Thoughts on other people’s thoughts on libertarianism

Ed Glaeser kicked this off over at Economix:

He sets some context thus:

Professor Miron’s libertarian mix of love of liberty and skepticism toward the state leads to his view that “radical reductions in government make sense for any plausible assessment of the effect of most policies.

(Emphasis added.)  But really I quoted that so I could quote this:

Consider the purely hypothetical case of a massive oil spill in the Gulf of Mexico. The traditional libertarian would argue that regulation is unnecessary because the tort system will hold the driller liable for any damage. But what if the leak is so vast that the driller doesn’t have the resources to pay? The libertarian would respond that the driller should have been forced to post a bond or pay for sufficient insurance to cover any conceivable spill. Perhaps, but then the government needs to regulate the insurance contract and the resources of the insurer.

Austin Frakt follows up:

“Keep the hand of government off my freedom and out of markets!” sounds like a sensible slogan. I’ve yet to understand how it’s possible. Where’s the line between the helping vs. heavy hand? Anyone claiming to see the absolute demarcation has impressive confidence.

Andrew Sullivan, naturally, is not impressed with “extreme libertarianism”:

This strikes me as a critique of extreme libertarianism (which, alas, tends to crowd out other variants). I believe in strong and aggressive government regulation of this kind of thing. So that companies like BP do not walk into disasters like this one.

Whew.  Where to begin?

First of all, I’m getting deeply annoyed with the tendency to define libertarianism as “opposition to government”.  T’ain’t so.  Let’s exercise our reading faculties and look at the root word — liberty.  Freedom from coercion.  Libertarian opposition to government is — to me at least — more properly described as opposition to government coercion.  Witness, for example, Doug Mataconis’s eloquent libertarian defence of the Civil Rights Act: the CRA led to an increase in liberty, even if it did involve the feds stomping on your right to be a racist dickhead.  (I will note in passing that vanishingly few of the blogs I read, libertarian or otherwise, have mounted even a perfunctory defence of Helen Thomas’s right to be an anti-Semitic dickhead.)

If libertarians spend most of their time opposing government, and we do, it’s because government grants itself a monopoly on aggressive force.  (Hence the double standard Digby notes over violent Congresshitbags vs. violent movie stars.)  “I can kick your ass and get away with it” is about as coercive as it gets.  So if libertarians oppose federal regulation of offshore drilling on ideological (rather than, say, economic) grounds, it must come down to a matter of coercion.  And indeed it’s hard to imagine a regulatory agency that doesn’t coerce the group it’s supposed to regulate.  But external costs — like oil spills — are coercive, too.  So where do we go from here?

Let’s go back to that original point of contention from Dr. Miron: radical reduction in government tends to make sense.  Rather than reading it as a point of ideology, let’s see if it stands up as a pragmatic heuristic.  Sullivan favours “strong and aggressive government regulation”, which’ll make a nice foil.  And since all three of the posts I linked to boil down to “Oh yeah?  Oh yeah?  What do you suggest, then, smartypants?” challenges to libertarians over the Deepwater Horizon fuckup, we’ll use that as a test case.

British Petroleum is regulated by — at least — the Occupational Health and Safety Agency and the Minerals Management Service.  (I’m dead certain there are others.)  OSHA accumulated a harrowing list of violations by BP over two and a half years, presumably in the course of investigating and prosecuting federal workplace-safety regulations — but that record doesn’t seem to have produced a culture of caution, safety, and responsibility at BP.

The MMS, for its part, didn’t exactly cover itself in glory.  As the Atlantic Newswire reports, the MMS was well and truly in the pocket of the oil companies — when its employees weren’t jerking off at work or jacking themselves up on meth, they reveled in “a culture where the acceptance of gifts from oil and gas companies was widespread.”

Now, I’ve presented anecdote rather than data, but you don’t get to write me off just because I don’t have a control group of alternate universes where the MMS wasn’t corrupt.  These anecdotes might indicate that Sullivan’s right: the OSHA didn’t have the teeth to enforce its regs, and the MMS was resigned to — and simply accepted — a world of dominant corporate influence.  If you believe the narrative that “Chimpy McHitlerBurton let teh ebil corporatezorz off the leash”, that might work for you.  (I can’t blame you if you do — both the Democrats and the Republicans are parroting that particular line.  But Bush 43 never earned the strong free-market credentials he claims, and that makes me skeptical.)

What I get out of these anecdotes is a straightforward story of regulatory capture and a single point of failure.  BP didn’t change its ways over two and a half years of “egregious willful violations” because it was cheaper for them to pay OHSA fines than to improve safety.  BP tolerated unsafe drilling practices in the Gulf of Mexico because buying off the MMS was cheaper than doing the job properly.  BP was able to do both because, once again, buying off (er, “lobbying”) the federal politicians who write the regulations was the cheaper option.  In any case, the problem isn’t that the regulations weren’t strong enough — it’s that the regulatory process and establishment is an easy target for large corporations like BP to exploit.

So what happens if we “find someone’s ass to kick” and crank down on the regulatory thumbscrews?  It might give OHSA enough oompf to scare BP into full compliance — and of course it might give MMS a great new tool for shaking down the oil companies — but it won’t remove that single point of failure.  Worse, it might raise the stakes and prompt BP and the rest of the energy sector to pump even more money into co-opting federal regulators.

Note that we’re talking about marginal effects here — not all-or-nothing, total expropriation or total deregulation, but more or less regulation.  And this is where I deviate from Miron: I don’t trust radical changes to have a particularly salutary effect in the short term.  Immediately dismantling OSHA, for example, would probably end up producing a workable workplace-safety framework, possibly even one that doesn’t insist on an MSDS for playground sand, but in the short term it’s a powerful signal to employers that they don’t need to worry as much about safety concerns.

Similarly, I’d like to see a more transparent, less centralized, harder to game — in other words, more market-based — approach to (say) oil-spill prevention, but shitcanning the EPA overnight and hoping for the best is probably the wrong way to go about it.  As a long-time admirer of the Pigou Club, I’m tempted to look for some sort of a levy on products sold by BP to offset the costs of spill cleanup, but I have no idea either how I’d do it or whether it’s practical.


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