From: Brad
Sent: Wednesday
To: [email protected]
Subject: compulsory automobile safety inspections and insurance
Dr Block,

A friend of mine who is skeptical of libertarianism e-mailed me the abstract of an automobile accident rate survey “The Effects of automobile Inspections on Accident Rates” published in “Accident Analysis & Prevention”
The conclusion is “The data suggests that poor mechanical condition is a significant factor in motor vehicle accidents and that annual inspections are a desirable means of reducing accident rates.” which seems logical to me. Some states require annual inspection and others don’t. Not too long ago, my state (NH) required car inspections every six months.

Now I realize that in our libertarian utopia all roads would be privately owned. The owners of the roads would decide which vehicles would be granted access, and they could permit vehicles without lights and brakes or they could require daily safety inspections as they saw fit. But in today’s world, I told my friend, just because we want safe vehicles doesn’t mean that the government needs to mandate safety inspections. For example, insurance companies could set up an inspection system. Lower insurance rates for cars that passed inspection would give drivers an incentive to drive safer cars, resulting in safer roads for everyone.

But what about people whose cars are not insured? Not all states require automobile insurance, and some people drive without insurance even where it’s required. As I understand it, libertarianism requires that people be held responsible for the consequences of their actions. Many people lack the resources to fully compensate victims of their unsafe vehicles and their unsafe driving. Consequently, responsible people buy insurance.

So my question is: Should the government mandate automobile liability insurance? In the absence of mandatory insurance, how can innocent victims of other peoples’ negligence and recklessness be made whole? Please comment on LRC if you think it appropriate.
B

Right now, what the government SHOULD do is privatize all streets, roads and highways. See my book on this: Block, Walter E. 2009. The Privatization of Roads and Highways: Human and Economic Factors; Auburn, AL: The Mises Institute

Now, let me address a very, very different question, not a normative (should) one, but a positive (cause and effect) one. IF the government were to require auto insurance, vehicle inspections, insurance, and penalize drunk drivers who have not so far caused accidents, would the fatality rate decrease? It is my judgement that highway deaths would decrease. It is my expectation that private road owners would do this.

Let me now address another different question. Suppose that now the government ran all restaurants and grocery stores. What would the libertarian say about this? That’s easy: the government SHOULD privatize all of these installations. What would the (Austrian, or any good) economist say about this question: IF the government ensured clean rest rooms, good food, safety, WOULD this improve consumer satisfaction? Again my answer is Yes, and for similar reasons.

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