Although I have libertarian sympathies I'd label myself more as a conservative than as a libertarian, mainly because I just don't think pure libertarianism can work. Why? Because humans aren't rational and we very often do things that aren't in our best interests, and when a critical mass of society lives miserable lives because of their own poor choices it's certain to bring the rest of us down as well. The externalities are unavoidable. Case in point: a significant percentage of people simply can't handle their own finances -- this article is about the UK, but I'm confident the situation is even worse in the US.

A debt-fuelled spending splurge at Christmas is set to push thousands of individuals into crisis and cause record bankruptcies in coming months as consumers struggle to pay off credit cards. According to the accountancy firm Grant Thornton, at least 20,000 people in England and Wales will become insolvent by the end of the quarter in March, and 66,000 individuals by the end of 2006. Both figures would be the highest since records of personal debt began 45 years ago.

Shoppers are thought to have been tempted into splashing out more than they could afford on food and presents at Christmas and on bargains in the new year sales. After a slow start retailers reported brisk business in December, and the bill for Christmas is almost certain to top the £10bn of 2004. The spree comes as personal insolvency surges at an annual rate of more than 30 per cent. Citizens' Advice Bureaux are reporting "huge numbers" of debt calls, and the Consumer Credit Counselling Service predicts bankruptcies will double in the next few years.

If people can't even handle credit cards, why do libertarians think they can handle, say, addictive drugs? Well, many libertarians don't, but respond to the philisophical difficulty by dismissing it and abandoning anyone who can't handle themselves to their own folly. But few people would argue that returning to an age of debtors prisons would be more desirable than a few governmental restrictions on borrowing and lending.

The key is "a few". Any regulations can go overboard, and bureaucracies have a tendency to expand to attempt to control anything they can get the budget for, so there's a fine line to walk to find the optimal level of liberty. I think we could do with a lot less regulation than we have now in most areas, but there are some that could do with a little more public oversight.

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