I want to start out this post by recommending The League of Ordinary Gentlemen, which is a great resource for a libertarian view point on issues, as well as boasting a surprisingly cordial comment section. It is a very interesting and thought provoking read.

A section of a blog post, and a subsequent comment by the author, about the libertarian conception of human nature got me thinking again about some of the fundamental assumptions that libertarians hold. Unlike their philosophical beliefs, such as the principal nature of individual liberty in ordering society, I find their empirical assumptions much harder to understand. In the piece and the comment section James Hanley argues that the two constraints that libertarians favor to correct for the ability of humans to cheat and generally treat each other poorly in economic transactions are competition and self-sorting. As he says in the article,   "Competition limits the ability to be un-angelic toward each other because it is based on seeking out reciprocal, voluntary exchanges. If I cheat or harm others, I will find it harder to persuade others to enter into exchanges with me. That reality, which liberals doubt, tends to break down primarily only when real competition breaks down."
In the comments he then doubles down saying that,
"the only structure that is necessary is widespread information (reputation), which allows people who are voluntarily deciding whether to enter an exchange or not to opt out of exchanges with those they don’t trust. And such information is more widely spread than ever before."


Before I move on I want to say that this seems to me to be the rationale for limiting a lot of regulation. Whether it's Ron and Rand Paul arguing that the Civil Rights Act was unconstitutional and unnecessary, or opposition to  various workplace safety or disability regulations, the view seems to be that if these actions are deemed unethical by the society at large they will stopped by individuals refusing to enter into economic relations with the offending institution. 


My question is, can he really believe that? We live in a giant interconnected world were goods and services are moved all across the globe before we decide whether or not we want to purchase them. Except in certain limited circumstances, such as farmers markets or local artists, the mechanism that libertarians would use to hold in check the unethical impulses of the business owner do not seem to be present in actually existing reality. Most people have neither the time nor expertise to research the products they buy in order to make sure that their purchases conform to their own ethical constructs. This is the reason that our society uses the democratic process to impose these ethical rules through the legal process. 


The way in which libertarians think about these issues is heavily influenced by their prior philosophical understanding of society. Meaning that they make an empirical argument that this self regulation of business by individuals leads to fewer abuses because people are not dependent on the government to look out for their moral and social interests, and that this lack of dependence makes people more consciousnesses and informed economic citizens. While their reasons for believing this are largely theoretical the argument is made as a practical critique of existing regulation. It does not take much searching in the historical record to see how this has not played out like libertarians would have predicted. There are two main failures here, one is that people just don't care about ethical concerns when they are looking to enter into a economic transactions, while the other is that as society has grown in scope and complexity our ability to ferret out charlatans and other that are trying to cheat us is just not that developed. We can look back throughout history and see that the means by which various immoral business practices has been curtailed is through government mandate. It is not that most people liked children working in factories, but rather that the citizens were in no way able to stop this practice through their purchasing decisions. The same is true of charlatans pushing useless of worse medical cures. I read a book a while ago about a 'doctor' around the turn of the century that was implanting goat testicles in people, and getting paid good money to do this. The ability of consumers to not get ripped off in one off transactions would never be a practical policy suggestion if one was making an argument from past historical trends. It only starts to make sense when one takes it as a matter of faith that the liberty to contract is a guiding principal of a 'free' society.