Monday, September 12, 2011

More good work from the Free Market Fairy

Left: The Free Market Fairy takin' care of meat safety.

Libertarians are fond of saying that the magical Free Market Fairy would take care of making sure that meat was safe in their magical Libertopia. Apparently the Free Market Fairy like, waves her(?) magic wand and, like, sprinkles magic free market jizzum all over the meat and presto, it's safe!

So, err... why isn't it happening? Yet another government-forced recall of Cargill turkey meat that made people sick. If the Free Market Fairy's magic wand would automagically make Cargill ship only safe meat in Libertopia, why isn't it happening?

My problem with the Libertopians isn't their theories. My problem with the Libertopians is that they're just fuckin'-a *DELUSIONAL*. Their notions are pretty and all, but you can't point me to a single nation, anywhere, where they work in real life, and plenty of places where they clearly don't work -- like in assuring that meat don't kill you, yo.

-- Badtux the Snarky Penguin


  1. As a friend of mine puts it, the problem with orthodox Libertarianism is it doesn't take human nature into account. You know, just little things like avarice and laziness can really screw up Libertopia and the real world as well.

  2. Yeppers, it's the same problem as with orthodox Communism. Maybe it looks good on paper -- FREEE-dom! Everybody equal! -- but the ultimate test is the real world, and if it don't work in the real world, who cares what it looks like on paper?

    - Badtux the Practical Penguin

  3. The problem with ideologies like libertarianism and communism is that both can work in certain very limited situations. If you have a small group, people will volunteer to take care of the sick/weak etc so there really is no need for some kind of official intervention. And there are tons of successful communes out there that work because the group is small enough for there to be the kind of social pressure that prevents people from slacking off.

    But once you have a larger group, things break down. It becomes easier to assume that the sick/weak are someone else's problem. It becomes more difficult to know which individuals are slacking off or free riding.

    The problem really is that people seem to assume that because certain economic systems work in certain specific situations, they'll work in *every* situation. That simply is not true.

  4. The problem with ideologies like libertarianism and communism is that both can work in certain very limited situations

    Libertarianism can work in even small groups?

    Communism is predicated on a communal distribution of production - the government, or "consensus" in a small group (such as a family). Libertarianism distributes production based on a market mechanism - which must be predicated by institutions and custom.

    God, I'd love to be the only doctor among all the industrialists and financial geniuses in Galt's Gulch. "Everything you're worth + 10 years of indentured slavery" would be the going price for treatment of anything immediately life-threatening.

  5. Communism/socialism in a true meritocracy has better prospects for long-term survival than straight-up capitalism under any circumstances, providing it has equal access to global markets. Soviet-style communism had no chance of survival due to its political structure and international trade embargoes levied against the State.

  6. Phoenician, as I've mentioned repeatedly on this blog, the whole concept of a free market doesn't apply when it's literally "your money or your life". There's little difference between your Gault Gulch scenario and today's healthcare system in America or, for that matter, between today's healthcare system in America and an encounter with a random armed mugger making the same demand of you.

    Phil: 50% of people are below average. And average ain't so smart. A meritocracy sounds good, but the only way to impose it upon ordinary people, the salt of the earth, the common clay, you know... morons... is at gunpoint. Sad to say, pure communism -- one that does not incorporate any concept of property ownership but rather all property is communal in nature -- does not work in any group larger than a typical family unit, and even there, it sometimes gets pretty damn wild (there is one piece of land that I own 1/16th of along with 15 other extended family members, and *nobody* can get anything done with that piece of land, because none of us agree about what should be done with it!).

    Lynne: I have to agree with what you said. Plus, some of the Libertarian notions regarding markets in a pre-money economy just don't match up with reality, but we'll talk about that later.

    - Badtux the Capitalist Penguin

  7. @Phoenician

    Libertarianism can work in even small groups?

    Yes I think so. I have a friend who is really into this whole seasteading idea where I guess a bunch of libertarians plan to build a platform in international waters and then form some kind of libertarian dream society on it. He likes to talk about how it is some kind of grand experiment that will prove to the world the superiority of libertarian philosophy. But I think that as an experiment it is flawed because the group of people will have to be limited to just a few hundred. When you have a group that size, everyone knows everyone else. And it is a lot harder to let someone you know suffer than it is to let someone you don't know suffer. So I expect that private charity will be adequate on their little fake island. Also, there's a self selection bias but I won't get into all of the reasons why I think that the results of this seasteading experiment will generally be meaningless.

  8. Lynne, I don't think it'll even work for their little fake island. Anthropologists have looked at thousands of primitive societies as they were "discovered" by Western civilization. They found lots of things when they examined these primitive societies, but they never -- *ever* -- found a working Libertarian society in any of these, or anything at all that even looked like a market economy as described in Libertarian economics textbooks. These were small groups so it wasn't the fact that they were too big for Libertarian ideas to work that was the problem. It's the fact that Libertarian ideas are simply, inherently, tied up with the notion of private property ownership, and few primitive societies possessed that notion for anything other than whatever personal possessions you could carry on your self. I.e., small societies tend to be anarcho-socialist or Communist in their economic organization, mostly because, I suspect, they have a solution to the "deadbeat" problem that afflicts socialist economies (ostracize, shun, or expel the deadbeats from your society) and this most resembles the organization of a large family, which most of these primitives societies are (mostly having a few hundred members at best). Libertarianism similarly has an (unacknowledged) deadbeat problem -- Libertarians want the benefits of the commons such as the townhouse complex swimming pool (which raises the value of their townhouse) but don't want to pay for them -- but as a philosophy is so artificial and so divorced from the fundamental family unit from which civilization developed that it simply doesn't fit small societies very well. You simply don't treat family members the way that Libertarians call for treating fellow members of our society (i.e., let them die if they can't afford or refuse to pay for health insurance).

    I've never seen even a small townhouse complex run successfully on Libertarian principles because communally paying for the infrastructure simply is more efficient than a hundred homeowners hiring a hundred different contractors to maintain the infrastructure (where that's even possible -- how do you do that for the community swimming pool?). For something as complex as an offshore platform you're going to end up with the HOA From Hell -- basically, it's not going to be workable, and like the *last* five times it was tried, it's going to dissolve into lawsuits, financial chicanery, and collapse under its own weight.

    - Badtux the "Seen it before" Penguin

  9. The main reason I think that there is a chance that the seasteading thing might work out is because a similar experiment has seemed to work in my parents' neighborhood. (just a side note, I am saying it *might* work out, not that it necessarily will work out or even that it is especially likely to be successful).

    My folks are pretty standard upper middle class white people and several years ago, my mother got it into her head that she wanted a nice lake house for their retirement. They ended up buying a house in the weirdest neighborhood I have ever seen. I love their neighbors but they are pretty good examples of well meaning people who have a very libertarian philosophy. They don't get permits when they need to build anything. They don't bother with things like fishing licenses and only a minority bother to register their boats with the state. They don't call the cops about any crime that occurs. I could go on. Every 4th of July there is a giant illegal fireworks display that rivals those of many small cities, paid for entirely by voluntary contributions. They live in a rural township with minimal services and because of that, they pay very low property taxes. My parents actually have a lower tax bill than I do even though their house is easily worth five times what mine is worth.

    This neighborhood is about as close to a seasteading island as one can get. It's even on a penninsula so they aren't quite an island. There is a single private mile long dirt road that is maintained by the HOA but they don't actually require anyone to pay their HOA dues.

    And yet, it works. But only because the group is so small. Almost everyone pays the dues because they are really low and there is significant social pressure to contribute. Also, they have this one neighbor who, along with his mentally ill son, has taken on most of the maintenance of the place. The HOA fees are paid primarily to him so he can put gas in his tractors. The labor is free. He grades the road. Plows it in the winter. Mows everyone's grass *and* often shovels everyone's walks up to their doors. If a storm knocks a tree down, the men in the neighborhood race out with their chainsaws just for the opportunity to play with their "toys" and perhaps also for the grateful thanks other neighbors give them.

    Everything is privatized that can be. The road maintenance. The garbage collection. Everyone has a well and a septic system and so far no one has chosen to allow their system to leak into the lake.

    Basically it works. But only for two reasons as far as I can tell.

    1. It is a small group of people and everyone knows everyone. The one time they had someone who refused to pay the home owners association dues, they just shunned her and reminded her of her lack of payment whenever she complained about the bushes on the side of the road scratching her car. They were just like, "Pay up or go out and cut the bushes down yourself." There is very little freeloading because the group is small enough that everyone is accountable to everyone else.

    2. There is a lot of self selection. If you can't afford a car, you can't live there. Heck, if you can't afford a nice lake house, you can't live there either. So there is an absence of many of the kinds of social problems that crop up in larger society. e.g. They don't need a lot of police coverage because they deal with what little crime they have more directly, i.e. going over to the thief's house and telling his mom. Something you can't really do if you don't know the thief or his mom.

    Both of those elements will be major factors in this seasteading project. Also, billionaire financiers who will subsidize everyone else. Still, just because it has a slim chance of working out in this very specific situation, that kind of philosophy breaks down in larger groups.


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