The excesses of ethanol

The other day, Katherine Mangu-Ward of Reason wrote a post noting that ethanol fires are apparently rather difficult to put out. This has come under criticism from Thoreau of Unqualified Offerings:


I’m sure that they’ll offer the key libertarian insights on this: Don’t worry, the market will decide on good fire-fighting technologies for dealing with this problem, and insurance companies will price the risk, enabling the market to fairly and efficiently allocate risk. Besides, if you’re really worried about this, the best approach is to privatize fire departments so that they can respond to market incentives to develop better fire-fighting technologies, and also remove the public guarantee of protection that encourages risky behavior.

Standard libertarian gospel.

Oh, wait, they aren’t. They’re offering it as an argument against ethanol fuel.

Don’t get me wrong, I’m not a big fan of ethanol fuel (or at least not ethanol fuel from subsidized corn). And I’m not even sure that I would always agree with the Standard Libertarian Gospel on industrial and consumer product hazards. Still, it’s just kind of funny to see my fellow libertarians using “Oh no! Somebody might get hurt!” as an argument against a chemical additive. Seriously, this is the best we can do? Not even some token “Well, the public sector fire-fighting bureaucracies will be too short-sighted to respond to this effectively, yet another wing of the state subsidizes it anyway, once again illustrating the inefficiency of Leviathan”?



I'd say that the fires are a justifiable target for libertarian snark to the extent that the government is subsidizing/mandating a fuel that would otherwise be too dangerous to be deployed by the free market. Ethanol has many drawbacks, of course, and fire hazard is probably not the greatest of these. Nonetheless, it adds to the market clearing price at which ethanol will be adopted, helping to make it so high that it never would be adopted without politicians pandering to Iowa.