually to argue for constitutional constraints: courts should protect the minority against the majority. That argument is correct and necessary. But it is not sufficient. Courts can only enforce the norms that the broader culture is willing to sustain. When the culture becomes sufficiently hostile to a minority, courts become captured, reinterpreted, or ignored. The most reliable protection against the fear-driven expansion of state power is not a better-worded amendment. It is a culture that has genuinely cultivated the capacity to see and treat the out-group as human.
What Voluntary Communities Can Do Without the State
Elinor Ostrom won the 2009 Nobel Prize in Economics for demolishing one of the most influential arguments for state intervention in common-pool resources. The “Tragedy of the Commons,” as formulated by Garrett Hardin in his famous 1968 paper, held that any resource shared by multiple users would inevitably be overexploited and destroyed, because individual incentives always favor taking more while sharing the costs. The policy implication, widely drawn, was that commons required either privatization or government regulation to survive.
Ostrom went and looked at actual commons around the world: Swiss alpine meadows that had been sustainably grazed for centuries, irrigation systems in Nepal and Spain that had managed shared water for generations without state management, inshore fisheries that had avoided collapse through community governance. She documented her findings in Governing the Commons (1990, Cambridge University Press), showing that in each case, the communities had developed their own institutions, rules, monitoring systems, and dispute-resolution mechanisms. These systems worked not because of top-down enforcement, but because the communities had the social capital, the mutual trust, the shared norms, to make them work.
Ostrom identified eight design principles shared by long-enduring self-governing commons. Several of them are essentially descriptions of a culture that has the dispositions we are discussing here. Graduated sanctions rather than immediate harsh penalties: that is forgiveness as institutional design. Accessible conflict-resolution mechanisms: that is the disposition to work problems out within the community rather than escalating them to external authority. Collective-choice arrangements where those affected by rules can modify them: that is pluralism and inclusion as governance practice. (Ostrom, Elinor, Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, 1990.)
What Ostrom’s work demonstrates, across dozens of empirical cases, is that voluntary cooperation in the absence of state management is not a libertarian fantasy. It is a historical reality, documented and replicable, and it depends on exactly the cultural dispositions that this article argues are essential to liberty. Communities that trust each other, that include diverse members in rule-making, that resolve disputes through dialogue rather than coercion, and that use graduated rather than punitive responses to violations are communities that can govern shared resources sustainably without the state.
The inverse is equally important. When those cultural dispositions erode, or when the community becomes internally fractured along lines that prevent trust from extending across them, the self-governing commons fails. Not because the idea is wrong, but because the cultural preconditions no longer exist. The Tragedy of the Commons is not an iron law. It is a description of what happens to a community that has lost the capacity for mutual trust.
Forgiveness as a Political Economy
The argument from forgiveness is the one that libertarians have most often left undeveloped, because it sounds like a religious instruction rather than a policy claim. It is, in fact, both. And the empirical case for it as a policy matter is stronger than most people realize.
The United States has the highest incarceration rate of any country in the world. As of 2023, approximately 1.9 million people were incarcerated in American prisons and jails, a rate of roughly 600 per 100,000 population, more than five times the rate of most Western European countries. (Bureau of Justice Statistics, Correctional Populations in the United States, 2023.) This is not simply a function of crime rates; the U.S. violent crime rate, while higher than some comparable nations, does not by itself explain the magnitude of the gap. It is, in significant part, a function of sentencing policy: mandatory minimums, three-strikes laws, and a sentencing culture that emphasizes punishment over rehabilitation, in a legal and political environment where leniency is treated as a political liability.
The cost is not only fiscal, though it is enormous fiscally: the U.S. spends more than $80 billion annually on incarceration. The deeper cost is social. Mass incarceration disrupts families, communities, and labor markets in ways that generate ongoing social dysfunction and further demands on the state. Children of incarcerated parents have significantly elevated risk of poverty, educational failure, and their own eventual incarceration. Returning citizens face systematic barriers to employment, housing, and civic participation that make reintegration extremely difficult. The system is, in an important sense, self-replicating: it creates the conditions for the next generation of incarceration.
The research on restorative justice approaches offers a systematic alternative. Meta-analyses across restorative justice programs, in which offenders meet with victims and community members in facilitated processes to acknowledge harm, make amends, and develop plans for reintegration, find that recidivism rates are reduced by approximately 10 to 25 percent compared to conventional criminal processing. Victims who participate consistently report higher satisfaction, greater psychological resolution, and lower rates of post-traumatic stress than those who interact only with the conventional court system. (Sherman, Lawrence W., and Heather Strang, “Restorative Justice: The Evidence,” The Smith Institute, London, 2007.)
These findings do not mean that punishment has no role. They mean that the current balance in American criminal justice, heavily weighted toward punitive incarceration and away from community-based accountability and reintegration, is both more expensive and less effective at its stated goal of public safety than a system that builds more capacity for forgiveness, accountability, and reintegration. The insistence on punishment as the primary and often exclusive response to wrongdoing is not a hard-nosed policy choice. It is an emotionally driven one, and it is producing worse outcomes at greater cost.
The broader point for this article is that forgiveness, understood not as the naive abolition of consequences but as the principled preference for responses to wrongdoing that restore rather than simply punish, produces better outcomes at lower cost with less state apparatus. A culture that can forgive is a culture that needs fewer prisons, fewer prosecutors, fewer probation officers, fewer parole boards. The libertarian case for shrinking the carceral state is not simply about civil liberties, though it encompasses them. It is about the cultural prerequisite: a society that genuinely believes people can change, and that structures its institutions accordingly.
The Economic Payoff of Pluralism
Economists studying why some cities and regions consistently outperform others in innovation and economic growth have repeatedly identified diversity of perspective as a significant factor. Not diversity as a check-box category, but genuine cognitive diversity: the presence of people who see problems from genuinely different angles because they come from genuinely different backgrounds, experiences, and intellectual traditions.
Richard Florida’s research on what he called the “creative class” found that the regions attracting the highest concentrations of innovative workers were disproportionately tolerant of unconventional lifestyles and diverse communities. His measurements of a “bohemian index” and a “gay index” (measuring concentrations of artists and gay couples as proxies for cultural openness) were among the strongest predictors of regional innovation and economic growth, not because either group causes innovation directly, but because the underlying cultural openness that attracts and retains them also attracts and retains the broader creative workforce that does. (Florida, Richard, The Rise of the Creative Class, Basic Books, 2002.)
The management science literature has further developed the economic case for diversity of perspective in problem-solving contexts. Lu Hong and Scott Page, in work published in the Proceedings of the National Academy of Sciences, demonstrated mathematically and empirically that groups of people with diverse perspectives and heuristics consistently outperform groups of uniformly high-ability individuals on complex problem-solving tasks, because the diverse group explores more of the solution space. (Hong and Page, “Groups of Diverse Problem Solvers Can Outperform Groups of High-Ability Problem Solvers,” PNAS 101, no. 46, 2004.)
This has direct implications for the relationship between cultural pluralism and economic prosperity. An economy that systematically excludes, marginalizes, or drives out people who are different, whether through legal discrimination, cultural hostility, or the social costs of not belonging, is an economy that is paying to make itself less innovative and less capable. Discrimination is not merely unjust in the abstract. It is economically self-destructive in the specific, and the cost is borne by the broader economy, not just by the excluded individuals.
The libertarian who argues against legal discrimination but remains indifferent to cultural hostility toward minorities is not completing the argument. If the culture makes it effectively impossible for certain people to participate fully in economic and civic life, the legal prohibition on discrimination produces much less benefit than it otherwise would. Culture sets the practical ceiling on what law can achieve.
Two Spirals: What the Evidence Adds Up To
Pull the threads together and a pattern emerges that is consistent across economics, psychology, sociology, and history.
When a culture is high in trust, pluralistic, willing to resolve disputes through dialogue rather than coercion, and capable of forgiveness and reintegration, several things happen simultaneously. Voluntary associations form and solve problems that would otherwise fall to government. Markets work with lower transaction costs, enabling broader and more innovative economic activity. Communities manage shared resources without requiring state oversight. Criminal responses become less punitive and more effective, requiring smaller carceral infrastructure. And the political demand for a powerful state to protect one group from another weakens, because the cultural anxiety that generates that demand is lower.
When a culture moves in the opposite direction, toward fear, distrust, tribalism, unforgiveness, and punitive rather than restorative responses to wrongdoing, the reverse cascade follows. Voluntary associations fray. Transaction costs rise. Commons fail or require state management. Incarceration expands. And political entrepreneurs who specialize in naming threatening out-groups and promising protection from them find a ready market for their product.
These are not separate phenomena that happen to correlate. They are expressions of the same underlying cultural variable: the extent to which people are willing to extend trust, empathy, and good faith to those who are not already members of their tribe.
The libertarian who focuses only on the state, arguing for smaller government and lower taxes while remaining indifferent to the cultural dynamics that determine how much government people will demand, is working on the symptoms rather than the disease. The state does not expand in a vacuum. It expands to fill the space that culture vacates. And when culture is characterized by fear, distrust, and the refusal to extend grace across lines of difference, the space it vacates is enormous.
This Is the Loveatarian Project
The name of this blog combines two words that most people treat as belonging to different domains. Love, they think, is the province of personal life, religion, and the private sphere. Liberty is the province of politics, law, and public life. The Loveatarian project is the argument that this separation is false.
Love, understood not sentimentally but structurally, as the practical commitment to seeing and treating other people as full human beings whose lives matter and whose potential deserves space, is what makes a free society possible. Not in a soft, aspirational sense, but in the hard, load-bearing sense.
The empathy that allows you to understand why someone whose life is different from yours might have legitimate needs and perspectives is the same capacity that makes pluralistic voluntary association possible. The forgiveness that allows you to give someone a second chance rather than permanently excluding them from the community is the same disposition that keeps people within the cooperative web rather than outside it, radicalized or incarcerated. The kindness that costs little but signals membership in a shared humanity is the same lubricant that keeps transaction costs low and institutional trust functional.
None of these virtues requires the state. They require a culture. And building that culture is not the work of government. It is the work of individuals, families, schools, communities, congregations, and civic institutions, all choosing, daily and in small ways, whether to extend the circle of trust or narrow it.
That is the argument this blog exists to make. Not because it is easy or sentimental, but because it is true, and because the alternative, a politics of fear and exclusion that demands an ever-more powerful state to manage the fractures that fear creates, is the trajectory we are on and the trajectory that leads, historically and with depressing regularity, somewhere much darker than any of us wants to go.
Go Deeper: Books by Alex Merced
The argument in this article weaves together economic theory, moral psychology, sociology, and political philosophy. Alex Merced has written directly in each of these domains.
Economic Ideas: From Beginning to Early 2026 builds the economic foundation this article rests on. The Knack-Keefer finding that trust drives economic growth, Hayek’s argument that markets emerge from cultural norms of honesty and reciprocity, and the broader story of how economists have come to understand social capital as a real and measurable form of wealth are all developed in the intellectual history this book traces.
The Field Guide to Libertarianism is where the political philosophy behind this article lives in full. The distinction between negative liberty (freedom from state coercion) and positive liberty (the cultural conditions that make freedom actually available), the Ostromian argument that voluntary cooperation can outperform both markets and states in certain contexts, and the case for a libertarianism that is grounded in human dignity rather than just property rights are all central to the guide.
Political Thought and Debates of the United States grounds the abstract argument in American political history. The Tocquevillian tradition of civic republicanism, the tension between individualist and communitarian strands of American liberalism, and the recurring debate about whether rights can be sustained without the cultural virtues that sustain them are threads running through American political thought that this book traces from the Founders to the present.
All three are available on Amazon. The full catalog of Alex Merced’s work is at books.alexmerced.com.
Sources and Further Reading
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Knack, Stephen, and Philip Keefer. “Does Social Capital Have an Economic Payoff? A Cross-Country Investigation.” Quarterly Journal of Economics 112, no. 4 (1997): 1251-1288.
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Zak, Paul J., and Stephen Knack. “Trust and Growth.” Economic Journal 111, no. 470 (2001): 295-321.
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Hayek, F.A. The Constitution of Liberty. University of Chicago Press, 1960.
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Hayek, F.A. Law, Legislation and Liberty, 3 vols. University of Chicago Press, 1973-1979.
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Tocqueville, Alexis de. Democracy in America. Translated by Harvey Mansfield and Delba Winthrop. University of Chicago Press, 2000. Originally published 1835/1840.
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Putnam, Robert D. Bowling Alone: The Collapse and Revival of American Community. Simon and Schuster, 2000.
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Ostrom, Elinor. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press, 1990.
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Haidt, Jonathan. The Righteous Mind: Why Good People Are Divided by Politics and Religion. Pantheon Books, 2012.
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Florida, Richard. The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community, and Everyday Life. Basic Books, 2002.
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Hong, Lu, and Scott E. Page. “Groups of Diverse Problem Solvers Can Outperform Groups of High-Ability Problem Solvers.” Proceedings of the National Academy of Sciences 101, no. 46 (2004): 16385-16389.
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Sherman, Lawrence W., and Heather Strang. Restorative Justice: The Evidence. The Smith Institute, London, 2007.
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Bureau of Justice Statistics. Correctional Populations in the United States, 2023. bjs.ojp.gov.
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Freedom House. Freedom in the World Annual Reports. freedomhouse.org, ongoing.
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Anne Frank House. Educational materials on scapegoating as a political mechanism. annefrank.org, updated 2022.
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Hardin, Garrett. “The Tragedy of the Commons.” Science 162, no. 3859 (1968): 1243-1248.