Don’t Like The State? Don’t Drive On Their Roads!

Posted on November 3, 2010 by

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This is not a definitive work but an additional analysis of faulty reasoning used by those who worship the state as a way to coordinate society rather than the market.  My first post in this series is here.  This isn’t an argument for privatized roads as much as it is an argument against the logic of those who claim certain libertarians shouldn’t drive on roads if they believe in their privatization (proper privatization to the taxpayers, not a sell off to the highest bidder).  The statist starts:

If you are a Libertarian, against the state production of roads, you should not drive on them!!!  You must isolate yourself to the confines of what amounts to a market…. That’s what you believe in right?  Yeah, we used violence and property theft to create these roads, which favored those who were in the political “in” crowd, but you must deal with it.  You believe in markets so only markets you will have! (Dr. State Sycophant)

Libertarians have the unfortunate task of dismantling this economic foolhardiness using the arguments of eminent economists like Adam Smith and David Ricardo who explained the benefits of associating with other people in the face of stolen property stolen from people “for the good of the many.”  If a libertarian were to take the advice of state loving apologists, he or she would surely perish, not because of the flaws in a vibrant free market but because of the obstacles that would be impermissible (with this logic) to overcome in order to take advantage of the benefits of associating with other people.

The arguments below are some of the most powerful made in the history of human thought.  The applications are endless.  Furthermore, Students for Liberty will be hosting a free webinar discussing topics similar to this one with Dr. John Hasnas concerning market failure and the so called necessity of the state for the production of roads and mitigation of pollution.  This is a rare chance for us folks in the Midwest to hear Dr. Hasnas so TAKE ADVANTAGE!  The webinar will take place Monday, November 8 from 8pm to 9pm.

Absolute and Comparative Advantage

Absolute advantage is a good preliminary theory of why international trade, and trade between individuals, occurs spontaneously.  This theory was popularized by Adam Smith in his book “The Wealth of Nations.”  If you have and “absolute advantage” over someone else in the market, you have the ability to produce more goods out of the same amount of resources as a competitor.  Trade will occur because it costs you less to produce more, so it is to your advantage to trade with others who have production advantages in other areas.

The theory of “comparative advantage” comes in when the question is asked “what shall we produce if we have no advantage in any area of production?”  Robert Torrens answered this question in 1815 while David Ricardo popularized it further in 1817.  Basically, people produce different goods at different rates.  The opportunity cost given up to produce a certain good represents the cost of producing a good.  People have the incentive to produce what has less opportunity cost for them in relation to with relation to what they can purchase from other people.

Robert Murphy, author of “The Politically Incorrect Guide to Capitalism” took the example of a lawyer and a secretary to illustrate this theory.  The lawyer may be more productive than the secretary at answering phones and typing up notes but the opportunity cost of a lawyer forgoing other more profitable endeavors to pursue the secretary’s assigned duties is too high to rationalize.

There are other arguments for why association with other people has benefits.  Resource concentration, for example, could instigate the necessity to trade with others in a world with scarce resources and a growing population.  For the casual neocon reader, it is much cheaper to trade with a country for its resources than to attempt to invade it.

The Statist’s Argument

Both of these economic theories show how trade increases the quantity of production through the division of labor and trade in a free market.  What does this have to do with roads?  Well, if the government produces roads and creates them in such a pervasive way that we must use them in order to take part in this wealth creating process of the division of labor then, because of scarce resources and a massive population (made possible by this process), it would be suicide to take the advice of the myopic statist and refrain from interacting with others in society.

If the government used its monopoly of violence to create for itself a monopoly of food production and distribution, the government apologist could use their same line of logic to celebrate the life bringing sustenance the government provides for people while at the same time scathing those who think markets could do better.  “People would starve” they could unthinkingly claim, even when their fellow man is starving as they did in Russia and China under various dictators with similar policies.  “If we don’t guarantee every man food” they continue “we can’t very well rely on selfish people to provide it for the destitute out of the goodness of their heart!”

One of Ayn Rand’s lesser known works, We the Living, illustrates the destitution that comes from the line of thinking that the state should take care of people from cradle to grave.  Kira Argounova, the main character in Rand’s novel, became accustomed to the disarray of life in Bolshevik Russia that it became less and less of a surprise when buildings simply collapsed out of disrepair.  Tragedies like this happened because there was not an efficient coordinating mechanism in Russia where people are unable to adjust to each other at an international level through a price system.

If people are self-interested at all, and many people clamor in disgust that they are, then markets will provide a solution to facilitate the dissemination of information and the transportation of goods and services throughout society.  It is likely that roads would be produced at a much lower rate and more emphasis would be added to mass transportation but who am I, or who are you, to question the resource saving habits of the market?

To hear more on this subject make sure to tune in to the webinar linked above.

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Posted in: Statist Logic