I have painted myself into a corner: big government doesn't work, and though the free market is the perfect solution to problems of supply and demand, there are certain areas of human aspiration which are best served by commons, common interests, common actions. Therefore, there are certain zones in which the free market is just as inept as big government. All of which is another way of saying that humans are inept at managing their destiny - a proposition for which I see significant evidence every time I read a newspaper, take a subway, or have a conversation.
So, should we give up? No; we can, motivated by the foolish but sustaining optimism that has always kept us alive, realistically work for the best accomodation of bad systems - hoping that the whole will be greater than the sum of its parts, as it is with the best of human endeavors. Let's use the free market where possible, and government where necessary.
I've touched on this topic before. I like to think of this argument as the "environmentalist's objection" to Libertarianism. Now, I don't agree with all the points made in this essay. But I do think there's at least a core of truth he's getting at. A quick summary of my thinking on this issue might be:
1) The environment can't really be privatized, not practically anyway. So when someone pollutes they're hurting everyone. (This idea runs fairly contrary to current Libertarian dogmas.)
2) Some things will never be profitable, so the free market will never provide them. But they may still be important. Law enforcement comes to mind - I can't see any way that the police can be simultaniously both uncorrupt and for-profit.
3) Market failures do exist. Free markets are great, but they're not 100% perfect. And when market failures start interfering with freedom, how do we deal with that?
I suppose all of this makes me more in the Minarchist camp than the hard-core Libertarian. But I'm cool with that. I think, given the current state of the nation I live in, that there's way more than enough common cause between Minarchists and Libertarians for us to set aside our relatively small differences as academic for the moment. We can get right back to infighting when it might actually make some practical difference. I think, also, given the nearly universal tendency of governments to expand and annex themselves more power, the differences between Libertarians and Minarchists may continue to be be academic for quite a while...