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Readers' Views: What a free market can't provide us


I am writing in response to Sheldon Richman’s column, “Life without FEMA? It can happen’’ [Nov. 7, Press And Journal]. The Future of Freedom Foundation, of which Mr. Richman is a fellow, is a Libertarian think tank. The central claim of Mr. Richman’s piece is that the private market can provide a number of essential services more effectively than the federal government.

These claims are supposedly based on a profound knowledge of the mechanisms of the free market and how they work – something Libertarians often pride themselves on. However, like most ideologues, they overlook a number of things. 

In Economics 101, you are a taught that there are some fundamental goods that we all need but the market will not and cannot provide. These goods are called public goods. A classic example is a lighthouse. If you think about it, where is the incentive for an entrepreneur to build a lighthouse? How does one charge for this service? And if somebody refuses to pay, we can’t say, “Close your eyes when you sail past this dangerous area.’’

FEMA is such a public good, a kind of insurance against worst-case scenarios when disasters strike. Even staunch conservatives seem to agree.

In 2003, a Republican congress and president made FEMA part of the Department of Homeland Security. This Congress was by no means a fan of big government; however, it did see a purpose for FEMA in terms of national security.

Even the father of modern day economics, Adam Smith – the darling of conservative politicians – argued there was a need for institutions like FEMA. If you read Adam Smith’s masterpiece, "The Wealth of Nations,'' he makes it clear that there is a need for government institutions that will prevent and secure citizens from natural disasters. He argues that the state has certain obligations, and among them are:

• “obligations to build party walls to prevent the spread of fire’’
•  “patrols by town guards and fire fighters to watch for hazardous accidents’’
•  “erecting and maintaining certain public works and public institutions intended to facilitate commerce roads, bridges, canals and harbours’’

It is clear that Smith felt one of the purposes of government was to maintain public safety and to invest in infrastructure projects. He did not believe that the market could more effectively provide for all of society’s needs. Furthermore, he also believed that the proper role of government is to provide such public goods. So did George W. Bush and the 2003 Republican Congress.

My suggestion to Mr Richman: Before you start commenting on the free markets and its blessings, maybe you should put down the ideologue Ayn Rand’s “Atlas Shrugged’’ and pick up Smith’s “Wealth of Nations.’’ Just a thought.

                                          David Madsen