May 12, 2004

Explaining Libertarianism II

I had a sneaking suspicion that it would be a good idea to start with the roman numberals on this one and Michael Williams provides an urgent need for a followup. The genesis of my earlier article was my sense that libertarianism wasn't being described properly and what was going on was beating up on a straw man caricature.

The truth is that libertarianism, at the most extreme margins, is about as flaky as your average hard leftist who pulls the Democrat lever or the hard right bircher who pulls the Republican lever. In other words, it can get very flaky indeed. The practical man takes a look at libertarianism as a guiding approach to solving problems and implements it where he can, where the spare theories of the idea men have been fattened up into a program that provides a roadmap to making things better.

The truth is that you can take any american critique of libertarianism and it will fit comfortably in the mouths of statists in just about every country. The only difference is what is to be privatized, what regulations are being abolished, and what freedoms will no longer be infringed by the government. The criticism remains remarkably the same, only most countries are arguing over the impossibility of privatizing and deregulating things in the US that never were privatized or regulated so we tend to look at them like they're idiots. We know that private agriculture works fine but it was an awfully hard argument to convince the Soviets.

But there are some areas of society where we are not the most free nation on earth. Some countries have stolen a march on us (most famously Chile) and liberalized pensions into private accounts long before George Bush had the courage to touch the "third rail" and advocate the same thing for Social Security. Private roads are much more developed in the UK than they are in the US. In such areas, we're the idiots, talking about the impossibility of taking this or that government responsibility and shifting it to private action.

Government ownership of roads does not mean federalized road ownership. It means public road ownership and public roads have a very old history in the US. There are very few private roads around in the age of automobiles and what few exist do not form a critical mass sufficient to justify the creation of an alternative system of regulation. If private roads are a mere appendix, they will just save themselves the effort and just mimic government rules.

None of these solutions emerged even when there was little government regulation, not at the local, state, or federal level; since 1980 (and the founding of MADD (not my favorite group, by any means)) drunk driving deaths have been reduced by 40%, largely due to regulation and law enforcement.

There was little regulation but certainly during the period before and after the improvement one constant existed, government ownership, therefore control and responsibility rested in public hands.

If instead of government roads there had been private roads and MADD was lobbying road company and insurance shareholders instead of legislators, would the improvements have happened quicker or slower? Would BAC or functional tests have predominated? Would there be more or less drunk driving as a result? In short, the question isn't whether government action has made things better. Clearly it has done so. The real problem is whether an alternative system would have been even better. I think it would and as long as the discussion is not on comparative benefit grounds, we're never going to get anywhere.

Private ownership and control is not a magic wand but it's the best structure we've got except for those areas where we haven't figured out how to extend it into. The list of those areas is remarkably short and getting shorter and the US could stand to lose quite a few chunks of regulation and government functions. Where we've figured out how to privately regulate, we should privately regulate and use the advantages of the market to provide better services to society.

Michael Williams is right in that there is an optimum level of size and efficiency that can be gained at any particular time. Where he is wrong is that he doesn't quite put together the fact that government use of technology has usually lagged the private sector (outside some very limited cutting edge priority areas) and so the more technology gets used, the more government will fall behind. Since technological progress is accelerating, it makes sense to shift more and more things over to private sector action to accommodate the shifting reality that the government is getting relatively less improvement out than private institutions.

In a nutshell, that's the libertarian policy prescription. slice the government salami and shift as much as practical every year into the private sector. How that is impractical is a mystery to me.

Posted by TMLutas at May 12, 2004 03:19 PM