Positive Approaches Towards Current Problems


It is difficult to predict whether the aftereffects of Watergate will lead to a distrust of political "solutions" to public problems. Haven't we already heard the cry concerning "reform" of campaign financing practices: "We need more government control to prevent abuse of power by the government."

Now is the time for the libertarian alternative to be presented as prominently as possible, if we are to avoid the widespread "kneejerk" reliance on government action and yet further concentration of power in the institutions of government. It is nothing new to witness attempts to use state power to cover up, or divert attention from, the abuses and failures of government action. What is needed now is a broader awareness of positive approaches towards the solution of current problems.

• Inflation. The statist kneejerk: The "narcotic" of price controls, which try to mask the results of government intervention in the economy, and which expand government power over literally every American citizen. Price controls are counterproductive; they lead to shortages, black markets and inequities. The libertarian alternative: A free market economy, without government expansion of the money supply, without government deficit spending, without monopoly privileges for unions, without import quotas, tariffs and subsidies. The only freeze which is meaningful is to freeze taxes and government spending. (For additional comments on price controls, see REASON's editorial in the October 1971 issue, "The Wage-Price Freeze: Bold Action Against Free Enterprise.")

• Mass Transit and Air Pollution. The statist kneejerk: Government spending to construct and maintain transportation systems using buses, trains and subways, involving exclusive franchises to metropolitan transit authorities and private taxicab companies; and, for pollution control, government proposals to ban construction of new parking facilities, to require antipollution devices on vehicles, to ration gas, and to ultimately reduce or ban automobile travel. The libertarian alternative: To move towards a totally free market in urban transportation, including private ownership of roads and deregulation of taxis and jitneys, with use of the price system to allow imposition of user charges reflecting the market value of use of the roads at various times. Much of the problem of traffic congestion and auto exhaust pollution has developed because of an earlier statist kneejerkthe vast amounts of money spent by government to construct a highway system which does not impose user charges and treats scarce resources as free goods. If highways were privately owned (e.g., by oil companies, insurance companies, car manufacturers or Howard Johnson's), the pollution resulting from traffic on a particular highway could be readily measurable and its cost imposed on the highway owner, who could pass it along to highway users in the form of tolls or license fees. Private ownership of roads may be a long way off, but an immediate, dramatic effect could be achieved by deregulation of taxis and jitneys, thus allowing maximum flexibility and reduced costs for urban travel. (For an informative discussion of the benefits of a free market in urban transportation, and the political obstacles to effective reform, see Sandi Rosenbloom's significant article, "Taxis and Jitneys: The Case for Deregulation" in the Feburary 1972 issue of REASON. And a useful explanation of allocation of scarce goods by the price system is contained in Professor Michael Levine's article, "The Airport Crisis and How To Solve It," in the April 1973 issue of REASON.

• Automobile Accident Compensation. The statist kneejerk: No-fault automobile insurance, which superimposes on the existing legal system a mandatory form of medical and disability insurance coverage, which provides for identical treatment for negligent and innocent motorists, which decreases the cost of auto insurance for some while it increases it for others, and which (under some no-fault proposals) eliminates the right of a disabled, innocent accident victim to recover for impairment of earning capacity and for pain and suffering caused by the accident, and which further extends governmental control over private insurance companies. The libertarian alternative: To retain the legal rule requiring compensation to innocent accident victims by those who are negligent (the principle of "liability for fault"), with reliance on the market to allow individuals to voluntarily purchase whatever insurance coverage they desire, including the presently available coverage for medical and disability claims. The fact that attorneys benefit from the system of liability for fault is not in and of itself a reason to retreat from a market approach in favor of compulsory no-fault insurance. It has been argued that under the present system, injured claimants frequently receive a higher net recovery when represented by counsel than otherwise; if this is so, insurance companies are not paying the "market value" of injuries (as determined by judges and juries), and it is inappropriate to complain about the percentage of the recovery which is retained by the victim's attorney. It is likely that in a totally free society, with private ownership of highways, more satisfactory means of dealing with the consequences of automobile accidents would evolve, but at present, compulsory no-fault insurance is no more desirable than compulsory social security legislation.

• Airline Hijacking. The statist kneejerk: To impose compulsory searches of all airline passengers to deter a minimal number of skyjackings, with costs paid out of general tax revenues, thus falling on user and non-user alike. The libertarian alternative: To allow the free market to operatewithout CAB price controlsleaving to each airline the decision to require or not require searches of their passengers, at a cost borne by each airline, and leaving to airline passengers the option of selecting an airline providing maximum security against skyjacking or an airline which emphasizes comfort over security, without imposing time-consuming searches of all passengers.

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The case for a free market can be argued on both moral and utilitarian grounds. Since many people do not accept the fundamental libertarian premises of freedom and non-coercion, it is important that libertarians be prepared to discuss utilitarian considerations applicable to current problems. And if statism is to be rejected, maximum exposure must be given to innovative libertarian alternatives.