Critics of libertarianism sometimes argue as if the libertarian position against centralized government regulation bases itself on the idea that only consumers’ willingness to pay for a product should restrain producers via boycott (e.g. Scott Alexander). Libertarians have the boycott tool in their toolbox, but that’s not all. I ignored this tendency toward error for a long time, then suddenly it turned around and looked at me. Are they such rank sophists, or do they actually know a lot less about libertarianism than I give them credit for? So what are they misunderstanding?
Libertarians are tediously predictable. Every solution offered by libertarians involves voluntary interaction based on private property and avoids unilateral decrees by an authority. So there is at least a bit of plausibility attached to this idea that laissez faire means no one does anything ever. But if libertarians are such absolutists when it comes to non-interference, how do they maintain their precious property rights? How do they even prohibit murder? If libertarians have no way to deal with producer externalities, do they have a way of dealing with anything at all? Should murderers be punished with a boycott?
Libertarians often get accused of oversimplifying reality, and in this instance the libertarian position is indeed quite simple. When someone violates your property rights, you sue them. A murder was committed? The victim owned that body, and the heirs can sue. Any serious dispute should be resolved by arbitration.
How would this work for cases of externalities or other targets of regulation? If the externality affects my property, e.g. pollution falls on my house and gets in my lungs, I have grounds to sue. At that point, the mechanism for resolving the conflict is the same as if a murder or theft had been committed. Libertarians may be overly optimistic with regard to the effectiveness of this approach, but that is not the same as suggesting that nothing be done.
Clearly, there are potential problems. Perhaps the process will be too slow. The persons arbitrating the case can take bribes or help out their friends. It may be difficult to find evidence of the tort. A little guy may not have the resources to take on a giant. One side of the dispute may try to intimidate the other. The arbitrators may honestly overvalue or undervalue the significance of the externality. More possibilities may occur to you. (E.g. David Friedman has pointed out that this approach can lead to absurd conclusions if taken as an absolute. If any use of your body whatever creates a tort or assault, I can’t point a flashlight at you. But this theoretical problem solves itself in practice, as the expense of suing for photon assault wold be much higher than the appropriate restitution, unless we’re talking about a high wattage laser that does actual damage.)
None of this disappears when we wave the magic wand of regulation. Perhaps you feel skeptical about the idea that private arbitration can accomplish all this. Similarly, libertarians feel skeptical that government regulation accomplishes this effectively. The most salient difference lies in the different attitudes toward experimentation and innovation. Classic regulation takes a hostile view of experimentation, while tort liability remains indifferent ultimately to everything but results.
If tort liability is so great, why has it failed to deliver paradise in the past, and required the legislature to create regulatory bureaucracies and frameworks? Inadequacy of tort liability as a remedy is one possible explanation of what happened. I can think of two related alternatives. Perhaps tort liability was working fine and special interests lobbied to cripple it to bring about a more favorable outcome for themselves. Or perhaps our society made a different evaluation at that time, and chose higher production and higher employment over a clean environment. These two are not mutually exclusive. Then when people began to get tired of rivers that catch fire, government agents were happy to create a new bureaucracy to make sure rivers don’t catch fire.
Why would they do that, if all they needed to do was overturn some precedents or pass legislation clarifying liability? The cynic would answer that ambitious persons in government always want to create a bureaucracy to solve anything, as it expands their power, prestige, influence and budget. A more charitable historian might suggest that people had mostly forgotten how things got that way in the first place, and cultural attitudes favored a centralized top-down approach.
Reasonable persons can believe that tort liability can’t do as good a job of resolving externalities as centralized government regulation. This is an empirical question, though not easy to answer. Critics of libertarianism can either criticize this position or engage in sophistry by pretending it doesn’t exist. I wish to hear more from serious critics and less from sophists.
No comments:
Post a Comment