A Libertarian carpark

The thing about libertarians that frustrates non-libertarians the most is their utter and willful short-sightedness: they simply refuse to see beyond their own notion that freely agreed on exchanges of value are good, therefore markets are just. I believe it’s called the “fallacy of composition”. The problem is that markets have emergent behaviour that is grossly unjust. A further problem is that this behaviour – that wealth tends to concentrate – actually destroys the market in the end. When a few multibillionaire families have 90% of a society’s cash, people cannot engage in ecomomic activity for want of a medium of exchange, and society enters a depression (characterised by high unemployment, low prices, and little buying and selling going on).

Probably the best way to learn about this is with Parker Brother’s “Monopoly”. An amazing act of subversion – a child’s came that right on the box tells you what they will learn by playing it: that markets destroy themselves.

But one of my favourite illustrations of the idea that sometimes the problem is the system itself – that you get undesirable things hapening even in a “fair” system – is an idealised carpark.

This carpark is a single long one-way street. there are parking spaces all down one side of the length of it. At one end is the mall, where people want to shop. Everyone wants to park as close to the mall as they can. If you can’t find a park, you have to go around again. We assume that the loop of road itself can essentially hold an unlimited number of cars.

Our goals are: to reduce the amount of time it takes to get a park, which is the same as saying to reduce the traffic density in the carpark, and secondarily to reduce the average distance people park from the mall.

Now, there are two ways you can run this carpark. You can admit people into the street at the end near the mall, or you can admit the cars into the street at the far end. The issue is: how to these two methods compare? How does the system behave under load?

In the first situation, behaviour is very simple. You’ll take the first space you find. If the carpark is very loaded up, then you might get all the way to the end and go around again in hopes that a spot opens up, but this only happens when the carpark is essentially full. In the situation where about the same number of cars arrive as are leaving, there will be few gaps near the mall – meaning the average of how far people park from the mall will be about as small as it can be. The only variables are the average rate of people using the carpark, the average length of time a spot is occupied, the number of spots, and the amount of time it takes to traverse the length of the carpark.

In the second situation, things get chaotic. You have to adopt a strategy for “do I take this spot, or is it likely there will be a better one ahead?”. You have to gamble, depending on how many spaces ahead you can see (another variable). This means that there will be situations where you reject all the available carparks – even when there are plenty of them – in hopes that there will be a better one, and you have to go around again. Straight away you can see that people will therefore – on average – spend more time going around, and that therefore the traffic density will be higher. People that decline to gamble will take bad spots far away from the mall even when there are better spots further on, so it follows that the average distance to the mall will be greater.

The only advantage that the second system has is that the load, while higher, is evened out a bit. In the first system, all the activity takes place at one end, usually. But in my ideal carpark, cars that are parking don’t block other cars, and pedestrians don’t have to thread their way through the cars.

The thing is: the second method is every bit as fair as the first. No-one is privileged over any other. The system itself creates the parking madness and road rage. But the libertarians just say “Everyone gets the same chance to find a good park blah blah freely chosen exchange of value blah blah” and simply refuse to grapple with the issue being raised – that the behaviour of the system as a whole is behaviour we don’t want.

It’s a common problem with people that take high-minded stands on matters of principle without regard for how they play out.


5 Responses to A Libertarian carpark

  1. Valerie Curl says:

    The problem I find with Libertarian philosophy is their lack of understanding of human nature. In the Hyack-Mises libertarian point of view, if government stayed completely out of the marketplace, set no rules of any kind, and gave no tax preferences to any industry, the marketplace would work perfectly because the consumer would be able to pick, choose, and discern the winners even though some losing consumers lost everything as a result of “con artists.”

    While they don’t say that all market players are honest, moral or ethical, that is their basic assumption.

    I find that analysis naive at best and irresponsible at worst, especially given the almost completely unregulated financial market collapse which just occurred.

    To restrain the worst of human nature there must be a cop on the beat.

    • Paul H says:

      The flawed thing about any political discussion, and hence analogy like the carpark thing here is that people fling themselves at categories, extremes; simplifications. And then blame the flaws in the operation of a system on these categories, labels, simplifications.

      I am particularly confused at how the current financial systems could possibly be referred to as an implementation of any sort of ‘libertarian’ economy (whatever that means)…

      • Paul Murray says:

        Well, the carpark is not really an analogy of anything. It’s an example of a system that can have systemic problems. Something that Libertarians often stoutly deny, or fail to grasp at all.

      • Paul H says:

        Ah, I see. I am a little wary when it comes to these lines of conversation… maybe I shouldn’t have chipped in at all 😉

        I am wary because the conversation often goes:
        “X don’t accept blah, therefore things that X say/believe are wrong”.

        And this is because people are clinging to labels and categories and assumptions.

        I suspect some of my views could be branded as ‘libertarian’: loosely in the context of this blog post, I hold that one person’s ‘economic policy’ is another’s code rot. And that much of it is arbitrary, *not* evidence-based, *not* monitored to form a controlled feedback loop subject to later adjustment/tuning.

        And yet I don’t believe that there should be zero government fiddling with economic policy. It’s just that generally government is the only institution empowered to do so (the central banks are another dimension).

        Markets (and nations) should be free to set whatever economic policies they like.. it just seems a shame that hardly any of these processes are transparent (the RBA didn’t even produce minutes until Krudd, IIRC), nor is the way that money supply (currency) even remotely on the edge of the public conscious: try telling an ordinary stranger that banks *create* money out of thin air, let alone the fact that this money may need to be later *un* created…

        • Paul Murray says:

          “And yet I don’t believe that there should be zero government fiddling with economic policy. It’s just that generally government is the only institution empowered to do so”

          Considering what the word “government” means, it’s more the other way around. Any person or institution empowered to fiddle with economic policy is the government. The question then is whether we want the government to be that democratically elected body on the hill down Adelaide Avenue, or not.

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