Like much of the blogosphere, Centroids has been

discussing the fallout from Katrina and what it tells us about

both government and Libertarian philosophy — specifically, the

limits of both.

One of the most creative was Rich Hockett’s proposal for privatizing and tying

together flood prevention and insurance, which led me to

assert three fundamental fallacies of Libertarianism

:

*a) There is always a
solution that does not require a strong central authority with coercive
powers*

*b) Big business
is inherently wiser than big
government*

*c) Rational,
self-interested financial calculations *always* yield the optimal social result*

and the following axiom of small

government:

*In
order to deal with a real, large problem, the only way to make government a)
smaller is to simultaneously make it b) stronger, and c)
smarter*

My problem with

Libertarians is that they demand (a) while claiming (b) is undesirable and (c)

is impossible! I also replied to Rich’s fundamental

principles:

*> 1) there
are many problems that can (and should) be handled by the private sector rather
than the public, and that’s OK
🙂*

*> 2) local institutions*

(private and public) are more effective and efficient than big

government

(private and public) are more effective and efficient than big

government

*> 3) rational,*

self-interested financial calculations often yield better results than political

aspirations

self-interested financial calculations often yield better results than political

aspirations

with my own

premises:

*a) Market
solutions allow greater individual creativity at the price of lower social
accountability*

*b) Local*

solutions enable greater responsiveness at the risk of global

mis-optimization

solutions enable greater responsiveness at the risk of global

mis-optimization

*c) Rational,*

self-interested financial calculations are only optimal if they take into

account long-term

consequences

self-interested financial calculations are only optimal if they take into

account long-term

consequences

*d) Rational,*

self-interested political calculations are only optimal if they take into

account long-term

consequences

self-interested political calculations are only optimal if they take into

account long-term

consequences

though I did

concede:

*e) Our current
financial systems tend to provide greater discipline than our current political
systems*

Though as a fixable aspect

of the systems involved, not an immutable law of nature.