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Externalities

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ThePostmaster Posted: Mon, Jul 28 2008 11:41 AM

So one of the things that people seem to complain about the whole libertarian/minarchist/anarcho-capitalist/voluntaryist ideal most is our response to externalities. Some people who might otherwise join our side seem to object on these grounds alone. Here are a few examples.

 

1. Sure it might be your own business if you drink, smoke, eat fatty foods, but when you have bad health it makes all our healthcare costs go up and imposes and externality, so some "nanny state" laws are justified on these grounds even if unjustifyable from "protecting you from yourself."

 

2. If you open up a nightclub out of your own home and it annoys your neighbors. Libertarians think private property is sacred, but what if it pisses off my neighbors with noise and drunk people and stuff.

 

3. Pollution, obviously.

 

So far those are the main ones, lifestyle choices impose monetary costs on others so should be regulated, what you do on private property can disturb your neighbors, pollution. I actually know how to answer the pollution one around private property and tort law, but what about the others?

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ThePostmaster:
1. Sure it might be your own business if you drink, smoke, eat fatty foods, but when you have bad health it makes all our healthcare costs go up and imposes and externality, so some "nanny state" laws are justified on these grounds even if unjustifyable from "protecting you from yourself."

The only way it can impose costs on others is if we have a socialised health system. Your private insurance company will insure you based on your personal criteria (genes, behaviour, etc.). Other people's behaviour would not drastically effect the price of your healthcare. Fat people cost the 'free' healthcare system so much money the government is beginning to pay people to lose weight. Taxes on food and smokes hurt the poorest people the most. The poor give about 80% of their income back to the government. Any nudge to get people to do what's good for them ends up hurting us all, not helping.

 

ThePostmaster:
2. If you open up a nightclub out of your own home and it annoys your neighbors. Libertarians think private property is sacred, but what if it pisses off my neighbors with noise and drunk people and stuff.

If I am harmed by noise of a late night establishment I should be compensated. The money should go to me, not to the government. But being hated by my neighbours is disincentive enough to stop any house-nightclub ideas.  As for drunk people, it's not my responsibility what they do once they leave my place.

 

ThePostmaster:
3. Pollution, obviously.

 

A good article on this is Rothbard's Law, Property Rights, and Air Pollution, among others.

Austrians do it a priori

Irish Liberty Forum 

 

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Bostwick replied on Mon, Jul 28 2008 4:23 PM

ThePostmaster:
So one of the things that people seem to complain about the whole libertarian/minarchist/anarcho-capitalist/voluntaryist ideal most is our response to externalities.

Government does not prevent externalities, it creates them.

If someone sets his house on fire, I pay to put it out.

If someone steals my neighbor's car, I pay to lock him up.

If someone crashes his car, I pay to fix him and his car.

If someone gets fired from his job, I provide his paycheck.

If someone starts a war, I get drafted to die in his place.

ThePostmaster:

1. Sure it might be your own business if you drink, smoke, eat fatty foods, but when you have bad health it makes all our healthcare costs go up and imposes and externality, so some "nanny state" laws are justified on these grounds even if unjustifyable from "protecting you from yourself."

 

2. If you open up a nightclub out of your own home and it annoys your neighbors. Libertarians think private property is sacred, but what if it pisses off my neighbors with noise and drunk people and stuff.

 

3. Pollution, obviously.

All the situations you named are government created externalities.

  1. Government regulation of health care is responsible. Competition in the provision of health care and an unregulated insurance industry would prevent it.
  2. Arbitrary zoning laws makes it possible( though unlikely) for this to happen. A civil court system would prevent it.
  3. Government courts began defending polluters over a hundred years ago, because the polluters, the railroads, were politically connected. Prior to this common law treated pollution in a libertarian manner.

 

The only reason to have taxation is to shift cost off of those responsible. Universal health care subsidizes unhealthiness, and universal justice subsidizes anti-social behavior.

These people aren't against externalities, they are for all (deliberate) government created externalities. What they really oppose is allowing any interaction in which government is absent. That is the sum of their ideology, any justification is ad hoc.

 

Peace

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I'm just curious, did these people pause for a minute to think this through and research how private property can be and has been used to deal with such situations? It would seem not.

-Jon

Freedom of markets is positively correlated with the degree of evolution in any society...

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Solomon replied on Tue, Jul 29 2008 8:35 AM

ThePostmaster:
1. Sure it might be your own business if you drink, smoke, eat fatty foods, but when you have bad health it makes all our healthcare costs go up and imposes and externality, so some "nanny state" laws are justified on these grounds even if unjustifyable from "protecting you from yourself."

Any argument premised on "it drives up prices!" is moot since, to use the same reasoning, attempting to regulate the behavior in question just hurts the suppliers (in this case healthcare providers) by taking away their business.

ThePostmaster:
2. If you open up a nightclub out of your own home and it annoys your neighbors. Libertarians think private property is sacred, but what if it pisses off my neighbors with noise and drunk people and stuff.

I'm a bit tentative about this issue but I'm inclined to agree with Matthew.

ThePostmaster:
3. Pollution, obviously.

If someone's property is polluted, naturally he should be compensation.  But if you're referring to a super-abundant commodity with quality being diminished by someone's actions (e.g. atmosphere), then even if compensation is deserved it would not matter since its value was already zero.

Diminishing Marginal Utility - IT'S THE LAW!

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