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Kinsley on Libertarianism:

Whatever one thinks of the Ron Paul campaign, it has caused some to take a more serious look at libertarian policy ideas. This Michael Kinsley column, which is largely critical but respectful of libertarianism, is a good example.

Libertarians get patronized a lot. Chipmunky and earnest, always pursuing logical consistency down wacky paths, they pose no real threat to the established order. But the modest success of U.S. Rep. Ron Paul of Texas in the presidential campaign entitles them to some answers to the questions they raise. They say: People should be free to do whatever they want, as long as it doesn't hurt other people. If you agree, how do you justify (let's pick just two): 1) laws that forbid private behavior, such as recreational drugs; 2) government programs that redistribute one person's money to someone else?

The libertarian perspective is useful, and undervalued. Why does the government pay farmers not to grow food? Why are medications for fatal diseases sometimes held off the market in case they aren't safe? (Compared to death?) Legislators and regulators should ask themselves far more often than they do whether some government activity or other expands freedom or contracts it.

Furthermore, democracy and majority rule are no answers. Tyranny of the majority is a constant danger. How would you like a law requiring that people with odd Social Security numbers have to give $1,000 to people with even Social Security numbers? To libertarians, much of what the government does is essentially like that. . . .

Libertarians ask: By what justification does the government concern itself with inequality -- financial or otherwise -- in the first place? They are nearly alone in asking this question. Even conservatives claim a great concern for equality of opportunity, while opposing opportunity of result. And the reasons seem obvious: some degree of material equality as a necessary basis for political equality; the huge role of luck in getting each of us to our relative stations in life; etc.

But nothing like this is obvious to libertarians. They force us to think it all through from scratch. Good for them.

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Michael Kinsley on Libertarianism:

Washington Post columnist Michael Kinsley deserves credit for taking libertarianism seriously and trying to present a reasoned critique. It's often difficult to make a real effort to understand an ideology very different from one's own instead of just dismiss it.

However, the quality of his criticism is uneven. Here, I focus on two of the most important problems: Kinsley's use of public goods and externalities to attack libertarianism, and his rebuttal to the libertarian critique of paternalism.

I. Public Goods and Externalities.

The most important flaw in Kinsley's critique of libertarianism is that he implicitly assumes that libertarianism rests on claims that the market is virtually perfect in providing for our wants and needs. Thus, he thinks it's a sufficient refutation to point out that the market doesn't deal perfectly with public goods, externalities, and other problems:

So what is wrong with the libertarian case for extremely limited government? Economics 101 teaches some of the basic justifications for government interference in the economy. Some things, such as the cost of national defense, are "public goods." We can't each decide for ourselves how much defense we want. We have to decide that together. Then there are "externalities," which are costs (or, sometimes, benefits) that your decisions impose on me. Pollution is the classic example. Without government involvement of some sort to override our individual judgments, we will produce more pollution than most of us want.

In reality, the case for libertarianism is based on the flaws of government as well as the virtues of the market. To justify the modern activist state, it's not enough to show that the market has shortcomings; you must also prove that the government can A) solve those problems, and B) do so without introducing worse problems of its own. Libertarians contend that government is systematically inferior to the private sector despite the fact that latter has significant flaws. In my view, for example, there is good reason to believe that government is likely to fail more often than the market because the quality of government is greatly undermined by the widespread and rational ignorance of voters; by contrast, market participants have stronger incentives to become informed about the goods and services they purchase and are therefore less likely to make serious mistakes.

It's also unfortunate that Kinsley acts as if libertarians haven't given any thought to public goods and externalities (or have only done so in crackpot ways). In reality, there is a vast libertarian literature on both subjects, some by Nobel Prize-winning economists such as James Buchanan (who won in part because of his work on public goods) and R.H. Coase (who won it for his work showing that markets can effectively address many types of externalities).

Most libertarians (myself included) do concede that there are some public goods that can only be provided by the state. However, there is a lot of evidence suggesting that the market can provide a much wider range of public goods than traditionally assumed. For example, Elinor Ostrom has shown how a combination of property rights and social norms can conserve valuable resources and greatly reduce various environmental externalities. Robert Nelson has documented how private planned communities can provide a variety of local public goods traditionally viewed as the exclusive preserve of local government.

II. Libertarianism and Paternalism.

Kinsley tries to rebut the libertarian critique of paternalistic policies as follows:

Something similar goes on when the government forbids or requires people to do something for their own good. Why shouldn't people, at least adult people, have the right to decide for themselves? .....

The trouble here is that libertarians tend to analogize everything to a right to die. If you have the right to end your own life, you must have the right to do anything else you wish, short of that. If you're allowed to shoot yourself through the head, why aren't you allowed to drive without a seat belt?

The answer is that it's a bad analogy. When you drive without a seat belt, you are not motivated by a desire to die, or even a desire to take a small risk of dying. Why should your motive matter? Because your death — especially your death in a car crash — does impose externalities on others. I would pay good money not to have to see your bloody carcass lying beside the highway, or endure the traffic jam, or pay the emergency room costs. A serious right like the right to die may be worth the cost, while a right to be careless or irresponsible is not.

If Kinsley really accepts the idea that we have a right to die and that government shouldn't forbid you to "shoot yourself in the head," he has already gone a long way toward the libertarian position. I fail to see, however, why he concludes that people have a right to deliberately kill themselves but don't have a right to take a much smaller risk of death by not wearing a seatbelt. Yes, it's true that those who indulge in the latter activity are not motivated by the desire to die or take a risk of death. They may, however, be willing to take a small risk of death in order to achieve some other benefit, such as avoiding the discomfort of wearing a seatbelt. Similarly, many people eat large quantities of hamburgers and drink lots of beer even though they know very well that it's bad for their health and increases the risk of an early death. As I explained in greater detail here, a key flaw of paternalism is that it denies individuals the right to decide for themselves whether the benefits of taking a risk are worth the cost. The mere fact that an activity creates a risk to your health or even your life doesn't necessarily mean that only a "careless or irresponsible" person would do it.

As for Kinsley's laundry list of "externalities" of not wearing a seatbelt, some of them are not externalities at all and others are themselves caused by government intervention. Car accidents, for example, are not caused by not wearing seatbelts, though the latter does increase the danger that you will get hurt if you do get into an accident. The extra damage from not doing so, however, will fall almost entirely on the person who made the decision and is therefore not an externality. As for emergency room treatment, this "externality" is the result of government's decision to subsidize the treatment of injuries caused by motorists' decisions not to wear seatbelts. Eliminate the government intervention and this "externality" disappears.

UPDATE: It's strange that Kinsley thinks that "The Terry Shiavo [sic] case of 2005 was libertarianism's greatest moment so far." Libertarians played only a minor role in the Schiavo debate, which itself was a relatively minor event in American history. I could easily think of many far more important events on which libertarian ideas had a much greater influence. For example, deregulation and privatization policies first advocated by libertarian economists have been adopted in numerous nations around the world. Here in the US, ideas developed by libertarian thinkers have played a major role in the recent resurgence of interest in judicial and legislative protection of property rights.

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The Problem of "Externalities" Caused by Government Financing:

One of Michael Kinsley's criticisms of libertarianism is based on "externalities" caused by government financing. He argues that people should not be allowed to drive without wearing seatbelts because their risky behavior creates an "externality" - a cost that they don't bear themselves. The externality in question is the fact that government may end up financing their medical treatment.

These kinds of "government financing exernalities" are commonly used to justify government regulations that restrict individual freedom. Liberals use these arguments to justify such regulations as mandatory seat belt laws, smoking bans (because government may end up subsidizing smokers' medical treatment if they get lung cancer), and most recently restrictions on morgage terms (because the government may bail out people who end up defaulting). Conservatives have their own favorite government financing externality arguments. For example, many argue that we should restrict immigration because otherwise the immigrants might collect welfare benefits that are paid for by taxpayers. Obviously, the greater the role of government in financing a wide range of activities, the greater the number of potential government financing externalities. The expansion of government spending facilitates the expansion of government regulation intended to curb the negative effects of the spending.

Government financing externality arguments generate their appeal from the fact that they seem not to be paternalistic. We are willing to let you hurt yourself, advocates implicitly suggest, but we can't let your bad behavior hurt the taxpayers.

The libertarian solution to this problem is to eliminate the government financing that created the "externality" in the first place. If you are worried about taxpayers having to pay for smokers' medical expenses, then argue for the elimination of government subsidies for the treatment of illnesses caused by smoking. Ditto for injuries caused by not wearing a seatbelt. The 1996 welfare reform law already eliminated even legal immigrants' eligibility for most welfare state benefits. But if you think there are still problems in this area, then argue for further reductions. Most immigrants would be more than happy to accept a deal under which they are allowed to stay in the US legally only on condition that they forego welfare state benefits.

In some cases, eliminating the government financing externality by eliminating government financing may be impossible for political or technical reasons. In such situations, there really is a difficult tradeoff between individual freedom and taxpayer interests. However, if government financing externalities are your true reasons for favoring any given type of regulation, you should at least consider the possibility of getting rid of the externality without restricting freedom.

Related Posts (on one page):

  1. The Problem of "Externalities" Caused by Government Financing:
  2. Michael Kinsley on Libertarianism:
  3. Kinsley on Libertarianism:
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