It seems to me, that there are a few issues that Libertarians are guilty of ignoring because the solution to them is so obvious. They just don’t offer an intellectual challenge, yet remain important.

Gay marriage is one of them, the obvious solution being to “privatise” it, splitting it into myriad institutional arrangements run by churches and philosophical groups rather than the state, for profit in some cases but probabaly not for profit most of the time. For example, the register of marriages might be a for profit service operating a wholesale service model.

Racism is another, we find it beyond obvious that the law should not treat people differently based on the colour of their skin or ethnic origins, and we rarely take the time to re-iterate that despite the tactical utility of doing so. Indeed, this is one area where people would really appreciate libertarian help because we do not make the mistake of hectoring the other side to conceal their prejudices, instead we tend to employ economic or epistemological arguments to persuade people that racism is just stupid, and without too much concern for anyone whom that would offend.

Corruption is the most topical of these problems, and the arguments are well worth reheasing.

Corruption arises due to incentives. If a man is making a decision about his own money he will want to make the best use of it. There can be one time finacial incentives – called “discounts” – and there can be value to be had outside of the trade – such as building a longer term relationship by patronising family members or community leaders. Neither of those factors will persuade someone to spend their own money on anything other than merit, they just broaden the range of factors involved in assessing merit.

In the other hand, if a man holds something that is not his own, such as taxpayers money, then it will be possible to bribe him. The bribe consists of a part of the profit available to a party if the resource is allocated to them, rather than to the party that merits it most. That portion is always going to be smaller than the total value of the missallocated resources but will always be larger than the stake held by the decision maker, which in the case of public officials is zero. The only disincentive is a small risk of getting caught.

So, when a libertarian looks at the Government and says “privatise it all!”, he is advocating for the realignment of incentives such that decisions are more likely to be made on merit. That does not mean that they believe the only value to be had from something is financial – not all capitalists are money grubbers – but it will mean that all the incentives (money, happiness, relationships, virtue etc) are more likely to be weighed correctly and things are more likely to be run well.

When we look at Cameron, a supposed capitalist, hob nobbing at No 10 with prominent business people (more alleged capitalists) is that a situation that improves or corrupts the incentives at work? Cameron has his hands on the levers of power and is First Lord of the Treasury. He is able to influence the reallocation of resources that are not his own, so it is actually quite reasonable to wonder if the business people are there to offer him a bribe and that he might indeed be tempted by those bribes. That would match our understanding of the incentives.

We could react to this by bashing capitalism, and doing down business people, but that would tend to mean more power and money going to politicians and would actually increase the incentives further in favour of bribery.

The clever trick the libertarian is performing is aligning his policy with the grain of the incentives. By keeping all the money and power away from politicians there is no incentive to go and bribe them. In this way, more resources will be allocated on merit leading to superior outcomes.

The gap in the theory is that politicians might actually like to receive the bribe and will fight against efforts to strip them of power. Also they need power to offer their own bribes to their favoured groups of electorates. The real challenge then is to persuade the electorate, not the politicians, to stop accepting bribes.

When the electorate is as alert to bribes offered to other members of the electorate as they are to bribes offered to politicians then the libertarian policy of privatising everything will  seem obvious to everybody.