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What makes me sad is that a lot of people, even here, discharge Ron Paul as some sort of crazy guy without even listening to what he says. In comments to this post "thesagan" wrote that some of his ideas are "batshit crazy" as if his ideology is composed of many different unrelated parts. Not true, Ron Paul ideas are ideas of libertarianism and if you study them diligent enough, you'll eventually be used to thinking in this framework. Which is actually the point: it is a framework which has logical structure to it. Unlike both parties' ideologies, which are, indeed, crafted out of many different unrelated parts serving special interests.



"Ron Paul ideas are ideas of libertarianism and if you study them diligent enough, you'll eventually be used to thinking in this framework"

I'm trying not to violate rule #1 of the internet ("never argue with an internet libertarian"), but you're making a classic Nerd Error: if you have to say the words "you'll eventually be used to thinking in this framework", you've already lost the war.

Politics are not about logically consistent philosophical frameworks, and even if they were, there's certainly no inherent reason that "liberty" has to be your guiding value for establishing such a framework (you could just as easily chose "safety" or "health" or, for that matter, "happiness"). There are a number of practical situations where people will happily, sanely support reductions in liberty to gain other benefits. People who do not recognize this reality are doomed to marginalization.


I recognize very well that politics is not about logic. This is why I'm very pessimistic about prospects of libertarianism and especially anarcho-capitalism. Because especially the latter has nothing to do with politics at all.

Generally, I think the idea that the majority of people can vote for something and restrict freedoms of other people who opposed the idea is something completely crazy and it's so sad that a lot of people will, I'm sure, continue thinking that is the way to go.

Update: also, let me ask you, cos I'm not sure, why do you think it's a bad idea to argue with a libertarian?


Well, what's the alternative to having majorities vote? Since I gather you're a libertarian, let's make a market-based argument.

There will always be some demand for violence (meaning the application or threat of force to cause other autonomous agents to act a certain way), and there will always be suppliers of violence. The question then becomes of market structure: do we want decentralized and competing suppliers of violence in a given geographic area, or a monopoly? Both can be Pareto-efficient, so that provides no guidance.

Having a monopoly supplier, however, gives that supplier an incentive to maximize the net economic value of its customers: this allows it to extract more of that value. Competing suppliers, however, have no such incentive: if one cultivates a client, there's no reason for the others not to swoop in and extract the surplus. It's a race to the economic bottom. If economic well-being and surplus are good, then having a competitive market in violence is bad.

Okay, so we have a monopoly supplier of violence. What then, though? How do we structure it internally? Well, the way it arises will be the way it's structured, regardless of what we might like in an imaginary world. And that will be some group of agents who have to negotiate contracts with each other and with the customers who are exchanging labor in exchange for violence.

What remains is squeezing out the information and liquidity gaps that make every market inefficient. People should have a clear set of rules that they can assume will be okay with the monopoly violence supplier: then they will not miscalculate when they do something thinking it will not cause violent reprisals. That's what we call rule of law.

That says nothing about what the contract is, though: it may be "everyone pays a flat fee," it may be commission based, it may be commission based on a sliding scale. Who should decide that? Well, you ultimately don't want internal factions to splinter off to compete with the original monopoly (after all, we like the monopoly! At least at the margins.) So you've got to set up an corporate structure where no large enough group of customers feel that they could have a better deal with another supplier in the market. Everyone needs equal input.

We've tended to solve that problem with majority vote.


I think you're assuming that violence is somehow more profitable than no violence. I disagree. In fact, I think it's the opposite: violence is much less profitable than a non-violent solution. Violence only becomes more profitable when you have a monopoly to it: it doesn't cost you anything to use it, because you know no one is even gonna try to challenge you.

On the other hand, when you don't have a monopoly, even if the other side is weaker than you are, you would still have to factor in your potential losses and see if you can strike a deal that would allow you to avoid violence and, thus, losses completely.


I'd agree that without a monopoly you'd have lots of deals being struck. If you're just talking about violence-suppliers, the likely equilibrium is no violence at all.

But you're always fighting over stuff and, moreover, people. In all the cases I can think of, violence-suppliers would look at all the people it can extract value from, look at each other, and then combine forces to extract the most value from people. The only time they'd fight each other is if someone miscalculated who had more capability to deliver violence. But either way, violence suppliers would either combine forces or get destroyed, ultimately leading to a monopoly and making violence a profit center.


Wait, so if you say the likely equilibrium is no violence at all, what's bad about it? If violence-suppliers form a cartel and people are happy about the way it serves them - what's wrong with that? If some become unhappy, they do 2 things: stop paying their monthly fees and seek a new company to protect them (which will inevitably emerge, because there's a demand).

On a side note, libertarians call violence suppliers "private protection agencies". Reflects their nature better, since we agreed that the equilibrium status quo would be no violence.


I think this is getting to semantics, but revealing semantics. I would say a situation where "violence-suppliers form a cartel and people are happy about the way it serves them" to be a wordy way of saying the State. And the same agglomerating forces that lead to a cartel in the first place make it difficult for another violence-supplier to appear: if it offers a better deal to customers than what the cartel is offering, the cartel will point its guns at it and say, "are you sure? You should reconsider."

That's why "private protection agencies" really doesn't get at their nature: being plural is contradictory with having a single cartel supplier of violence. And it's hard to say "private from whom" when there's only one party you negotiate with. And when you're negotiating for protection from violence with the only likely source of that violence... the word racket comes to mind better than protection agency.


It's a valid argument that private protection agencies may become de-facto government. With one crucial distinction: no one's giving them any legitimacy to be one. If they point guns to people, people are free to organize themselves and fight or hire somebody else to fight for them. Either way, it would put a cost on the protection agency. And as we determined, it is always more costly to fight than to strike a deal, even if you're stronger. Wouldn't you agree then, that the equilibrium would be reached in which protection agencies act more like actual businesses serving their customers, rather than as racketeers?


Well, who's giving the State its legitimacy right now?

It's not some god in the sky that does. We do: not just a generic we, but most people reading this, you and me included. We choose to participate in the markets it establishes; it tells us what property rights are and says they're property rights because it says so and has the guns to back them up. The corporations we work for rely on it to break down people's doors when someone gets ahold of a next gen device that they misplaced, and we feel safe that the money we put into our banks is safe for us because the State will yell at the bank if it takes our money and pay for it if the bank loses it.

There's no reason a protection agency wouldn't do the same to establish its own legitimacy. It seems like a good business model, in fact: convince everyone that questioning it is morally bad, create some ideal of "citizenship" that amounts to brand loyalty to violence, and then expropriate value from a populace that's not only cowed but actively consenting.

Don't get me wrong: it gets my goat as much as yours that that's the situation. But I wasn't describing before how a hypothetical, ahistoric government-like entity might develop: I was offering a general theory of how it actually did. If it's right, the State isn't some aberration but an emergent, self organizing maelstrom that has gradually grown to envelope virtually all people in all places.

My issue with libertarianism as it exists in popular culture is that its idea of liberation seems to be getting the State to deign to rewrite property rights to privilege one part of society instead of the current one (that's all of electoral politics, actually). Once that's achieved, one gathers, we can all become happy and free consumers because a certain property right regime has become the law of the land, imposed from above by our now-purified and almighty State.


I think scarmig means that the equilibrium would be a monopoly which would then take the role of government. And in fact, on an international scale, there's an oligopoly violence suppliers, it's just that they're not "private", but "public".


Why assume an equilibrium?

Events, power struggles as people rise and fall in strength are all likely. Economics is a dynamic process, modelling as a stable or convergent systems is an extremely naive approach.


Violence only becomes more profitable when you have a monopoly to it: it doesn't cost you anything to use it, because you know no one is even gonna try to challenge you

Unfortunately, it looks like nobody explained this to criminal gangs. They obstinately use violence against each other, especially when no one gang has a near monopoly...


> Having a monopoly supplier, however, gives that supplier an incentive to maximize the net economic value of its customers: this allows it to extract more of that value

Could you explain this claim? I wouldn't agree with it if you we're talking about fulfilling the demand of other sectors (like music or food), so I'm curious why it would apply to violence.


Sure.

Represent an economic transaction with {M, X, V}, where M is currency, X is some good or service, and V is violence.

For a music cd, there's three parties involved, though the third is sometimes not explicitly accounted for.

1:{-M, +X, 0}

2:{+(1-p)M, -X, 0}

3:{+pM, 0, V}

(aside: money, you see, plays a nice role of making it a 3-tuple instead of an infinite-tuple)

The first two elements of a tuple have the constraint that they must sum to nullity across all the other parties involved. You can't make labor or goods appear out of thin air.

Violence, however, doesn't have that constraint. You can always throw in more violence, and it's always a positive amount.

(Why doesn't 3 just set p = 1? It certainly could, but that isn't the optimal proportion to maximize sum(M). The incentive structure breaks down: Laffer bites with a vengeance. So there's some other optimal p 0<p<1 that maximizes sum(M) over all clients--what that value is is simply an empirical question.)

So let's look at a market of violence, with multiple suppliers:

1:{-(q+r)M', 0, 0}

2:{+qM', 0, V'}

3:{+rM', 0, V''}

where q + r = p' and M' is the total value that 1 provides at p' where p' maximizes M'.

This satisfies the required constraints, but it's not a stable equilibrium. q+r is that same optimal value p from before, but with a twist: it's not set by only one agent trying to maximize sum(M) but by two trying to maximize their own. There's no reason for 2 not to go for (q+e) instead of q, and the same is true of 3. Taking only q and r as varying qualities, and you rapidly end up at q + r = 1, which means no one gets anything.

In practice, what happens is that 2 and 3 have their own separate transaction since they can foresee that upcoming equilibrium:

2:{0, 0, V'}

3:{0, 0, V''}

That itself is unstable: assuming that V' > V'', the new equilibrium is

2:{0, 0, V'}

Leading to

1:{-p'M', 0, 0}

2:{+p'M', 0, V'}


I lose you at the part where you essentially claim that violence is free or unlimited. In reality, violence is very costly and risky. In this sort of analysis, I don't see why violence would be considered a separate variable, rather than simply one cost factor for both sides of the transaction, just like the cost of advertising, or paying employees.


"I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it." - George Bernard Shaw

(...let's be clear that I'm not calling libertarians pigs. The point is that you can't change a dedicated person's mind via argument, and neither I nor Shaw found the effort enjoyable or productive.)


Ok, sure. Let's not argue then. I have a question though (and it's not intended to spark an argument), I'm just curious to know, how and why do you think people become libertarians?


By reading Atlas Shrugged and having an egocentric view of the world.


Because having a simple and logically consistent system to decide what is right and wrong in any given situation absolves one of the responsibility to make complicated moral decisions on their own merits.

I understand libertarianism and I very much appreciate that it is built on a foundation of reason. However, being an imperfect being, a wise man tempers his reason with empiricism.


> Because having a simple and logically consistent system to decide what is right and wrong in any given situation absolves one of the responsibility to make complicated moral decisions on their own merits.

But libertarians are the ones who want to take direct moral responsibility for their circumstances; it's statists who seek to outsource that responsibility to distant formal institutions or systems of pre-defined abstract rules.


You may want to take direct moral responsibility for your circumstances, but that would be very dishonest. Whether you like it or not, you are part of a society and the very existence of society makes your circumstances possible.


Every human being, like every other discrete thing that exists, inhabits a particular context; the question is not whether an individual takes responsibility for himself with respect to some abstract, Platonic universal, but whether he takes responsibility for himself with respect to the particulars of the world he actually inhabits.

This includes choosing what trade-offs to make in the interest of maintaining or creating specific relationships with others - this is what society is. But what you're referring to as "society" is merely a logical construct, abstracted so far from the actual circumstances of people's lives that it does not represent anything that really exists.

Actual societies only emerge from the substantive interactions of particular human beings. Suppressing those individuals' ability to freely negotiate the terms of their relationships by forcing them to adhere to generalized rules, promulgated in the abstract, actively damages society.


It's not built on reason. It's based on Econ 101 oversimplification along with principles no less arbitrary than any other political ideology.


> why do you think it's a bad idea to argue with a libertarian?

Every time I argue with a libertarian, it's an endless series of "No True Scotsman" arguments.


I could just as easily say that whenever one argues with a non-libertarian, he or she lays out an endless series of straw men.

See how that works? "Your argument doesn't accurately represent my viewpoint" is what both No True Scotsman and straw men are about. So rather than opting out of an argument by calling "logical fallacy" on someone, why not clear up the definitions and be sure of what each other are talking about?


That's odd. Can you give me an example of a common libertarian No True Scotsman argument?


Well, it's not really a pure free market system, so it doesn't count.


you do realize that is a valid argument though, right? The core concept of the no true scotsman argument is the wishy-washy definition of what is being debated. He isn't a true scotsman because a true scotsman would wear a kilt! something like that. If the definition of scotsman is "wears a kilt" the same way a libertarian would say "pure free market" then it is totally valid.


He may wear a kilt, but he doesn't play the bagpipes, so he's no true Scotsman.


Probably referring to you calling the US health care system free market...


Herbert Hoover was a huge activist big government Keynesian.


Yeah, the problem is that "study it out" is not a valid response, in practical terms, to someone saying your political ideas are stupid. Most people will never bother. Being able to understand this and be "flexible" (read: inconsistent) is what makes a person a good politician.


The problem is Ron Paul is a crazy guy. He's trying to rigorously apply principles from the 1700s to today's world. He's not willing to compromise in the face of evidence that contradicts his firmly held opinions.

I've studied Libertarianism to the point of finding out that, not unlike other extremist philosophies, it's too far-fetched to ever work. People are too "human" for Libertarianism to ever work. It's too easily corrupted to serve the interests of those with power.

Ron Paul either lives in some kind of puppies and rainbows small-town world where corporate interests never trump personal liberties, where money doesn't equate to power and relative immunity from prosecution, or he's willing to overlook all that and hold out faith that Libertarianism will somehow change how people iteract.

Basically he's the Richard M. Stallman of politicians. Blinded by ideology and ultimately dragging things in the wrong direction.


I challenge you to give me one very specific example of how something is not going to work in a libertarian world and I'm going right here right now to prove you how it actually would work. (because, with all due respect, I think writing comments that basically say "it's not gonna work because it's puppies and rainbows" is not helping us find out the truth).


Others have chimed in with similar explanations but it often revolves around the principal problem of how do you allow "freedom" without infringing on someone else's?

For instance, if I want to drink radiation laced water, Libertarians would think I have the right. They'd also say I should have to pay for my own medical treatment resulting from that. Reasonable enough.

However, if I drank radiation laced water because a chemical company was disposing of their waste in my backyard and I didn't know, Libertarians would tell you it's your fault for not having the proper testing equipment or paying a company to run these tests for you.

The same thing shakes out for food. For employment. For air travel. For basically everything you do you're assumed to have done enough research to know the risks you're exposed to. Libertarianism also makes the enormous assumption that a safe option will always be available.

Since there's zero protection from monopolies in a pure Libertarian society, they will naturally occur, and the results will be overwhelmingly negative for all but a handful of people, the proverbial 1% if that.

Libertarianism also as much as endorses discrimination as it sees it as your absolute right to decide who you provide goods and services to. Idealists would have you believe that non-discriminatory companies will always out-perform their discriminatory counterparts, but history has proven the opposite. If people are racist, they will certainly pay a small premium for service that reflects their views.

It's this every-man-for-himself approach to living that quickly degenerates into pure Darwinism where the one with the most money, who can easily afford to build a protective bubble around themselves, thrives and the others live miserable, dangerous lives.

Basically a pure Libertarian approach has too many dangerous failure states for it to be taken seriously. There are arguments that can be made for a more or less libertarian approach to problems in society, but to go 100%, full-on is to miss the point.


WRT "if I drank radiation laced water because a chemical company was disposing of their waste in my backyard and I didn't know" from my limited understanding of Libertarianism, they do believe the government and legal system should promote property rights. Therefore, if a company pollutes your water supply, you would have legal recourse to recover damages assuming you live long enough.


You're assuming it's only the government which is interested in providing me the information about services I use and the environment that I live in. An implicit monopoly of information.

But I want to ask you this question: can you come up with at least one monopoly that existed naturally for a substantial period of time without any government support for it and without anyone being able to challenge it?


The government performs the function of a referee, and without it the players are free to make up their own rules.

You can only "vote" for a company with your dollars if you have choices, not if they assume a de-facto monopoly.

At least in theory you can vote for your government and effect change that way. This is why they serve a critical function.

Corporations are profit driven. Governments are election driven. These two dynamics can work together to create a reasonably good outcome. Libertarianism promotes corporate interest in isolation of regulation, leading to a run-away system of chaos and virtual anarchy.


So you still haven't come up with a monopoly example. Can you prove that monopolies would exist in a completely free market?


Think infrastructure. Consider utilities, internet, interstate highways or any similar circumstance.

On a practical level, I don't see how these exist without government. The risk would be astronomical for a private entity to undertake such a massive investment that relies on negotiations with thousands of individual private property owners. However, if a private entity could pull it off, they would have extraordinary pricing power.

Not my idea of utopia.


Your argument comes down to "but who's gonna build roads?" which is somewhat of a statist meme among libertarians. In short, it's this: roads are built by private contractors hired by the government, those contractors are paid by taxpayers money. Government acts as a middle man, which, indeed, may be necessary to coordinate the project, however it holds an ultimate monopoly for the middle man. There's no reason why one middle man should exist to coordinate building all roads.

When you talk about risks in undertaking an investment, it means there might not be enough demand for something that the government does and so taxpayers in fact are investing in things not enough people actually need to justify the investment. Which simply means that the government is an irresponsible fund manager.


A good way to get a free marketeer to stop talking is to ask them to come up with a free market system that doesn't end up hopelessly stratified. I don't know whether they shut down, like a killer AI given an unsolvable problem, or start reevaluating their views.


It's hard to create examples of something in a system that has never existed.


He rephrased his question, and he shouldn't have, because his original one works pretty well. Can you name a single instance of a harmful monopoly that didn't either form or persist because of government backing?

No goalpost-moving this time.


Are you claiming that no one has ever possessed a local monopoly on a resource that produced negative consumer effects? Pretty laughable claim and clearly false on hundreds of thousands of counts. Or are you ready to turn your back on basic property rights as an evil cooked up by the big bad gubmint?


Are you claiming that no one has ever possessed a local monopoly on a resource that produced negative consumer effects?

Such monopolies either (a) aren't really monopolies, despite people whining that they are; (b) don't last; or (c) have to be backed with collective force of some sort.

Pretty laughable claim and clearly false on hundreds of thousands of counts.

Then I'm sure you'll have no problem naming a few, in between the guffaws.


Windows

And who's moving goalposts? That seems like a random, out of nowhere comment.


Windows' monopoly relies upon state-granted monopoly powers (patent/copyright). http://archive.mises.org/17366/apple-vs-microsoft-which-bene...


The entire PC compatible movement would have been crushed by IBM mercenaries going garage-to-garage in a free market fantasy land. Bill Gates, coming from a wealthy family, would be the only one who could afford his own mercenaries.


Nobody asked about what "would" have happened. That's what I meant by goalpost-moving.


It's like we're talking different languages.

You said: "Can you name a single instance of a harmful monopoly that didn't either form or persist because of government backing?"

One possible answer: Windows

You asked a question. You got a suitable answer. What more is there to say? What is this "goal post" you keep referring to?

I know you're eager to roll out the "copyright and patents are government-granted monopolies" line. But those don't work as monopolies in comparing governments to contracts in imaginary free market systems.

Remove government, and businesses would develop their own systems like copyright and patents, which they would privately enforce through contract, private prisons, and mercenaries. You still end up with a Windows monopoly because Bill Gates started life with a lawyer and banker for parents.

You replace one system with another that's almost identical, but small businesses lose any kind of recourse if a bigger business decides it owns a particular creation.


I actually agree with you, in that any sufficiently dominant corporation is indistinguishable from a government.

However, even if you set aside the question of its dependence on government-enforced IP rights, Windows is a bad example of a harmful monopoly, IMHO. Network effects make the calculation of net "harm" very difficult. Thousands and thousands of entrepreneurs (to say nothing of Microsoft employees) have become millionaires thanks to those network effects. Good things have happened in the world of personal computing that could never have happened in a fragmented world where dozens of vendors were pushing their own 6502 or Z80 boxes with proprietary BIOSes and OSes, or where Linux geeks worked day and night to make sure ordinary users would never be able to accomplishing anything on their own. Somebody had to step in and harness all of those creative forces in a productive direction. Frankly, I'm glad it was Bill Gates and not Steve Jobs.

Where I think you are wrong is with your supposition that "IBM mercenaries" would have roamed around like mafiosi, crushing the PC revolution. That's what I call moving the goalposts, or more properly, a strawman scenario. You won the argument in your own head by inventing a fictional world where you could claim to be right.

Remove government, and businesses would develop their own systems like copyright and patents, which they would privately enforce through contract, private prisons, and mercenaries.

I'd need to see an example to buy this. (Don't use Somalia or any other failed Islamic states dominated by other governments' proxy warriors.) We don't live on the set of Blade Runner, at least not yet.

I guess the closest example I can think of would be the medieval guild systems. Those aren't coming back, not as long as capital can flow freely between nations and individual actors are gaining rather than losing influence.

You replace one system with another that's almost identical, but small businesses lose any kind of recourse if a bigger business decides it owns a particular creation.

The patent system is doing a better job at that than your violin-case-toting IBM thugs ever could have.


> I'd need to see an example to buy this.

The system where that's real is as real as whatever free market system exists in your head. I don't think football metaphors (goal posts) will work until we agree on what the stadium looks like.

Until that happens, all we can do is talk past each other based on our own ideas about what "free market" means. A free market to me is one where the strongest invariably crushes anyone weaker. Anything more restrictive would require government or cultural norms. Moving to any more or less restrictive system requires changing at least one of those things. Any discussion that doesn't see that isn't going to produce anything practical.

And I'm not interested in discussing hypothetical markets, so I'm going to go do something else and ignore this subtree.


I answered this down here: http://news.ycombinator.com/item?id=4799229


>However, if I drank radiation laced water because a chemical company was disposing of their waste in my backyard and I didn't know, Libertarians would tell you it's your fault for not having the proper testing equipment or paying a company to run these tests for you.

This is simply false. Pollution would be treated as a tort. Now, you can't set up a home near an already existing, noisy club and complain about noise pollution. If you set up a home in a quiet and unpolluted area, you have a right to maintain the structural integrity of that area.

The details of what the maximum allowable punishment for someone coming along and polluting your land is is a bit of an advanced subject. That you have no recourse except to test your soil for pollution and clean it yourself is just incorrect.

>The same thing shakes out for food. For employment. For air travel. For basically everything you do you're assumed to have done enough research to know the risks you're exposed to. Libertarianism also makes the enormous assumption that a safe option will always be available.

Again false. Libertarian law is all about what to do when people violate others' rights. There's also certain reasonable assumptions of safety which consumers must be able to make. For instance, it would be a crime to sell some sort of food, presented as safe to eat, which was really poisonous. It would be a crime to sell tickets for a plane ride and fly with an untrained pilot or a plane which hadn't been checked for safety.

>Since there's zero protection from monopolies in a pure Libertarian society, they will naturally occur, and the results will be overwhelmingly negative for all but a handful of people, the proverbial 1% if that.

If you had any genuine concern about monopolies, you would have concern about your government. A state is a territorial monopoly on the legitimate use of violence, the ability to arbitrate disputes and to assign property rights.

State-granted monopoly rights (IP for instance) is different from a hypothetical "natural monopoly". A natural monopoly would not be problematic because all it would mean is that one company is so successful at meeting the demands of consumers such that no others care to or are able to enter the market.

>Libertarianism also as much as endorses discrimination as it sees it as your absolute right to decide who you provide goods and services to. Idealists would have you believe that non-discriminatory companies will always out-perform their discriminatory counterparts, but history has proven the opposite. If people are racist, they will certainly pay a small premium for service that reflects their views.

The other side of the coin to rights of free association, or what you would disparage as legalized racism, is that the tolerant of is would be free to discriminate against racists. As it is now, we will never root out racism because hardcore bigots are afforded state subsidies and not cast out of civil society.

If people are not racist—and I would say the vast majority of Americans are not—why wouldn't they also pay a bit extra for services which reflect their values? If most people are concerned for the poor not receiving medical services, why wouldn't they pay a bit extra to receive services from a Samaritan hospital which never turns away the poor?

You can't just take a look at a small segment of the worst of humanity and pretend they are the majority because it is convenient for your argument.


> This is simply false. Pollution would be treated as a tort. Now, you can't set up a home near an already existing, noisy club and complain about noise pollution. If you set up a home in a quiet and unpolluted area, you have a right to maintain the structural integrity of that area.

Let's analyze this situation with some economic rigor. What you're invoking is Coase's theorem. The idea that if you create property rights in what would otherwise be externalities, and let people transact freely in those property rights, the end result will be an optimal allocation of rights that maximizes value.

Now, I'll get to the punchline before going further in depth. It's deeply ironic that libertarians invoke Coase's theorem in this context, because Coase himself used smoke pollution as an example of a situation that called for regulation rather than the creation of property rights.

You see, there is an important assumption underlying Coase's theorem: transaction costs are zero. But in the environmental context, transaction costs are not zero, and in fact they totally dominate the relevant transactions. A polluting coal plant might cause $1,000 of health damage to each of 100,000 people, and it isn't worth any of their whiles to litigate such injuries. Yet the cumulative impact of such activity is large--the coal plant is essentially "stealing" $100m, but getting away with it by stealing a little from a lot of people at once.

Multiply that by the hundreds and thousands of pollution sources that have a measurable impact on each person, and what you get is an unworkable system. And Coase himself recognized this and said as much in his papers.


>Let's analyze this situation with some economic rigor. What you're invoking is Coase's theorem.

You're attacking a strawman, and I said nothing about the Coase theorem. For some criticism of Coase by a libertarian economist see here from page 4 of the PDF: http://mises.org/rothbard/lawproperty.pdf

I said, "Pollution would be treated as a tort." Nothing really special there because all rights violations would be, viz. we do not believe in victimless "crimes against society".

I then was mentioning the idea of easement rights in pollution (for more on this cf. from 26 in the above PDF).

>A polluting coal plant might cause $1,000 of health damage to each of 100,000 people, and it isn't worth any of their whiles to litigate such injuries. Yet the cumulative impact of such activity is large--the coal plant is essentially "stealing" $100m, but getting away with it by stealing a little from a lot of people at once.

In common law tradition, people were able to sell their tort claims, no matter how small. Modern authoritarian law prohibits this, there are barriers to class action suits, and so on. We'd like to return to the common law tradition here, so if you are concerned about this, you ought to be on our side.

Besides the problem with a governments ability to simply be corrupt, polluters often pay fines to the bureaucracy rather than compensating victims. You are incorrect to automatically assign a $ amount to any claim of this sort. The punishment could involve at least a chance of death and who knows what all these minor health hazards might add up to.

Still, the impact of an individual polluter may be seen as trivial, but firms would be able to collectively pursue the torts after buying claims from the victims.

I believe in a continuation of good 'governance' after abolishing 'government'. I'm working on some interesting ways in which "municipal" service providers might utilize distributed torts against polluters into something resembling various "social welfare" programs we have today.


Rothbard is not exactly an libertarian economist he is an Austrian school economist, not every libertarian is an Austrian school economist. Although I'm sympathetic to libertarianism I loathe the Austrian school because of their unscientific methods. No need to answer to me about that, it's only my belief and of some others in the libertarian camp, Bryan Caplan for example.

My main problem with Ron Paul besides the fact that he never tried to approach libertarianism as something that is useful to solve pragmatic problems that exists today and tried to develop a confrontational attitude towards other people, he was someone who always chose tribalism instead of being a good politician, the racism in his newsletters and the fact that he always appealed more to the angry white male stereotype than to the common people, mom and pops of every ethnic group who are working to pay their bills and raise their children. That and the fact that he's a firm believer in the Austrian school.


Rothbard is clearly a libertarian economist and I never said that all "libertarian" economists must be Austrians. You might want to not talk about things being unscientific when you fail to back up your assertions.

It has been fashionable since the success of the natural sciences in the 1800's to attempt to apply the methods of the natural sciences to the social sciences. Concepts like "equilibrium" are applied incorrectly because a person goes on to striving for the next thing right after achieving the first and markets are in a constant flux.

On why mathematical economics is a failure, see here: http://mises.org/daily/3540


I said I have no interest of discussing anymore. I'm not here to build a thread pointing failures in first order logic in other comments, this was my opinion and it would be better if you just accept that I do not believe in the same things as you.

If you wish there are plenty of refutations of why the criticism of Austrian school about modern economics is misdirected, I believe pretty much of them do a good job, Bryan Caplan was right in almost everything, you need not to accept any of them of course, I respect you, but you'll need to know that I do not accept anything that comes from mises.org and do not read them anymore.


You're a steaming pile of fallacies and non-arguments. You have an opinion, congrats. Here's a couple refutations of Caplan:

http://mises.org/journals/qjae/pdf/qjae6_3_4.pdf http://www.mises.org/journals/qjae/pdf/qjae2_4_1.pdf

You're either incapable or unwilling to have a real discussion though, so that is just for anyone else who cares.


No need to name calling. I did not called you anything, lack of respect is not something that I encountered in many austrians but you're clearly one that does not respect people apparently, wish I am wrong.

As I said in the above post I am unwilling, I have more important things to do than entering in eternal ego wars on the net.

By the way: http://ycombinator.com/newsguidelines.html

EDIT: I was rude in this comment and if you felt offended I ask you to forgive me.

Either way my problem with Autrian school is that it try to rely too much on logic and methodological individualism, probabilistic CFD using some Monte Carlo methods, I'm not against first-order logic since I'm a mathematician by training and I think the Austrian use of it brought some useful and good insights into economics, my main problem is with methodological individualism, I think it does nothing to advance economics as a science, you're right that Economics is not Physics, but them ever in Physics we have Fluid dynamics and Heat transfer models that use statistics[1] because they are complex and a complete model is unforeseeable in the near future, maybe there will be a complete model, maybe not.

A macroeconomic model is just trying to approach a complex system in the same fashion which have an additional problem, it deals with humans, mind you that generally every researcher in neoclassical economics[2] is well aware that their models have some assumptions that breaks at some point, Stieglitz and Kahneman have shown some example and general equilibrium is a favorite target. It's also good to point out that not every economist is trying to use their models to recommend banks or governments what to do, Krugman made an essay in the past actually recommending economists to advise policy, not every economist is interested in this however.

I believe this is enough, if you reply I will answer one time but bear in mind that I'm not an economist.

[1]: or numerical methods, my PhD thesis was in CFD [2]: They all generally know about this: http://en.wikipedia.org/wiki/Criticisms_of_neoclassical_econ... Generally every


It's pretty pointless to talk to people who reject empiricism. They're nothing more than barbarians.


I actually thinks it's also pointless but sometimes I give a try to see why they think empiricism is more a evil than a good way to try to infer about the world, I edited the post to see what happens.


> Pollution would be treated as a tort

It's impossible in many cases to identify the source of pollution. For instance, suppose I'm a farmer and acid rain is damaging my crops. The source could be polluters hundreds or thousands of miles away. Proving that any specific polluter was the source of the pollution that hit my farm is simply not feasible.

The tort approach in essence says it is OK to pollute as much as you want as long as your pollution will be dispersed enough so that no particular victim can trace the pollution on their land back to you.

Another problem with it is that cleaning up pollution can be very expensive, so that it would not be uncommon for those polluters who can actually be identified sufficiently to be sued to not have enough money to cover the damages they cause.

The tort approach simply cannot deal with the problem. As Friedrich Hayek (one of the leading libertarian economists) noted in his book "The Road to Serfdom": "Nor can certain harmful effects of deforestation, or of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation by the price mechanism. But the fact that we have to resort to the substitution of direct regulation by authority where the conditions for the proper working of competition cannot be created, does not prove that we should suppress competition where it can be made to function".


"Pollution would be treated as a tort."

That's a very bold statement that needs some justification.

Take climate change. For the moment, I don't care if you believe in it or not: just take it as a given, because something like that is certainly physically possible.

Let's say for years many countries polluted the atmosphere with CO2. Over time, it substantially changes the planet's climate and causes untold trillions of dollars of damage to billions of people.

How do torts handle this? For one, who does the suing? Do we allow class action lawsuits with billions of people? What about countries that don't allow class action lawsuits?

What if one heavily-polluting country has for years funded propaganda opposing accurate science, and when chickens come home to roost it still insists that carbon emissions had nothing to do with warming climate? What if the legal system refuses the huge payoffs that would be required? What if the will happens to be there but the country just can't afford to pay for the damages it caused?

Is it even fair to levy taxes or fines on people to pay for something that's been going on for generations? After all, why should our descendants be forced to suffer because of our present day callousness and shortsightedness?

Should people who benefited from climate change be forced to pay more? How does one deal with the fact that everyone, to varying extents, helped cause it? Is it only people who were totally off the grid and carbon free who should get to receive compensatory payouts?


>What about countries that don't allow class action lawsuits?

Maybe you should take issue with those countries' laws rather than anarcho-libertarian law.

>What if the will happens to be there but the country just can't afford to pay for the damages it caused?

Sometimes we can be faced with a situation where a destitute criminal causes more damage than he will ever be able to repay. Insurance is a possibility in protecting victims faced with such a circumstance. I am not sure what else you think we could do though, or how this is supposed to be a valid objection to anything I've said, even granting for the sake of argument that climate change can be directly attributed to certain perpetrators.

Hold on a second though Al Gore. I am not so much a climate change denier as a believer in science. For any model in the natural sciences to have validity, that model needs to be able to predict. As much as it is repeated that the current science is beyond questioning, climate change scientists still lack a single accepted model which is able to predict anything.

If you had one then we might be able to attribute a certain amount of damage to one individual from their seaside home being washed out to myriad CO2 emitters. Certainly this would be a massive clusterfuck if you actually had valid science, way more than a region would have to deal with sorting out the horrible situation with typical pollution governments have caused, but I can't give perfect answers on how people might sort this hypothetical out.


You're right in saying that the libertarian would say that a person is responsible for their own actions, but your argument lacks completeness. A company which pollutes water at large would suffer the consequences of its own actions. People aren't stupid; they'd notice the contamination and act.

Your argument implies a lack of faith in a single person or a small group of people to effect change. Do you believe that only government has the ability to keep our water clean?


> People aren't stupid; they'd notice the contamination and act.

Is this behavior guaranteed, and would the public necessarily choose to stay informed? Free markets are dependent on rational, informed actors; humans are neither rational nor informed 100% of the time. Some other thing would have to step in (an organization, a government, whatever) at some point.

> Your argument implies a lack of faith in a single person or a small group of people to effect change

If I owned the polluting company, I would likely have much more power than the poor sap I'm poisoning. Money seems to speak louder than actual words. Compared to some tycoon, a normal person is basically insignificant and is much less likely to cause any change.

> Do you believe that only government has the ability to keep our water clean?

I don't know what the right answer is, but to put it bluntly, your approach seems like a deeply flawed one to me.


Personal stewardship of nuclear weapons.

Please don't "prove to me how it actually would work". Just think about it a while for yourself, and learn to accept that there's limits to the philosophy. Libertarianism is ultimately a heuristic, and you do it no favors by handwavingly claiming that you can prove desirable large scale behaviors based on a small set of axioms.

Signed - a libertarian.


This is a simple one, just watch Dr. Strangelove.


This has been what bugs me about gun rights people. The argument about personal safety is fine, but the people who want everyone to be armed in case the government decided to show its true colors or something? Um. You don't want a firearm. You want a tank.


I dunno, there's some folks in Afghanistan and Iraq who did pretty good for themselves against our high-tech arsenal with just some old automatic rifles and homemade explosives. Vietnam, too.


All of the insurgents in these conflicts have been armed by third parties.

The Vietcong got weapons and supplies from China and Cambodia, the Afghani insurgents got weapons and supplies from the US to fight the Soviets (including explosives [1]), and the current Iraqi insurgents get money and supplies from extremists all over the place, mostly from the Emirates (afaik).

All of these fighters did not build their own weapons and skills out of nothing.

[1] "Other CIA specialists and military officers supplied secure communications gear and trained Pakistani instructors on how to use it. Experts on psychological warfare brought propaganda and books. Demolitions experts gave instructions on the explosives needed to destroy key targets such as bridges, tunnels and fuel depots. They also supplied chemical and electronic timing devices and remote control switches for delayed bombs and rockets that could be shot without a mujaheddin rebel present at the firing site. " http://msuweb.montclair.edu/~furrg/pol/wtc/oblnus091401.html


None of which is relevant to the original assertion, which was that defeating a modern army requires heavy armor (which we can use for discussion purposes as a proxy for the complete spectrum of modern, high-tech weapons) rather than small arms. The Chinese weren't funneling tanks to the Viet Cong, and the US wasn't funneling A-10s to the Afghan insurgents. It was small arms and man-portable weapons like mortars and MANPADs.

And while those armies did eventually get arms supplies from abroad, in their early days they had to improvise. Viet Cong fighters early in that war, for instance, had to scrounge old French weapons or even homemade shotguns fashioned from galvanized pipe. The Iraqis' first IEDs were jerry-rigged artillery shells lifted from abandoned army depots. The foreign arms pipelines generally don't open up for a revolutionary army until it's proven it can fight and win at a small scale on its own.


Turns out rifles and IED's are pretty effective. Tanks aren't worth shit in a guerrilla war.


No, you want black markets and cryptography.


That's actually kind of a fallacy. Gun lovers don't want guns because they are scared of the Government. They want guns in case the Government fails. To protect them that is.


Let me preface this by saying that I'm actually pretty much onboard with a lot of the Libertarian policies that I've heard. Like anything, of course, I think it can be taken too far. So, when you ask for a "very specific example", this is the sort of thing that comes to mind:

- City governments have health inspectors that check local restaurants, and food-product companies to ensure they are using good ingredients, that the equipment is clean, etc. In a libertarian world (at least, certain versions of one) this practice would not exist. Now think what happens when a Monsanto executive realizes that paying the occasional legal suit is cheaper than keeping their packing plants clean and disease-free.


When you tackle a certain problem and try to apply a libertarian framework to it, odds are you have to check if it's an implicit monopoly that you're dealing with and go from there.

In your particular example you're dealing with a city government monopoly for health inspection. It's not free and is paid by citizens in the form of taxes. If there was no government and citizens believed it is in their interest to have such an inspection, surely you'd have at least one, but possibly two or more competing with each other and financed by consumers voluntarily. When you have a government, what you have is a monopoly which is, apart from all other evils of monopoly, much more vulnerable to corruption. If a government official is bribed and it is revealed, he may go to jail, but the agency itself stays in business. Which means it has almost no incentive whatsoever to prevent corruption among its employees.

Finally, government doesn't really ask people if they need such an inspection after all and if yes, how thorough the inspectors should be: maybe businesses in this town are exceptionally honest, or maybe, on the other hand, they are exceptionally sloppy. So what you have with a government in place is a monopoly which business operations are based not on the actual demand for its services, but rather on some metrics that government officials came up with, which may or may not be useful.


Libertarian belief system fails because it bases it's ideology around the idea of ownership.

You explain the problem pretty well yourself when you say that we have to think in the framework of libertarianism.

Thats like saying you will believe in Jesus once you let him into your heart.


He explained this pretty well. How come most ecommerce websites have "trust badges"? The government didn't need to create an agency to rate web site security, but yet such a thing exists.

If people wanted a health inspection organization to rate restaurants it'd exist. Since the govenrment already monopolized that field it doesnt. Okay, it sort of does, it's called Yelp.

Anyways, the point is pretty clear, we have all sorts of "trust" systems on the Internet to verify everything from privacy (Truste) to security (Verisign, etc.). People can create these types of organizations on their own without government and will if they actually do something useful.


There is a big difference between digitally world and the physical world. Ignoring that is the biggest mistake that is being made here.


Seriously? You don't think it's possible for 3rd party accreditation firms to exist in the physical world?

Have a look at: http://www.bbb.org/


The discussion is way way bigger than that.


Ah, sorry I was actually confusing 2 separate comment threads. :-/

I see your point.


I don't believe you gave any examples of that, what you did what put forward a postulate with very little weight.

With respect to health inspection. The problem is that most people don't care about health inspection as long as they don't get sick.

I.e. Yelp is useful for detecting whether people get food poisoning perhaps. It is not useful for detecting when 25 year old meat is being used which it actually is some times.

Detecting that takes quite a lot more effort.

So again the internet is good for many things and is able to disrupt a great many areas and already have. But don't make the mistake of confusing technical disrupting with political disruption.

I don't understand what me working at Square has do do with anything.

I believe in as little a government as possible. That does not mean that I believe that there should be no government at all.


My point was, 5 years ago no one imagined a concept like Square would exist. Just because you can't imagine a nongovernmental organization that serves the same purpose as local health inspectors doesn't mean it's impossible to have such a thing.

On the contrary, quite a few similar organizations do exist, but only when a government monopoly doesn't kill competition in that space. For example, who in the 90s would have guessed that something like TrustE would exist. It's not that far fetched to imagine that if government wasn't policing restaurants a private organization could exist to provide such a service. Yelp doesn't do that because it's not their mission and no one is going to make that their mission since the government already monopolized that job.

I'm not saying we should have 0 government either, but if we're not willing to question the necessity of things as trivial as local government health inspectors then where do we draw the line?


Man, isn't it easy to explain things in a world where there are no transaction costs, no information asymmetries, no externalities, and no collective action problems?


I was in china for a month and had a great time eating at local restaurants that weren't monitored by health inspectors.

Most of the developing world does not have health inspectors monitoring restaurants because it's not that important of a thing to do.

The lack of food regulations in China made it possible for lots of amazing restaurants to exist because local people don't worry about regulations. If they want to sell you food, they just do it. Somehow, society manages to exist in this manner and it's actually quite nice.


In China far more people die from eating food laced with toxins than do in countries with food inspectors.

Your argument is totally absurd.

So many people in Africa are dying of AIDS, malaria, and other diseases that have long been cured in western society, near apocalyptic levels of death by European standards, yet the population is growing and commerce is going on. Are you suggesting that this situation is "quite nice"?

When you eat at a restaurant that isn't expected you'll probably live, but if you die you'll just be a statistic. Is that any way to run a society?


What does AIDS & malaria have to do with food inspectors in the US?

In China, far more people die from a lot of things because the majority of the country still lives in poverty. Lack of government regulation is why they are one of the world's fastest growing economy and economic growth is the main engine for solving their health issues.


China's economy grows so quickly because of the gap between China and the developed world. People will demand regulation as they gain power and awareness of the abuses that come with rapid growth.


There are poorer countries than China that are not growing at their pace. Your claim implies all developing economies should be growing because of the "gap" between them and developed countries. In reality, most developing economies are struggling to find a path to growth.

You're perhaps right, people will one day "demand regulation" because that's what happens when countries get so wealthy that politicians can't pander on bigger issues and instead start making big deals out of smaller ones (i.e. we'll protect you from unhealthy restaurants). Not to mention, like all organizations, governments fight to continually grow. Unlike corporations, governments can't go out of business (easily) and have the support of misguided do-gooders.

Europe is going through this right now. They developed before the United States and they are declining before us as well due to the excess of government.

Finally, to claim economic growth in China is "abusive" is to show total disregard for the poverty of the people living in the country. China is still an incredibly poor country and economic growth is helping move millions out of poverty every year. Would you prefer slower growth and more poverty?


Why do you think unconstrained capitalism is the only way to bring a country out of poverty? You sound like an ideologue.


I never said that. Please read: http://en.wikipedia.org/wiki/Straw_man

What's the point of commenting if you're just going to name call and divert attention from the original conversation using straw men?

If you really care about people and what's best for society you'd act differently. Granted, 2 people chatting on HN don't matter much, but why even to comment if you don't give a damn about anything other than protecting your current set of beliefs?


You accused me of strawmanning and strawmanned my comment in a single post. Congratulations.


You did strawman. I never said capitalism should be unconstrained. I said a lot of things but nothing to that extent. Instead of responding to what I said, you created a straw man.

Just to clarify:

"A straw man is a type of argument and is an informal fallacy based on misrepresentation of an opponent's position"

You misrepresented my position. I chastised you for not responding to what I said, but that is not the same as misrepresenting your position.


> You did strawman

Nah


> In China far more people die from eating food laced with toxins than do in countries with food inspectors.

Citation please...


I have one Chinese friend who married a Chinese American and had a child with her. He then got a job opportunity in Shanghai and took it, leaving her in the US with the child because the food safety is so bad in China. Knowing nothing about the particulars of food safety in China, I thought this was insane. I brought it up to two other Chinese born coworkers, and they thought it was reasonable to raise the child in the US because of food safety concerns.

Briefly searching around the net, the food safety in China does seem very scary.

http://en.wikipedia.org/wiki/2008_Chinese_milk_scandal http://www.nytimes.com/2012/08/18/opinion/chinas-corrupt-foo...


Briefly searching around the net, anything can be found to be very scary.


Spotty enforcement isn't the same as lack of regulation: http://en.wikipedia.org/wiki/Food_safety_in_the_People%27s_R...


My family hails from a developing nation. People get sick eating restaurant food all the damn time.


That sounds strange. Why would I eat where people are getting sick all the damn time? Is the alternative (avoiding restaurants) worse?


>Now think what happens when a Monsanto executive realizes that paying the occasional legal suit is cheaper than keeping their packing plants clean and disease-free.

The maximum allowable punishments under libertarian law would be very harsh. Endangering swaths of people's lives could result in that executive's death. It wouldn't be just a matter of paying off a small bribe. For details on the theory of proportionality, see this PDF from page 12 especially: http://www.walterblock.com/wp-content/uploads/publications/b...


> I challenge you to give me one very specific example of how something is not going to work in a libertarian world and I'm going right here right now to prove you how it actually would work

What do you mean by "libertarian world"? Libertarianism is a spectrum, so it's hard to give examples without knowing what specific kind of libertarian world we are discussing.

For instance, there are some libertarians who say there should be NO government. Everything should be handled by markets and private property rights. To those libertarians, my example would be dealing with crime. For instance, suppose you come home and find that a crime has been committed against you--perhaps something of yours has been stolen, or a family member has been killed.

You call a police company (one of many competing private police companies) and hire them to investigate the crime. As part of their investigation, they determine that they would like to talk to me, and that they believe important evidence is in my house.

When they knock on my door and ask to search my house, I'm going to tell them to go away (and I'm going to back that request with force--both my own guns, and the guns of the private police force I have hired to keep trespassers off my land).

Oops. With no government, who issues search warrants and provides the force to execute them?

I've seen various attempts to resolve this problem, but none that would actually work, where by "work" I mean achieve the outcome that they are intended to achieve.


Your example is the one that was cracked by David D. Friedman, I recommend you watch the part of his talk discussing the exact same case you mentioned: http://www.youtube.com/watch?v=yXWFWIM8OCI#t=620s


I've seen that argument before. It fails, because I'll simply hire a private protection agency that does not have an agreement with your private protection agency to go to an arbitrator when the two agencies find themselves representing opposing clients.


It doesn't fail. You're assuming that one such agency would exist. In reality, violence is prohibitively expensive. No agency would stay in business for too long if it constantly engages into conflicts on behalf of its customers. Prices for its services would go up, while demand would go down. Also, savvy competitors would team up and contribute to destroying this nasty agency as well, because it hurts their peaceful business.


> Also, savvy competitors would team up and contribute to destroying this nasty agency as well, because it hurts their peaceful business.

You realize that's what a government is, right?


"I challenge you to give me one very specific example"

I see your challenge went mostly unanswered. Unfortunate because I really would like to hear from the "Ron Paul is crazy" crowd since this is the first I've heard that such a crowd exists. Whenever I hear Ron Paul speaking he sounds very smart, educated on the topic at hand, and possessing of a much deeper insight than most.


Explain how environmental protection works without regulation, taking into account negative externalities as well as transaction costs.


Two ways: first, people do not currently value environmental protection. When the environment deteriorates to a certain point, people will be motivated to do environmental protection in the absence of regulation.

Second, allow lawsuits for damage to property resulting from pollution. There could be a neat little lawsuit right now: NY and NJ residents vs. 5 biggest polluters in the world, on account of Sandy and the scientific evidence that Sandy was very much a result of AGW. (But then, it should be noted that lawsuits decided by courts is a governmental function.)


Your explanation ignores both externalities and transaction costs, not to mention more subtle things like information asymmetries and cognitive overload. You can't just ignore the parts of economics that don't fit into your ideology.


> Your explanation ignores both externalities and transaction costs

Well, handling property damages in court is deterring "tragedy of the commons" by making putting the commons-over-user at financial risk.

> ... more subtle things like information asymmetries and cognitive overload.

You pay someone to give you information. We do this now: our taxes fund the EPA and they give us information.

> You can't just ignore the parts of economics that don't fit into your ideology.

I'm not a libertarian. To the best of my understanding, there are some things that really should be done by the private sector and not by the government (airport security, for example). There are also things that really should be done by the government and not by the private sector (the trend of privatizing prisons disturbs me).

You asked a question, though: how would a libertarian society's environment be protected. I offered up an option.


My point is that he libertarian approach is non-sense.

You have a market failure: pollution creates negative externalities and are over-produced in a free market.

You use one common solution to market failures: create property rights that can be protected by litigation.

You now run into another economic problem: Coase's theorem only guarantees efficient outcomes if transaction costs are low. The cost of litigation to enforce injuries as diffuse as environmental injuries would be huge.

You also run into another problem: it's nearly impossible to track injury resulting from pollution to a source once it's out and mixed with all the other pollution.

The libertarian approach runs face first into the brick wall of the very economic theory it's based on.

The sensible solution, as Coase himself noted, is a regulatory apparatus to stop pollution before rights are violated. As a lawyer I'd love the litigation free-for-all that would arise in the libertarian scenario, but it's just an unworkable approach. The fact that it is repeated so much is a triumph of ideology over rationality.


About the transaction costs issue... how do class action lawsuits rate in terms of transaction costs?

I'm with you that the libertarian approach is somewhat worse on the effectiveness scale than what we're capable of doing in our current system. But I'm not going to go so far as you and say it's nonsense.

A current issue in my area (Minneapolis metro area) is 3M's PFCs contaminating ground water in Lake Elmo, Oakdale and Woodbury. 3M released these chemicals into the area starting in the 1940s, when their health and environmental effects were not known. Regulation would therefore not have helped in this particular case.

The court system is working, though: the State of Minnesota is suing 3M for damages, and 3M is engaged in clean up. Note that this lawsuit is not alleging an infringement of regulations (at least, not to my knowledge), but instead is focused on 3M having negatively affected property regardless of intent.

This is one example of the court approach working (I've got my fingers crossed that 3M's gonna lose).

My point is, framing it as a property rights issue and handling it in the courts is a helpful thing and not nonsense.


A lot of the "privatization" today is no-bid contracts given out to corporatist entities. Nothing like today's situation would exist in a libertarian society, also because so many prisoners are drug offenders. Unfortunately this scan is kind of bad, but this is an excellent book on various topics on privatization: http://www.scribd.com/doc/64560944/Benson-1990-the-Enterpris...


Ugh, I hate haggis.


OK, I'll grant you that, barring the last paragraph which is flame-baity and I'm not about to take the bait.

Suppose Ron Paul is not willing to compromise on his libertarian principles. Wouldn't he still make a good president considering that there are "checks and balances" and he wouldn't have dictatorial power? I mean there are so many politicians of various denominations out there and none of them that are of any significant power are libertarians - all of them are essentially "compromisers".

Having a diehard libertarian of influence in such an environment can't be bad for the country. Somebody to look after the liberties. To raise hell every time some commercial interests try to impinge on yet another one, you know.


> where corporate interests never trump personal liberties

Corporations are a construct of government. So yes, if we limit the power of government, corporate power will be limited too.


? explain your point. you are saying than in a full libertarian society there would not be any corporation? i say there would not be any USA, nor society.


I guess what he meant is that in a libertarian society corporations would not be able to lobby the government for special (monopoly) rights and privileges - because there would be no government to lobby. Corporations would have to rely solely on consumers to generate profits by providing services consumers want. And if they fail to do so, they'd go out of business and no one's gonna bail them out.


We have a lobby system in place. Why would the world be any other place than upside down? You've got a tobacco vote in the House and John Boehner is handing out checks from the tobacco lobby. Really?


Let's listen to some things Paul says and does:

• Has no clue how the banking system works. Even the Cato Institute called him "incoherent". http://www.politifact.com/truth-o-meter/statements/2011/dec/...

• To lower the cost of health care he says we need to increase competition by increasing the availability of quack medicine (specifically homeopathic medicine) over science-based medicine. http://www.ronpaul.com/2009-09-24/ron-paul-we-need-true-comp...

• Has repeatedly introduced legislation to reduce the scope of the First Amendment's establishment clause so that it would not apply to state and local government, and to remove Federal recognition of a right to privacy. http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.539:

• His budget plan proposed immediate massive cuts in research in science and medicine, and didn't have anything allocated for the National Science Foundation or NASA. Also immediately eliminated programs for the poor (specifically the woman, infant, and children supplemental nutrition program and the low income home energy assistance program). (No cite, because his site appears to have taken down the page that had the budget plan).

• Voted to block the USDA from even considering the possibility that there might be climate change and trying to figure out what impact that could have on the US food supply and the mission of the USDA. http://tinyurl.com/albm229 Here is what Paul wanted to stop: http://www.ocio.usda.gov/directives/doc/DR1070-001.pdf

Sounds like a crazy guy to me.


So, he's crazy because he doesn't want to regulate things. You believe homeopathy is bullshit - fine, I agree with you. We can campaign against it and inform people it's bullshit. But you and I have no rights to tell people what to believe and how to spend their money.

I would like to specifically talk about climate change, though. I don't want to question the legitimacy of the claims that it's happening - to the best of my knowledge it is. However, people somehow assume it's definitely a bad thing, which is simply not true. Climate may indeed change in one place and make life of people more difficult, while it may also change in another place and make life more prosperous there. No scientists I know of can predict what effects exactly and on which places climate change is going to have. It seems to me, people who are afraid of climate change simply want to preserve the status quo. Not a bad thing - everybody wants to protect their life and assets. But we must recognize it for that - an attempt to preserve the status quo, not save the planet for the greater good.

Back to Ron Paul: he may not be the guy I can agree 100% of the time on everything, but then you can never do that with anyone. Before trying to assess why he voted for this or that, one should understand the reasons why he did so. For instance, he voted against net neutrality, but not because he believed internet shouldn't be free - he believed the government itself cannot make it free, but competition can.


None of what you say about climate change is an argument for ignoring it, which is what Paul wanted the USDA to do.


Libertarianism is just as much a patch-work of different beliefs as any of the party ideologies. There is a huge internal inconsistency, for example, between it's reliance on economic theories with its embrace of "natural rights" approaches to freedom of action.

Libertarians deeply want to believe that we live in a world where you can leave people free to transact freely in a free market, and that will maximize total value. And economic theory tells us that isn't true.

Once that ideological purity is lost to brutal reality, libertarians are stuck fighting in the mud like the rest of us: arguing over which particular bits of government intervention maximize value without much in the way of theoretical projections or empirical proof.


> Libertarians deeply want to believe that we live in a world where you can leave people free to transact freely in a free market, and that will maximize total value. And economic theory tells us that isn't true.

Libertarianism isn't about maximizing total value; not if you're intellectually consistent about it. Most libertarians see libertarianism as a moral imperative and respond to arguments about "maximizing total value" with "the ends don't justify the means".


There is a self-consistent version of libertarianism based on a moral belief in freedom tempered by property rights (which is of course a totally arbitrary premise). I disagree, however, that most libertarians feel that way, largely because of the huge emphasis on free markets. I think most are just utilitarians who are mistaken.


Lots of libertarians aren't intellectually consistent; I was just talking about the intellectually consistent ones who actually have a "libertarian framework" to apply rather than simply a generalized skepticism about government ;) I think we agree.


Most people seem to have good intentions but good intentions don't always lead to good results.

The intentions of laws with compulsory fees (taxation) and compulsory who marries who are based on good intentions (in the minds of those who create them).

In both cases, these good intentions are based on theft of basic rights. But, in the long term, how can you make society better off when your core beliefs are based on theft? ("Unlike both parties' ideologies, which are, indeed, crafted out of many different unrelated parts serving special interests.")

The "batshit crazy" ideals of libertarians is to base your good intentions on non-aggression: not theft.


Good thing someone brought the non-aggression principle up. Personally, I don't believe in it. I mean, I think eventually the society becomes smart enough to understand aggression in any circumstances is both costly and immoral. However, I also recognize that it's a long way to go there. I think before we get there, we'd have to rely on some sort of protection and the monopoly which government has to provide it cannot be a good solution. It is inconceivable how people hate monopolies when it comes to things like smartphones, airlines or even shoes, but when it comes to their own protection the monopoly is taken for granted.


Non-aggression is not no-aggression. To summarize, using my understanding, is that it is unlawful to "aggress" someone until they "aggress" you. Many cultures are based on this concept.

NAP allows for "retaliatory violence" (had aggression but as pointed out below is not the correct usage of the word aggression).

One of the difficulties, as you point out, comes when people don't realize that they are aggressing others. An example being when they attempt to limit who can get married to who (whom?).

Again, there are good intentions behind such aggression (limit the right to use marijuana to protect children) but the results of aggression seem to always lead to more aggression (creation of an illegal drug black market leading to instability in Mexico).


I think you're a bit confused about definitions. You seem to be using "aggression" to refer to violence, when it in fact refers to the initiation of violence. The NAP prohibits the initiation of violence, but not retaliatory violence.


True that.


It sounds like you do believe in the NAP. You just might disagree about how society can or should transition into one that follows it.


If taxation is theft, property is theft. Or in other words: what gives you the right to compel me to defend your property?


> If taxation is theft, property is theft.

Property can never be theft as theft only exists if property exist. You can't steal something if no one can "own" anything.

> what gives you the right to compel me to defend your property?

No one has a right to compel you to do anything.

However, you will act in your best interest. How about I pay you to defend my property?

Or, perhaps it is in both of our interests if we defend each others property. After all, if you let others steal my property, yours will probably be next.

This holds even more true for rights.


This comment is well intentioned but fails to compel any non-libertarian to consider Paul's opinion. It is true that Paul is unfairly (perhaps unjustly) portrayed by the media as, to put it plainly, crazy but whining about how unfair it is won't help matters.

Ron Paul's message places personal, financial and social liberty at esteem and condemns government encroachment on these liberties. His career as a congressman is consistent with his message which is saying more than can be said of any other politician. For these reasons, the man deserves to be heard and he deserves your respect.

The least anyone could do is read the actual transcript of the address--techcrunch doesn't do it justice.

http://m.washingtonexaminer.com/transcript-ron-pauls-farewel...


if a politician can be described in such terms at the end of a career (in no less a house of "compromise" than the us congress) his accomplishments are not over.


And after that, if you keep thinking critically about it instead of taking comfort in having a seemingly logically coherent ideology, you start realizing that the entire framework of libertarianism is batshit crazy and your initial intuitions were not actually that far off. This leads to a healthy distrust of ideologies in general, which is only a win.


George E.P. Box's law: "All models are wrong, but some are useful". The problem with libertarianism/anarcho-capitalism, marxism/communism, etc. is that they don't acknowledge that truth and want to extend their models of human behavior well beyond the scope of their usefulness, as if human societies were simple, linear phenomena.


"discharge Ron Paul as some sort of crazy guy without even listening to what he says"

Or they read enough of what he has said and found it abhorrent.

"composed of many different unrelated parts. Not true, Ron Paul ideas are ideas of libertarianism"

Libertarianism and the coming race war.


And even more people disparage him as a nutcase after listening to him.


A logical framework is worth exactly as much as the underlying assumptions. In Ron Paul's case, the soundness of those assumptions ranges from "obviously true" to "questionable" to "provably false" to "batshit crazy".




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