Does the Libertarian Party differ from other third parties?

In Downs chapter on "The Statics and Dynamic of Party Ideologies," he says that third parties in two-party systems exist for two reasons. The first, which seems more intuitive, is to come to power and at least threaten the main two parties grip on voters. The other is to influence policy. As Downs points out, clearly both these end goals require a voter contingent, but this does not mean electing officials must be the primary goal. The two examples today that clearly seem to be the latter type are the Green Party and, though not a fully separate party, Tea Party Republicans. Both of these examples reside at the edges of the liberal, conservative continuum and seem to be in place to prevent Democrats and Republicans from edging towards the median voter. While the Tea Party Republicans have gotten some officials elected, the rhetoric seems to focus on non-establishment, renewed conservative values that would limit its platform's appeal but not limit its influence on the larger Republican party.

My question then became, which type is the Libertarian Party? With no elected officials in the House or Senate and Presidential candidate Gary Johnson receiving only 1% of the vote in 2012 despite the party being formed in 1971, intuition would say the party exists to influence policy. Furthermore, both Johnson and the Green Party's Stein are likely receiving some substantial boost this election season due to the unfavorability of Trump and Clinton. Still, this answer does not seem satisfactory since its fiscally conservative, socially liberal policies take elements from both main parties (though it does emphasize reducing the government's role consistently). The fact that Johnson draws voters away from both parties backed up by FiveThirtyEight's article back in July, which found that Clinton did only slightly worse in polls with third party candidates. Additionally, Gary Johnson has been polling between 8% and 13% this election in general electorate polls with more substantial numbers in particular subsets (as high as 31% with independents, 36% with those in the military, 26% of voters age 18-29). Overall, the purpose of the Libertarian Party remains unclear and may only become apparent in future elections.

President Obama and Expected Benefit

In one of his most passionate speeches in recent memory, President Obama urged black voters to show up in support for Hillary Clinton this November at a Black Caucus Foundation gala on September 17.  In response to Mrs. Clinton's weak energy among young black voters relative to energy for Mr.  Obama in the 2008 and 2012 elections, the President argued that the 2016 vote will determine far more than merely the next head of state:  "My name may not be on the ballot, but progress is on the ballot.  Tolerance is on the ballot.  Democracy is on the ballot.  Justice is on the ballot."

Vis-a-vis the Johnson reading, Mr. Obama's speech bears two points of interest.  First of all, the speech ups the 2016 ante.  That is, he is attempting to convince black voters that the benefits of their voting for Mrs. Clinton may be higher than they previously thought:  the President is implying that fundamental progressive values are at stake.  Thus, the rational potential voter must not only consider the benefits of Mrs. Clinton's policies, but also the benefits of "progress," "tolerance," "democracy," and "justice," which carry, of course, quite some value.   Ironically, though, given that Mr. Obama is encouraging a higher voter turnout among black voters, the expected probability of a single voter swinging the election decreases even while the benefit of voting for Mrs. Clinton increases, and perhaps the outcome of the individual voter's equation changes very little.

However, Mr. Obama's encouragement to vote may not be naive after all.   A two-term, energetic President with ever increasing favorability numbers, President Obama's actions may very well swing the election if his encouragement convinces enough people in the black community to vote.  His words as a popular figure carry far more influence than his individual vote ever could, and one could perhaps argue that he would do better to spend November 8th making stump speeches at voting locations in Florida or Ohio rather than taking the time to cast a vote.

The Grand Nicaragua Canal: Fact or Myth?

Chinese businessman Wang Jing’s canal scheme is just one more added to the pile. After the Panama Canal expansion project was completed this year, the grand Nicaragua Canal was put on hold, and perhaps for the best. After several studies were performed to analyze the socio-economic and environmental impacts of the project, experts started questioning whether it was a good idea or not to build the canal. China’s record on environmental matters is very poor, so there is a reason to concern about the possible negative environmental impacts. In addition, the area targeted for the project is home to a large population of indigenous farmers that don’t have formal titles to the lands they have inhabited and cultivated from generation to generation. Thus, there is also a big concern regarding the people that would have to be evicted from these lands.

According to Coase, the assignments of property rights have no effect in the way economic resources are allocated, in a world with low transaction costs. If transaction costs were low, Wang Jing and the indigenous farmers’ Cacique would bargain to get to a Pareto Optimal allocation. One possible scenario is that all farmers had legal titles to their lands and Wang Jing pays an amount relative to the market value of the acres of land the farmers would give up for the canal construction. If Wang Jing got the rights for the lands instead, according to Coase’s Theorem, the same allocation result will be achieved. However, in reality, the Cacique is not the sole representative of the whole indigenous population that inhabits that area, so the negotiation will not be exclusively between Wang Jing and the Cacique. Due to the large number of parties in the transaction, transaction costs are indeed very high and bargaining is not possible. The lack of ownership (excludability) over the lands gives government authorities the default right to allocate them however they prefer. In a country with weak institutions that doesn’t usually lead to a Pareto optimal allocation that maximizes social benefit. This is a perfect example that shows how incomplete property rights can create conflict, like Coase suggests.

Celebrities say my vote matters, are wrong about everything

In what is essentially an in-kind donation to the Trump campaign, a group of Hollywood celebrities made one of those obnoxious videos where each person is featured individually in front of a blank white background, and they each repeat the same phrase ad nauseam, before finally moving on to another phrase they each repeat ad nauseam, and then to another, before finally forming one complete and coherent thought. The ad doesn't tell you for whom you should vote, just that you should vote (although it's pretty obvious who their preference is). The ad comes from Avengers' director Joss Whedon's new Super Pac, "Save the Day."

A few things stick out.

First, it's clear the celebrities did not take Public Choice. One tearful celebrity I don't recognize implores me to vote because "we can't say one vote doesn't matter." Don Cheadle points at me, and tells me "your vote matters." The tearful, unrecognized then says: "your vote matters." (I warned you they repeat things) Scarlett Johansson tells me my vote "affects everything." This is doubtful. Living in Virginia, I suppose it's possible my vote matters slightly more than a voter in Oregon, but I still wouldn't say a 1 in 10 million chance of casting the deciding vote means my vote matters, or "affects everything." Plus, Virginia is quickly losing its swing state status, so my vote likely matters even less than normal.

Second, the celebrities don't ask me to educate myself -- they just want me to vote. You'd think in the 3 minutes they spend repeating each other they could spare a sentence to ask my to learn about the issues. Is Hillary Clinton's stance on immigration good for the country? How about Trump's plan to increase tariffs? Does Jill Stein's suggestion that Wi-Fi is giving our kid's cancer have merit, and what are the implications if true? These policy proposals actually do matter, and while they probably are unable to "affect everything", their implementation will certainly affect more things than my vote will. A drive to increase voter education, rather than one that simply tries to increase turnout, would be much more beneficial to society. But perhaps Whedon is aware of at least one lesson from Public Choice: remaining ignorant of these issues is rational for most voters, so asking them to educate themselves would likely be fruitless. A Super Pac simply aiming to increase voter turnout will enjoy a much greater return on investment.

The Veterans Health Administration: Are the Benefits Greater than the Costs?

The Veterans Health Administration, an integrated healthcare system for veterans, is provided publicly through the US Department of Veterans Affairs. The effectiveness and efficiency of the public provision of this system have been scrutinized because veterans are often not getting the benefits promised to them in a timely manner, but also defended as many believe that the benefits of the VHA, which include arguably higher quality of healthcare for veterans than common hospitals, outweigh the costs, which have included high wait times and recent scandals. In 2014, numerous veterans died after being left off the long wait list for medical appointments.

In The Role of Government in a Free Society, Milton Friedman addresses the reasons for which government is necessary when the actions of one party affect another without being able to charge or recompense them, or when it is more efficient to have a single producer. By looking at this issue from Friedman's perspective, we may come to the conclusion that the public provision of veteran healthcare isn't justified using either of these rationales. Private provision of veteran healthcare (or, simply allowing veterans to pursue other healthcare options instead of offering their benefits only in the VHA system) does not result in any neighborhood effects where third parties are not able to be charged or compensated for any external effects. In addition, Friedman suggests that the reason the government has prohibited privatization of postal services is that no one else would be able to compete successfully with the current public monopoly of the post office, but he claims that there is no way to know whether this is the case without allowing free entry to test it; similarly, Friedman would say there is no way to completely rule out the possibility of a successful private provision of veteran healthcare until we try it. Open entry encourages innovation, so it may be beneficial to analyze whether the benefits of public provision of veteran healthcare through the VHA outweigh the costs.

Yasuni, A Natural Treasure On Top of a Pool of Money

Ecuador’s economy is highly reliant on oil obtained from Amazonian lands. One of the national reserves is the Yasuní, considered one of the most bio diverse places on earth. In 2007 an issue arose when one of the biggest oil reserves the country has ever had, was found underneath the Yasuni. Thus two options were presented, destroy a biologically diverse area, or extract around 800 million barrels of oil equating a value of $3.6 billion. The President Rafael Correa reached out for international support, by proposing organizations and countries to cooperate and pay Ecuador for not extracting this natural resource. Since Ecuador is a third world country, in need of financial support for government expenses, it cannot afford loosing this much money. After six years of negotiations, no consensus was reached, and Ecuador started the oil drill.

This situation can be related to Coase’s theory of social cost. Just as the rancher’s cattle inflicted damage over the farmers crops, the oil procedure from the state will damage the biodiversity from the environment. Besides the destruction happening, the issue is the lack of clear property rights for biodiversity, since it is a purely public good. Nevertheless, this does not mean that by drilling the oil people will not be affected, because many value natural resources and the air will be contaminated. Anyone who has some value over these, will incur a damage. Thus, if the oil is drilled a negative externality will be imposed on all the people that are connected towards this good. So what is the efficient solution? According to Coase, assuming no transaction costs, this can be found through bargaining. Bargaining was the President's intention, asking countries to compensate for the damage incur, in exchange of not using this resource. Some were interested, but the transaction costs were too high, the biggest one being the free rider problem, which lead to a failed bargain. If someone agreed to help, other affected countries would still be benefited despite their contribution, because this is a purely public good with no excludability nor rivalry. Thus, at the end, no solution was obtained, without reaching efficiency, which shows a big problem with public goods of how efficiency is not always possible.

The True Value of a Vote

Although Johnson highlights the economic rationale that the costs of voting in a presidential election will outweigh the expected benefits, I still firmly believe that it is ones duty as a citizen to vote in an election. One's vote is not significant in how it influences the result of the election, but in what it expresses. We are privileged to live in a democracy where the government if "of the people, for the people, and by the people."

The duty to vote however, does not mean that people should be feel pressured by society to vote for one of the two major parties. What makes a vote valuable is not the probability of changing the election, but what is says about our democracy -- that we are allowed to express our opinions. People often cite that if they don't vote for a major party candidate, they are effectively "throwing their vote away." However, this line of reasoning suggests there is no reason to vote in the first place. The expected value of your vote making an impact is almost the same no matter who you vote for -- about 0. This election year marks a particularly bad set of candidate options. Over the past year alone, Trump and Clinton have continually out done each other in giving the public reasons why they are unfit for the Presidency. Peggy Noonan from the Wall Street Journal writes that people don't want to express their voting preferences publicly because they will have to defend what their candidate has done. If this is the case for your candidate, I suggest you vote for someone else. In an election where there are historically low approval ratings, people should vote for a candidate they want to win and not default to one of the two major parties that offer a false sense of vote value. What makes a vote truly valuable is what it represents and not its impact on determining the result of the election.