Liberal Journalist Matt Yglesias Recognizes that Water Markets Work—Why Not Apply Same Insight to Other Commodities?

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Kudos to liberal journalist at the Center for American Progress Matthew Yglesias for recognizing the importance of markets in water for encouraging conservation and in getting supplies to poor people. As evidence, Yglesias favorably cites a 2007 study done for the Pioneer Institute in Massachusetts whose researchers reported:

We reviewed well over a hundred studies, and found strong and consistent empirical evidence that using prices to manage water demand is more cost-effective than implementing non-price conservation programs (emphasis Yglesias'). 

Welcome aboard Matt! See Reason on the topic here and here

Interestingly Yglesias also acknowledges: 

In general, when you take something that's valuable—fresh water, space on an arterial highway at rush hour, the right to put carbon dioxide into the atmosphere—and give it a sub-market price, the result is overconsumption. Wasted water, polluted air, crowded highways, etc.

We await Yglesias' eventual realization that this same brilliant insight applies to many other commodities, such as food, clothing, housing, schooling, energy, and health care.

NEXT: Financial Crisis Quotation of the Day

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  1. This interest in water markets will last precisely until the first round of heartbreaking stories about poverty stricken children, too poor to be able to afford to bathe.

  2. We await Yglesias’ eventual realization that this same brilliant insight applies to many other commodities, such as food, clothing, housing, schooling, energy, and health care.

    Fat chance.

  3. It all looks nice in theory. In practice, you get stuff like the Cochabamba water war. Not that you care, right? I mean, the corporations got theirs in that one.

    And this is what’s wrong with libertarianism! You never think of the consequences of your ideologies, you only say that they weren’t implemented in a 100% pure manner and keep pushing them, you’re all as bad as the commies! A little acknowledgement of the past would help you plan a better future, but you just will not do that!

    And this is why, ladies and gentlemen, there has never been a Libertarian society. Every other system of government has been tried, on a small or large scale, somewhere, and has worked for a while. But all Libertarianism has is – tee hee, the Minerva project. Chortle.

  4. C-, trollumination. Step it up.

  5. Warty,

    The problem is that he started so strong with the Rand/Zylkon B train post that it’s just all downhill from there.

  6. For those who are wondering what happened after the private water company was forced out of Bolivia, see this: http://en.wikipedia.org/wiki/Cochabamba_protests_of_2000#Continued_lack_of_water_in_Cochabamba

  7. And this is why, ladies and gentlemen, there has never been a Libertarian society.

    Trollumination, you continually confuse libertarians with anarchists. Libertarianism is a direction, not a status. That direction is toward a society with a small government sphere, and a large market/civil society sphere.

    I believe there is a large sample of data demonstrating that relatively libertarian societies are more successful than others.

  8. So, no schools or health care for the poor? Of course, you don’t mean that, exactly, and I agree that just about everything is (too) heavily subsidized, but still.

  9. Fat chance.

    I dunno, the little bit about water markets shows enormous personal growth from Yglesias, considering his previous devotion to the notion that there is absolutely nothing in life that couldn’t be improved with a big smattering of government regulations, oversight, and central planning.

    Wikipedia tells me he’s now in his late twenties, which is when a lot of people in life start to realize the government isn’t all fairness, equality, progress, and prosperity.

    He might not ever become a full convert, but maybe he can learn to stop posting mental diarrhea like this.

  10. Fat chance.

    Tall order.

  11. Ron Bailey,

    Yglesias was brilliant in posting this too, even endorsed Ezra Klein.

  12. I’m not that new. Used to post here and other places. Got tired of it, it was like arguing with a recording. Have come back wondering, if after global economic meltdown and all that, y’all were re-evaluating anything. But it’s all the same market-veneration.

    Yes, Dean, I do conflate Libertarians with anarchists. Am I wrong to see you guys on a spectrum? There are left and right handed anarchists, this split has been there since even before Saint Ayn was born. So you say Libertarianism is a direction not a status – fine with me. But whenever some market-oriented ideology runs smack into the real world and makes a huge splat, the answer is always “not unregulated enough”. So is true Libertarianism asymptotically unapproachable, then? Or is it just a direction that you follow, through good results and bad, in an endless utopian dream? Now, as Lew Rockwell said to me once, Libertarianism is not in fact about utopia. Rather, it is the moral thing to do and its axioms of non-regulation and property rights must be followed regardless of the outcome. That regardless of the costs of a bad result, moral considerations more than make up for it. It’s right, therefore do it! Sounds sort of Bushian in that respect. Faith-based. So you may hypothesize that a movement in a Libertarian direction produces good results. Yet it’s a cliche by now when a regulated market is deregulated catastrophically. And there’s those like Lew Rockwell who honestly don’t care, just keep on moving that way until it all settles out.

    Did I start strong with the Zyklon train post? Hope I got some of you thinking. I mean, I just assume that Ayn Rand wasn’t a complete idiot, that she had something to say, I look at the overall themes of the book, and I look at the time when Atlas Shrugged was written – a time when a great many living Americans and Europeans had been involved in the Nazi war – and I see people being gassed with monoxide because in a moral sense they deserve it – and yes, I think of Nazis. Didn’t Ayn think of Nazis when she wrote that? Wasn’t I supposed to understand that myself? Isn’t that how one reads a book?

  13. Who hit Yglesias on the head?

    It looks like someone finally knocked some sense and reality into that thick head of his.

  14. AV: No. I mean better schools and health care for the poor. Governments reward voters–the middle class and above–and give short shrift to the poor. See my column on water as a human right:

    The activist myth is that the poor rose up when the evil multinational Bechtel raised the price of water by 43 percent to 60 percent, depending on the customer’s income. While it is true that the lucky few of the poorest who were connected to municipal water supplies did see big increases in their water bills, the majority of the poor who stood to be connected for the first time would have paid much less than they were already paying to water vendors. Segerfeldt calculates that piped water prices were already so low that this would mean the poorest 5 percent of the population would be spending 5.4 percent of their incomes on water. Segerfeldt reports that the opposition to privatization was actually lead by middle class and industrial users who had been receiving subsidized water. Opponents also included local water vendors and small farmers who wrongly believed that they were forbidden to access well water.

    Under pressure, Bechtel pulled out and Cochabamba’s water supply system is once again being run by the old public utility. Segerfeldt claims that water is now available only four hours per day and that no new households at all have been connected to the network since 2000. Meanwhile, the poor are paying 10 times more for their water than are the rich households connected to the system. This is a victory for the poor?

    Privatization is not a panacea, but Segerfeldt shows that, when properly done, it can play a huge role in bringing safe clean drinking water to the hundreds of millions of people who still lack it. In the meantime, Segerfeldt wonders, “why anti-privatization activists do not expend as much energy on accusing governments of violating the rights of 1.1 billion people who do not have access to water as they do on trying to stop its commercialization.” Good question.

  15. So, no schools or health care for the poor? Of course, you don’t mean that, exactly

    There is a big difference between “no government provided X” and “no X”.

    The poor would have schools. The government wouldnt be the source of those schools.

  16. Wow, some of the comments on Yglesias’ blog are amazing. One of them says “People should pay for pollution, not consumption of necessary things like clean air and water – these should be free; it’s a genetic right of all living creatures.”

  17. troll,

    She wasn’t thinking of Nazis, but she was killing most of America in that passage. It’s called self-defense.

    When someone points a gun at your head and demands things from you, it is not murder to take the gun from them and shoot them with it.

    The whole book is a call-to-arms against those who initiate force. All muggers are surprised when their victims stop wanting to be victims.

  18. That regardless of the costs of a bad result, moral considerations more than make up for it. It’s right, therefore do it!

    There is no bad result. Being morally correct is a good result. Moral considerations dont make up for a bad result, the moral considerations are the result.

    Being both a libertarian and a born-again christian makes this real easy for me.

    In both cases, doing the right thing turns out also to be pragmatically the right thing too, but there are no guarantees.

    Ends can NEVER justify the means. Follow moral means and accept the ends that result. Of course, choose amongst the moral means to aim for the best possible end, but sometimes the moral thing to do is charge the beach at Normandy and die.

  19. trollumination,

    More whitespace please.

  20. Being both a libertarian and a born-again christian makes this real easy for me.

    Note: easy as in “easy to understand” not “easy to follow thru on”.

  21. In general, when you take something that’s valuable-fresh water, space on an arterial highway at rush hour, the right to put carbon dioxide into the atmosphere

    Breathing and driving your car are now revokable or taxable “rights”?

    Tried to sneak that bullshit in there, didn’t he?

  22. By “driving your car” I was referring to it emitting carbon dioxide and water vapor and other innocuous emissions, of course.

  23. Wasted water, polluted air, crowded highways, etc.

    Because it takes a genius to think plant food — carbon dioxide — is a “pollutant”.

  24. Rather, it is the moral thing to do and its axioms of non-regulation and property rights must be followed regardless of the outcome. That regardless of the costs of a bad result, moral considerations more than make up for it.

    Some big-L Libertarians might be like that. Speaking for myself, I’m a bit more of consequentialist than that. I suspect others here might be too. It would be interesting to find out.

  25. Soda: I plead guilty to a modicum of Hayekian consequentialism.

  26. I’m not that new. Used to post here and other places. Got tired of it, it was like arguing with a recording.

    Let’s play guess-the-troll. I’ll go with Jersey McJones. It’s a long shot because of the lack of fucks, but the arrogant snobbery is there.

  27. Let’s play guess-the-troll. I’ll go with Jersey McJones. It’s a long shot because of the lack of fucks, but the arrogant snobbery is there.

    I’m guessing Whittaker Chambers. Is he dead?

  28. Question for the consequentialists: What is your metric?

    Despite my claim above, I could claim to be a hardcore pragmatist. Only, instead of GDP or life expectency or whatever, my metric is GDL (Gross Domestic Liberty).

  29. So the anti-libertarian argument is that without gigantic government to coddle us, there would be anarchy. Do you have that little faith in the American people? How sad for you.

  30. Yes, Dean, I do conflate Libertarians with anarchists. Am I wrong to see you guys on a spectrum?

    Do you understand the meaning of “spectrum” and “conflate”? Would you object if I said I conflate Communists with liberals, because I see you guys on a spectrum?

    I quit reading your post after the first two sentences, BTW. I figured after that ejaculation of idiocy, nothing worthwhile could be expected.

  31. Yglesias definitely understands the libertarian critique, he just ignores it when it conflicts with one of his cherished beliefs.
    In that way he’s like everybody else in the world.

  32. robc: Fair enough question, but it’s a long conversation. So shorthand–ordered liberty, not being a judge in one’s own court, enforcing contracts, punishing violations of others liberties, etc. For me, it’s mostly an estimation of alternative transactions costs.

  33. Matt Yglesias is actually more market-sympathetic than Ron Bailey and many of the commenters seem to realize. For instance, he has in the past blamed zoning laws for distorting markets for residential housing, as well as zoning laws which forbid fastfood restaurants in certain areas. Most important, he recognizes that our current statist transportation industry effectively subsidizes the motor vehicle at the expense of alternatives and that this has all sorts of distortive effects not only on transportation but in land use as well.

  34. Lars,

    Matt Yglesias is one of the most Progressive persons in the blogosphere this side of Ezra Klein.

    I seriously doubt that he was meaning anything that you are giving him “credit” for in the regressive context that you wrote.

  35. I’m going to back Lars up on this one. I read Yglesias from time to time, and find him relatively reasonable and intellectually honest, which is probably why he’s willing to acknowledge the efficacy of markets on occasion.

  36. Snark is not a susbtitute for argument. The fact that Ygelesias, like most smart liberals, acknowledges the importance of price in distributing scarce resources, does not, ipso facto, imply that they must become libertarians to maintain intellectual consistency.

    There is a broad ediface of statist arguments, usually invoking market failures, justifying interventions in health care, education, etc., despite the fairly self evident importance of price signals in efficient allocation of resources. Those arguements need to be engaged, not simply dismissed. Laughing at people who don’t have a basic understanding of economics is no substitute for engaging those who do.

  37. And I see a real mote/beam issues here, in some of the comemnts regarding carbon emmissions and air polutuion. While a libertarian is certainly not required to accept statist solutions to said problems, to fail to even acknowlege that the same economic analysis which can be used to critique, say, the free (or heavily subsadized) distribution of a resource such as water by the government, also applies to the unpriced use of a limited resource by carbon emitters and pollution emitters.

    Of course, sophisticated libertarians do enage such arguments. What’s amusing are blog comments which, on the one hand, lambast (fairly, in many cases) unsophisticated liberals for not understanding basic economic concepts, and then go on to demonstrate similar ignorance themselves.

    You see similar ignorance when some “libertarians” enage in full throated defeneses of large corporations without acknowleging the extent to which said corporations benefit from & are priveleged by our current system of government.

  38. Actually I think the problem is largely one of people getting warm fuzzies from collectivist social signalling.

    The statist arguments don’t have a lot of intellectual merit. It’s the emotional appeal of “sharing” and “community” and being against “selfishness” that’s the problem.

    If you try to engage the statists on dispassionate intellectual terms, what you get is that people think you’re a cold-hearted meanie. Doesn’t matter if you “win” the argument intellectually. You lose it emotionally just by being on the side of cold hard reality.

  39. Hazel Meade FTW!

  40. HM,

    I’m sure that that’s what you THINK is happening. The reality may, sometimes, be different.

    What often happens, I think, is that one ends up debating the least sophisticated defenses of statist interventions. Sure, it’s easy to “win” such arguments, but what have you really one if you have avoided the more sophisticated arguments?

    Just as it’s easy to “win” an argument against some of the less sophisticated libertarians, but doing so doesn’t mean that you have proven the need for state intervention.

    Not to be a snob, but most blog commenters of all persuasions have a pretty limited understanding of how the economy works. Layered on top of this is the fact that blog comments are a lousy vehicle for sophisticated argumentation. I would say that it’s impossible to “win” an argument against a smart opponent in blog comments because of space limitations.

    And if you really believe statist arguments have little intelelctual merit, but only emotional appeal, you should get out more. Whetehr such arguments are ultimately right or wrong (and I have an increasing respect for anti-statist arguments) they can’t generallty be dismissed THAt easily. Sophisticated libertarians recognize this and treat the arguments with the seriousness that they deserve.

    (Of course, the more extreme rights based libertarian arguments are another matter; if you accept them, then most of the policy arguments become moot. But then it isn’t a matter of intellectual disagreements, but more fundemental philosophical disagreements which aren’t subject to resolution on purely intelectual grouns).

  41. Silentz,

    I suspect that you misunderstand the meaning of the word anarchy. Or, to be more charitable, you are conflating two different meanings of it.

    By definition, a society without government is anarchy. Now, whether in practice such “anarchy” would look more like, say, Somalia, or more like some version of the libertarian utopia, is an open question.

    Most libertarians, though, seem to believe, quite understandably, that the complete absence of government would be a bad thing. They therefore support a limited state to protect property rights and provided for the common defense. They are minarchists, as opposed to anarchists.

    Many anarchists argue that, by supporting even a minimal state, minarchists have given away the game. Once one allows even for a minimal state, one paves the way for … well, what we have now. Both as a practrical matter (what’s to stop the voting populace from removing any constitutional limits on government) and on philosophical grouns (once one accepts even a minimal state on what are frankly consequentalist grounds, any number of state interventions can be justified).

    It brings a little bit to mind the old Winston Churchill anecdote, with a revised punch line. Madam, we have already determined what you are (a statist), now we are merely dickering over price (how much of a state).

  42. extreme rights

    Is there any other kind? You cant kinda sort have a right.

  43. Exxxxtremmmmmmme Rights snacks! Now in tropical blaze flavors!

  44. LarryM,

    I wouldnt say that anarchism is a bad thing. I would say it is an impossible thing. Anarchy is metastable, any perturbation and you have a government again. Somalia has a government (or many of them), but warlords is one of the worst forms of government possible.

  45. And if you really believe statist arguments have little intelelctual merit, but only emotional appeal, you should get out more. Whetehr such arguments are ultimately right or wrong (and I have an increasing respect for anti-statist arguments) they can’t generallty be dismissed THAt easily. Sophisticated libertarians recognize this and treat the arguments with the seriousness that they deserve.

    Well, okay. There are some more sophisticated intellectual arguments. The problem is that very few minds are changed by arguing the merits on cold intellectual grounds, because the basic reason people accept statist arguments has nothing to do with the intellectual merits, and everything to do with the emotional appeal.

    We’re pretty much biologically programmed to go around moralizing about sharing and altruism and ostracizing people that don’t conform to the community norm, because it’s genetically advantageous to present yourself as a generous self-sacrificer (even if your genes are really juyst trying to get you laid). Want to argue with people’s genes?

  46. To start with, “extreme” modified the entire phrase “rights based libertarian arguments,” not merely the word “rights.”

    More particularly, yes, one can believe that a certain “right” exists without beleiving said right is absolute. Some libertarians believe that property rights are absolute (or nearly so – as I said previously, most libertarians are minarchists, and thus would by definition favor some limitations on property rights in order to support a minimal government to enforce said rights). Most people in our society, rightly or wrongly, believe is a more limited and non absolute right of property. Setting aside the merits of said position, there is nothing inherently inconsistent in believing in limited (but existent) property rights.

  47. LarryM,

    As long as we’re going for the skeletons in the closet…

    While this observation is not original to me, I would not that in order to justify government intervention I’d argue that it isn’t sufficient that the market is viewed as working “imperfectly” (of course, it is odd even to use a term like that) – it has to have some special competence something which the market lacks; that in my experience (faulty as it certainly is) is rarely ever considered when proposals for state intervention is made.

    …also applies to the unpriced use of a limited resource by carbon emitters and pollution emitters.

    Well, I would note that lots of free market types have argued that the solution to this is not one size fits all regulations or technology demands, but a loose market in these things. The latter has – amongst other things – the benefit of being resistant to the problems which public choice economics deals with.

    Anyway, libertarians, free market types, etc. come in all sorts of flavors (just like any other grouping of individuals). If that is what you are driving at, well, I would agree.

  48. Hazel,

    There is a lot of truth in what you say. But the same principle applies to many libertarians as well; they just happen to find different emotional arguments appealing.

    To maybe put it another way, you might want to consider that some of the disagreements that you have with statists are the result of differing assumptions that aren’t subject to logical resolution – on either side – on purely intellectual grounds.

  49. Anyway, you folks have fun. 🙂

  50. Larry,

    Now that he has left, are you taking over joe’s lack of sense of humor?

    Of course extreme modified argument not rights, but it was more funner the other way.

    However, I do disagree about rights. They are absolute. Some say the right of free speech isnt absolute, but I would counter that those things that you cant say arent free speech. There is NO free speech that I cant legally speak if I have that right.

    Same applies to property. If, for example, emminent domain exists, you dont have any right to property. Its not that you have a limited right, you dont have a right. But, for example, restricting slavery doesnt prevent a right to property because people arent property to begin with. And never where.

  51. Seward,

    “I’d argue that it isn’t sufficient that the market is viewed as working “imperfectly” … it has to have some special competence something which the market lacks; that in my experience (faulty as it certainly is) is rarely ever considered when proposals for state intervention is made.”

    I think that “special competence” is almost always considered; I would agree with you that whether properly considered is quite another question.

    “I would note that lots of free market types have argued that the solution to this is not one size fits all regulations or technology demands, but a loose market in these things.”

    True enough – those sophisticated libertarians that I refer to. My beef is with the many libertarians, some commenting in this thread, that don’t even understand that the problem exists.

    I’d add that there is a convergence between the carbon pricing solutions of smart liberals and smart libertarians, along the lines that you suggest. Politics, of course, gets in the way of those solutions being implemented. I don’t think that either liberals or libertarians have any practical solutions to those political problems.

  52. robc,

    Sorry for the lack of sense of humor.

    I disagree with you, but I’m going to punt on a detailed response (after all, my original comment on right was more of an aside).

    I would simply say that you are confusing “should be” and “are.” In fact, in our system of government, most rights are not considered absolute (an observation that I think you will agree with). One can argue that that is a bad thing, but one cannot, I think, argue convincingly that limited rights=no rights. Even with significant limitations on rights, we are objectively much more free than nations which place more serious restrictions on rights.

  53. “I wouldnt say that anarchism is a bad thing. I would say it is an impossible thing. Anarchy is metastable, any perturbation and you have a government again. Somalia has a government (or many of them), but warlords is one of the worst forms of government possible.”

    I think that is certainly correct. The problem is that, even if we accept that, it doesn’t erase the anarchist critique of minarchists. It’s hard for me to see a principled argument (other than on consequentialist grounds) for a state that protects property rights and provides for the common defense, but nothing more.

    And as for the consequentialist argument – well, once you accept consequentialist arguments, keeping the state limited to protecting property rights and the common defense seems .. problematic. Even if one accepts that those state functions (and no others) can be justified on consequentionalist grounds, what’s to stop the rent seekers from demanding – and getting – more?

  54. LarryM,

    Rights come from God, not our system of government. Whether the government acknowledges the full extent of our rights or not, we still have them. No matter what government we are talkings about. North Koreans have the same rights as Americans.

    Even with significant limitations on rights, we are objectively much more free than nations which place more serious restrictions on rights.

    See, you even agree with your language, you say nations restrict rights, not they the rights dont exist. The full, unfettered, XTREME rights still exist, they are just being restricted by the government.

    The problem is that, even if we accept that, it doesn’t erase the anarchist critique of minarchists.

    I dont see this. Since the anarchist actually are suggesting maxarchy over minarchy (since anarchy cant exist and becomes big government immediately) I can ignore their critique entirely.

    The argument of minarchy vs anarchy is a false argument. xxxarchy will exist, There may not be a rights based argument about what xxx may be, but it cant be “an”.

  55. Sigh, I need to move on, things to do, etc.

    But it does occur to me – and I’m honestly asking – how does robc reconcile his absolute defense of property rights with his implied defense of a minimal state? Seriously wondering. I’ve read plenty of libertarian thought, but (unless I’ve missed it) I haven’t seen those positions reconciled. An absolute defense of property rights (or of the right to self ownership, for that matter) would seem to be incompatible with even a minimal state.

  56. LarryM,

    Quick answer so you can move on: A minimal state must exist because a non-state is impossible. Since the state will exist due to human nature, I accept that it will exist.

    As far as self-ownership, I already said that people arent property, so I dont have to worry about that. 🙂

    As far as absolute property rights, Im not sure how that conflicts with a minimal state at all.

  57. robc,

    Regarding your latest, our rights based argument is revaeled as being entirely over semantics. Mind you, I also have a more fundemental disagreement with you, but it’s one that I don’t have time to engage in, even if I thought it was able to be fully articulated in blog comments (I don’t think it can be).

    As for my point about minarchy, I think you are missing the point of my argument. We both agree that anarchy is impossible; my point, though, is that once one accepts that, how can one (both as a practical matter and as a principled matter) justify restricting that state to protecting property (and life) and the common defense? I understand the principled defense of the minimal state, though I think it lies on some fairly shaky foundations; I’m more interested in the practical problem – once you allow for any state (as I think we agree you must), how to you stop it from mutating into more or less the modern western welfare state (at best!).

  58. robc,

    I need to move on as well. But:

    “As far as absolute property rights, Im not sure how that conflicts with a minimal state at all.”

    Taxes for one. Or do you think that the state is going to subsist on voluntary contributions and user fees?

  59. once you allow for any state (as I think we agree you must), how to you stop it from mutating into more or less the modern western welfare state (at best!).

    That one is easy (and very practical) – When it gets too bad you kill all the fucking statists and start over.

  60. Taxes for one. Or do you think that the state is going to subsist on voluntary contributions and user fees?

    Why not? Since my minimal state wont even have the power to enforce membership (I see know reason governments must be geography based 🙂 ) then they will pretty much have to depend on voluntary contributiions and user fees.

  61. And by shaky foundations, I mean disputable empirical conclusions – i.e., ultimately the arguments used to justify even minimal state interventions (rights enforcement & the common defense) are similar in form to arguments supporting more invasive interventions.

  62. “That one is easy (and very practical) – When it gets too bad you kill all the fucking statists and start over.”

    I’m almost certainly guilty of once again lacking a sense of humor, but you do realize that said “solution,” emotionally appealing as it may be, is the same sort of impulse that has historically led to the very worst forms of statist tyranny, don’t you?

  63. LarryM,

    Think of me more of a government engineer not a government physicists. Fundamental disagreements over the exact nature of things doesnt matter if the bridge stays up.

    As I said somewhere upstream, in many ways Im a consequentialist whose metric is liberty.

    My argument for minarchy would be that the peak of the liberty curve occurs at a point of very low, but positive amounts of government.

  64. LarryM,

    the same sort of impulse that has historically led to the very worst forms of statist tyranny, don’t yo

    Yes, I am. I have yet to figure out how the Founding Fathers avoided it. The American Revolution is damn near unique. And possible not repeatable.

    And yeah, that was BOTH a serious answer and a joke.

  65. “Why not? Since my minimal state wont even have the power to enforce membership (I see know reason governments must be geography based 🙂 ) then they will pretty much have to depend on voluntary contributiions and user fees.”

    Whatever that is, it isn’t a state. So welcome to the anarchists afterall. 🙂

    Ultimately, it’s possible that a stateless society would indeed adopt the sort of voluntary rights enforcement organizations to which you refer. I, too, find such prospect appealing, at least in the abstract. Setting aside the difficulty of getting there, I tend to doubt the stability of such a system (i.e., I believe that, absent a change in human nature, it would tend to mutate into a more traditional state). Of course, that also ignores a whole host of potential other problems (including but not limited to resolving non-violently disputes between rival non-geographic “states,.”

  66. “My argument for minarchy would be that the peak of the liberty curve occurs at a point of very low, but positive amounts of government.”

    A reasonable response, though I think there are some who would argue that the peak occurs at a point further towards the statist edn of the specturm. Not to mention disagreements as to what it means to maximize liberty.

    But that doesn’t really answer my question about the practical tendency of the state to expand. Your serious/joking response along those lines fails to satisfy.

  67. Regarding those non-geographic voluntary “states,” apart from the risk of them evolving into conventional states, I’m also not sure what’s to prevent them into devolving into, essentially “warlords [which] is one of the worst forms of government possible.”

    I’ve also never seen a convincing explanation as to how voluntary rights enforcing organizations dependant upon user fees will be liberty maximizing in a world where some people can afford to pay for (much) more “justice’ than other people.

    Which may seem to contradict my statement that I have some affinity for the prosepect of such organizations; it’s an affinity for the ideal manifestation of such concept, as opposed to what I suspect would be the very unappealing actuality.

  68. LarryM,

    I think that “special competence” is almost always considered…

    I think it almost always is assumed, as opposed to considered.

    I don’t think that either liberals or libertarians have any practical solutions to those political problems.

    When it comes to political problems, generally speaking the solution is, well, time. That is, politics moves by slow, creaking and often painful generational shifts. Recently I heard a commentator argue that ending the drug war is analagous to abolitionism and the civil rights movement, and that analogy is something of a good fit I think.

  69. There is a signficant argument that, with regard to carbon pricing, we can’t afford to wait for those “slow, creaking and often painful generational shifts.” Which is why even some smart liberals who understand the problems with brute force approaches are willing to support suboptimal carbon pricing solutions over the doing nothing. Of course, given the politicasl unpopularity of even brute force approaches, we better hope that the more optimistic predictions of technological fixes are correct.

  70. The fundamental problem with anarchy is that no stable human society has ever existed above the level of a clan without some form of final and binding dispute resolution mechanism.

    That, I believe, is the root of all governance and the state, and why no anarchist society can exist on any scale.

  71. Regarding those non-geographic voluntary “states,” apart from the risk of them evolving into conventional states, I’m also not sure what’s to prevent them into devolving into, essentially “warlords [which] is one of the worst forms of government possible.”

    I never claimed otherwise. A republic … if you can keep it.

    Your serious/joking response along those lines fails to satisfy.

    Its the only solution I see. Eternal vigilance is necessary. And a sniper rifle. And good aim.

    Just because something is unlikely doesnt mean you shoudnt strive towards it. My solution may not satisfy you but I dont think I need a satisfactory solution to prefer a minarchy.

  72. R C Dean,

    I would argue even the clan needs it.

  73. robc/RC Dean

    Have you guys read David Friedman’s history of 13th Century Iceland & their sort of non-governmental system of conflict resolution?

    I’ve not read much of it myself, but Friedman obviously makes the case that an anarcho-capitalist system is workable…

    That said, I don’t know that I agree – for exactly the reason you said:

    The fundamental problem with anarchy is that no stable human society has ever existed above the level of a clan without some form of final and binding dispute resolution mechanism.

  74. The fundamental problem with anarchy is that no stable human society has ever existed above the level of a clan without some form of final and binding dispute resolution mechanism.

    So how does the 7 billion person stable human society known as humanity manage to exist? After all, there is no final and binding dispute resolution mechanism between nations.

  75. how to you stop it from mutating into more or less the modern western welfare state

    “Modern”? We’re regressing to Rome-like levels of corruption and debauchery.

  76. Most important, he recognizes that our current statist transportation industry effectively subsidizes the motor vehicle at the expense of alternatives

    The per-passenger-mile subsidy of, for example, rail vs roads, says otherwise, as does the billions of dollars (annually) diverted from the various state and federal roadbuilding trust funds into subsidizing bus and rail service.

    The real bankruptcy of rail fans shows in the claim that we can’t build more and better roads because demand will always exceed supply. Roads, apparently, are the one commodity that doesn’t respond to the law of supply and demand. The hypocrisy becomes more evident when the selfsame rail advocates don’t apply that rule to rail. Why should we build rail when expanding it would only lead to demand increasing faster than supply? Or is rail such a special means of transporting people that it is immune to the economic forces that allegedly doom roads?

  77. Bob Smith,

    The arguments of rail enthusiasts assume (correctly, I think) that road usage incurs massive external costs (primarily enviromental; one might also add a substantial portion of our military budget, given the use of our military in ensuring a stable oil supply) that are ignored in the kind of cost-benefit analyses that you cite. Moreover, other govenmental policies (primarily zoning) end up skewing people’s transportation choices choices in ways that are hardly a reflection of free markets. Right or wrong, you aren’t engaging their actual arguments. It would be interesting to see what kind of transportation network developed in a truly free and unsubsadized market. People who defend the status quo can hardly do so from a libertarian perspective.

    As for the argument that ” e can’t build more and better roads because demand will always exceed supply,” your snark aside, said argument has rather massive emperical support. Whether the same argument applies to rail I have no idea.

  78. As for the argument that ” e can’t build more and better roads because demand will always exceed supply,” your snark aside, said argument has rather massive emperical support.

    Huh? If you increase the capacity of the road by, say, a third, and a third more people use the road so it again reaches capacity, exactly what is the problem? A third more people can get where they want to go better than they did before, or they wouldn’t be there. How has the road improvement failed?

  79. The problem, to put it bluntly, is that that increase is being finananced by other people’s tax dollars. I find it ironic that, when defending state activity that they find favorable, some “libertarians” resort to the very same type of arguments that they deplore when coming from “liberals.”

    The claim that I’m defending is that building new roads does not aleviate congestion. That claim appears to be emperically true. That doesn’t mean that building those roads have utility. Ironically, the claim is true mainly because we DON’Thave a free market with regard to highway buiolding and use, which makes Bob’s “doesn’t respond to the law of supply and demand” snark particularly laughable.

    Does that utility justify the expense of the new roads? Heck if I know. Libertarians more than most people should understand that the fact that roads are built an operated by the state, and that road usage is not properly priced, makes it all but impossible to answer that question.

    Now, none of that necessarily implies that we should be spending more on rail. it may equally imply that we should, say, try to properly price highay usage, or even privatize some roads. I just happen to find it amusing that so called “libertarians” try to justify the very non-libertarian status quo with regard to transportation funding. Really that amusement is my only reason for this & my previous comment.

  80. Third sentence, sedond paragraph should read “That doesn’t mean that building those roads has no utility.”

  81. As for the argument that “we can’t build more and better roads because demand will always exceed supply,” your snark aside, said argument has rather massive empirical support

    Huh? If you increase the capacity of the road by, say, a third, and a third more people use the road so it again reaches capacity, exactly what is the problem?

    There is no problem, because the proposition has no empirical support. Since the population hasn’t magically increased, it follows that the extra people now using expanded road A are no longer using roads B,C,D,etc. Assuming drivers are rational, they’re using A even though it’s again at capacity because using A at capacity is faster than using B, otherwise why switch? Moreover, B may flow freely with higher average speeds now that A was expanded, improving transit times for its users. It appears at first glance that expanding A improved nothing, but that’s because you’re only looking at A and forgot that roads form networks.

  82. Bob Smith,

    Let me start by assuming that you are a self identified libertarian. If I’m mistaken, then I apologize to all self indentified libertarans. but if I’m correct, than this is yet another example of how libertarians can be as clueless about economics as non-libertarians.

    Your little just-so story would be interesting if true. I see no reasons to believe that it is tue, and my understanding of the relevant literature is that is is not.

    Nor should we (by “we” I mean those of us who have some real understanding of how markets work, or more properly about how they don’t work when government intervention screws up the incentives) should not be surprised that increasing highways doesn’t aleviate congestion – because, even apart from the question of externalities, highway usage is not properly priced. Because highways are built, owned, and operated by the state, and are not run as profit making enterprises. If they were, then one would, indeed, expect that increasing highways would decrease congestion. But they aren’t, and therefore building more highways does not aleviate congestion.

  83. Hmmm… I don’t recall mentioning who was paying for the road improvement. Let me go look.

    Nope. I didn’t mention who was paying for the road improvement.

    My issue is with the entire “building new roads does not alleviate congestion” argument. That argument weighs a second order bad (congestion) higher than a first order good (people going where they want to go). In fact, with a myopic silliness, some making that argument actually have the gall to claim that more people will be in the same congestion, so the situation is worse.

  84. And yes. A little googling reveals (1) a multitude of studies and cites to studies showing that, indeed, even considering the network effects that you cite, building highways does not alleviate congestion, and (2) self described “free market” advocates disputing same in a data free manner, usually invoking elaborate free market arguments which would be persuasive … if a free market for highway transportation existed.

    My point isn’t to disparage free markets. Quite the opposite, My point is that a free market defense of current highway policy is a bit like a free market defense of the social security system. That is, any oxymoron.

  85. Mike,

    Well let’s see. I can fail to mention, say, who is paying for, say, social security, in defending the social security system, but I doubt many of the commenters on this site would let me get away with such an omission. Who do you think pays for highway construction, in fact? The easter bunny?

    What I find most amusing is that no one wants to even attempt to come to grips with the more fundemental problem, which is the absurdity of a libertarian defense of the current system of transportation funding.

  86. Finally, even the Cato institute, who argues that, if all transportation was properly priced, there would be more (not less) use of automobiles, concedes as they must that even excluding externalities, current gasoline taxes are insufficient to fund highway construction and maintenance – i.e., we are subsidizing highway users (in fairness, they would argue that we are subsadizing mass transit at a higher rate – though said argument depends upon estimates of the cost of externalities which are, to say the least, disputable).

    And of course Cato doesn’t defend the current, veryun-libertarian transportation policy. While their conslusions wouldn’t make rail advocates very happy, they would also take measures to properly price highway usage.

  87. I can fail to mention, say, who is paying for, say, social security, in defending the social security system

    But I wasn’t talking about who pays for roads. I was talking about roads qua roads and the irritating argument that congestion on a bigger road does not obviously provide higher utility to its users than that same congestion on a smaller road. A better analogy would be my talking about retirement investment and countering the argument that one shouldn’t dollar-cost average (first order benefit) when the market is down (second order cost), and then your responding, “Who do you think pays for your retirement? The government, of course, through Social Security.”

    If you want to get into road funding, I think that roads are a private good that should be paid for by their users as they are using them. Intercity roads should be completely private. Intracity roads should be privatized wherever possible and otherwise treated as commons with improvements by the community, still paid for by usage.

  88. While I am addressing arguments…

    one might also add a substantial portion of our military budget, given the use of our military in ensuring a stable oil supply

    I think it is self evident that the US tromping around in the Middle East makes its, and the world’s, oil supply less stable than if it simply bought oil on the world market. Please don’t charge moronic foreign policy led by economic illiterates who don’t know what a fungible commodity is as an oil subsidy. It is exactly the opposite.

    other govenmental policies (primarily zoning)

    You will be hard-pressed to find someone as against zoning as I am. Nonetheless, zoning is a local activity performed by local residents that actively demonstrates their preferences. In a free market, people would like to live on large lots in a nonindustrial area — not the best way station for a train. While zoning passes some of those costs onto the rest of society, the expanding sizes of houses over the decades clearly show that people would be willing and able to pay more if that’s what it took in a free market.

    Would there be more mass transit in a free market? A little. Would there be more road travel in a free market? Yes. A lot. Precisely because road usage would be charged what it cost, congestion would decline and road usage would increase.

  89. MikeP,

    Some of what you say I agree with, some I disagree with but can’t adequately answer in the limited space of a blog comment, but this:

    “In a free market, people would like to live on large lots in a nonindustrial area — not the best way station for a train. While zoning passes some of those costs onto the rest of society, the expanding sizes of houses over the decades clearly show that people would be willing and able to pay more if that’s what it took in a free market.”

    deomstrates economic illiteracy, wishful thinking, or both. It makes no sense to extrapolate preferences that are skewed by current govenmental intervention – including but not limited to zoning and, perhaps even more significantly, by tax policy (the mortgae deduction) and assume that said preferences would obtain in a truely free market. Now, I expect that the opposite would be true, that, absent zoning laws and the mortgage subsidy which favor large properties (and zoning lawss which discourage mixed residential/commercial developments) people would prefer (at the margin) smaller lots/more dense communities. Afterall, even under the current set of warped incentives, city housing in good neighborhoods is MORE expensive than equivelent suburban housing, a price signal that mindless advocates of suburbia like yourself tend to ignore.

    Face it, absent a whole host of policies which favor a certain lifestyle – big pedestrian unfirendly suburban lots in exclusively residential neighborhoods – said life style would go the way of the dinosaur. Especially if the the prices of driving an automobile were properly priced (I suspect the biggest POLICY difference between you and I would be that I would include in said pricing a cost for carbon emmissions).

    Now, would this necessarily mean more public transportation. No. But it probably would mean more walkable communities, shorter commutes, and shorter drives to shopping and other venues. Thus, less driving without necessarily more public transportation, as the market would promote rational development, instead of the stutus quo, which is the result not of people’s free chocies, but of decades of govenmental intervention.

    It is particularly amusing to me that free market advocates can’t see the extent to which a certain life style that they prefer is made possible only by massive governmental intervention.

  90. And this:

    “.”

    represents a laugahble – and very un-libertarian – misunderstanding about how local govenments work. Again, why are people who are so clear eyed in identifying rent seeking behavior in other contexts so blind when their own ox is gored?

    But even to the very limited extent that it is true, it rather misses the point. Preferences of a local community don’t necessaarily map on to the preferences of the larger community. Such communities wouldn’t “need” to adopt zoinign restrictions on high density development if there wasn’t such a massive, unmet demand for such development.

  91. Oops, I forgot to cut and paste the quote that I was responding to. I was commenting on this:

    “zoning is a local activity performed by local residents that actively demonstrates their preferences”

  92. LarryM,

    Earlier you insisted that I wanted government to pay for roads when I said no such thing.

    Now you insist that I want large homes on large lots in business-empty suburbs when I said no such thing.

    I don’t. I want a much better mix of housing. I want much higher densities where they make market sense. I want the price of transportation to be what it costs, whether car or transit. I assure you that the extra dime or quarter an appropriate carbon tax would add to a gallon of gasoline is laughably low compared to the difference between transit’s price and cost.

    I’m just telling you what I see on ballots election after election: utter protection of existing sparse suburban development in the guise of “smart growth” which means, in their eyes, “growth somewhere else.” I don’t doubt that they will be willing and able to pay for slightly smaller houses on slightly smaller lots far from businesses absent the zoning subsidies.

    While dropping the heinous mortgage deduction will make houses more expensive relative to apartments, I think it will lower the price of houses where houses are expensive because of limited space — i.e., the hearts of mixed communities you appear to prefer.

    Yes, on the margin houses will become smaller and lots will become smaller. But I seriously doubt things will be that much different.

    You and I probably do agree a lot here. But I don’t think I am the one putting his ox on the line.

  93. I don’t have the time to fully engage you on your latest post, and I’m not sure that I want to given that we do agree on a lot. But a few points, less fully developed than I’d like:

    (1) Re “Now you insist that I want large homes on large lots in business-empty suburbs when I said no such thing.” My main point was that you stated – pretty explicitly – that you believed that that preference would obtain under a free market. I disagree. I admit that I also stated my assumptions about your own preferences; if I’m wrong, fine. But that was scarecely my central point.

    (2) Re carbon pricing, I suspect we would disagree by at least an order of magnitude as to the appropriate price. I’ll be the first to admit that such pricing decisions are problematic, given scientific uncertainties (not about the existence of AGW, but of it’s severity), and the fact that (by definition) the market is unable to properly determine the price.

    (3) Regarding ballots, I think you are repeating the errors that you made in your earlier posts. Firstly, while some zoning decisions (anti-growth decisions) are voter driven, other zoning decisions (favoring a certain type of suburban development) are developer driven (my rent seeking comment). Secondly, the fact that communities want “growth somewhere else,” while correct, says very little about the kind of communities that people would want to live in absent the perverse incentives of the present system. Moreover, being anti-growth is not quite the same thing as being anti-dense communities. Afterall, go back far enough and people choose to live in dense communities (towns) surrounded by farmland. I’m not naive enough to think that we are going to go back to that precise model, but the assumption that people make – and that you seem to share to a large extent (“But I seriously doubt things will be that much different”) – that current housing preferences in a distorted market would obtain in a free market – seems quite myopic to me.

  94. More regarding zoning, in my neck of the woods we have an interesting contrast – some communities where the voters seem to really control the zoning process have extreme anti-growth policies, whereas other communities are basically wholly owned subsidiaries of the developers. In those communities there is plenty of development, but it’s the worst kind of pedestrian unfriendly sprawl. Both extremes represent a distortion of the market in very different ways.

  95. If they were, then one would, indeed, expect that increasing highways would decrease congestion. But they aren’t, and therefore building more highways does not aleviate congestion.

    I guess the congestion relief the SF Bay Area experienced after expanding I880 in the 80s must not have happened.

    even considering the network effects that you cite, building highways does not alleviate congestion

    Does not relieve congestion where? Claiming that building highways doesn’t relieve congestion on secondary roads isn’t a credible argument. I can very well believe that it doesn’t relieve congestion on the highway itself, but that’s meaningless, since (A) more people are now using the highway, and (B) the lack of congestion relief is a rush hour effect, at other times including immediately before and after rush hour congestion will be lower.

    concedes as they must that even excluding externalities, current gasoline taxes are insufficient to fund highway construction and maintenance

    Including all the gasoline taxes diverted away from highway construction and maintenance? What I’ve seen doesn’t correct for that. And even if it were true, what about the boatload of other taxes paid by auto users? License fees, registration fees, excise taxes on lubricants, sales taxes on cars themselves as well as auto-related parts and service, and insurance excise taxes. Ignoring the totality of taxes paid by auto users in order to prove they don’t pay for themselves is dishonest.

    In those communities there is plenty of development, but it’s the worst kind of pedestrian unfriendly sprawl. Both extremes represent a distortion of the market in very different ways.

    In what way does a developer selling their land to customers who want “pedestrian unfriendly sprawl” (else why would they live there) constitute a distortion of the market? It isn’t meaningful to call a developer seeking such zoning a rent-seeker, because they are only reacting to what their customers want. Rent seeking, properly defined, means seeking laws that benefit the seeker at the expense of their customer, whereas developers seek zoning rules that will attract a customer. If you want to see distortions of the market, look at Portland OR, where mandatory density so beloved of smart growth advocates produces housing nobody wants. Even with the millions of dollars Portland has spent subsidizing them they are still abject failures.

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