Misconceptions about libertarians

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My counter argument is that preferences are never homogenous, but rather exist with varying levels of similarity. As well, affected people would not live in a close together area, pollution is a large scale externality, which means we have issues such as the city of New York complaining about the behavior of some of the factories in its borders, as well as perhaps outlying regions, and there are issues if even larger scale externalities, such as those posed by global warming have merit for consideration.

Free riding would still be quite possible, especially given that we are not speaking just of small towns but rather large cities, and given that not all people really care much about the wishes of their fellows. The only means to enforce something so large would thus end up having to be coercive and emulate the very government that people are trying to escape. A home-owners association is in essence though a localized governing agency. The issue of free-riding is not those who do not care about pollution, but rather the people who do but don't want to contribute, and those are indistinguishable for all practical purposes (other than optimal levels of pollution and the distribution of costs vs benefits) from those who do care about pollution.

For the other method to work we would have to have pollution rights held by the populace, and that can also have problems as it would have to be some form of majority rule system and thus be similar to a government anyway because of the fact that there could always be Hippie Joe who hates all pollution and will refuse to sell his pollution right to anyone at any price, perhaps we could adapt systems to prevent the Hippie Joes but it poses a significant problem. Yes, preference falsification is a problem there as well, but there would not be free-riders at least.

Even hippies have a willingness to pay at a certain level of pollution, even if they do not say so directly. For example, if you asked the hippie, "How much would you be willing to pay to reduce pollution in your area by .5%, by 5%, and by 15%?", I'm pretty sure he'd give a number (it requires some honesty and rationality, but even if he is irrational, the question can be phrased in a way to get a legitimate answer, and giving "no value" would result in "value = $0"). If you know how much they are willing to pay to reduce pollution, it gives you an idea of how much pollution is valued by hippies (similar as to how economists calculate the value of human life by people's willingness to pay to reduce their mortality). Also, in some jurisdictions (England at one point in time was well known for this), landowners not only own their physical property, but some of the air above it. If the pollution is affecting the air, then their property rights would be violated, opening the door for Coase.

As for preferences never being completely homogeneous; I'll agree with you to an extent since even people who dislike pollution vary in how much they dislike it. However, you can calculate the social marginal cost of the pollution for this quasi homogeneous group by using their personal demand curves for pollution. Everyone living in the same city I'd say is relatively close together, and transaction costs (since everyone is in the city) should be lower. Even if other cities are affected, the associations from various cities could more easily "join together" and pull resources (transaction costs should still be low, since each individual affected area groups up locally). As long as the affected people and the imposer of the negative externality can be identified then deals are possible, even if they are across state or national borders. People will likely not to contribute as much as everyone else in their group of people who do not like pollution would like, but there would be no need for coercion (considering people joining this group are only people who are willing to pay to have less pollution). People who claim to dislike pollution, but are not willing to pay to have it reduced most likely are really indifferent towards it (they claim to dislike it simply because it is a low cost idea to hold, like many other ideas the general populace holds), and so it does not matter if they free ride. Similarly, if you ask someone "Do you really care about starving kids in Africa?" and they say they do, but do not actually give any money, then they don't really care as much as they claim to care. You could say since most people claim they care, everyone should be forced to pay to reduce this negative externality, but that seems to be a bit misguided and isn't Pareto optimal.

Well, yes, to pay for it, but not necessarily to be paid. I was criticizing the notion of property rights as pollution rights not the other way around. I know that property rights can be designed the way you spoke of, but my criticism is that if an individual is irrational then the nature of their property ownership can stunt progress for a given region if not kept in line by other forces.

No, you can't because you can't know their personal demand curves for anything without having a *real* market situation, which cannot exist in this instance. As well, transaction costs would be relatively high because you would have to organize a lot of people together, multiple groups of people. Also, your assumption of indifference isn't warranted because not paying for a good that other people can get for you is hardly necessarily indifferent. Your claims seem to be a bit fallacious on indifference because of the fact that we are dealing with a non-exclusionary good, where even actors who care can still reap all of the benefits by not contributing. Now, I recognize that people make claims that they don't act upon and that we know this via revealed preferences, however, this situation is different because it is explicitly not a market involving a rival, exclusive good but rather involves non-rival, non-exclusionary goods. Frankly though, starving kids in Africa aren't much of an externality(I mean, we could make a case that they are, but it would be unrealistic given how most people really only nominally care), and as well, Pareto-optimality is only possible if we tax each person equal to or less than what they would consider good, and frankly, it isn't the end all of economics, as I think more people would actually care about Kaldor-Hicks efficiency in this matter anyway given the damaging effects of externalities and the commonly expressed love for utilitarianism.

True, in situations where we have the unanimity rule or super majorities, then a single irrational person could stunt progress. However, we can't assume people are completely irrational, especially in the market (where many economists would argue actors are rational, unless you're some Keynesian), so there should some price the "irrational" person will accept (even if it is fairly high). Assuming the person is somewhat rational, he could not argue that zero pollution is the only level he'll ever accept.



I would suggest transaction costs would be low even with multiple groups of people. Look at the Boy Scouts, they have the national organization, local chapters, and individual troops. If the national organization wants to have a jamboree, the only transaction cost is they have to tell their chapters when and where. Similarly, if there are lots of local anti-pollution groups, they only need one "national association" to organize everyone else (I believe large protest groups work in a similar fashion), similar to Coase's theory of the firm.

It's true that some people may dislike the negative externality, but free ride and let other people pay to have it corrected. However, because they are unwilling to pay anything while others are willing to pay indicates they do not care that strongly about the externality. If they did care, but wanted to free ride a little, they would at least contribute a little bit to signal "they care" (since there would be a high social ostracism cost for claiming to care, but then free riding, especially if they are "called out" on it). One could argue that environmental organizations/lobby groups are seeking to enhance non-rival public goods, and we still see individuals supporting them (look how many people are members of the Sierra Club for example). It is those types of people who would likely be bothered by the pollution enough to pay to have it corrected; the rest only marginally care (so with a high enough level of pollution, even the marginal people would be willing to actually pay). Also, even without raised levels of pollution, people can learn to co-operate with each other in this scenario such as using tit-for-tat (which also helps get one out of prisoner's dilemmas). Even assuming it is a market failure, it is not sufficient condition for a government to interfere. If people claim to care, but do not, then taxing people will likely overtax, resulting in less of the externality, but with the costs of reducing the externality being greater than the benefits (which would not be Pareto or Kaldor-Hicks optimal). The public sector can over or under provide an externality, but so can the government. As for starving children in Africa, I didn't mean for them to be an externailty (although I agree it could be argued they are); only that it is an example where people claim to care, but do not really care if they have to pay some cost for their belief.

Kaldor-Hicks efficiency would apply more in the former scenario rather than the later, which I agree would probably be a more optimal solution.

Well, the issue is that in a given population we may have one individual who is irrational. Economists mostly speak of aggregate tendencies and define rationality in a manner that our "irrational" individual may still be considered rational despite a preference for no pollution over lots of money. Frankly, Keynesians will still argue that actors are rational and they belong to the neoclassical-Keynesian synthesis which combines Keynesian macroeconomics with neoclassical microeconomic foundations. Really though, economics is meant to describe most cases, and cannot possibly examine the most extreme and absurd ones.


The Boy Scouts are a relatively small group with a centralized leadership and only decentralization in pack structures. The issue is in setting up the original group as the transaction costs are highest when first creating an organization, especially one that can only do its job at a certain size. You don't need many people to start up some form of scout troupe but you do need a lot if you are trying to deal with an externality that exists on a massive scale.

You don't have to claim to care to benefit from those who care. Frankly, not every person who benefits from the environment or from parks or anything like that is going to be that vocal or necessarily trust any method of organizing things on a large scale, or even necessarily stay educated enough on these issues to know that their interests are threatened. Even then, do you think that most people are so social that social ostracism is likely to happen? There are so few activists out there that it hardly matters, heck, with the example of donating to Africa we have a clear case of people who may or may not have some care about the issue who are never called out.

Umm... no, those organizations ARE exactly that, however, that still does not support your point. My argument is not that all individuals will free-ride but rather that an organized effort towards a social good will carry with it high-transaction costs. The number of people in the Sierra club vs the number of people who benefit from the environment being about as good at the level it is, are not equal. Well, yes, the highly bothered will bear all of the burdens while certain groups of people will keep for themselves the benefits, and these goods will be produced at a level that is less than optimal and probably fail Kaldor-Hicks efficiency.

People could learn to co-operate, but it is hard to organize something on this large a scale. Heck, instead, let us just imagine that we are worried about the pollution due to cars, we still have sub-optimal solutions there too. I never argued that market failure was a sufficient condition for a government to intervene. As well, I would likely use a different criticism of government actions in this case, because I don't think that the government's major problem in regards to this will really be overaction necessarily, because the voting booth will also allow for truer preferences to be revealed than simple opinion polls, which explains why we don't really have a lot of foreign aid.

Well, basically, if we pick Coase, we prevent Kaldor-Hicks efficiency. I am not claiming that governments will necessarily get that either. I am also not claiming that the government is necessary or a better option. I merely expressed the idea that transaction costs would be relatively high meaning a solution might be somewhat difficult, and I think that even if we put this into practice we would see this as it would likely take some time for our solutions to really emerge if they do. Btw, are you a GMU econ student and if so, what year? I noticed in your profile that it said you were from Fairfax, also your responses seem relatively typical of the school.

Heh, as a matter of fact, I am a GMU econ graduate (just graduated last May, but I still occasionally free-ride grad courses there at night). What's your school? Also, don't neo-Keynesians still complain about animal spirits, indicating that there is still some belief amongst them of the irrationality of actors.

As for setting up the original group and transaction costs; you do not actually require many people to group together to deal with it, you only need a few who are actually willing to pay to see it resolved (there could be 10 people in this club, and if each pays $500, then the pollution externality could be reduced). Of course, it'd be cheaper for each individual if there were more people willing to pay, but if a few people value less pollution at $500 each, and they pay $500, then their expected benefits will equal their expected cost. Everyone being in the local area I'd say lower transaction costs because no one would have to travel far for the initial meetings. As for advertising, like minded people tell other like minded people they know, or also create one of those "meetup" groups on that website/Facebook.

As for my point about the Sierra Club, it is meant to show that some people will care strongly enough about a problem will not free ride and pay for it (even if others who care free ride and do not join their club). "Pollution externality Club" would be similar in the sense that while people who "care" free ride, those that do not free ride and really are willing to pay are still able to achieve their goal (of course more people probably benefit than pay this cost, but so long as the people who pays expected costs = expected benefits, then there is no problem).

If you join a club or all your friends are apart of a club that cares about something, and you claim to, but do not contribute, then I think you would be called out on it/ostracized. It would be like claiming to be a Christian and going to a church, but never tithing (pretty sure most sects are expected to do this). Assuming most your friends are also Christian, then there would be a high social ostracism cost for doing so. Of course, this concept does not so much apply on this forum considering many people are already somewhat socially ostracized.

As for market failure, you really only have two options to resolve it; government intervention in some way, or leave the market as is. Assuming you assume the market status quo is not the optimal solution, then the only other option would be some form of government intervention to correct this externality. Like a true GMU economist, I would not go by voter preferences in the voting booth because voters tend to be rationally ignorant or rationally irrational, both of which do not produce good economic outcomes (although their "values" might be captured).



I'd say if we picked Pareto optimality, we would prevent Kaldor-Hicks more than K-H preventing Coase. While Kaldor-Hicks doesn't have to be a Coasian contract, it is possible to have both as long as property rights are clearly defined and winners and losers of the externality are known.

Econ graduate? Interesting, I am definitely impressed. I am a sophomore, currently in-between schools but I did some work at the University of Oklahoma. I wasn't aware that they still called the animal spirits, but instead viewed the problems as issues of rational miscoordination. I could be wrong though.


I am not denying that this has some truth to it. We already have systems sort of like this, buying carbon credits or some such, I know Al Gore did a lot of that. The issue still is that it could potentially not be an optimal level. You are right though that the government may also not be at an optimal level either, and with that, I would have focused on rent-seeking behavior more so than problems with the voting process. Honestly though, I am really not trying to be the opposition to your ideas so much as a skeptic. I really think it could work.


Well, assuming that all of your friends are strongly Christian, then yes that *might* happen, however, people not going to church or not tithing at their church is relatively common. As you stated though, some people are already somewhat ostracized.


You are absolutely correct, the government is a flawed system with both failure at the ballot box and failure in the implementation. The issue still comes down to which of those 2 is the worse option, and you are absolutely right, government could be the worse option, and frankly the market option could become a lot better if our institutional norms were to use the market over the government.


Perhaps so, however, I was assuming that Coase would lead to Pareto optimality because of the fact that if contributions are by choice then all who contribute would do so because they would get benefit, therefore nobody loses and some people are better off. The issue comes down to the extent of winning and losing and efficient definition of property rights, essentially speaking market failure seems inevitable, but the issue is one of greater or lesser failure than the government's actions.

I'm having trouble explaining to others that not all Libertarians are Randroids, although we do agree with some of her ideas, especially pertaining to personal liberty.

I've tried explaining how I think anarchy does not work, and that when Nietzsche said "as little government as possible" that also means "as much government as is necessary." I freely admit the validity of taxation (sort of, I dislike the "double jeopardy" that often results) and social welfare, but the US spends six times as much as the chineese on 'defense', when that money could be better spent on domestic issues and alternative fuel sources. Hell, if we split the defense budget in half, we'd still be spending 3 times as much as china.

There really are no easy answers, and part of growing up is learning when to compromise and when to draw the line.

Why non-aggression?
Why not might makes right?

Define aggression?

Lying and obfuscation of information can just as well be used to get what you want out of a limited pool of resources.

Besides, any moral code within our present philosophical understanding of morality is based on subjectivity and defended by an authority, so "non-initiation of force" is just as subjective and morally relative as "hit the guy over the head when nobody's looking".

There seems to be some hard fundamental truths about people that you are avoiding. Why? Because the truth scares you?

Because the latter is the moral attitude of statism and libertarians oppose that.

It holds that "aggression," which is defined as the initiation of physical force, the threat of such, or fraud upon persons or their property, is inherently illegitimate. The principle does not preclude defense against aggression.

I am sure that there are issues of the interpretations of terms, especially fraud, but I think that the definition used here would probably be intentional violation of contract.


Not really. The issue is that information would likely get out on any given matter, especially where direct personal benefit was at stake.


Correct, so you might really consider libertarians to be altruists as we are opposed to such things, or perhaps merely enlightened egoists.

Why does it seem that way?
The normal syllogism is
1. People are irresponsible.
2. Government provides a center of power that enforces behaviour.
3. Government is desirable because it forces people to be more responsible.

and the libertarian syllogism is

1. People are irresponsible.
2. Government provides a center of power that enforces behaviour.
3. Government is undesirable because it gives power to irresponsible people.

both ideas rest upon human evil, it is just that one sees the government as also responsive to this evil and even worsening it. To this end libertarians often identify the government as allowing for rent-seeking behavior so that private organizations can usurp the public good, or as giving power to ignorant voters to oppress others.

Honestly, I really don't think that your criticism that we are avoiding hard truths about people, but rather that you assume we do because you disagree with our position.

Does it take a state it to have a moral attitude of anything goes? That's the definition of anarchy. Libertarians are by definition anarchists therefore anything goes is the logical conclusion of their position including initiation of force. Who's going to stop anyone from initiation of force unless a mercenary is paid to initiate more force to stop the original initiator?



That really depends on the existence of idealistic do-gooders and whistle blowers. But, why would such people exist if I can simply paid to have them bribed with the proceeds of my operation? Or, if they don't shutup I just have them killed and make it look like an accident?

Besides, people dying and getting maimed is no big deal if you can make it look funny and entertaining. Who owns the media that could make that psychological manipulation a reality?



Who's going to protect your enlightened egoism without force of arms? A small cadre of "enlightened" egoists?



Sometime it is. In other times it isn't. Another universal assumption that can be proven false by finding exceptions to it.

I never said that government cannot be evil, but I'm not stupid enough to say that government is always evil.



People are busy. A few minutes of sound bites is all they have to judge anybody or anything. Further, people are specialized to the extreme. A seemingly good sounding idea can in fact be psychologically tailored by anybody including private business to be more beneficial than it actually is. It may in fact be a very bad idea. Do people have the time to read through graphs and scientific studies that could just as well be compromised by honest scientists that are threatened into producing fudged data? And, even if they do, does their extreme job specialization allow them to understand things that are not in their job requirements to know?

Umm... not really the definition of anarchy. Actually, libertarians don't have a problem starting original initiators, they have a problem with being original initiators. The issue here is a definition of initiation, as it can be argued that the first person to act in violence IS the initiator period and those redressing the issue are not.


Consumer Reports, other magazines, independent bloggers, etc. Frankly, it doesn't require a lot of idealism or anything like that, but rather rational human behavior. Heck, in studies done by accountants on manufacturing firms, a dollars worth of external failures(where bad products go out to customers rather than being caught in the firm) ended up costing the corporation $26 worth of future sales and $10.40 of future profits. As well, many firms use word of mouth as a form of advertising. Frankly, I don't think you could bribe people enough and bribe enough people, especially given that you will have opponents who would love nothing more than to see your company fail and their succeed, nor do I think that such a large amount of murders associated to the corporation would be good either. Frankly, the notions you are getting into at this point reach the nonsensical as you would have to out-advertise opposing firms with a clearly inferior product for a long period of time, and if you were doing it for a short period of time, then in many cases you would have to worry about the costs of capital and the opportunity costs.


Not really, people get horrified by that crap really easily. Just the notion of this being a possibility would cause a massive outcry. Trust me, you are underestimating how easily people get scared.

We never said we would abolish the law and I don't think that abolishing the law is a libertarian position.


I don't think that libertarians exclude the theoretical possibility of a non-evil government, however, that does not mean that a non-evil government is likely and for all practicality, we have to refer back to the likelihood of things.


I agree with all of that. Not so much threatened scientists, unless you are speaking of politics deceiving itself; I would argue that the greater likelihood is bribed scientists. The issue is that libertarians don't trust democracy because of the power of private organizations and the folly of the voters, they don't trust oligarchies because of the potential for corruption, and they certainly don't trust dictatorships for the same reason, but they do trust markets. This means that they seek to diminish the political system's power and increase the market's.

I'm glad to see there are other people on the internet who have actually studied and understand some economic theory, awesomelyglorious (I haven't really had a chance to discuss such concepts w/ anyone since I graduated really, so this topic is fairly refreshing).

As for the other posts; Libertarians by definition are by no means anarchists (some are, but they are really called anacho-capitalists); many of them favor the views of John Locke on what government's purpose is (short version is government should provide protect private property via ensuring there are courts/law, internal defense (police), and external defense (national defense). Of course many also at the same time recognize this sometimes is too idealistic, and believe we should try to constrain the leviathan through various means (but that's more of a different topic).

Private property extends to one's life as well as to what they actually own, so murder and mayhem would still be illegal under most libertarian-ideal governments (consensual cannibalism on the other hand, maybe not).

As for people being busy and thus ignorant on many issues, this is what economists would call "rational ignorance". Because the expected costs are high and expected benefits low, it is perfectly rational to be ignorant on certain subjects. This applies to pretty much any area, not just science or politics (I'm rationally ignorant on how to build a care from scratch). In a politics and democracy, this is especially true and can lead to bad results. This is one of the main reasons why many libertarians tend to be skeptical of democracy.

I would be interested to know what you mean by "too idealistic"? Also, what "leviathan" is one supposed to be controlling.

You say it is for a different topic, and I am inclined to agree. I am, however, not interested in the methods of control; just in what exactly you are wanting to control. Your statement seems slightly vague.

For the most part, Universal Healthcare should be a staple of every developed country. The US is in the dark ages with regards to healthcare equality. State healthcare is by no means forced upon everyone. In Britain, there is the NHS and there is a private healthcare market as well.
Also, medical services and companies must be carefully regulated in all aspects. Just like most organisations. But this one carries a unique risk. The risk of providing drugs that either do little or nothing, or, much worse, cause irreversible side-effects, even causing illnesses and defects as a result of their use. It is totally unacceptable. And often, these drugs are rushed out before the long-term side-effects can be properly assessed. Safety and quality before profit and economic growth. Government constraints are neccessary to ensure fair and honest trade. For many reasons, including this, I am strongly opposed to Libertarianism.

You can always make your nihilist arguments either way, AG, but when it comes to reality, in your "ideal" Libertarian state, the masses would be oppressed, and it would become a modern form of Feudalism. Of course, you're probably ok with that. After all, you think that corporations should have the right to do whatever the hell they want and get away with mass murder... if it's in the best interests of the economy, just about And you also support unchecked and unlimited economic growth. Heck, let's consume all the resources of the planet. Screw the wildlife, we're superior to them, and thus we should crush them under the Iron fist of Capitalism! In fact, let's expand throughout the universe, in the name of the holy God of money!! !! Capitalism works, but the brand you support is not sustainable.

I disagree with that first assessment, I think that health care would be better with competition and free enterprise at the helm. I think that the US has done everything wrong, but not by promoting enterprise but more so by intervening poorly in it. Honestly, the most I would really find a good idea is providing an insurance voucher to promote everyone having medical insurance to deal with catastrophes. Honestly though, I think we'd pay more than the value of stringent regulations, and this is not because bad medicines don't exist, but rather because they likely will still get through, and honestly, I think instead of heavy regulations, we should put up systems where medical developers have strong incentives to look at the long-run welfare of patients.

Obviously enough, I disagree with that assessment of feudalism. Interestingly enough, I have disagreed with the idea that people should commit murders throughout much of these debates. I do support unlimited economic growth though, and that is because the core of economic growth to me will be developing better technologies, and because technological growth is unlimited, economic growth should be as well. Obviously enough, I disagree, and think that your ideas carry a lot of assertions with them on what my ideas are or will lead to. I am not an animal rights person, so you got one part somewhat correct.