I received a note from my friend Hanad today: "I'm curious, what would the libertarian solution to the BP oil spill be? Trying to figure out how problems like this would be solved."
My response:
It is a very fair question. Here is the “short” answer.
The easiest way to "figure out" the libertarian response to any question is by starting with a couple of the core tenants of libertarianism: 1.) personal responsibility, which includes the acceptance of the concepts of self-ownership and personal property rights and, 2.) the concept that government’s sole purpose is to protect the individual rights and properties of it’s citizens (notice I did not say “organizations” or “groups” -- which is whom the Republicans and Democrats represent -- but I digress...).
Considering these concepts, let us apply them to the facts. The owner of the oil rig, Transocean and BP, who leases it, are responsible for all damage that their actions have caused. So what is the libertarian position on this? Simply put, anyone who can prove that they or their property has been harmed should be compensated by the perpetrators.
Will that happen? No.
Why? Because our government is going to “protect” Transocean and BP.
According to the New York Times, the companies will have to compensate people and businesses for things like property damage and lost business revenue, but that there is a law that currently caps BP’s liability to $75 million and Transocean’s liability to about $65 million.
Why do such caps exist? Essentially, according to the LA Times, government is artificially “stimulating” oil company off-shore drilling by “protecting” them from such damage claims. “Senate Republican leader Mitch McConnell of Kentucky said caps could be an important incentive to keep the private sector exploring for energy resources.”
But what does this government “stimulating” and “protecting” really do? It creates a moral hazard much like what just occured in the mortgage industry when government stimulated and protected that industry with artificial liability limits.
As a blog on the Libertarian Party site states:
“These kinds of artificial liability limits distort the markets, and basically create “moral hazard” by encouraging companies to act in riskier ways than they would otherwise. If BP’s well causes damage to property, then BP should be fully liable for all of the damage. It is BP’s responsibility to “make whole” whoever gets damaged.
If Congress hadn’t limited BP’s liability, it’s likely that BP would have acted differently. Knowing that a spill could cost them billions, BP might have demanded additional safeguards for their well, or tested their safeguards more thoroughly. These choices would have been expensive, but they might have prevented the huge costs that the spill area is now facing.
BP has said that it will pay all “legitimate claims,” even if they go past the liability limit. The problem is that when it comes to property damage, a court should decide what “legitimate claims” are, not the offending company!”
In my view -- and I think this may also be the general libertarian view -- if Transocean’s and BP’s actions caused the damage, they should be held liable, even if it means they are sued out of existence. Ironically, all the Republicans and Democrats can argue about is how much Transocean and BP should dole out in damages, rather than concentrate on the real issue, making whole those common citizen's that have actually been harmed.
On the other hand, let’s consider what would happen if that rig had been “government owned”. How likely would it be that anyone would be able to successfully seek damages if that where the case? Since government's tend to act outside the law, I would argue that no one would have been made whole...or worse yet, they would have been made whole with my money.
Now, an even more interesting question to me is this: Who owns the oceans? Or the moon, for that matter? I tend to lean toward John Lockes’ views on this one, but it sure makes for an interesting thought experiment.
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5 comments:
Correct me if I'm wrong, but your answer is basically "this never would've happened if a libertarian gov was in power." But, technically, it shouldn't have happened with a dem/rep gov in power either. There is nothing in their ideologies that say "protect oil companies from liability." Its gov being corrupt. Actually, MORE gov regulation is exactly what would've prevented this, not LESS gov regulation.
But if your argument is that a libertarian gov is uncorruptable one, then...there is really no point discussing this.
My question is basically: my understanding of the libertarian philosophy is less gov is better. Small local govs and very little taxes. But what happens when there is a big crisis like this? something that is too big for one state or one community? what if a private business does something this catastrophic because gov is hands off and lets them do what they want(kinda like BP)? With significantly less taxes - YOUR money - where will the $ come from fixing things - cleaning & restoring & compensating? BP will go bankrupt - what next? What if there is no company to punish - Katrina?
My problem with libertarianism is that its impractical and problems like these seem to foster a "it didn't happen to me so I shouldn't have to deal with or pay for it" attitude. Which reminds me of the quote "government is the enemy, until you need a friend."
Maybe I just don't understand Libertarian principles. If so, educate me.
Oh, and one more thing, it shouldn't be called a "spill." A spill has an end. This is ongoing.
“Correct me if I’m wrong, but your answer is basically “this never would’ve happened if a libertarian gov was in power.”
I do not believe that. Nor do I believe that more regulation would have prevented it. Oil rigs are already regulated. See:
http://www.comcast.net/articles/news-politics/20100524/US.Gulf.Oil.Spill.Washington/
Seems government “regulation” is often just an incubator for crony-ism.
And even if more government regulation could stop every bad man-made behavior and/or error, more government regulation could not prevent natural disasters. Bad things happen. Government can't save us from everything even if it were effective at doing so.
Essentially, I am in complete agreement that regulation is needed. Where you and I differ is in where we think that regulation should come from.
No matter how well-intentioned, I believe all government regulators are susceptible to corruption -- as exemplified in the link above. The marketplace, on the other hand, more accurately rewards the winners and punishes the losers. It is not always perfect -- and I would NEVER make that claim, but it is the fairest and most disciplined system that exists. (In fact, most corruption that occurs in the marketplace is when government decides it knows better how to chose winners and losers and gives unfair advantages to whom it favors.)
“But if your argument is that a libertarian gov is uncorruptable one, then...there is really no point discussing this.”
My point is the EXACT opposite of that. ALL governments are corruptible. And the bigger they get, the more chance there is for MORE corruption. Unlike a free market, where greed is regulated by fear of failure, there is nothing to regulate government. On top of that, regardless of what claim any flavor of politician may make, none of them know what is best for you more than YOU know what is best for you.
I also would never say “less gov is better.” I would, however, say that the more personal freedom an individual has, the better off we all are for it. There is no such thing as too much freedom, as long as it does not infringe on the freedom of others. But freedom does require responsibility. Our choice is to be like the turkey and have the farmer feed and care for us everyday, hoping that he will remain benevolent; or be like the hawk, soaring freely, but having to fend for ourselves. That “fending” requires personal responsibility.
Which leads me to your point on taxes. I am not as hardcore against taxes as many libertarians are, but here is my general problem with them: They only go up: they never go down. (“A little government involvement is just as dangerous as a lot -because the first leads inevitably to the second.”-- Harry Browne )
There is always some “worthy” cause: education, police and firefighters, elderly care, military, health care, roads, disaster clean-up, etc., etc. Since none of these things have to perform to any competitive standard, the more they fail, the more funding they get. When was the last time you heard of a government program that was so successful that they lowered their request for funding? (BTW - I like the idea of a flat tax to take care of the things that government needs to “fix”. I live within a budget. All I ask is that my government do the same.)
“But what happens when there is a big crisis like this? something that is too big for one state or one community? what if a private business does something this catastrophic because gov is hands off and lets them do what they want(kinda like BP)? ”
Short of using a nuke to cap it off, it seems the “federal government lacks the expertise and the technology to manage the cleanup effort, according to environmental groups. Like it or not, the government can’t contain the worst environmental disaster in U.S. history without BP.” See full article from DailyFinance: http://www.dailyfinance.com/story/bp-oil-spill-government-fix/19489192/?icid=sphere_copyright
“With significantly less taxes - YOUR money - where will the $ come from fixing things - cleaning & restoring & compensating? BP will go bankrupt - what next? What if there is no company to punish - Katrina?”
Why do you naturally assume the best solution for “cleaning & restoring & compensating” must be supplied by the government? Why are they the nanny? Katrina is a great example. FEMA? Really? Louisiana will thrive as businesses revive, not because the government sent a bunch of trailers down there two months after the fact.
The current oil “leak” is a tragedy. Many people are going to be adversely effected. But why should the government compensate them? If something tragic happens to me, is it government’s job to “make me whole”? Especially when you consider government has to take those resources from the production of other people to do so. And again, who decides what “tragedies” qualify for compensation -- and more importantly, which do not?
And why are you so eager to “punish” BP? Do you really think they wanted this tragedy to happen? (And after all, as I stated before, it is not even their oil rig. They are leasing it.) That sentiment seems as silly as those coming from the Right, who are now trying to make Obama a villain for not “acting fast enough”. What is he suppose to do? He is not some all-knowing, all-fixing superman. He is a public servant. He didn’t cause this disaster to happen. He doesn’t possess some magic plug to fill the hole.
If BP is found to have been negligible, they will be held responsible. What about the “over-seers” -- the regulators mentioned in the article above? Since they are government “officials”, they will get their hands slapped at most. And do I dare say, they probably won’t even lose their jobs.
“My problem with libertarianism is that its impractical and problems like these seem to foster a “it didn’t happen to me so I shouldn’t have to deal with or pay for it” attitude. Which reminds me of the quote “government is the enemy, until you need a friend.”
I do not see government as “the enemy”. I just don’t see it as the answer to every problem. I would concede however, that government does have a role to play. But government is a bureaucracy and historically, bureaucracies become less effective the bigger they get. Therefore, believing that government is an effective tool to solve all problems is “impractical” from my point of view.
As for the ““it didn’t happen to me so I shouldn’t have to deal with or pay for it” attitude”: One cannot help others until they accept responsibility for themselves first. Our society is evolving into one that is constantly looking for scape-goats rather than solutions. That is because we have been conditioned to spurn responsibility.
There was a time in this country when, if someone’s house burned down, all the neighbors would show up to help out. Now we have been conditioned to look at someone else’s tragedy and just say, “Too bad. Well, the government should really do something about that.” The real tragedy is that people pay taxes, then figure they have “dealt with it and payed for it”, and it is no longer their problem. Responsibility ends once that tax check is dropped in the mail.
On the other hand, considering that I am wrong about a lot of things, in the grand scheme of things, I do have to concede I may be wrong about the importance of personal liberty as well. Maybe we should all be like the turkey and give all our resources to the government, let them take care of our every need and hope for the best.
But please continue to dig deeper, beyond the simple view of libertarianism through the tainted glass of “no taxes” and “anti-government”. Actually, most libertarians that I know (with a small “l”) have nothing to do with politics, could care less about tax policy and/or government.
Indeed, my path to libertarianism was more akin to Naomi Wolf's. I was left-leaning on social issues and become more libertarian in my thinking simply because I believed people should have the right to live their life any way they want, so long as they don’t impede on the freedoms of others. It is about respect for my fellow man. That may be “impractical”, I don’t know. In essence, I am humble enough to admit that I do not know what is best for Hanad. Therefore, Hanad should freely choose what he feels is best for himself. Libertarianism (again, with a small “l”) is really no more complicated than that.
Only later did I come to realize that more government -- in virtually any form -- was an impediment to that end.
I know you may never fully agree, but I hope that helps to clarify some aspects of libertarianism, at least some what.
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