The whole backyard looks like this due to an entire commercial lot behind her that didn't properly prepare for run-off into neighboring properties. She's pursuing it with the county, and probably will get compensation from the company, which acknowledges she deserves it - but the point is, this shouldn't have happened in the first place (and certainly not multiple times, since last fall, with no compensation yet), and she shouldn't have to incur transactions costs or delay over this. It's killing her plants. Her backyard is basically made of red clay right now, and has been all spring. And she's trying to sell the house. She lives alone and isn't really able to do heavy yardwork in the heat (Kate and I live just a couple miles away so we can pitch in). You might not be able to tell, but this isn't just a little bit of water - it's doing damage to the yard at a really bad time for her, not to mention destroying the shed (not pictured).And it's not just her - it's her neighbors too, and sediment is pouring into a storm drain that empties into the Chesapeake Bay.
Now, what is the more market-oriented solution? Pursue some sort of tort/legal route that ultimately only burdens her and hasn't been fruitful for months. Or, provide basic ground rules through emergent institutions like local governments in recognition that externalities are real and you've gotta anticipate this stuff and make sure contractors do things in a way that doesn't risk violating other peoples' rights?
"Or, provide basic ground rules through emergent institutions like local governments in recognition that externalities are real and you've gotta anticipate this stuff and make sure contractors do things in a way that doesn't risk violating other peoples' rights?"
ReplyDeleteUnless the town is six months old presumably such an emergent order ought to exist by now? I mean, stormwater runoff, etc. isn't exactly a new sort of nuisance or anything.
Oh, that's right, during the industrial revolution the state in partnership with certain interests killed nuisance law as it had existed before so as to favor those interests.
Not sure what your point is.
ReplyDeleteIn this case, the company wasn't following construction regulations that did exist - so yes, they are there.
The point is, a lot of libertarians won't even acknowledge these sorts of regulations. This is precisely why it makes sense. As this situation demonstrates, problems happen even with these sorts of regulations but this is precisely why they're not some affront to liberty - in fact they're exactly the opposite.
The same can be said of BP with the oil spill. BP is notorious for violating safety regulations.
ReplyDeleteMy analagous point is "this is precisely why we need these regulations and why we need to actually enforce them with some vigor", while others respond "nah - scrap em - that's what tort law is for".
Tort law reacts to violations of property rights, and it does so imperfectly. I'd rather have a workable property rights regime that acknowledges externalities and use tort law as a last resort.
I don't believe there is much in the way of any evidence (at least for the U.S.) that regulation leads to the sorts of outcomes you want it to. Regulation - in the U.S. at least - is far too prone to capture by the regulated entity and other related problems.
ReplyDeleteI also question the notion that regulation is emergent; it tends to be anything but.
My point? We had a far more usuable system of common law based incentives for mitigating nuisance before changes by positive law, etc. gutted it.
"The same can be said of BP with the oil spill. BP is notorious for violating safety regulations."
And this had been widely known about for years; including myself. Which is why I always laughed at their commercials. Regulation is essentially a game of whack-a-mole.
Anyway, there are plenty of alternatives to command and control regulation besides tort law.
ReplyDeleteThough I don't agree with everything written here, if one really thinks one has to follow the regulatory route this is an example of how to do it:
http://techliberation.com/2010/05/19/the-constructive-alternative-to-net-neutrality-regulation-title-ii-reclassification/
"I don't believe there is much in the way of any evidence (at least for the U.S.) that regulation leads to the sorts of outcomes you want it to."
ReplyDeleteThis is pretty unintelligible as it stands, Xenophon. What regulation, exactly? I'd agree with you completely on certain kinds of regulation.
It always amazes me that libertarians who pull out the "aggregation fallacy" card so readily never seem to be able to apply it to government or regulation or stuff like that. It's always "more government" or "less government"/"more regulation" or "less regulation". Never any differentiation or consideration of specifics.
The libertarians would suggest using a third-party intermediary because the US legal system is absolutely atrocious. In the absence of heavy government (your libertarianism), the town or the townsfolk themselves would hire intermediaries to settle violations of property rights like this quickly.
ReplyDeleteLocal governments emerged as intermediaries, though. Local governments predated the federal government and even strong state government as problem solvers in this country.
ReplyDeleteI'm with you on decentralized power. I'm with you on emergent solutions. I'm with you against command and control. I think where we depart is this caricaturing of what government is. For example, look at how Xenophon raises common law as if it's somehow a counter-argument to my point. It's not a counter-argument at all! And neither are any intermediaries that you're bringing up. These are both part of the same social process that gives rise to local government regulations.
I dislike any of these as solutions....I fear that as a libertarian, I have to stand here and say that the legal system has become exactly as De Tocqueville feared...an instrument of the elite and educated. When I was in court for a traffic ticket I was disgusted to find out how many lawyers tout their relationship with the DA and the judge because that DOES make a difference.
ReplyDeleteOn the other hand, Daniel, even though I am a libertarian who think there are externalities and that the market cannot solve them through property rights alone, I do not agree that simple regulation will solve the problem either. First, regulations are tirelessly flaunted and the cost and time it takes for government to assess and penalize is at least as lengthy and arduous a process as filing a lawsuit. For example, I was fired unjustly once and when I brought the case to EEOC, they told me I had a very strong case and to come back for a hearing with my witnesses in 3 years! By that time, what did I have to gain by doing so? Second, if the company is large and wealthy enough, it doesn't matter what regulations exist. The legislation will be lobbied against and we all know that corporations and the elite can do this while the average citizen cannot. If the legislation passes, the large wealthy corporations will ignore it, BP is a great example. But if you manage to pass regulations, you may make rules that are so severe that companies will choose not to do business in your state/locality, etc. As one article I was reading said, at least BP has the money to sue them for rather than having to deal with a high risk-high reward fly-by-night corporation.
I am not saying I have a solution, but I don't think those offered are the best outcomes either. I suggest that perhaps by increasing competition in the markets and NOT allowing the influence of lobbyists and corporations to dominate the discussions in government, this issue can be addressed.
One aside...why don't proponents of government regulation realize that as a result of lobbying and the power of elites and corporations in government, that government is exactly where they should NOT be turning for help? If you were to split law passed by Congress into laws that are for the greater good and laws that protect the interests of portions of the country you would find a enormous imbalance.
I should probably clarify something - I'm not suggesting that they will solve the problem. I'm just suggesting that having rational ones and enforcing them is important. Will it solve the problem? No. Neither does the market for that matter - it's a "discovery mechanism", not a panacea.
ReplyDelete"I am not saying I have a solution, but I don't think those offered are the best outcomes either. I suggest that perhaps by increasing competition in the markets and NOT allowing the influence of lobbyists and corporations to dominate the discussions in government, this issue can be addressed."
If property rights are well defined and respected, I could agree with this. But where they aren't well defined or when they are easily flaunted (ie - if they don't build the proper containing walls ex ante, all you need is rain and gravity to flood her lawn), competition is likely to make things WORSE. Construction firms are less likely to build the required containing pond for runoff if they face heavy competition and need to cut costs. As I sugggested in my "knowledge problem vs. incentive problem" series, heavier competition only really helps if what we're dealing with is a "knowledge problem" as classically conceived by Hayek. If it's due to something else, competition doesn't really do anything for you. Unless I'm missing something. How would competition help here? I just don't see it.
"One aside...why don't proponents of government regulation realize that as a result of lobbying and the power of elites and corporations in government, that government is exactly where they should NOT be turning for help?"
I never understood this complaint. Of course that's a problem. But what do you think is going to be more productive - my 5'3" mother in law who has no knowledge of construction site management and landscaping going to the CEO of the construction company and saying "excuse me - before you start building I think you need to build up this berm and make a deeper containment pond", or the county - with contributions by people who know this stuff - having requirements laid out ahead of time. If you think of it in these terms, the question is a non-starter. Yes, corporations influence government. In a lot of cases, the worst that happens is that regulations are non-binding (ie - they get the county to pass measly little requirements they would have done anyway). And then you're no better than you were without the regulations.
Now, other regulations that limit competition and provide rents are a different story - and corporate involvement with government are obviously a different story. But that's precisely why I said to Xenophon that libertarians need to actually engage and get specific when they criticize "government" or "regulation". You see me advocating a lot of government action on here, but you rarely see me advocating subsidies or things like that. It's because I recognize the fundamental point your making - but I think it applies more in some circumstances than others. "Government" and "regulation" is not a monolithic beast.
"What regulation, exactly?"
ReplyDeleteAny kind so far. There have been a number of literature reviews in journals like the Yale Journal of Regulation that have come to this very conclusion (outside of a couple of very specific policy areas). Americans apparently do regulation quite badly.
Anyway, it isn't an aggregation fallacy.
dkuehn,
ReplyDeleteI think you may have a hard time imagining a world where there is a no good solution, no win situation. In the world that we currently live in that is the case.
"But that's precisely why I said to Xenophon that libertarians need to actually engage and get specific when they criticize "government" or "regulation"."
We've all been rather specific.
"You see me advocating a lot of government action on here, but you rarely see me advocating subsidies or things like that."
Subsidies and cronyism is the inevitable result of government action. The best argument you can make is that the good things that are supposed to be associated with the latter are not swamped by the former.
I think you may have a hard time imagining a world where there is a no good solution, no win situation. In the world that we currently live in that is the case.
ReplyDeleteQuite the contrary, I think your idealism tends to lead you to hold Daniel to similar standards, when that's not at all what he's after. He's not offering regulation as some sort of panacea, but simply defending the sensibility of it on grounds amenable to those who are generally opposed to it. I think to paint Daniel as a blathering optimist simply sets up a straw man.
Ya Xenophon, I'm really not sure what else to say when you write a post like that immediately after I write this:
ReplyDeleteI should probably clarify something - I'm not suggesting that they will solve the problem. I'm just suggesting that having rational ones and enforcing them is important. Will it solve the problem? No. Neither does the market for that matter - it's a "discovery mechanism", not a panacea.
Which I never felt the need to write initially precisely because I never made the claim that regulation would fix things, so that I never thought I needed to affirm that I didn't think it necessarily would until waterzooi's post.
I can forgive waterzooi's confusing that I might have thought that (although I don't see how he could have gotten there). Your comment after my clarification is inexplicable.
Subsidies and cronyism is the inevitable result of government action.
And ultimately it's a cost-benefit analysis. Some will slip through. But I'd rather have a U.S. with solid regulation, rule of law, and recognition of property rights and some foul play/crony capitalism than a libertarian U.S.. Not my cup of tea, but it's a degree of risk I'm willing to take. Take biofuel subsidies. I'd rather not have them. But I'd rather have biofuel subsidies than small farm subsidies, and I'd rather have small farm subsidies than agribusiness subsidies. You can recognize these costs without embracing them.
There is some rent-seeking in any regulation. I have never suggested otherwise. I'd rather have some rent-seeking regulation and good regulation than no regulation. That's the point.
Evan,
ReplyDeleteI'm not an idealist.
His argument can be reduced down to this: where markets fail we will find that via the state there will emerge these superior non-market solutions. That argument is optimistic and only works if the state as a useful bit of technology has any life left in it.
I'm not an idealist
ReplyDeleteMaybe not, but you come across as one compared to just about anyone else that comments on this blog.
His argument can be reduced down to this: where markets fail we will find that via the state there will emerge these superior non-market solutions.
I suppose I might be construed as an optimist - I could buy that perhaps. But this is not my argument - I think you're misunderstanding me. I want to be careful to impress upon you that I'm not saying all libertarians do this - but I notice especially that libertarians tend to have a totalizing approach to discourse that leads them to interpret statements in this way. That is quite simply not my position. It's close semantically, but the difference matters tremendously.
Sorry I missed all these comments. I made mine and didn't check back.
ReplyDeleteI don't believe that intermediaries necessarily become governments. In a minarchist/anarchist society, I find it completely reasonable to think there would exist private agencies whose sole function is to arbitrate property rights disputes.
They would certainly be a hell of a lot less cumbersome, and I would expect it to be more fair given its fairness is what is keeping it in business as an intermediary.
Anyway, this argument is a rather endless one and I'm just going to leave it alone in the future.
ReplyDeleteHave a delightful time in Paris. I'm going to an undisclosed southern locale to work on my tan.