One thing that’s not being talked a lot about is the fact that the BP oil spill proves once again that Libertarianism is not a workable policy.
The classic idea in Libertarianism is that we don’t need government regulation because there is sufficient economic incentive for companies to regulate themselves. There is no need to regulate the oil companies because they realize that if there is a spill in the gulf they might not be allowed to drill there ever again.
So we’re following the classic Libertarian model here. Industry realizes public relations nightmare. Industry will toughen their self-regulation in response. But where does this leave the public? How in the Libertarian model do you get the public back on board? Do they just believe that if an industry destroys themselves through “the Jungle”-style lack of regulation that the industry is gone for good?
This is one of the places that industry regulation is great for business. There will undoubtedly be some new regulations put in place after this, and drilling will more than likely resume in the gulf in a few years. Because ultimately we do trust that the government can do a pretty good job of regulating the oil industry. But how would that trust ever be regained in a Libertarian model?
Libertarians always say that consumers should ultimately make the decisions. But what if consumers actually did and half of Houston’s economy disappeared overnight?