[RC] Katrina and libertarians

[Dr. Ernie Prabhakar]

Hi Rich,

On Sep 30, 2005, at 8:13 PM, Rich Hockett wrote:
> what I've done (or tried to do) is show a way to minimize  
> government (ie, make it smaller), not eliminate it. I suppose some  
> Libertarians (capital L) would like to eliminate government, but  
> why bother discussing radical extremists? ;) As a radical centrist,  
> shouldn't you attempt to make use of the effective portions of a  
> philosophy rather than continue to bash the ineffective portions?

Certainly -- I've already conceded long ago that I agree with  
Libertarians that government should be *leaner*, and that there are  
many valid Libertarian critiques of government.

But, here is the kicker. *Simply* making government smaller is not  
enough.  In fact, I would assert the following axiom:

"In order to deal with a real, large problem, the only way to make  
government a) smaller is to simultaneously make it b) stronger, and  
c) smarter."

My gripe with Libertarian proposals is that they ask for (a) while  
refusing to allow (b)  and claiming (c) is impossible.

What your proposal really comes down to is:

a) The government should *require* flood insurance from all residents  
and property owners in flood-prone areas

b) We should enlist the creativity of private corporations to measure  
the financial risk of improperly managed levees

c) We will need government regulation of those insurance companies to  
prevent i) price-gouging or ii) insufficient reserves

In other words, we need to *strengthen* governments ability to a)  
develop, and c) enforce policy, in order to get them out of the  
business of b) implementing policy.

> I prefer the libertarian (lower-case L) viewpoint that central  
> government handle what cannot be handled by private institutions,  
> and nothing more. So yes, the government is still going to have to  
> use coercion to guarantee a fair and just market, etc. Bankruptcy  
> is a problem that needs to be dealt with on its own.

If you're willing to concede that those issues *must* be dealt with  
by government, then I'm happy to support your proposal -- but I  
suspect you could no longer call it Libertarian (or even small-l  
libertarian)

> And finally, I never mentioned "big business." To me that would  
> mean a nation-wide corporation that insures/protects threatened  
> areas all over the place. My plan was for a company focused on one  
> area. Perhaps there could be a "federation" of such companies --  
> enjoying the benefits of both big and small corporations ;)

Um, that seems like a double-standard.  Do you mean to say that you  
don't think State and City government are naturally less incompetent,  
since they're relatively small? Or are you tacitly admitting that  
size isn't really the issue? Or saying the effective scale of  
business is different than that for government?

> So how about these points for libertarianism (lower-case L):
> 1) there are many problems that can (and should) be handled by the  
> private sector rather than the public, and that's OK :)
> 2) local institutions (private and public) are more effective and  
> efficient than big government
> 3) rational, self-interested financial calculations often yield  
> better results than political aspirations

I consider those formulations red herrings.  I would instead say:

a) Market solutions allow greater individual creativity at the price  
of lower social accountability
b) Local solutions enable greater responsiveness at the risk of  
global mis-optimization
c) Rational, self-interested financial calculations are only optimal  
if they take into account long-term consequences
d) Rational, self-interested political  calculations are only optimal  
if they take into account long-term consequences

Would you disagree with any of those statements?  If so, I would  
certainly concede:

e) Our current financial systems tend to provide greater discipline  
than our current political systems

But that's a fixable aspect of the systems involved, not an immutable  
law of nature.

-- Ernie P.

>
> -----Original Message-----
> From: Centroids-bounces at radicalcentrism.com
> [mailto:Centroids-bounces at radicalcentrism.com]On Behalf Of Dr. Ernie
> Prabhakar
> Sent: Friday, September 30, 2005 6:06 PM
> To: Radical Centrist discussion list
> Subject: Re: [RC] Katrina and libertarians
>
>
> Hi Rich,
>
> On Sep 30, 2005, at 5:21 PM, Rich Hockett wrote:
>> I haven't been very vocal lately (too busy), but I have been
>> following along.
>> I just had to pipe up here with an idea that's been buzzing around
>> my head since Billy has been using Katrina to bash libertarians.
>> First off, I'm not (entirely) libertarian, so I can't speak for any
>> specific philosophy/political grouping/etc. This is just me
>> speaking ;)
>
> Thanks for speaking up!  I think you are right that Billy has been
> overly broad (or perhaps vague) is his critique of libertarians, and
> I think your solution does match Libertarian philosophy.
>
>> I have a problem with Billy using the political mistakes concerning
>> Katrina to bash on libertarians. As far as I can tell, most of the
>> blame here is on the layers of bureaucracy, as well as
>> unaccountable politicians. This is exactly what libertarians are
>> against! So the Katrina disaster seems to entirely justify the
>> libertarian antipathy towards "big government."
>
> Yes and no.   As I've said before, we *all* agree that Katrina shows
> the problem of *dumb* government.  The radical centrist view, though,
> is that the solution is to create *smarter* government, not just
> *smaller*.  Most Libertarians seem to equate the two, but I don't
> really see the justification for that.   After all, large _companies_
> tend to be slower and dumber than small ones -- but not always.
>
>> Now, what might the libertarians offer as an alternative? I don't
>> know. But here's my idea:
>>
>> what if a private corporation set itself up (through competing bids
>> or something) to insure the city against hurricane damage, and at
>> the same time held the responsibility for preventing that damage.
>
> There's an old saying: crime wouldn't pay if the government ran it.
>
> There's also a flipside: business doesn't pay if it has to be the
> government. :-)
>
> I'll give you points for creativity, and there's certainly elements
> there worth considering.  But, I don't see how it really solves the
> problem. Isn't this the same as simply mandating that every property
> owner and resident to carry flood insurance? That still requires  a
> central mandate, and authority to enforce it -- something I know
> Libertarians dislike, right?
>
> There's other complications.  How do you ensure the corporation
> doesn't mis-invest and go bankrupt?  Either the government acts as re-
> insurer -- and thus has to do all the same tests and validation -- or
> the investors could pocket fat profits for the next twenty years and
> be shielded when it runs out of money at the next big hurricane.
>
> If you follow the logic far enough, I think you'll find that we have
> all the same problems we do now.   It seems simpler (and cheaper) if
> we're willing to assume that nothing goes wrong in the governance
> mechanism.  But, if we could assume that, then even government would
> work, right?  Would you really want to trust, say, Enron, or even
> Halliburton, with *your* city?
>
> The valid point that I think Billy *did* make is that Katrina
> highlights what I consider the three fundamental fallacies of
> Libertarianism:
>
> a) There is always a solution that does not require a strong central
> authority with coercive powers
>
> b) Big business is inherently wiser than big government
>
> c) Rational, self-interested financial calculations *always* yield
> the optimal social result
>
> Are there ways to harness market mechanisms to empower more rational
> decision making?  Yes, but only as a way to *discipline* the
> government, not replace it.  I'm all for market-based
> *implementation* of policy, but there still needs to legitimate
> central *development* of policy.  A distinction Libertarians seem
> unwilling to recognize.
>
> That to me is the real crime of Libertarians.  They are so blinded by
> their hatred of government [just as modern socialists are blinded by
> their hatred of corporations] they refuse to take the rational steps
> needed to *redeem* government.   Instead, they merely gloat about how
> horrible government is -- not realizing that by saying government is
> *inevitably* incompetent they give "aid and comfort" to those
> politicians and bureaucrats who *should* know and do better -- and
> would, if they had more accountable systems to enforce it
>
> At least, that's how I see it.  I welcome a rebuttal.
>
> -- Ernie P.
>
>
> _______________________________________________
> Centroids mailing list: Centroids at radicalcentrism.com
> http://radicalcentrism.com/mailman/listinfo/ 
> centroids_radicalcentrism.com
> Archives at http://radicalcentrism.org/pipermail/ 
> centroids_radicalcentrism.com/