Comment: A response to Paul Krugman's article.

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A response to Paul Krugman's article.

Tues. 14/08/11 09:40 EDT
.post #2

Krugman seems to say that "libertarian economics is not at all realistic" because The Free Market (TFM) can't solve the problem of lake pollution by farmers.

At least three problems with this argument:

1. Let's assume that this "problem" can't be solved by TFM. But this doesn't mean "libertarian economics is not at all realistic." There are problems (many of them) statist economics can't solve. Shouldn't Krugman then admit that statist economics is also not realistic? But, he doesn't. It's not a valid argument to say that something is "not at all realistic" just because there are a few as-yet unsolved problems.

2. Krugman does not know that this "problem" can't be solved by TFM. He simply makes the assertion. Krugman does not and cannot know, for example, that TFM might discover ways of providing water consumers want and will pay for despite the presence of farm phosphate runoff. What Krugman does know is that government has failed to make such a discovery. And why does it fail? Because government need not be innovative: Instead, it can legally point its guns and take our money whether or not we are satisfied with its "service," whether or not we even use its "service." It can't be put out of "business" because it operates outside of market discipline and regulation.

3. We do not have anything even approaching TFM. What we have is statism, and the very phenomenon Krugman calls a problem has occurred under his beloved statism, not TFM he reviles.

Krugman makes the common mistake of portraying our system as two antagonistic systems operating simultaneously: "The Free Market" and government. In Krugman's view, "TFM" produces problems like pollution, and the government is there to solve or at least minimize those problems through regulation. He fails to acknowledge that, when you mix legal coercion and gun-pointing with TFM, you no longer have TFM, just like when you mix poison and clean water, you no longer have clean water.

As you've probably heard, the City of Toledo recently warned its residents not to drink the water. Why? Contamination from toxic algae blooms in Lake Erie, largely caused by the runoff of phosphorus from farms.

Can you imagine a bottled water company warning its customers that its product was contaminated, then forcing those same customers to pay for the water anyway, then bestowing a Nobel Prize on a New York Times communistcolumnist who tells the customers what a great job the bottled water company is doing? Yet when government does the same thing, Krugman sees no problem. The fact is that government has failed to provide clean water, yet continues to collect money, at the point of a gun, for the ostensible provision of clean water...and Krugman gets paid and rewarded to tell us how "libertarian economics is not at all realistic."

But libertarian visions of an unregulated economy do play a significant role in political debate, so it’s important to understand that these visions are mirages.

This vision is Krugman's mirage only, and Krugman is tilting at scarecrows (i.e. Straw Men). Libertarians don't envision "an unregulated economy." Libertarians envision and endorse market regulation, not governmental regulation. Libertarians envision and endorse competition, where both profit and loss are private, not a legal gun-pointing monopoly, where profit is private and loss is socialized. Libertarians envision the elimination, through loss of voluntary patronage, of companies that fail to serve their customers, not the preservation, through gain by involuntary taxation and inflation, of a blundering, inept, corrupt, coercive, and irresponsible monopolistic parasite that proclaims to be serving its host while providing inferior products and service.