A Cost-Benefit Approach to Public Policy

Let's look at all the consequences of various interventionist government policies and let's think about whether we think the whole set of effects that we get is positive or negative, aggregated together somehow. I'd like to talk a little bit about two different versions of libertarianism. The more traditional and probably the better known, people refer to as philosophical libertarianism and very, very crudely put, it's the notion that people have rights, individual rights to freedom, to liberty, and government policies infringe those rights and therefore those policies are not legitimate or not appropriate, not desirable. A different perspective, which I call cost-benefit libertarianism or consequential libertarianism or sometimes just economic libertarianism, says that we don't necessarily need to talk about rights per se, we should simply say let's look at all the consequences of various interventionist government policies and let's think about whether we think the whole set of effects that we get is positive or negative, aggregated together somehow. My claim is that in a huge fraction of cases, when you look at all of those consequences, you find that the net consequences that actually occur as opposed to just those consequences that politicians talk about when they advocate these policies, the net consequences are pretty bad and therefore whether or not you put a huge emphasis on individual rights, you still should come to the view that those policies are not such a great idea. A clean example is drug laws. A philosophical libertarian might say, I have the right to control what goes on in my own body so a government policy that outlaws marijuana is illegitimate and makes it harder and imprisons me even for just doing something that really only affects me and that infringes my rights. A consequential libertarian would say, leave that aside for the moment, the attempt to try to prevent people from consuming marijuana generates a black market, generates crime, corruption, quality control problems, disrespect for the law and so on. It has at best a small effect in reducing the consumption of marijuana. So whether or not you think people should have the right to consume marijuana, whether or not you think consuming marijuana is good or bad, if you consider the whole set of things that happen when we try to prohibit marijuana, we're getting a very, very bad combination of effects and so even someone who doesn't quite share the philosophical perspective can still come to exactly the same conclusion.