The Problem with Libertarians

Libertarians speak of a simple principle called “initiation of force”, meaning that one may only use force in response to force.

That sounds nice until they use it to defend the right of a restaurant owner to put a “Whites Only” sign in the window. If a black man walks in, sits down, and calmly orders a cup of coffee, they say that he has “initiated force”, and the owner is now free to throw him out.

Libertarians see government as the bad guy, especially when it forces them to pay taxes or attempts to regulate their business. They complain about the FDA even though it prevented thalidomide from being licensed in the USA, avoiding the thousands of deformed babies that were born in other countries.

Libertarians evangelize a market free from government regulation. Enron executive Ken Lay successfully lobbied to remove regulations on the energy market. Enron later purchased power companies in California, deliberately caused rolling blackouts, and raised electric rates. Enron was one of many companies using corrupt accounting methods to bloat its stock prices and conceal its losses. When its pyramid collapsed, pension plans lost their money. For more details, see the documentary “Enron: The Smartest Guys in the Room”.

Congress passed the Sarbanes-Oxley act to correct the corrupt practices, but Libertarians argue the regulations are unnecessary and too expensive.

Alan Greenspan, a fan of libertarian author Ayn Rand, also believed the markets would regulate themselves. In 1998, when the Commodities and Futures Trading Commission attempted to regulate the shadow derivatives market, Greenspan lobbied Congress to pass several bills that stripped the CFTC of its authority. Ten years later, the unregulated derivatives market was a major cause of the financial collapse of 2008, requiring the bailout. For the whole scoop, see the PBS Frontline documentary “The Warning”.

Libertarians often appear like sweet old ladies offering a delicious apple, but remember what happened to Snow White!

Marvin Edwards

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