Krugman: "Why Libertarianism Doesn't Work"

The Krug-man sums it up:

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 problem with libertarianism (well, one of them) is that economic power almost always translates into political power. That political power gets exploited to build greater economic power, which translates into more political power, ad nauseum.

The only way you can prevent that is to use political power to prevent it. That gets harder and harder over time, as economic power gets concentrated in fewer and fewer hands. And it requires loci of political power that are separate from those of economic power. That's what democracy is supposed to do.

(It isn't, of course. Economic power has been translated into political power, so much so that most people believe that their votes can't really change a damned thing. BP will probably skate on this. But that's the general idea.)