Depending On Conscience
Krugman makes a good point about why libertarianism doesn't work:
Thinking about BP and the Gulf: in this old interview, Milton Friedman says that there’s no need for product safety regulation, because corporations know that if they do harm they’ll be sued. The funny thing is that the same people who believe we should rely on tort law also push "tort reform" which essentially guts it.
Interviewer: So tort law takes care of a lot of this ..
Friedman: Absolutely, absolutely.
Meanwhile, in the real world: In the wake of last month’s catastrophic Gulf Coast oil spill, Sen. Lisa Murkowski blocked a bill that would have raised the maximum liability for oil companies after a spill from a paltry $75 million to $10 billion.
This exposes one of the great problems with libertarian thought. First, it assumes that people are rational in the first place. And then it assumes that people who are rational care about preserving the system as much as they care about getting theirs.
This fundamental misunderstanding of human nature is what led Oracle Greenspan to find himself gobsmacked at the age of 80 by the Wall Street melt down. It just never occurred to him that rational people would kill the golden goose --- even though they had already hoarded enough goose eggs to keep them and their heirs sitting pretty for centuries.
Are they supposed to "care" about what happens to other people? Gosh, what would Ayn Rand say about that?
As Krugman dryly notes:
And don’t say that we just need better politicians. If libertarianism requires incorruptible politicians to work, it’s not serious.
I'd say the same thing is true of unfettered free markets: if libertarianism requires responsible businessmen, it's not serious either.