When Libertarianism Does Not Fail

LvMIC:

To those who value truth, reasonable explanations for happenings are a must.  For example, it would be nonsensical to declare that an increase in ice cream sales is directly responsible for the increase in kidnappings.  Correlation is not always causation.  The more sensible account for an increase in kidnappings is the steady onset of warm weather as more people engage in recreational activity outdoors.  The warm weather effect just so happens to explain why ice cream sales have picked up as well.

Though it is impossible for man to totally rid himself of his values and preferences in the process of describing how the world functions, he can certainly develop sound explanations for perceived dilemmas that can withstand intellectual criticism from his peers.  In the world of internet blogging, such a process tends to be hijacked by an underlying agenda that seeks to discredit a particular viewpoint.  Case in point:  Salon columnist Will Doig’s recent crack at libertarianism entitled “When Libertarianism Fails.”

In the article, Doig attempts to show that Chinatown buses in New York City may have been profitable and were adored by consumers but their model of business wasn’t exactly the safest.  And it is because of this lack of safety Doig denounces the free market for allowing travelers to ride under less than pristine conditions.  He writes:

The Chinatown buses were frequently hailed as a smart new transit model and an example of urban ingenuity. But last week’s crackdown and several recent crashes complicate that picture, illustrating that a $15 bus ticket can be like a $3 steak — you don’t necessarily want to know why it’s so cheap. Many of these bus lines were shameful by any normal transportation standards: unlicensed drivers, deadly safety records, a disregard for the streets they drove on. Much of what made them “innovative” was good old-fashioned corner-cutting.

What Doig and his fellow left-leaning writers fail to understand is that freedom of choice is necessary for markets to function effectively.  Not one person was ever forced to patronize a Chinatown bus line.  Each did so voluntarily.  The crashes which occurred were indeed saddening but what must be remembered is that all modern day transportation is dangerous to some degree.  Just by leaving your place of residence, you open yourself up to all types of hazardous situations.  Because there is an inherent danger in interacting with the world doesn’t mean you should board up your windows and take refuge in a closet however.  Open markets are what allow experimentation in the provision of goods and services to occur.  As long as people are free to choose, those producers who fail at meeting consumer demand will cease from operating.

Accidents will happen as humanity is imperfect.  This shouldn’t be an excuse for the heavy hand of the state to interfere in what would otherwise be a harmonious transaction between buyers and sellers.  History shows that escalating use of government red tape leads to less competition and therefore fewer options for consumers to seek out better services.

Interestingly enough, Doig points out how entrepreneurs are currently transforming the Big Apple for the better.

And, more to the point, in the urbanism era, food trucks, pop-up parks and other flexible, pared-down amenities are seen as just as good — or better than — more established or expensive ones. Today, we recognize that a scrappy curbside bus service can be smarter transport than a high-speed rail line if it ultimately better serves its users’ needs. This “hack your city” mentality is upending city life in fantastic ways, allowing citizens with great ideas to improve our lives. It’s given us gems big and small, from instant playgrounds to New York’s High Line park.

This is the essence of entrepreneurship.  The emergence of trucks that offer a quick meal or street cars that provide quick transportation are simply the products of people seeking to please others in pursuit of a profit.  As anyone not totally ignorant of basic economics should know, earning a return on investment is the only way to keep such efforts in business.

But Doig refuses to fully embrace this enriching trend.  He argues that while efficient and affordable alternatives to public transit may save commuters money, it also steals “riders from the already cash-strapped bus system. They put transit in the hands of low-paid, non-union drivers.”

Here is where Doig’s agenda is revealed.  Consumer sovereignty through the market not only weeds out the inefficient, it also results in less use of government-operated alternatives.  It serves as a threat to the protected class.  What Doig is really advocating for is mercantilism.  His thinking is not new as it goes back to the Europeans of the 16^th and 17^th century.

Doig fears the free market because it has the tendency to improve living standards and enable others to see the state as an anachronistic provider of service.  He would rather see consumers forced to subsidize politically protected ventures than choose to make their lives more convenient.

A perfect example of the type of top-down, centralized planning Doig wants implemented is already present in NYC’s tax medallion system.  Because taxis in New York can only operate legally if they have a state-sanctioned medallion, the subsequent low supply of available taxis has increased the price of fare.  Without dynamic competition, most New Yorkers have become priced out of the taxi market.

What Doig is truly ignorant of is how the market process works as its own regulator.  As per usual, reactionary public officials couldn’t stand idly by and allow the market to fix what some may deem inadequate service.  If a bus company’s safety standards really were dismal, then their customers would likely think twice about purchasing a ticket. It would be an opportunity for competing bus lines with better records to swoop in and pick up market share.  The unsafe company would have to beef up its safety precautions in turn to woo back its lost customers.  The beauty of the market is that it is always self correcting.  The government crackdown has stopped such a nonviolent event from occurring.  At the same time, it has emboldened lawmakers to regulate an industry already in the clutches of various bureaucracies.

What also must be pointed out is that while Chinatown bus lines may have a lousy safety record, they are forced to travel on socialized streets.  Public roads, like the common storehouses of colonial American, often fall victim to the tragedy of the commons principle.  Without private ownership and the ability to charge for individual usage, public streets are used heavily and with little regard to other users.  Those who live in suburbs and must navigate around campers, boats, and other hefty vehicles parked on public streets can certainly attest to this.

State owned roads also prevent entrepreneurial innovation from occurring to perhaps charge drivers of larger vehicles more for using the road than those driving compact cars.  Such socialized maintenance is the reason traffic congestion isn’t addressed in a timely or profitable manner.  And as Walter Block calls attention to:

If the highways were now commercial ventures, as once in our history they were, and upward of 40,000 people were killed on them annually, you can bet your bottom dollar that Ted Kennedy and his ilk would be holding Senate hearings on the matter. Blamed would be “capitalism,” “markets,” “greed,” i.e., the usual suspects. But it is the public authorities who are responsible for this slaughter of the innocents.

In the case of Chinatown buses, it isn’t libertarianism that has failed.  What has failed is New Yorkers not being able to fully act as sovereigns of their wallets and choose that service which best corresponds to their individual needs.  The essence of libertarianism is based on the non-aggression principle.  If people want to voluntarily board a Chinatown bus, they should be free to do so.  Riders will gauge the risk associated with such travel and decide accordingly.  As Doig actually mentions, many have by opting for Megabus and Boltbus which offer better amenities and a safer ride.  If NYC’s unionized public transit system wasn’t so inflexible and resistant to change, it’s doubtful the various private forms of transportation options would have arisen in the first place.

Ludwig von Mises identified the crux of the interventionist creed decades ago when he wrote:

It is a sad fact that most of our contemporaries are not familiar with economics.

Will Doig is right at home with Mises’ apt characterization.  When he worries over “cheaper and faster” coming at the expense of government transportation, we should all be so lucky for such to occur.