A libertarian at liberty

Laura Ingalls Wilder left the royalties from the Little House in the Prairie series to her daughter, Rose Wilder Lane. Rose had no living children of her own, so she bequeathed the rights to the Little House series to Roger MacBride. 

One account of why Wilder left everything to MacBride is the adopted grandson theory: MacBride was Wilder’s business manager and closest friend. It was only natural that she would leave her fortune to him.

Another account begins with the fact that Rose Wilder was one of the key figures in the development of libertarian philosophy in the US. She instilled her philosophy in MacBride, whom she was grooming to be a future leader. With Wilder’s financial backing, MacBride could take libertarian politics to the people, and establish a new political movement in the US. I don’t know how much truth there is in this second version of events, but it is the more interesting one to analyze.

MacBride faced a trade-off. He could devote his life to libertarian politics. But given the libertarian party's electoral prospects, that didn’t pay well - actually it didn't pay at all. He had to earn a living. In order to generate income, he had to spend less time on libertarian politics, and more time on other things.

The diagram below analyzes the problem with formal economic tools. On the vertical axis is income earned; on the horizontal, time spent in libertarian politics. The trade-off between the two is represented by the green line, B, which shows the reality MacBride faced before the bequest: in order to earn more income, he had to spend more time in paid employment, and thus less time in libertarian politics. Faced with this trade-off, MacBride made some choice- indicated by the point where the indifference curve, I, just touches the budget line - say 20 hours per week of libertarian politics, 30 hours per week of paid employment, and $500 in income.

The cash bequest from Wilder shifted MacBride’s budget constraint upwards to B’. Wilder’s bequest meant that MacBride could afford to spend his time on libertarian politics, if that was what he chose to do. The impact of a lump-sum increase in income, without any change in relative prices, is called an “income effect.” It is shown on the diagram as an increase in the amount of time spent in libertarian politics to 40 hours per week, a corresponding decrease in the time spent working for pay to 10 hours per week. 

However Wilder did not just bequeath cash to MacBride. She also left him the rights to the Little House series. These rights gave MacBride a lucrative alternative to politics: building the Little House on the Prairie franchise. The opportunities offered by the series are shown in the red budget line, B**, which represents the impact of an increase in MacBride's wage rate. For each additional hour spent working, MacBride now earns more income, so the budget constraint is steeper.

The net impact of an increase in a person's wage rate hours worked is ambiguous. On the one hand, a higher wage translates into more income, which means that one can afford to spend more time in libertarian politics, if this is what takes ones fancy. At the same time, a higher wage increases the opportunity cost of spending time in politics, inclining one to spend more time in paid work. On the diagram above I have shown the impact of the increased wage rate as a decrease in hours spent in libertarian politics to 30 hours per week, with 20 hours per week spent working for pay.

History does not tell us which of these two effects actually predominated. In a sense it doesn't matter: what is of interest here is the possibility of Wilder's bequest having unintended consequences. MacBride certainly devoted a fair amount of time to the Little House franchise: he sold the TV rights to the series, joined the TV series as co-producer, and wrote three additional Little House books, just for starters. At the same time, he remained active in libertarian politics, running as Libertarian party candidate for president of the United States in 1976, although in 1983 he rejoined the Republican party.

One could even argue taking Little House to the people was a way of instilling a libertarian ethos in the American people - Little Rose as John Galt, Little House on the Prairie as a kid-lit version of Atlas Shrugged, setting out a vision of how happy people could be in a world free from government. After all, the Little House books were Sarah Palin's favourites growing up. 

MacBride died relatively young - at the age of 65 - and the rights to the Little House franchise passed to his heirs (presumably his daughter Abigail Adams MacBride, who has disappeared from public view). In hindsight, if Wilder had wanted to promote libertarian  thought, she would have been wise to establish a foundation, some kind of trust that would have allowed her gift to libertarian thought to live on after MacBride's death.

But she chose individuals over collectives every time.  

Comments

[Tom]

Very interesting history about MacBride, that I didn't know.

On income effects, Nick (and Scott S) don't talk enough about the huge Net Worth hit homeowners have had, with what they thought was their equity savings being reduced by $50-500k in the house price drop.

[Ryan]

Remarks:

1 - Atlas Shrugged is the kid-lit version of Atlas Shrugged. ;)

2 - Your Sarah Palin reference seems to imply that you think she is a libertarian.

3 - There are income and wealth effects at play here; It could be that there is both a "libertarian effect" and a "friendship effect" present in the bequest. I know it can be hard to imagine that libertarians have friends, and that those friendships can (sometimes) involve more than listening to Rush albums over a rousing game of Magic: The Gathering, but it's true...

[Michael]

"MacBride faced a trade-off. He could devote his life to libertarian politics. But given the libertarian party's electoral prospects, that didn’t pay well - actually it didn't pay at all. He had to earn a living. In order to generate income, he had to spend less time on libertarian politics, and more time on other things."

A bit of a tangent: This posting leads me to think about teaching the work-leisure model. Putting something like "time spent in libertarian politics" on the horizontal axis, instead of the more general "leisure time," might be a better way to introduce the model to students. Perhaps students will better understand the idea if a teacher starts with a specific non-income producing activity and then adds other non-income producing activities (leisure is then the sum of specific activities).

Has anyone here tried teaching the model this way?

[Frances Woolley]

Michael - " Perhaps students will better understand the idea if a teacher starts with a specific non-income producing activity and then adds other non-income producing activities (leisure is then the sum of specific activities)."

That's what I've found, and that's what appealed to me about the MacBride story. I've also found that the second horizontal axis, the one that shows hours working for pay going in the other direction, really helps as well.

Ryan - It is certain that the bequest had both a libertarian and a friendship motivation - I'm not saying that the friendship motivation was unimportant, only that the libertarian one is more fun to analyze.

Tom - the labour force participation rate in the older age groups has really increased recently, and part of that is almost certainly wealth effects.

[Ryan]

I was just making a couple of jokes, anyway...

[richard]

I think that this can be tied into the recent dairy quota post. Clearly we need a quota on libertarians - there are far too many of them (given the paucity of data to support their views) and thus their continued presence is a waste of air.

Worthwhile Canadian Initiative can do its part by limiting the number of comments by libertarians on any post to one. As all linertarians say pretty much the same thing, that covers the free speechy thing and the bandwidth savings would likely over time pay for the cost of supporting dairy farmers. Win-win.