The PROBLEM is the one that Nozick did not and could not solve in his book, “Anarchy, State, and Utopia.” I don’t claim to have identified the problem; others have pointed to it, but I’ll take the rap for my explication of it. On the Libertarian model, each succesive association of persons in time is moral/just only if it comes about through the voluntary (uncoerced) actions of all persons. No coercion is permissible to bring about the next state of association. Suppose then there is a dispute (The Lipitor killed my wife; the computer won’t display the porn I want, whatever.) Who is to adjudge the merits of the dispute? Of course, only those parties to whom the disputants give consent. And so if one or the other party will not give consent? …. Locke solved this problem with a theory of natural rights, which in turn substantiated an argument that sometimes, some people can do things to people without their consent. There are other “solutions”, but they all require that some other standard, value, moral good, SOMETHING other than consent of the parties comes to “trump” consent as the final measure.

Defenders of Libetarian political philosophy may and can quibble that odd cases don’t count, that people will enter into adjudicating services, etc., but THAT is an empirical question and does not address the lacunae in the theory itself: Each of is, by it, the last judge and jury in cases about oneself. As a strong defender of freedom of consciousness, I want to say: Count me in. As a member of a community, I have to say: What if you’re conning me?

I am naturally an anarchist, but knowing people, I suspect anarchy degenerates to chaos, and out of chaos comes tyranny. Give me inefficient, bloated bureaucracies, ultimately reviewable by the people they serve, well or badly as the case may be, most any day. All the faults of government by consent are, after all, our own.

You obviously don’t know me, what I do and do not know about the pharmaceutical industry, nor do you have any idea what would happen in a free market, which China obviously does not have. There would be private alternatives to the FDA, which would most probably do a far better job vetting drugs, while not restricting access to new drugs that can save people’s lives, as long as they are willing to take that risk.

As far as mislabeled drugs, like I said above, fraud needs to prosecuted, and prosecuted much more diligently than it currently is. I find many of the FDA drugs to be frauds, because the FDA is in the pocket of most of the large pharmas. The whole anti-depressant industry is absurdly profitable, while providing minimal efficacy.

So no, everything would not go to hell and handbasket like everyone thinks it would if competition to the FDA were allowed to exist. If the FDA picked up its game, and were able to compete with private alternatives, I would be less averse to its existence. But in its current form and purpose, it does far more harm than good, and lulls consumers into a false sense of security. Reminds me quite a bit of the financial industry to be honest…

You clearly have NO understanding of the pharmaceutical industry. You don’t have the foggiest idea of the controls involved in drug manufacture. Without an FDA, if you bought, say, Lipitor, you’d have NO IDEA if what you were getting was what the label said it was (or even if it was Lipitor, whether the dose was what was claimed). Read up on the dietary supplements industry, which has no such requirements. Those sort of problems are rife there.

The FDA’s failings are lack of funding and lack of nerve. You may be happy to live in a place where dangerous unregulated chemicals can be mixed with drugs, as routinely happens in China, but that isn’t how the vast majority of Americans want to live.

You say my argument is fallacious…exactly how? I point out the exact problem you note, about how we need to enforce the laws on the books. But when there are so many laws to enforce, how can they actually be enforced? You want the government to spend more money? They already do a miserable job with the unbelievable amount they already spend. I don’t think the answer is to give them more. They need to balance the budget, and stop spending what they don’t have before they should even think about spending more.

I think you should re-read my entire post so you understand what I am saying. I am actually of the opinion that the FDA should not exist whatsoever. It has consistently proven ineffective and downright dangerous in the very recent past. In a free market, the FDA would have gone out of business long ago because of its inefficacy and incompetence.

This is a fallacious argument. Law is one thing, its enforcement is another.

FDA wants more money for enforcement. You’ll have to trust me if I tell you this is the crux of the matter: Congress has repeatedly denied the FDA more money for effective enforcement. At the same time, Congress has NOT done its job in vetting the Administration nominations at the same Agency.

The result is pretty damning: as a former clinician, I can assure you the FDA I knew when I started was vastly superior and far more respected than today’s edition. Ask any physician that has been around > 15 years.

Yes! They want more money (eeeek!) …because this time, they badly need it and for good reasons.

I must disagree with this assertion for a simple reason; access to and capacity to influence the political deciders makes the difference one of kind, not of degree.

Witness the cabal mounted by the hedge funds managers over their personal taxes treated as capital gains versus income. A difference between 35% versus 15%. Of course, the assistant admins for these managers keep their “right” to pay the higher rate, thanks precisely to their lack of access and influence. Note how fast (3 weeks, if that) the leadership in the Senate shelved the irritating proposals for “another time”.

That is just about taxes. The same kind of influence can be seen when it comes to “debate” what to do for homeowners stuck underwater, where you can hear all sorts of moral hazard arguments put forth, ( a useful tool for denial of help) while bankers and financiers just have to raise their voice a little to make politicians backtrack on the topic of regulations. These same politicians do not appear to have any qualm whatsoever when some ordinary people raise their voice.

Truth be told, who can blame the politicos? They get a a non-negligible chunck their campaign money from the uber-rich. And even when they don’t, they know full well that going after, or even only displeasing the elite is bad for business. Just look how much of a thorn in the side of the democrats Mellon-Scaife has been for so long.

Influence here, influence there, and soon enough, you get a series of changes that convert any notion of gradual modification to a completely different situation. A mutation from degree to new specie.

I think the main point of contention here is that of cause and effect. I am reminded of my favorite idea/quote from Plato: “Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws”.

I do not see legislation or laws as the answer to every problem that arises w/in human interaction. Take for example, the food issue. Right now, food stuffs coming in from abroad are highly regulated. That regulation has failed, so now the FDA wants more money? When the next problem emerges, they will want more. This is the nature of all bureaucracies.

What is the solution? Hold people and companies responsible for their actions. Regulations are usually written by companies to protect themselves, both from legal issues, and to increase barriers to entry that new companies are forced to navigate. Libertarians believe in the rule of law, and when there is an act of aggression (physical, legal, etc.) against another’s property, a mediating authority needs to step in (whether that be the government, or SRO). So when poisonous products were sold to unsuspecting consumers, I have no problem with those companies being sued for fraud, or something along those lines. They either go bankrupt, learn their lesson, or eventually go bankrupt because people won’t buy their products. Right now, Mattel is still doing fine, the FDA is asking for more and more money, and the only solution is a few more regulations to solve a problem that the market has already made Mattel solve. There will be a new problem eventually, that instead of, say, Mattel, acting proactively to stop out of fear of lawsuit or tarnishing their reputation, will find out the hard way, when regulations fail, and people are hurt. The answer will be the same, that is, new regulations, not accountability.

In the end, it is the people that dictate what the market should deliver, and the people who invest in the US want a properly functioning, transparent market. The maze of rules, products, regulations (most of which are not enforced, I am reading Einhorn’s Fooling Some of the People All of the Time, which is a great example) make enforcement of laws essentially arbitrary. Different regulators will enforce different regulations, because it is literally impossible to know all of the rules, and more importantly, to enforce them accurately. It also leaves a lot of room for so called ’stretching’ of rules.

Now I’ve rambled a little bit there, but the point is that regulations are always claiming to protect the consumer, but they actually protect the producer. Not to mention that consumers are also paying for that regulation, both through taxes, and an increase in the cost of the product. I think it is a mistake to assume that because the markets are heavily regulated (by the government), they are transparent and safe. Rather, it is the demand for a transparent market where fraud is punished that ends up in its creation. Now is it out of the realm of government to enforce laws regarding fraud? I am less certain on this, as I would prefer an SRO, mostly to avoid mission creep, but I also like the idea of locking up white collar criminals and throwing away the key.

BTW, I hope I wasn’t too forthright earlier. I am a big fan of the blog, but each of us has our pet issues, this just happens to be mine!

Thanks for your comments, but I do not believe you have addressed the point in the post. How do you have anonymous transactions, or transactions involving goods in which you lack expertise, in the libertarian framework?

As Amar Bhide discussed at length in his article, “Efficient Markets, Deficient Governance,” the model most people look to when they think of a well functioning market is the US stock market, which in fact is very heavily regulated. Similarly, I don’t think most people recognize the laws that protect them when they engage in routine purchases, such as going to a grocery store (food safety, truth in advertising, retail store regulations). As the brouhaha over Chinese heparin and pets dying from tainted additives shows, most people are not in a position, for instance, to independently check the safety of their food. I don’t see how you get around these issues in a modern, industrial society.

Austrians have no lost love for Friedman. In many ways, he has been more destructive to the freedom movement than any outsider could be, because he advocated much more state intervention than any Austrian ever would. He has been more influential because many of his recommendations have helped the state to become better at what it does (i.e., withholding taxes). His policy prescriptions are pretty much in line with what we are seeing from Bernanke right now, which are most certainly not free market. A central bank can never be.

Marshall,

Austrians have always been there, criticizing, yet ignored. Case in point is Ron Paul, whose candidacy was virtually ignored by the media outlets, while he was ahead of Obama on youtube and google.

You can’t pull down regulations, while increasing moral hazard and expect nothing to happen. Like I mentioned before, there are many so-called libertarians whose theory and policy prescriptions are unsound. If those are the people that have been chosen as the stewards of libertarianism by TPTB, that is not the fault of Austrians, but of the establishment in separating good ideas from bad.

And where were those who claim there’s a difference between the version of free markets presented in the media which has helped shift money to the very rich and the version that the Austrians advocated (who per Anon above isn’t the only group advocating free markets) were when these policies were implemented? My impression is that libertarians as well as other free markets advocates were plenty happy to see regulations pulled down. It’s only now that the chickens are coming home to roost that some are trying to distance themselves from what happened.