Sunday, October 29, 2006

Guaranteed profitability hurts the little guy.

I've written before about Bolivia's nationalization of its oil and gas industry. Now it's cutting deals with large international oil companies - and guaranteeing them profit.

Of course, what this means is that if the companies make bad decisions, they won't suffer - the people of Bolivia will. This is a gross perversion of what nationalization of the energy industry was supposed to do, that is, stop exploitation by the oil companies and protect Bolivians. (There was no chance that nationalization would accomplish this, but it's a nice goal at least.)

This sort of thing demonstrates something we libertarians have issues convincing people of - big government quite frequently advances the goals of big, exploitative corporations, and the only way that exploitative corporations can continue harming their customers is with government help. Markets don't guarantee profitability, and nothing should. Guaranteeing reward for something that may or may not be beneficial is the best way to guarantee that no benefit will come from it.


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