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07/30/2007 - 10:04am

Libertarian Myths - Part 1


When people first learn about libertarianism, especially from anti-libertarians, they are exposed to a few myths, which I'd like to dispel. The most common one goes like this:

Libertarians are utopian.

At first exposure to libertarianism, it's easy to see where people might think our views are simplistic in a "if government would shrink down to almost nothing, everything would be perfect" sort of way. This myth also stems from libertarians believing that if everything wasn't government regulated that the "goodness" of people would take care of itself.

The truth is that it's much more complex than that. Libertarians aren't naive enough to believe that everyone is benevolent and will therefore take care of everyone else. But we realize an important truth in the free market, and that's that businesses want to succeed. To succeed, you must be better than your competition. And since your competition has the same goal, this is an ongoing battle that has the nice side-effect of continuously increasing the quality of goods and services and lower prices.

Imagine two gas stations on opposite corners of the streets, and no government regulations as to how these businesses would operate. Each gas station would continuously lower their prices in an attempt to undercut the other, until the price of gas was as low as it could possibly be while still making it economically feasible for the gas station to stay in business.

At this point, the two gas stations are providing the best prices possible. So now, they must find other ways to get more customers than the other. They might start adding more services, like free water and air for your radiator and tires, free fill-up service, combo packages where a discount is given on gas if it's purchased with an oil change, or many other ways to attract customers that all ultimately benefit the consumer.

Libertarians understand that businesses are greedy, and it's their greediness to beat their competition and get more business, not their goodness, that causes them to provide better goods and services at better prices.

In recent decades, government has often actually stood in the way of competition for many businesses. The general public is often not aware of this, so they end up blaming the businesses for bad prices or bad service.

Years ago, we had the telephone monopolies. You got telephone service from one company depending on where you lived, and one company only. These companies were government-granted monopolies, because competition wasn't allowed to exist. Does anyone remember what it was like 10+ years ago to try and get good customer service from your phone company?

I remember calling Mountain Bell (which provided phone service in Arizona, which later become US West and now is known as Qwest) and waiting on hold for over an hour to speak with someone, and then getting nowhere with that person. I spent about two years trying to get a phone line repaired (waiting on hold once every few weeks when I could find the time to sit and wait) and finally gave up on it.

Why would they care about giving good support back then? What was their benefit? It's not like you could switch to some other phone company if you didn't like them.

Today, getting technical support or other customer service from a phone company certainly isn't a joy (customer service rarely is "fun", so let's keep this in perspective), but it's far better than it ever was. And today, there are a myriad of phone companies with which to choose from. Some of these arose out of technological advances that didn't exist 10 years ago, but most of them came from the fact that this industry was no longer being controlled by the government to the degree that it was then, and competition was allowed.

Now, if you don't like your phone company, you can switch (like most other things), which gives them an incentive to make you like them. This comes in the form of much better service than we've had in the past.

I would, in fact, venture to say that non-libertarians are utopian, because they believe that with enough government regulation and control, everything would be perfect.

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