Libertarian Perspective on the Stock Market and Economy
- EricTheVogi
- Feb 3
- 13 min read
Part I: What is Libertarianism
Core beliefs:
Personal freedoms: Libertarians typically support things like free speech, freedom of religion, the right to privacy, and letting adults make their own choices about their personal lives (what they consume, who they marry, etc.)
Economic freedoms: They favor free markets with minimal government regulation, lower taxes, private property rights, and the ability for people to start businesses and trade freely without heavy government oversight.
Limited government: Libertarians believe the government should be small and focused mainly on protecting people's rights and safety (like police, courts, and national defense) rather than trying to solve every social or economic problem.
Obviously this isn't a perfect system and can naturally lead to inequalities when everyone is left to their own devices in a world built for creation that contains finite resources. Therefore, libertarianism has it's critics that mainly argue these ideas:
Causes inequality and poverty
Critics argue that without government intervention, wealth concentrates at the top and poor people get left behind. Things like minimum wage laws, welfare programs, and food assistance exist because the free market doesn't automatically provide everyone with basic necessities. A purely libertarian system might leave vulnerable people (elderly, disabled, children) without support. Libertarians often argue that free markets have historically lifted more people out of poverty than any other system. They point to economic growth in countries that liberalized their economies. They also argue private charity was significant before government welfare, and that high taxes and regulations actually make it harder for poor people to start businesses or find work.
Leads to market failures
Free markets don't always work perfectly. Sometimes businesses create externalities. Classic example: a factory polluting a river. Without regulations, the factory has no incentive to stop polluting because it's cheaper not to. Critics say government needs to step in for these situations however, many libertarians support property rights as the solution. If you own the river, you can sue the factory for damages. even so, many libertarians would accept a limited role for government in protecting against clear harms to others.
Monopolies and corporate power
Without regulation, big companies can dominate markets, crush competition, and exploit workers or customers. Critics argue you can end up trading government tyranny for corporate tyranny. although libertarians often argue that most monopolies are created or sustained by government (through licenses, regulations that favor big companies, or contracts). They point out that in truly free markets, monopolies face competition from new entrants. When you see a lasting monopoly, look for government protection they'd say.
Public goods problem
Some things benefit everyone but are hard to profit from like roads, clean air, scientific research, or national defense. Critics say these won't get funded adequately without the government because individuals can "free ride" or benefit without paying. You could charge user fees to amend this, but many libertarians would simply agree that some government role might be necessary.
Collective action problems
Some problems require everyone to cooperate like pandemics, climate change, or infrastructure. Critics say voluntary action won't work because individuals have incentives to not participate while still benefiting from others' actions. Libertarians might point to private solutions that have worked like industry standards organizations, private fire departments in some places, or mutual aid societies. But again, many moderate libertarians accept some government role for things like defense.
Democracy concerns
Some critics argue that libertarianism is somewhat anti-democratic because it tries to put many decisions beyond the reach of democratic choice by limiting what government can do, even if the majority wants those programs. Libertarians argue that some decisions, like how you spend your money or live your life are too important to be decided by a vote or a show of hands. In their view, restricting the scope of government actually expands the scope of personal democratic agency over one's own life.
As you may have noticed, Libertarians can be flexible with their views in order to satisfy the systems so they function effectively. It's less about what is politically correct or true to their core beliefs, and more focused on efficiency and productivity. Of course like any movement there are dedicated, principled believers that will argue that liberty is the ultimate goal and must never be traded for productivity. However this report will focus on the reality of the current environment as more evidence shows a prevalence of pragmatic libertarian ideas that align more with free markets being naturally more efficient and focusing on what works to move society toward 'freedom'.
Part II: Libertarianism in Power
Libertarians in power would want to reduce government spending massively. They would want to cut or eliminate many federal agencies and programs. Trump talked about cutting spending and created the DOGE headed by Elon Musk to do exactly this but then later actually increased spending significantly on specific areas like defense.
Massive deregulation. Yes, even more than what Trump has already done. True libertarians want to remove regulations on businesses across the board (environmental, labor, financial, you name it). Trump did some deregulation, but libertarians would do way more. For example, Trump has declared a national energy emergency to bypass bureaucratic delays for oil, gas, and coal production and even targeted everyday consumer issues by ending the forced use of paper straws and deregulating water pressure for showerheads.
Social Security and Medicare is a big one. Libertarians would want to phase these out or privatize them. Trump promised not to touch these programs and then proposed keeping reimbursement rates for private Medicare Advantage plans almost completely flat for 2027, which is a much lower update than the insurance industry expected. To further reduce spending, the administration also moved to crack down on chart reviews, a practice where insurers often add extra medical codes to patients' records to get higher payments from the government.
Many libertarians want to audit or even abolish the Fed, return to gold standard, or allow competing currencies. Trump mostly left the Fed alone in terms of abolishment though he consistently publicly complained about interest rates, which brough up questions regarding fed independence and government control. Libertarians think it would prevent inflation and stop the government from printing money recklessly.
Competing currencies means allowing people to use alternatives to the U.S. dollar like Bitcoin, gold coins, private currencies, etc. Right now the government requires taxes be paid in dollars and it's the only legal tender. Competing currencies would let you pay for goods or taxes in something other than U.S. dollars effectively ending the government's monopoly on money.
Part III: What's actually happening now:
Trump has nominated a new Chair, Kevin Warsh who he anticipates will be more aligned with his desire for lower interest rates. Trump has also leaned into the competing currency idea by encouraging the use of Bitcoin and other digital assets in 401(k) plans and private business. Some Trump allies are very pro-Bitcoin and crypto, which is a form of competing currency. So there's actually some movement in that direction, which is somewhat libertarian.
It seems as though Trump’s circle (family, tech billionaires, wealthy donors, certain business interests) are libertarian on the specific issues that make them money. They are cherry-picking libertarian ideas that benefit certain groups (deregulation, privatization) while ignoring libertarian ideas that don't fit the agenda (like cutting military spending or staying out of foreign conflicts). It's more about who benefits financially than pure ideology and political beliefs. They want government out of the way when it restricts their profits, but they want government involvement when it helps them make money.
For instance, specific issues that make them more money include:
Deregulation: removes costs and restrictions on their businesses.
Government contracts going to private companies: tech and AI companies, defense contractors, and private health companies all benefit.
Cutting agencies that oversee/regulate them: EPA, FTC, consumer protection, labor regulations.
Privatizing government services: creates new markets for private companies to profit from, such as healthcare.
Tax cuts: they keep more of their wealth.
Competing currencies: many of them are invested heavily in this (think crypto).
But are not libertarian on:
Military spending: because defense contractors would make more money and it projects government power which is not what pure libertarians want.
Foreign intervention: they have already made clear actions against Venezuela, and are discussing intervention in Greenland because there are resources and strategic interests that would help increase global American dominance.
Tariffs: Libertarians are against tarrifs since it protects certain American industries and donors.
Providing subsidies for favored industries: as seen with certain manufacturing or energy sectors.
This is sometimes called crony capitalism or corporate welfare. Using libertarian rhetoric about freedom and efficiency while actually just structuring government to benefit specific wealthy interests. The contradiction makes sense when you follow the money:
Cut social programs? Saves money that could go to tax cuts for the wealthy.
Cut regulations? Their companies profit more.
Privatize Medicare? Health companies make billions.
Increase defense spending? Defense contractors make billions.
Space race? Contracts for SpaceX and others.
See through the rhetoric to the actual financial incentives. That’s the real game being played.
Part IV: Currency
Right now the Federal Reserve can create more dollars whenever they want (this is what people refer to as printing). The Fed's trading desk in New York buys back government bonds from private banks with digital dollars it didn't already have. Now the banks have liquid dollars in their accounts for regular use like lending to businesses as opposed to holding illiquid government bonds in their portfolios. That is the mechanism for how money enters the system.
There is nothing physical backing the dollar, because if there was and we returned to the gold standard you could walk into a bank and exchange your $100 bill for actual gold worth $100 and the government cannot create new money unless they acquire more gold first. This stability can be extremely restricting to economies and ultimately lead to fragility.
Solving the Great Depression was owed to leaving the standard when people panicked and traded their dollars for gold, which drained the government's vaults and forced the Federal Reserve to raise interest rates to protect its remaining gold. These high interest rates made it impossible for businesses to get loans, caused more banks to fail, and sent unemployment soaring. By abandoning the standard, the government could finally lower interest rates and print enough money to restart the economy.
So why do some libertarians claim they want this?
The dollar today has value because the government says it does and people trust it. It's value is based on government decree rather than a physical asset. They argue that this trust based system gives the government a dangerous monopoly on money, allowing them to print more whenever they want to fund wars or social programs. A gold standard stops government from inflating the currency, forces fiscal discipline and society has a system that uses sound money which holds physically backed value. They see the process of printing money and inflation as a hidden tax that quietly steals the value of your savings to fund government spending on specific projects.
But here's the reality if we went back to a gold standard and why this would actually screw most people:
With massive deflation, money becomes worth more over time, which sounds good but actually it makes debts harder to pay.
Your mortgage stays the same but money is worth more, so you would get it for cheaper if you secured it later vs. earlier.
Discourages spending (why buy today when it’ll be cheaper tomorrow?)
Causes economic depressions. Can’t print money during recessions, pandemics, wars, etc.
The wealthy who have cash and can hold gold become even more powerful, those with debts become even poorer. Obviously there's no gold standard today, but it's not just some old libertarian idea from the 80s. It is strongly acknowledged as rhetoric to make people distrust the Federal Reserve.
"The government is printing worthless money! We need real money backed by gold!"
It could also be messaging to make crypto sound legitimate.
"You need something hard that's finite that can't be printed infinitely”
“We need sound money! Government is destroying the dollar!” "Gold 2.0."
Part V: Deciphering the Rhetoric
Instead of returning to a gold standard to satisfy libertarians, more easily in todays financial system it would be more practical to introduce competing currencies by allowing citizens to choose between various private or digital options. Libertarians often prefer this because it uses market competition to naturally punish currencies that inflate or lose value. Modern technology, such as blockchain and stablecoins already provides a functional framework for these competing systems to exist.
Competing currencies already somewhat exist, but the dollar is privileged. What libertarians and pro crypto people want to change:
Be able to pay taxes in Bitcoin/crypto.
Make crypto legally equal to dollars.
Remove regulations on crypto exchanges and transactions.
How this benefits them:
Their holdings explode in value
Less tracking of their wealth
Can move money internationally easier
Avoid taxes by using crypto
How this could impact regular people:
Chaos. Which currency do you get paid in? What if your employer pays you in something that crashes in value?
Weakens government power. Can’t collect taxes as easily, can’t control monetary policy.
So it makes sense to believe that they don’t actually want to return to a gold standard due to the technical hurdles. What sounds more practical is that they actually want to legitimize crypto as competing currency since they already hold billions in Bitcoin/crypto.
If crypto becomes legitimized as “competing currency” or the government embraces it, the value of their holdings skyrockets. They’ve already made this happen. Trump literally launched his own crypto tokens and his family is doing multiple crypto projects. Deregulating crypto means they can operate without oversight, make more money, and avoid securities laws.
It's important to mention that libertarians would be against a central bank digital currency (CBDC). They don't want the government creating its own digital currency because that would compete with their Bitcoin investments. They want private cryptocurrencies to win, not government-controlled ones.
Current system:
Dollar is the dominant currency.
Federal Reserve controls monetary policy.
Crypto is somewhat regulated and taxed.
At the same time:
They hold massive amounts of Bitcoin and crypto.
They want crypto to become mainstream and valuable.
Less regulation = easier to trade, manipulate, and profit.
If crypto becomes accepted for payments, taxes, etc. = their holdings explode in value.
Bitcoin potentially has way more upside potential than gold.
Easier to move and hide.
They’re already heavily invested in it.
Trump literally launched his own crypto tokens; that tells you where the actual money play is.
Part V: The Fed
Trump's new pick for the fed is widely believed to want a stronger dollar. This causes deflation and benefits people who already have money. When you want a stronger dollar, you reduce the supply so there's less circulating and your dollars become worth more. For example, if you’re sitting on $100 million, and deflation happens, that money buys more. On the other hand, if you’re in debt (like regular people with mortgages), you’re screwed because the debt doesn’t shrink but money gets tighter.
A stronger dollar and the resulting deflation can lead to higher interest rates and increased market volatility. Trump has been extremely vocal on lowering rates but to strengthen a currency, a central bank typically raises interest rates, which attracts foreign investors seeking higher returns but also makes borrowing more expensive for everyone else. This higher cost of credit often triggers market crashes. This duality of goals is why markets are predicting volatility.
Why they would want higher rates even though it crashes the economy? They can buy everything cheap when it crashes. When stocks crash and people panic sell:
Regular people lose their savings and sell at the bottom
Wealthy people with cash reserves that appreciated from tightening money supply, buy up assets for pennies on the dollar
After the crash, they own even more of everything
This is what happened in 2008 when the housing market crashed. Regular people lost their homes so hedge funds and private equity bought up thousands of homes dirt cheap. Now they own massive amounts of real estate and rent it back to people who lost their homes, and newcomers in an inflated system.
This is a phenomenon known as disaster capitalism.
Create or allow a crisis
Regular people panic and sell
Wealthy swoop in and buy
Emerge owning more of the economy
Workers get desperate, accept lower wages
Regulations get loosened “to help the economy”
Small businesses fail, big corporations buy them
Consolidation of power
The 1929 comparison also applies because of what happened in the Great Depression. Stock market crashed, banks failed and regular were people wiped out. But the wealthiest families bought assets at rock bottom prices and they emerged from the Depression richer and owning more.
Part VI: The Cycle
Tighten money supply, rates go up.
Economy slows, unemployment rises.
People can’t pay debts causing foreclosures and forced selling.
Stock market crashes.
Wealthy buy everything cheap.
Eventually economy recovers.
Wealthy now own even more.
This is where we see the pattern. Every crash wealth transfers upward.:
2008 crash increased wealth concentration.
COVID crash saw billionaires make trillions while small businesses died.
The contradiction is that it seems insane to crash the economy you’re part of. But they’re not crashing their economy, they’re positioning to profit from your losses. They know when tightening is coming (insider knowledge) so they can short the market, move to safe assets before crashes then buy back in at the bottom.
Now that we've potentially uncovered a major secret of the financial system, let's just say it plainly. It’s not about a healthy economy, it’s about extracting maximum wealth during both booms and crashes.
Now let's cut the conspiracy and clear the air to cover what we actually know from public record. Wealth concentration after crashes is measurable. After 2008 the top 1% recovered quickly, middle class took over a decade. After COVID billionaire wealth increased $3.9 trillion while 100+ million fell into poverty. This is documented data, not speculation.
Additionally, asset purchases during crashes are public. BlackRock and others bought foreclosed homes after 2008, stated in public records. Private equity firms bought distressed businesses as reported in public filings. These are observable facts.
On top of this, Fed policy impacts are studied by economists constantly. It's acknowledged that high rates cause borrowing costs to rise which has historically led to economic slowdowns. This is basic monetary policy, not conspiracy. What I don't know is how exactly the administration and the Fed will continue to pick pocket libertarian policies to beenfit themselves financially. I cannot say for certain whether Warsh or Trump’s circle are intentionally planning a crash, their private motivations or any coordinated strategy.
What I’m doing is showing you how the mechanics work, who benefits when certain policies are enacted and aligning them with historical patterns.
Part VII: The Conclusion
The contradictions mentioned are real:
Can’t do tight money AND massive government spending without exploding the deficit.
Can’t strengthen the dollar AND pump crypto.
Can’t cut spending AND increase military budget.
So what’s likely:
Option 1is they’re fully winging it:
No coherent plan. It’s transactional based on who’s giving him money/loyalty right now and what makes him look powerful right now. Policies shift based on these answers.
Each faction backing Trump gets some wins.
Contradictions in libertarianism, democracy, capitalism, etc. don’t matter because they’re just enriching themselves however possible.
Option 2 is controlled chaos:
Create instability
Profit during the volatility
Buy assets when things crash
Different people profit different ways
Option 3 is that they’ll settle on one path:
Either go full crypto/weaken dollar route
OR go traditional finance/strong dollar route
Depends who has more influence with Trump
The only consistent thread is to enrich the wealthy people in his circle, reduce oversight/regulations on their activities, transfer public resources to private hands and do these things and other actions the Trump administration feels it wants to carry out through whatever method works.
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