On the Soapbox

Much better...

If that was your point it did indeed get diluted in the monstrosity of an entry. However, I found the longer post more interesting and through provoking. I suppose this is primarily because I would agree that the hard line stance is, while amusing to take myself sometimes, not one that is likely to attract public support. So I saw you saying that, agreed with it and promptly dismissed it in order to go on to thinking about the things that I don't yet agree with, probably because I don't really understand them.

As an example: I can see the validity of your concern about almost any externality example you can bring up today and am likely to be happy with most reasonable market solutions you may propose. My biggest fear is always how to define the future areas open to regulation. I cannot place my trust in future leaders following the spirit of a constitution. What is accepted today, say driving a car (source of noise in this example) through a residential neighborhood, could be considered a negative externality that must be regulated in the future. Eventually, it becomes possible, or likely if I listen to my own fears, that a small group with the right leverage will be able to enact some very silly pieces of regulation within almost any set of guidelines drawn up to setup the "right" way to regulate externalities. Care to suggest any reading material that might enlighten me on some good (or new and interesting) ways to form a government that minimizes the risk of future peversion, short of a required sunset clause on everything? (A good idea, but I don't think it is always enough, nor always the right path to take).

Hehe, yes, I know you agree with those positions, Jack. In fact, you, along with the Libertarian Party, are the first entities that come to mind whenever I think "hard-line libertarian". ;)

To address your point, I think that one of the key themes that I was trying to put forth, but that unfortunately got chewed up by that monstrosity of a post (it was late at night so I was in no mood to review and edit it :P) was that we need to acknowledge the role that government needs to play while at the same time applying the principles of small government (with some sound economics) to implement that role.

For every role that government plays (including ones that even Libertarians can agree on, like basic law enforcement), there are good ways to do it and there are bad ways to do it. The Constitution does not say much in the way of specifics in regards to law enforcement, aside from setting lines in a few specific areas that must not be crossed. How government implements the rest of the details lies in the finesse (or lack thereof) of governing. That we can dream up of bad ways to execute law enforcement does not mean that we should eliminate it. Likewise, dealing with things such as externalities is something that only a third-party entity with legal powers (i.e., government) can accomplish, and just because there are bad ways to do things (e.g., the current decree-style environmentalism) does not mean that we should just throw out government. Who else would have the sorts of powers necessary to implement the good solution, i.e., gasoline taxes?

I can certainly understand why what I am advocating can be very unsettling: by refusing to set the sorts of strict, absolute bounds on the role of government that hard-line libertarians advocate, the door is left wide open for the types of future abuses that you speak of. But by setting such bounds, we will be neglecting the roles that government needs to play. This is an imperfect choice: we run a risk of an over-regulating government on one hand, and we lose the power to deal with real issues on the other. Would you accept at least that this is an imperfect choice?

There are two things that are worth considering when making this choice. First is the precedent argument that I used earlier with ensuring the rule of law. After all, Jefferson advocated limited government, not no government. Second, while the Constitution spells out various specific limits on the implementation of government's role as the "night watchman", there are few limits placed in other areas, which is why we have earmarks. If specific guidelines (not necessarily Constitutional) are set to ensure that government executes its expanded roles in a libertarian spirit, then it would, I think, greatly mitigate the sorts of problems that we have today.

Finally, in an imperfect world, there is never a solution that is absolutely right. In the case of my pet gasoline taxes, it may not necessarily put a price on the emissions externality, as it is pricing it through a proxy that does not always perfectly correlate (as I noted, emissions are affected by more than just fuel usage; technologies such as filters are important too). There are countless externalities in our lives, most of which are never priced, such as your example. The difference between a "good" way of doing things versus a "bad" way of doing things is the net benefit. Pricing the externality of the noise pollution of a passing car will not contribute very much to the social good, and the monstrous regulations that would be needed would quickly negate any gains. Pricing air and water pollution is very valuable to society, but doing so using a tangled web of regulations will negate a significant amount of that gain while doing so with a simple gasoline tax would not result in such a problem. An example of a bad way of doing things in regard to law enforcement would be to spam every single street corner with lots of police; as long as they do not enter without a warrant or do certain other things, this quasi-police state would be perfectly Constitutional. Yet, over-policing is not implemented because society has been at least somewhat rational about this: the economic cost of hiring so many people and the bad vibes that they would generate outweigh the gains. These issues are not timeless, either. The FDA was established largely in response to the problem of the market being flooded with snake-oil medications and fraudulent products, and the market was unable to overcome this problem. Indeed, economists have shown that under certain circumstances, markets deal very poorly with asymmetric information, and consumer advocacy is an area where the private sector's successes have been mixed, largely due to the positive externality nature of providing consumer information. This justified some (though not all) of government-sponsored information campaigns (admittedly, some were poorly executed, such as the food pyramid that was influenced by interests such as the dairy industry). However, with the advent of the Internet, private entities no longer face the same sorts of costs associated with private sector consumer advocacy, so government's role can be reduced in certain respects.

In the end, if people are educated and if enough people are vigilant about government, I believe that, along with the help of some systematic reforms (ahem, earmarks), it is possible to make things work. Government needs to be executed intelligently, and it also needs be flexible to deal with changing circumstances. That governments have historically not been executed well should not constitute a call to be negligent and abandon government. Instead, it should be a call for people to become more active and to reform government so that it behaves more rationally.