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New York Times columnist and Princeton economics professor Paul Krugman wrote the following on his blog. It's called Why Libertarianism Doesn't Work, Part N. I quote it in it's entirety (though I must have missed parts A thru M):
Why Libertarianism Doesn’t Work, Part N
Thinking about BP and the Gulf: in this old interview, Milton Friedman says that there’s no need for product safety regulation, because corporations know that if they do harm they’ll be sued.
Interviewer: So tort law takes care of a lot of this ..
Friedman: Absolutely, absolutely.
Meanwhile, in the real world:
In the wake of last month’s catastrophic Gulf Coast oil spill, Sen. Lisa Murkowski blocked a bill that would have raised the maximum liability for oil companies after a spill from a paltry $75 million to $10 billion. The Republican lawmaker said the bill, introduced by Sen. Robert Menendez (D-NJ), would have unfairly hurt smaller oil companies by raising the costs of oil production. The legislation is “not where we need to be right now” she said.
And don’t say that we just need better politicians. If libertarianism requires incorruptible politicians to work, it’s not serious.
The first question to answer is whether Krugman is properly voicing the position of the Libertarians on the BP oil spill and product safety in general. The answer is, NO, he is not. The Libertarians would not only endorse Sen. Menendez' bill, they would go even further and remove the the maximum liability cap completely to incentivize companies like BP/Transocean/Halliburton to maintain the most stringent safety standards possible. The following quote comes from an article called Liability Limits Make Oil Spills Worse, posted on the Libertarian party website:
The New York Times has reported that federal law limits BP's liability to $75 million, and Transocean's liability to $65 million.
These kinds of artificial liability limits distort the markets, and basically create "moral hazard" by encouraging companies to act in riskier ways than they would otherwise. If BP's well causes damage to property, then BP should be fully liable for all of the damage. It is BP's reponsibility to "make whole" whoever gets damaged.
If Congress hadn't limited BP's liability, it's likely that BP would have acted differently. Knowing that a spill could cost them billions, BP might have demanded additional safeguards for their well, or tested their safeguards more thoroughly. These choices would have been expensive, but they might have prevented the huge costs that the spill area is now facing.
The Libertarians also point out that the government itself is a great polluter, and the government has sovereign immunity, meaning it cannot be sued. This is yet another example of the government setting different rules for itself than it does for the rest of us.
Krugman sums up his misguided tirade with his most inane statement of all - "And don’t say that we just need better politicians. If libertarianism requires incorruptible politicians to work, it’s not serious."
This is precisely why Paul Krugman can't think. If he thinks Libertarianism, the philosophy of limited government, requires incorruptible politicians to work, then Krugman's favored big government socialist philosophy requires the same to a far, far, far greater degree, because it is ubiquitous in our lives. Krugman's form of government is much more powerful than the Libertarian model, and therefore much more subject to corruption. As they say, power corrupts, and absolute power corrupts absolutely.
But I do agree that Krugman's philosophy, to quote Krugman, is "not serious." It's a lot more dangerous than that.
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