Big Lies: Free Market Economics

One of the hallmarks of Paul’s career, and the thinking of his followers, is the ludicrous – outrageous, really – belief that somehow maintaining a nation can be done entirely by the private sector, and that any taxation – any taxation, including of corporations – amounts to theft.

This is abuse of rhetoric in the first degree. It’s a nice little button to push that gets the monkeys flinging poo, but bears no relationship to reality.

This is quite typical of the sort of thinking that Paul and his acolytes engage in.

Don’t get me started

One recent comment on the video really jumped out at me, and I want to take some time to dissect it a bit. I chose this particular comment because it very effectively illustrates so many of the logical and ethical flaws and failures in “Libertarian” philosophy circa 2011.

jb4rp2012

@lowgenius everything here that you listed should come from the private sector… The courts and police should come from your city, county or state governements [sic] not the federal government. Government produces nothing it only takes YOUR money and then spends it on things they want from people they know.

Pasted from <http://www.youtube.com/watch?v=jpkpggjiYzE>

First, note the username; this person has obviously created a YouTube account specifically for the purpose of promoting Ron Paul’s 2012 presidential run.

This tends to get things launched on questionable footing; certainly one can’t expect a person who names themselves as a promotional tool for the person in question to be objective. But that’s just a sidebar thing, a quirk, a note of interest to be considered, but not a primary point on which to construct an effective counter-argument.

Let’s take a look at the meat of these arguments.

Government By Corporation

The first assertion from this poster – and it’s as common a refrain from Paulites as “yeah” is in rock and roll songs – is that all of the services provided by the government “should come from the private sector.” Now keep in mind that “everything here that [I] listed” included:

• Roads
• Police
• Courts
• The internet
• NASA
• NIH
• CDC

• The National Weather Service

• “and thousands of other agencies and programs that make your day to day existence possible.”

I don’t know about you, but first and foremost I definitely don’t care for the idea of police and courts being privately owned. Being privately owned means that their first priority is – and must be – profit. Not justice, not law enforcement, not truth or righteousness or fairness. Profit.

Now one of the things is often put forth by these types of folks is the idea of privatizing road construction.

Roads are networks, right?

Consider rural broadband in this country for a moment. Why is it so hard to come by?

Because it’s not profitable.

Now apply that to road construction.

How long do you think it would be until you had to park a couple of miles from grandma’s house and walk the trail instead of driving down her street…because she lives out in the middle of nowhere and there’s no way to turn a profit by building a road that leads to her house? (For a broader discussion of this point, please see my article “What If We Privatize Everything?” at PoliticusUSA.Com)

What the “private enterprise should handle it” crowd fails to recognize – in spite of their loud and insistent claims that anyone who criticizes them “doesn’t understand free-market economics” – is that we’ve already had a “let private industry handle it” system in human history. Several of them, in fact.

And they were all despotic oligarchies.

Local Control

Another point where this post-Buchanan breed of “Libertarian” seems to go completely off the rails is local control.

On the face of things it’s obviously a valid point to make; a police officer who is familiar with his beat and the people on it will be more engaged with local citizens and build a healthier and more effective relationship with them, in part because of cultural similarities.

Okay, that’s great as far as it goes…but the gist of this argument relies on a subtle but clear reductio ad absurdum fallacy. If it makes sense to have individual police officers not commuting coast-to-coast for work, then it makes sense to have the laws they enforce doing the same thing. Huh? Exactly. It makes no sense…but that’s exactly what the “local control” demagogues are proposing.

The unfortunate reality is that “local control” has done a fair bit of harm in this country…and that’s a reality that, once again, the modern “Libertarians” ignore for convenience and a smug sense of superiority.

The assertion that “courts should come from your county, state, or city government” makes little sense to me. If there is no unification of law across various political boundaries, why are we a confederated nation of states in the first place? Under that thinking, the US is really no more than a beta version of the EU – an economic union without the necessary consistency of fiscal and legal policy and mechanisms across multiple states to make it work.

Social Welfare

A final common point made by small-government types is that absent taxation, private charity would be more than sufficient to take care of everyone’s needs. If it weren’t for those darn taxes, we’d all be running soup kitchens.

This is demonstrably untrue. The fact is that historically (at least as far back as the history goes), charitable contributions tend most often to move with the rate of taxation as a percentage of gross domestic product. Taxes increase, charitable giving increases. Taxes go down, charity goes down with them. This is true both as comparison to GDP and as comparison to tax/charity rates of the preceding year.

This is precisely the opposite of what one would expect if the “lower taxes = more charity” argument held any water at all.

Conclusion

So you can see that this notion of free-market economics being a solution to the services that are provided by centralized government just doesn’t hold any water when you really hold it up to the light.

Thanks very much for watching. Please be sure to check out the links to other articles, wherever you’re watching this video. The main article attached to it has links to several other articles that explore some of these issues in greater detail, including the provision of some numbers and cites and things like that.

Thanks once again, I appreciate you stopping by, and we will see you soon.