I am not a Libertarian Because I Believe in Freedom and Property Rights, And I’d Like to Minimize Government Coercion, Part 2

by Mike Kimel

I am not a Libertarian Because I Believe in Freedom and Property Rights, And I’d Like to Minimize Government Coercion, Part 2

This is a follow-up to my previous post on libertarian philosophy, the aftermath of which was a surprising amount of, well, let’s just call it assorted vigorously uncomplementary communication. (Shows what I get for making myself easy to find, eh?) But I also got some more interesting comments from libertarians which have led me to think further, and perhaps they can help me refine my thoughts.

To quote something I noted in the last post below the fold:

In the end, the question is – who will be coerced, how many will be coerced, and how bad will the coercion be? I tend to come down on the side that the coerced party should be the one that is the first to try to coerce others, and that the coerced party should be as small as possible, and that the coercion should be the least bit possible.

By that I mean the following… when people in an apartment complex listen to loud music, or they let their lawn get overgrown with weeds, or they don’t vaccinate their children, or they dump toxic waste in a river that passes through their property, or engage in any number of other of activities, there can be very large negative externalities created. This is because the loud music doesn’t stop at their property line, and the weeds emit seeds or shelter vermin that move beyond their property line, and stuff dumped in a river keeps going past their property line, etc.

Now, just about every activity produces some externalities, positive and negative. Externalities are a byproduct of human activity and progress, and we don’t want to eliminate the good with the bad. Nothing gets produced without some amount of pollution and/or destruction. That means unless we want to live in caves, some amount of externalities have to be tolerated in society. The question comes down to how much, generated by whom, who decides, and is there some form of compensation for those who suffer the consequences?

Decades ago, Ronald Coase provided an answer. (A comment to non-economists: the paper, perhaps the reason he won a Nobel Prize, is surprisingly readable and I recommend it. A pdf version is here. Its been a decade since I looked at it last, I think I’ll reread it myself!) Essentially, he said that the problem is reciprocal – my right to prevent you from emitting toxic fumes impinges on your right to emit them. As long as the property rights are well defined, and it is easy for the various parties to negotiate, you end up with the same (efficient) outcome no matter who has the right to decide what goes into the air. The reason: the various parties will negotiate amongst themselves.

But there are some problems, aside from who decides the property rights. Coase identified one – that is is often difficult for parties to negotiate; one nightclub has a lot of incentive to generate loud music and might be able to figure out how much that generates in revenue, whereas folks two blocks away might still have their sleep disturbed by some sub-sonic thumping, but they might have a harder time realizing they were harmed or putting a dollar figure on that harm. Besides, how do you get everyone together who was harmed to negotiate?

There are other problems… my son is too young to be vaccinated for many diseases. The anti-vaxx movement is killing herd immunity. If my son gets the measles before he is old enough to get the MMR vaccine, will I know who caused it? In the unlikely even that I do know, in what world will my son be adequately compensated?

But there is one other problem Coase did not consider. I frankly don’t care if someone is listening to mind-numbing bass on their sound system down the block. I only care if I (and to be socially minded) or someone else is forced to listen to that bass. My guess is that in most instances, the person generating the mind-numbing bass doesn’t care whether other people are listening to it either. And while it is possible for the party generating the music to ensure that the music (mostly) stays on his/her property, it is very difficult for a very large number of neighbors scattered over a wider area to protect against the broad range of all possible negative externalities that might seep onto their property, any one of which might start up at any time.

In the end, someone has to decide how much a person can do on his/her property taking into account what externalities are generated. And unless you want a free-for-all or people are sufficiently distant from each other that none of the negative externalities generated is very large, that someone is the government.

From what I can tell, this is the crux of the problem as far as most libertarians are concerned. Given their distrust of the government, they want people to be left alone. And that leads a free-for-all. Galt’s Gulch may even begin as a well-ordered place, but it very quickly either develops order, or becomes an anarchy and eventually gets abandoned. If you don’t believe it, there are countless examples across the American West. Less familiar to Americans, the same pattern can be seen with settlements all across Latin America. Pick any random town in the middle of, let’s just say, the state of Goias in Brazil. (A nice place to visit, by the way, though I haven’t been there in twenty five years.) The history of that random town is probably the same regardless of which one you pick. Some settlers left a bigger settlement somewhere on the coast of Brazil, either because they were looking for gold or wanted to set up a ranch. At first there were no rules, but those settlements that are still around today are called towns and cities, have plenty of rules, and a government to enforce them. I can’t think of a functioning place that manages to remain like Galt’s Gulch after a couple of generations.