One thing I don’t like about some (and note I said some) libertarians is their tendency to lump all government action together as evil acts of statism. While we might agree in opposing the Patriot Act, or at being pissed off at the Congressional Democrats regarding their compromises on domestic surveillance, our agreement becomes less meaningful when they go on to attack agencies such as the FDA or government action such as the inspection of meat just as vehemently.
Megan McArdle is one libertarian blogger who shows perspective, and recognizes that some government action is sometimes of value. While discussing such government functions she writes:
In my opinion, the government has a valuable role in providing transparency. The USDA meat grading system is pretty valuable, for example. I think the food and drug industries tend to be badly regulated, and overregulated, but I do not think we would be better served without an FDA. Rather, I think we would be better served by focusing on a certification model rather than an “everything not compulsory is forbidden” model. I don’t think the government has any business telling people they can’t drink unpasteurized milk, but I think it can play a valuable role in deciding what constitutes pasteurization, and forcing companies to honestly tell their customers whether or not they meet those standards.
Now, these functions are often ably served by private organizations–FASB, which sets accounting standards, is both private and the best accounting body in the world (IMHO). Similarly, the ASPCA and the Humane Society are doing great work with their Certified Humane program, which sets farming standards and inspects farms that want the coveted certification to ensure that they meet these standards. But where there are gaps in the market for standards and transparency, I think it’s desireable for the government to step in.
Some libertarians prefer to dispense with all such government action and see litigation as a better model. They would allow private companies to function without any formal government regulation, but those who are harmed by their actions could sue.
This gets to my real ulterior motives for quoting Megan today. Her post also discusses the limitations of relying on litigation, using malpractice as one example:
Lawsuits are expensive and inefficient; medical malpractice, probably the best model we have for this idea, does a pretty terrible job of allocating awards to people who have been harmed by doctor malfeasance–there’s only a very loose relationship between who is harmed and who sues, and who is harmed and who wins. Juries in obstetrics cases are particularly notorious for giving awards to parents of congenitally deformed babies on thin evidence, but the problem is not limited to OB/GYN. On the other side, disliking your doctor is probably a better predictor of whether you will sue than actual malfeasance.
Moreover, the harm is not necessarily proportional to the size of the company. A small farm with a bad salmonella problem could make a lot of people sick, but have few assets to take. Again, there is a flip side to this–lawyers often go after the people with the biggest pockets, rather than the people who have caused the most harm. The current asbestos debacle is a good example of this.
She certainly hits it with regards to malpractice.
And speaking of frivolous lawsuits against obstetricians, the media is now reporting that Obama is considering John Edwards as a potential running mate, apparently not taking Edwards seriously when he said he is not interested. Hopefully he is just promoting him in appreciation for his endorsement and it won’t go any further than that. It hardly makes sense for Obama to pick a running mate who is less experienced than he is, and I don’t think Obama can really count on him bringing in the working class vote. Working class voters appear to have been doing a better job of seeing through his act than the juries he argued before in the past.
The same reports also mention Obama is considering Sam Nunn. Please don’t go there either. There are ways to shore up national security credentials on the ticket without resorting to a running mate who “supported school prayer and opposed gays in the military.”
