Libertarians diagnose with open eyes.

David Z at …no third solution has a smart post today, titled If You Subsidize It…, about moral hazard in the context of Hurricane Katrina. He concludes:

…we can’t content ourselves to argue, “A free market would’ve built better levees!” when the reality is that a free market might never have built any levees in the first place.

This is exactly right. Maybe participants in a free market would build there. No one else is competent to judge another’s preference. Perhaps he really does like the ocean view in California that much more than the risk of wildfires (or earthquakes). And he’s willing to bear the costs. That’s his own rational, if not objective, decision-making.

This is part of my core knowledge that a limited government is the maximum – not some theoretical, unworkable minimum – to which we should strive. One complaint I see lodged against libertarians is that we don’t have ideas on how to run things instead, that we only offer complaints about what’s wrong. Of course. It’s entirely true, and the explanation against that attack is so obvious in the argument that to defend it is to elevate the oblivious to an unearned legitimacy.

I’ll make an attempt anyway. We can judge from facts that something does or, with government, doesn’t work. We make that judgment. We also realized that the answer isn’t necessarily to complete a task better. Perhaps the answer is, as David suggests, to not do the task. Individuals operating in their own self-interest are far likelier to discover that than the collective need to Do Something that mingles diligently with a world devoid of accountability for mistakes. No thing can ever be wrong, it is merely not yet achieved. People who invest their own time and money are much less prone to such silly observations about their own infallibility.

So, when I complain about single-payer health care, for example, I’m not saying I know what the solution is. I don’t. I know that I understand basic economics. I know I don’t know anything about operating a health insurance plan. Economics tells me one option, the Free Pony Plan, isn’t feasible. But I trust that there are smart people who understand economics and operating health insurance plans. They see the possibility of profit deriving from their knowledge and effort, so they seek to achieve the goal. There will be bumps regardless of the activity because we haven’t found perfect humans, but what we want will eventually happen. Injecting government only changes and removes natural incentives by replacing them with those inspired by nothing stronger than a hope for happy feelings. And run by non-perfect humans.