Sunday, November 18, 2007

Libertarian idealism in practice

I think sometimes the Austrian distaste for empirics has left libertarians too eager to construct theoretical expansions of the private sector instead of appealing to real world examples of private services in action. Here are a couple of examples that I think libertarians should use a lot more:

1) Turnpike trusts

The construction of the railways with private capital is the classic example of infrastructure being constructed, at an incredible pace, by the private sector. The private sector railways only fell into disrepair and then the clutches of government when they were wrecked by wartime use and poor maintenance.

However, the railways aren't the only example of the private sector managing basic transport infrastructure. Calls for the roads to be privatised may seem radical now but it wouldn't be without precedent.

In the seventeenth century the roads were the responsibility of parishes and in a poor state. With volumes of trade increasing they were being used more and more heavily and needed investment and proper maintenance. The solution was a libertarian's dream. Significant numbers of the most important roads were handed over to Turnpike Trusts that looked after the roads and charged a toll for their use. They produced a much improved trunk road network and played an important role in moving goods from canal and railheads in the early stages of the Industrial Revolution.

2) The lifeboats

An emergency service run successfully for hundreds of years on a charitable basis, in the libertarians' dreams surely?

The Royal National Lifeboat Institution runs an emergency service that saves 22 lives a day. Running a lifeboat service is obviously a massively capital intensive activity and one that needs to be on service permanently. Despite that it has been a private service funded philanthropically since its founding in 1824. While the Admiralty could not be persuaded to take an interest private society set the service up and legacies and other donations still provide it with the funds it needs to operate each year.


Dave Cole said...

Those are good examples, but I would qualify them a little.

In response to turnpike trusts:
1. Look at the tube map; there is lots of doubling of lines that is not necessarily as efficient as you might want.
2. There is, at least in some areas, an argument for state funding or regulation to guarantee minimum service to some areas that might not otherwise generate enough revenue.
3. Directly with roads - they are probably the quickest way to turn a profit, but not the best for UK plc.

I think the second example is stronger; the RNLI are wonderful without qualification. The only thing I would say is that they are only part of the picture. Co-ordination is done by HM Coastguard and the expensive (in terms of capital expenditure, maintenance and skills) assets that are helicopters are provided, I think, by the RAF and RN.

They are, though, strong examples. I would add, though, that with increased population density and spread, certainly in the UK, there is an argument for continued state regulation of roads. On the construction side, for rail, road and canal, many of the Acts of Parliament that enabled them were railroaded through (pun intended) without reference to the wishes of the people affected in the localities.


Matthew Sinclair said...

Thanks for that Dave. Your qualifications are important ones.

Dave Cole said...

One other thing - eminent domain or compulsory purchase, depending on what you call it. While this can link into my point about taking account of the views of people on the ground, care always has to be taken with CPOs. The Crichel Down rules to make things a bit safer, but as was said at the time, 'Charles I lost his head for no less than this'.


Anonymous said...

i entirly agree with you both good stuff a level economics text books can often be very lazy on this subject.