Tuesday, May 25, 2004

Governments purpose
Some people wrongly accuse the advocates of libertarianism and related ideologies of being in favor of anarchism, and in general, of being anarchists. But this is wrong of course. Although both fight for limited government in the sense of wanting it limited from its size today, the two ideologies, libertarianism and anarchism, have a very different view on what the "end goal" should be. A short explanation now follows, which of course is biased since I am a human being with opinions and views:

Not all people are good and nice, and not all people care for other people. Some are selfish and violent, and some have a strong need to hurt others just like others have a strong need to heal and help. But most people just want to exceed on their own, live a peaceful life and do their own thing without posing violence to others. For the rare exceptions, there is generally a need for some law-enforcement and of course a court-system to clear disputes and decide a fair retribution when rights have been violated, be it government run or privately run.

Anarchists think a little different. They deny the need for law-enforcement besides a civilian-run one of course, and I don't think they are in favor of a court-system run by the state. I think they want some kind of citizen-councils to come together when something needs to be decided by the public, and be dissolved when the issue has been cleared out. But enough about that (since I'm on very weak ice when talking about the very broad term of "anarchism") ...

What most Leftists and many conservatives say is that libertarians want a very weak government which practically has no role in human society. That is wrong, and this is what makes people confuse libertarianism with anarchism. What libertarians want is a very strong government but with the very limited but important role of protecting people properties and rights. Not a complete definitions but close enough.

But don't we need to make some arrangements to prevent corporations to take everything over and force the public to buy stuff it doesn't need for the price they don't want to pay? No. The very strong government will maintain a free-market environment - no corporations set the law no matter how powerful they are. Corporations can only maintain their size by pleasing the consumer, but while they do so they will face no government action, such as "anti-trust"-laws or "competition-laws", which always come down to anti-trusting the consumer and reducing competition when it comes to pleasing the consumer.

But doesn't the government need to protect the environment? No. Where private property-rights have been clearly defined, and protected by law, there will be no such thing as pollution without the explicit agreement with the owner of land/soil. This is obvious of course. Where is pollution the biggest problem? Is it not in countries where big corporations have been able to grow strong without government action? No. Pollution is not the same in all countries which have heavy-industry inside their borders, for example. Pollution is the greatest problem in the lands of collective ownership of land, like in the former states of the Soviet-union, and many countries which have governments who have listened to socialist-propaganda about environmental-protection. Simply upholding a strong protection of well defined private property-rights is the environmental-protection which we need, and little other.

How about the poor and the children? The oldest cliche of the Left is to say that a huge government is necessary to help the poor and help the children. This is wrong. In free economies fewer people are poor than in socialist-economies, the poor are richer, the poor are poorer for a shorter period of time and the poor have more options of earning themselves up the income-ladder. This the Left wants to exchange for a system where the poor remain poor, but remain it in such a way that they wont really have to break out of poverty and, in fact, can hardly break out of poverty! Government expansion harms first those who have low income and great difficulties with putting out money for this government program or that, although it is meant to help those who need help. Historically, those who enjoy the fruits of "unlimited" capitalism are those who have worked their way fastest out of poverty and, in given time, become among the richest.

What about markets with market failures? Doesn't the government need to regulate them? This has never worked out to be an argument which holds. What markets are we talking about? Well, mostly people mean the markets of health-care, both the healing part and the insurance part. One popular term to use is information asymmetry and even use it with a tone which indicates that no other arguments are needed! I mean, doesn't the doctor know more about healing than the patient being healed? Can't the doctor overprice the patient and heal him badly without the patient being any wiser? Won't insurance companies find themselves mostly stuck with patients that are all very sick, because the healthy people won't see the point of insuring themselves?

This is actually the core and essence of the case against market-run health-care systems. Everyone agrees that the most poor will probably need help with paying the medical-bills, and also poor students and so on, but that is no case against the market, since privately provided help is abundant where the government stays out of financing (because less taxes mean people generally give more to charity and related operation). But the information asymmetry? Well, that's no good is it? In short, the case of that argument is also a weak one, and the reader should simply ask himself how much he knows about his future car-crashes before he buys insurance for the car, or how much he knows about fires coming up in his house in the future, and how the insurance companies attract buyers who generally drive pretty damage-free and have good fire-protection gadgets in their homes. (Hints: Bonuses, discounts and refunds.)

But you forget the poor people in other countries! We need government to provide them with help! Do we? How about just not restricting them with customs and excessive regulation and let them trade with what they have, and become rich the same say we did! Experience shows:

  • Free trade gives rise to wealth.
  • When a certain part of the people have the means to become rich, they tend to lift the living-standards for others in their society, and therefore allow even more people to participate in wealth-generation.
  • When people start to enjoy the wealth of capitalism, they tend to demand more freedom in social matters and political ones as well.
  • Results: Capitalism encourages freedom and democracy
This has been found true for many societies, if not almost every one! So to the original question - to help the poor in poor countries, we need to give them free trade, but not free aid, and capitalism instead of socialism (unrestricted aid and loads of trade-restrictions) and fascism (give aid which ends up in the hands of corrupted politicians).

A system of private property rights and well protected civil rights, or libertarianism and related ideologies, is the system of choice. Don't confuse it with something else. Thank you very much.

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