Saturday, September 3, 2016

On Libertarianism

Something that I don't often write about is political libertarianism. I have a problem with it. I have a problem with the view that the free market approach works everywhere. But in order to talk about this stuff, one needs to bring in the fields of political philosophy and economics that I am much less acquainted with than with the relevant fields needed to have the religion debate.

In political philosophy, one of the major questions is "what is the purpose of government?" It's an interesting question few of us ask ourselves. We tend to grow up in cultures where government exists and its role is taken for granted. The US was founded by rebels who broke away from a theocratic king and set up a secular democracy. The preamble of the US Constitution reads that its purpose was "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity". It was the first secular democracy in the world and quite revolutionary.

The purpose of the newly independent US government seemed quite clear. Or was it? What does it mean to "promote the general Welfare?" Libertarians generally believe that the purpose of government is to protect the rights of the citizens and perform a few basic functions like military, police, and the law: The military to protect the country from all enemies foreign and domestic, the police to provide security internally, and the law to provide judges and courts for legal matters. Other than that, most, if not all other areas of society will be handled by the private sector.

Libertarians disagree over exactly how far government should extend beyond the police, military, and the law. They also disagree on taxes. Some support a flat tax, others support no taxation at all and consider any form of taxation the moral equivalent of stealing. People would instead voluntarily donate money to the government in such a system. Voluntaryism, the philosophy that forms of human association should be voluntary is big among the "taxation is theft" wing of libertarians.

I've challenged many libertarians I know on whether an all voluntary taxation system would actually be able to pay for the government they think should exist and the answers I get don't sound too confident. I've asked them what should be done if voluntary tax donations weren't enough to cover the costs of the government functions, like for example, the police to secure the safety of the community, and I haven't gotten a good answer yet. Voluntaryism would also allow free riders to game the system. If your neighbors are voluntarily paying for the police and you're not, you're still going to get the same police protection they paid for. Also, who would build and maintain the roads, bridges, and tunnels? Would the private sector really be able to handle this with the level of coverage government could?

Libertarians are very anti-utilitarian. They are not focused on the end result, but rather the principle being held. So if an all voluntary taxation system failed to pay for the needs of the small libertarian government and it resulted in massive societal problems, like rising crime and civil unrest because of the lack of paid police officers, then so be it. All that matters is that government didn't tax, or "steal" anyone's earnings.

On economics, libertarians are split on whether the government would regulate anything. Some say the government should play a role in providing some basic regulations, like food safety standards to ensure that restaurant doesn't serve you tainted food, or driver's licenses to ensure the bus driver has passed a basic competency test. Other libertarians think the business sector should be completely unregulated. That would mean a restaurant could serve you tainted meat that had been stored in unsanitary conditions, and a bus driver could have severe eye issues that prevent him from seeing properly.[1] If someone gets sick or if the bus crashes, that restaurant or bus company's reputation will suffer, the libertarian argues, and people will stop using them and they will either raise their standards or go out of business and the free market will have fixed the problem.

Of course, that's not usually how these things go. First, many people will have to die before any change is done. People might be used as guinea pigs that allow the "free market" to work its way out. No one will ever be able to have a basic assurance that their food was held to reasonable safety standards, or that there bus driver was mentally and physically competent to drive the bus. If you've ever been to a third world country, you'll know how problematic this is. I was back packing in Mexico years ago and got very sick by the food I ate from a food cart at a bus station. I ended up having diarrhea for a week and I threw up. This was because in third world countries they often don't adhere to basic safety standards, and my health suffered as a result of that. Deregulating businesses will ensure that safety standards go down. I suppose a company could exist that provides regulatory inspection that other companies voluntarily adhere to, but that doesn't happen.

Second, the way markets work is that you tend to get monopolies. One company gets really good, puts its competitors out of business, and then owns the lion's share of the market. And once it does so it doesn't have to worry as much about competitors. It can raise prices, decrease standards, without any fear. And because often the up-front costs for any competitor will be very high, new competition is unlikely. The company monopolizing the sector can always lower its costs near the new competitor to put them out of business, and then just raise their prices and lower their standards again.

The fundamental debate between libertarians and non-libertarians will be over whether taxation in principle is theft. It all starts from there as I see it. I don't think it is in principle. Excessive taxation can be a form of theft. But not all. Taxation is required for governments to promote the general welfare by providing the services that the free market is not best suited to do. That is the purpose of government as I see it.

[1] It would also mean that a 10 year old could drive a car if he had access to one, or buy an AR-15 assault rifle if he could afford it.

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