[RC] Katrina and libertarians

[Dr. Ernie Prabhakar]

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.


> They would be responsible for the levees, etc, and for designing/ 
> implementing plans for evacuation, clean-up, etc. Perhaps they  
> could insure the city for all damages caused by any Category 4  
> hurricane or lower. They would then go to each "ward" or whatever  
> in the city, estimate the risks, etc, and charge accordingly. Then,  
> if a hurricane is approaching, they would presumably be pretty  
> motivated to prevent as much damage as possible, and to minimize  
> what they could not prevent.
>
> One significant problem/outcome of this idea would be more  
> attention paid to areas that are more likely to flood, which as I  
> understand are more likely to be inhabited by the poor. If they  
> couldn't pay enough to justify the expense of protecting those  
> areas, those people would be in trouble. But that's part of the  
> libertarian creedo, at least as I understand it. Why should the tax  
> payers put up with the expense of allowing these people to live in  
> such vulnerable areas? I think the libertarian view (and so far I  
> would agree) would be to make these areas uninhabitable (parks,  
> lakes, etc).
>
> So -- comments, criticisms?
>
> Rich