CRAIGforCONGRESS
Missouri's 7th District, U.S. House of Representatives

 

 

 

Bringing LIBERTY to Capitol Hill -- 2008
OZARKS VIRTUAL TOWN HALL
Saturday Morning, August 4, 2007, 10:30am

A Discussion of The President's Saturday Morning Radio Address

Click here to listen to a replay of the August 25, 2007 Ozarks Virtual Town Hall

Notes and Summary of the Broadcast -- Government Bridges Falling Down

THE PRESIDENT: Good morning.
       Today, I am traveling to Minneapolis to the site of Wednesday's tragic bridge collapse. Like millions of Americans, I was shocked and saddened when I heard the news that the I-35 bridge gave way during rush hour. The bridge was a major traffic artery, and when it collapsed dozens of cars fell into the Mississippi River.
       On Thursday morning, Transportation Secretary Mary Peters and Federal Highway Administrator Richard Capka traveled to Minneapolis. They announced $5 million in immediate federal funding for debris removal and to help restore the flow of traffic. This is just the beginning of the financial assistance we will make available to support the state in its recovery efforts. Several federal agencies are on the ground aiding state and local officials, including the National Transportation Safety Board, the Federal Emergency Management Agency, the Coast Guard, the Army Corps of Engineers, and the Environmental Protection Agency.

A Libertarian Response:

  1. The Constitution does not require the federal government to build roads and bridges in Minnesota.
  2. Madison, Jefferson, Monroe, Calhoun, and many other wise statesmen opposed government funds for roads and bridges.
  3. They reasoned that businesses should build the roads and bridges they want their customers to use to travel to their place of business.
  4. Businessmen should not use the government to take money from their competitors and give their own business a competitive advantage.
  5. No human action is performed more efficiently than the Free Market. Capitalism, not government socialism, is the best way to create the goods and services our nation needs.

Kevin Craig's Platform:  Transportation

Recent Blog Posts:

Additional Resources:

Book Review, Journal of the American Physicians and Surgeons - Vol. 12 No. 2

The Privatization of Roads and Highways: Human and Economic Factors, by Walter Block, 381 pp, hardcover, $119.95, ISBN-13: 978-0-7734-5841-3, ISBN-10:0-7734-5841-7, Lewiston, N.Y., Edwin Mellen Press, 2006.

Walter Block is on a mission. His book sets out to prove that roads should be completely privatized. The author’s first sentence informs the reader that he recognizes that his book will not be well received: “Most people who read this book will dismiss it as the ravings of a lunatic.”

He knows that the vast majority of economists and political philosophers are wedded to the notion of market failure: that some goods and services are different from the rest, necessitating their provision by government. At core, that conviction provides the rationale for socializing a host of goods and services such as roads, medical services, education, old-age pensions, etc.

Block is cognizant that the human intellect is limited in its ability to comprehend universal abstract economic and philosophical concepts that conclusively demonstrate that all goods and services can be more justly and efficiently provided by a genuine free market than by any known alternative. Therefore, he has chosen roads, the quintessential example of so-called market failure, to prove that all goods can be privatized.

Government-run highways are a public health issue. Over 40,000 people die each year on our government's roads, and in excess of one million are seriously injured in traffic accidents. No private corporation could get away with maintaining such a threat to public health without the cooperation of the government.

For doctors, the implications of Block’s defense of free markets are not insignificant. If Block succeeds in his quest, he will have laid the theoretical framework for the restoration of free-market medicine and of all other goods and services.

The book is divided into five parts: the free-market theory for privatizing roads, specific applications of the theory, the process of transitioning from a public to a private good, answering his critics, and an interview with the author.

The first part of the book explains the chasm between the dominant neoclassical school of economics and the Austrian school. Both schools use similar language to explain abstract economic principles. But the connotation of the words differs widely. The consequence is that the schools adopt very different views of how an economy works.

Is it any wonder that the adherents of each school talk past one another, even though they use the same words? Is it any wonder that both schools arrive at radically different solutions to the problem of scarcity and other complex economic problems?

For example, Block contrasts the definition of competition, which the neoclassical school teaches to be one of perfect competition, while the Austrian school rejects that notion to advocate the concept of rivalrous competition. In addition, each school has a different understanding of externalities, monopoly, and other basic terms.

Block repeatedly discusses the important distinction between the ultimate and the proximate cause of a problem. He correctly points out that the majority of scholars fail to address the ultimate cause, and focus instead on a multiplicity of proximate causes. He identifies the ultimate cause of the problem with roads to be the destruction of free-market prices. The same problem confronts medical services, because they also lack free-market prices to transmit the encrypted knowledge required to rationally allocate resources. In short, if the goal is to prevent economic chaos, the only tool available to accomplish that task is real free-market pricing, because this precludes the possibility of having too much or too little of any good or service.

Because government prevents generation of real prices to guide provision of medical care, it must compensate for that fundamental error by resorting to an array of bureaucratic solutions: Pay for performance (P4P), which is simply more micromanaged care; Information Technology (IT); the Health Insurance Portability and Accountability Act (HIPAA); Electronic Medical Records (EMRs), which are information-gathering tools required by government to micromanage medical care; and Evidence-Based Medicine (EBM), which is a euphemism for politicized science whose dangers have been exposed by several academics.

Readers who wish to delve into the proximate causes of the road problem should read Block’s book.

Block thoroughly discredits public-private partnerships (PPPs). He calls PPPs “partnering with the devil.” He states that PPPs are “an unholy alliance of public and private [that] tends to obliterate the crucial line between them. As there is no more important distinction in all of political economy than that which divides coercion and non-coercion, such combinations tend to blur this crucial difference.”

Block pointedly reminds the reader that PPPs require entrepreneurial subcontracting skills similar to those of a general contractor building homes. He asks the obvious question, “Is it written in stone somewhere that state bureaucrats have some sort of comparative advantage in such responsibilities?” The conclusion is clear. If government bureaucrats cannot competently subcontract to build homes, they cannot do so to provide roads, medical care, etc. Efforts to “fashion a better or more effective law” to correct the inadequacies of PPPs are futile.

Regrettably, physicians routinely leap at the opportunity to help government “fashion” counterproductive laws. The solution is simple. Everyone, including physicians, should adopt a strict policy of nonparticipation with government attempts to provide goods and services.

The fourth section of the book is most edifying because Block responds to his critics, including Gordon Tullock and Robert Poole. Even though the latter are reputedly staunch defenders of the free market, they do make an exception when it comes to roads. However, Block will have none of it.

In the last section, Block answers tough questions posed by libertarian students. For example, he is asked whether he is optimistic or pessimistic for the future of liberty. He gives a two-pronged answer. He admits to being somewhat optimistic because, “[i]n the early days, if I didn’t know the person as a libertarian, they probably weren’t one [ ]. Now, there are entire libertarian organizations, let alone individuals, of whom I am entirely unaware.”

He is also pessimistic, for he contends, “humans are hard-wired, based on psycho-biological considerations, to be anti-freedom.”

There is abundant evidence supporting Block’s pessimistic outlook. A small segment of the world’s population had a very brief flirtation with liberty in the 19 century after being shackled for millennia by kings, queens, and emperors. As a consequence, the world’s GDP grew 1,000 percent in less than 200 years, compared to a 50 percent growth rate in the prior 100,000 years.

Alas, liberty may not endure. The few countries that experienced a modicum of liberty have voluntarily donned the “secure” noose of the welfare state. These countries are at the crossroads. They must elect to tighten the welfare state’s noose, snuff out liberty, and return to the economic stagnation of their not-too-distant past, or discard it in favor of liberty and prosperity.

Walter Block’s uncompromising defense of liberty should be perused by all serious defenders of liberty, because he provides the intellectual ammunition required to discredit statists of every stripe.

Robert P. Gervais, M.D.
Mesa, Ariz.

Click here for a replay of this edition of the Ozarks Virtual Town Hall