Refuting a statist position on "unregulated" oil rigs

[E_R_Olovetto]

I think BP could afford a more powerful private security firm than the shrimp fishermen…

Wait they already have a few I think!

This destroys your own argument. Keep in mind that part of a firm which tries to dodge its tort liability immediately becomes an outlaw. Firms such as BP are already guilty of collusion with government and would have claims brought against them immediately in a free society. Even if a firm so large existed, it is still dwarfed by the rest of the economy. It would end up bankrupting BP to have to send security escorts to every gas station and protect every facility. You also can’t ignore the market pressure on everyone BP does business with to not deal with outlaws.

[Giant_Joe]

Jonathan, do you have a source for the $75 million liability limit?

I found something here that expands on it from cafe hayek:

Oil Spills, Tort Law and Libertarianism - Marginal REVOLUTION

[Benjamin]

This destroys your own argument…

All you’re saying is that in a free society, good outcomes are encouraged and bad outcomes are dealt with. Fine, I agree with that. But how**?**

You know, everyone is totally free to boycott BP right now. But their share price is still $46 and change with a MARKET capitalization of $145 billion. The ‘market capitalization’ of the fishermen, on the other hand, is doing less well I’d imagine.

There is no government regulation or interference requiring anyone to continue to hold BP shares. People, right now, could put BP’s value into the toilet simply by selling any of their shares that they already own.

But it’s not happening… I could speculate that volume of stock ownership and having a conscience tend to inversely correlate, but whatever the reason, people seem to be quite willing to do business with outlaws if they expect it will return a profit. There doesn’t seem to be much of any market pressure not to do business with criminals in this case.

Although, BP is possibly only morally criminal for fudging safety measures resulting in a disaster, because corporations like them are writing many of the laws now.

If you’re saying that there should be no liability cap, I totally agree. But that implies that there’s a policy, and laws. Who’s going to write these new policies or laws which won’t give special treatment to favored corporations and groups? How large would a coalition have to be to effectively oppose them anyways?

If all of the people who have an economic stake in the Gulf come together and state that anyone who damages their economic interests in it will be held liable, whether they like it or not, then how is that not a government? If they don’t do that, why would a BP even pay attention to them?

[DanielMuffinburg]

If BP’s stock tanked, the SEC, an arm of your beloved and omniscient state, would probably come in and call it a computer-glitch.

[nirgrahamUK]

at first glance BP’s stock seems to be down 15% in the aftermath

[Snowflake]

Another worry is that the rich would rule. After all, won’t justice just go to the highest bidder in that case, if you turn legal services into an economic good? That’s a common objection. Interestingly, it’s a particularly common objection among Randians, who suddenly become very concerned about the poor impoverished masses. But under which system are the rich more powerful? Under the current system or under anarchy? Certainly, you’ve always got some sort of advantage if you’re rich. It’s good to be rich. You’re always in a better position to bribe people if you’re rich than if you’re not; that’s true. But, under the current system, the power of the rich is magnified. Suppose that I’m an evil rich person, and I want to get the government to do something-or-other that costs a million dollars. Do I have to bribe some bureaucrat a million dollars to get it done? No, because I’m not asking him to do it with his own money. Obviously, if I were asking him to do it with his own money, I couldn’t get him to spend a million dollars by bribing him any less than a million. It would have to be at least a million dollars and one cent. But people who control tax money that they don’t themselves personally own, and therefore can’t do whatever they want with, the bureaucrat can’t just pocket the million and go home (although it can get surprisingly close to that). All I have to do is bribe him a few thousand, and he can direct this million dollars in tax money to my favorite project or whatever, and thus the power of my bribe money is multiplied.

Whereas, if you were the head of some private protection agency and I’m trying to get you to do something that costs a million dollars, I’d have to bribe you more than a million. So, the power of the rich is actually less under this system. And, of course, any court that got the reputation of discriminating in favor of millionaires against poor people would also presumably have the reputation of discriminating for billionaires against millionaires. So, the millionaires would not want to deal with it all of the time. They’d only want to deal with it when they’re dealing with people poorer, not people richer. The reputation effects – I don’t think this would be too popular an outfit.

Worries about poor victims who can’t afford legal services, or victims who die without heirs (again, the Randians are very worried about victims dying without heirs) – in the case of poor victims, you can do what they did in Medieval Iceland. You’re too poor to purchase legal services, but still, if someone has harmed you, you have a claim to compensation from that person. You can sell that claim, part of the claim or all of the claim, to someone else. Actually, it’s kind of like hiring a lawyer on a contingency fee basis. You can sell to someone who is in a position to enforce your claim. Or, if you die without heirs, in a sense, one of the goods you left behind was your claim to compensation, and that can be homesteaded.

Here

[MJGreen]

You know, everyone is totally free to boycott BP right now. But their share price is still $46 and change with a MARKETcapitalization of $145 billion.

This is true, but tells us little of what might happen in a free society. The preferences of people in statist America are not likely to be the same as the preferences of people in stateless America. For instance, many of us today likely assure ourselves that, “government will take care of it.” In a stateless society, many people might believe it is up to them to exact justice and would be more willing to boycott the companies responsible. (especially since several other social problems, like the drug war and institutional unemployment, are not likely to exist and divide our attention) That there is not some mass uprising in contemporary society does not mean there would be no such uprising in a stateless society.

And I know it has been brought up, but I find it hard to believe that the BP/Halliburton/Transocean equivalent in a stateless society would invest so many resources into an oil rig without signing some contracts and insuring themselves to some degree. Somewhere in those contracts they must have listed their obligations should their oil rig fail and harm others’ property.

[Faithkills]

@Benjamin

You know, there actually was a plan in place - a government plan - which could have cointained this oil spill and prevented it from potentially destroying the fishing and tourism industries in the Gulf. Read about it here:

http://blog.al.com/live/2010/05/fire_boom_oil_spill_raines.html

And it worked as well as most government plans do.

@Benjamin

The problem? The Federal Government didn’t have the resources on hand - all those taxes had been spent, because the system is run by “special interests”

You’re right. The special interest is the government.

@Benjamin

We’re getting the latter because we’re losing all control of our own government.

We lost that last under Lincoln.

Regardless making the government we’ve lost control of stronger is insane.

Like all statists you believe that the answer to a powerful government being owned by the rich is to make the government a more attractive target for the rich to control by giving it more power.

You’re on a austrian site. FFS avail yourself of some Rothbard. A primary reason the government is out of control because crony capitalists convinced socialist stooges like you that a more powerful government would protect them from the crony capitalists.

Has it worked yet?

Clearly government needs more power!

In a free market you have to compete with the best product and price.

In a regulated market you just compete for government protection. This is what we have. Because socialist utopian tools like you believe the lies.

The whole damned problem in the Gulf is because your congress wanted to milk the oil companies and in return gave them a liability cap. The money they milked was supposed to go for the very emergency apparatus that you mentioned but of course it was just wasted like every other ‘trust fund’ the government holds for ‘us’. Eg social security.

Sans that regulation there would be no liability cap. Sans that regulation BP would have known, if they spilled, they would be potentially on the hook for all of their assests in the world.

Knowing this they might have been a bit more careful. Sans the regulation the spill would not likely have happenned at all. Their entire business would be on the line.

Instead they have government certificates, even awards, to point to saying they were inspected and should be indemnified.

Sans regulation they would not have had to be drilling a mile down in the first place.

Sans the failed government planners you love so well BP would have to pay for every single cent of damage they caused.

Theists believe in an old man in the sky who wishes them well.

Socialists believe in a politician in DC that wishes them well.

I’m never sure which is is more stupid.