Sunday, September 22, 2013

Road map for the Libertarian Party in the US

I'm writing this post because I'm in a state of disbelief over recent political changes taking place in Australia. What I mean by recent political changes is that the new prime minister of Australia has removed science and environmental ministers from his cabinet and has ended funded for an apolitical climate change working group. While I am a firm believer in limited government, I find the recent moves in Australia (along with some of the anti-science rhetoric in the tea party in the US) to be counter-productive to the cause of freedom. The goal of this post is to explain my beliefs on limited government (i.e. what should be funded by governments and what should not funded) and state my hope for the future of the Libertarian Party in the US.

My belief is that governments should fund public goods and should refrain from funding non-pubic goods. The strict economic definition of a public good is a good that is "non-excludable" and "non-rivalrous." The classic example of a public good is the military. National defense is "non-excludable" because there is no way to limit the benefits of a strong national defense only to those people who pay for the service. Also, national defense "non-rivalrous" because it does not get consumed (in the same way that hamburgers can be consumed.)

Another example of a public good is basic scientific knowledge.  Basic scientific knowledge can't be consumed and is not "less true" because somebody else learns the knowledge. It is also non-excludable because the knowledge can be transmitted on the internet with near-zero cost to anybody who is interested. It is virtually impossible for the scientists doing the research to keep the knowledge a secret because once they share the information, it can easily be put onto the internet and will spread like a wildfire. (Though, it should be pointed out that many forms of applied knowledge are not public goods. For example, knowledge of the amount of oil&gas in the ground in a specific location can be "consumed" and can be "less true" when somebody else learns this knowledge because this knowledge is not a constant with time.)

For me, some of the items that fall into the category of basic knowledge are funding for space exploration, particle physics, nuclear fusion, as well as the basic physics behind solar photovoltaics and solar electrolysis technologies. It's hard to argue that these sciences and technology are "excludable" and "rivalrous" because, right now, the knowledge about the basic laws of physics, about the existence of other life forms, and about the laws of electricity generation from nuclear fusion and solar energy can't be consumed and the knowledge of these technologies does not prevent others from learning about these sciences or technologies.

It is my belief that the role of the government is to stay focused on public goods and to say away from producing non-public goods. Electricity, ethanol, gasoline, natural gas are not public goods because they are both excludable and rivalrous. It is my opinion that the government should stay out of the energy industry except for two crucial roles: (1) enforcing environmental laws and (2) funding basic energy sciences. For example, the government should not be involved with funding solar energy companies like Solyndra or subsidizing nuclear fission power plants in Georgia.

What scares me about the recent moves in Australia (and in parts of the US) is that some extreme libertarians have become conspiracy theorists (i.e. believing that global warming is a hoax, or that global warming is not human induced, or that scientists are sucking money from government for their own person gain.) These types of conspiracy theories will cause irreparable damage to the libertarian cause if they are allowed to spread. Human-induced global warming is a very real problem in the long-term. Higher concentrations of CO2 in the atmosphere will increase the average temperature of the atmosphere and will cause the pH of the oceans to decrease. This is not a conspiracy. The evidence here is not disputable. The question is only "how much" will the temperature increase or pH change as a function of the CO2 concentration. There is no debate about whether the temperature will increase and the pH will decrease.

Given that a clean and healthy environment is public good and given that maintain a clean environment runs into the classic "problem of the commons," I believe that the government does have a role to play to protect the environment. The government should be the enforcer of fair environmental laws and regulations. This is no different than the fact that local police enforce laws against theft and murder. There are laws&regulations against emission of pollutants into the air, into the water, and into landfills. Enforcing these laws&regulations is an important role for the local government. These laws include the emission of particulates, NOx, SOx, PCBs, and mercury, to name a few. But there are also global pollutants, these include GHGs and CFCs. (CFCs are both ozone depleters as well as greenhouse gases, GHGs.) It is absolutely crucial that we globally limit the emission of GHGs and ozone depleting chemicals.

So, my concern with recent development in Australia (and with the fossil fuel industry backlash against CO2 regulations in the US) is that libertarians are fighting the wrong battle.

Libertarians should be focused on limiting the government's role in "non-public goods." For example, the government shouldn't be subsidizing electric vehicles or solar PV power plants because cars and electrons are not public goods. Cars and electrons can be consumed and are excludable (i.e. you only get to drive the car if you own/rent it and you only get to use electricity if you pay for it.) Also, the government shouldn't be mandating certain amounts of ethanol in gasoline or subsidizing wind turbines. Once again, ethanol and wind turbines are not public goods.

To summarize, my belief is that the government should stay out of the energy industry, except to enforce environmental laws and to fund basic science. The reasons for these two exceptions is that they involve the production of public goods, and the government can often (though not always) produce public-good cheaper than private industry.

If libertarians started cutting funding for public goods, there will inevitably be a public backlash that will damage the libertarian cause. As such, true lovers of freedom need to focus on eliminating government funding for non-pubic goods and allow the government to do what it does best...produce public goods (i.e. maintain a national defense, protect the environment, and funds basic science.)

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