Why libertarian cities fail

In my Atlas Shrugged series, I mentioned how Ayn Rand holds an attitude best described as “cornucopianism.” She treats every natural resource as inexhaustible. Nothing ever gets scarce or runs out, so nothing needs to be conserved.

When the narrative moves to Galt’s Gulch, a secret hideout for the world’s greatest capitalists, the paradox gets sharper. Their logging, mining and heavy industry don’t create any pollution or leave any mark on the beautiful natural landscape. What’s more, conveniences like roads and coffee and fresh fruit appear as if materializing from nowhere, despite there being no obvious way to produce them.

Now—if you were of a libertarian bent yourself—you might object that this is a work of fiction, stripped down to the essentials to make a philosophical point. You might argue that libertarians know perfectly well that in the real world, natural resources aren’t infinite. You might say all of those things.

With that in mind, let’s talk about Rio Verde Foothills.

Water, water everywhere… or not

Rio Verde Foothills is an unincorporated rural community in the wilds of Maricopa County, Arizona. As you may know, Arizona is largely desert, and deserts are well-known for lacking abundant water.

Arizona law requires homebuilders in active management areas to secure a reliable source of water expected to last at least a hundred years. However, there’s a loophole: the law only applies to subdivisions of six homes or more. You can guess what some clever developers do: they simply build lots of “subdivisions” each consisting of only five homes.

These so-called “wildcat” communities are all over the state. They’re miniature havens of freedom, perfect for stubbornly independent libertarians who want to get out from under the thumb of government bureaucrats telling them where they can and can’t live. Rio Verde Foothills is one such.

But then they made an awful discovery. It turns out, even when you find a way to skirt regulations about water… humans still need water.

Where have Rio Verde Foothills’ inhabitants been getting water to drink, wash and brush their teeth? They’ve been doing what libertarians usually do: they rely on other people who planned better than they did.

Specifically, for years, they’ve been getting water from the neighboring community of Scottsdale. They would drive tanker trucks into Scottsdale, fill up from the municipal supply, and haul the water back to Rio Verde Foothills to store it in tanks.

But Scottsdale grew tired of this. Since they themselves were under drought pressure, they took the understandable position that they should be conserving their water for their own residents, not to subsidize their neighbors who couldn’t be bothered to plan. Scottsdale repeatedly warned Rio Verde Foothills to make other arrangements, a warning they ignored. Then, at the beginning of 2023, Scottsdale cut them off.

Since losing their water supply, Rio Verde Foothills residents have been complaining bitterly, protesting and petitioning. They even filed a lawsuit demanding that Scottsdale turn the tap back on. In the meantime, they’re relying on water trucked from farther away in the state, at great expense, with no assurance of future availability.

The obvious solution would be for Rio Verde Foothills to incorporate, form a water district, and find its own reliable supply… but it turns out that might involve taxes, so the whole proposal collapsed. I’m not making that up:

When some proposed forming their own self-funded water provider, other residents revolted, saying the idea would foist an expensive, freedom-stealing new arm of government on them. The idea collapsed.

This quote from a resident, George Rodriguez, sums up the head-in-the-sand attitude that prevails:

“There are a lot of political undertones that we don’t understand; we don’t wanna understand that. We just want a solution,” says Rodriguez.

Rio Verde Foothills is one of many communities in red Western states which are finding, to their dismay, that natural resources aren’t limitless. A town called Oakley, in Utah, had to halt all new development because of insufficient water. Its mayor said:

“I hate government infringement in people’s lives, but it’s like having kids: Every once in a while you got to crack down.”

The same is happening in Fountain, Colorado; in St. George, Utah; and in Kansas, Oklahoma and Texas, where the Ogallala Aquifer is being drained dry.

These towns and farms in the desert were built according to cornucopian assumptions that there’d always be more water—no need to worry about where it comes from. When that proved not to be true, the freedom lovers who live there were flummoxed and dismayed.

Learning the hard way

In Ayn Rand novels and libertarian politics in general, the government is a bunch of parasitic bureaucrats and thugs who stop people from doing what they want for no good reason. If we got rid of them, we’d all be better off, with no downsides.

When libertarians try to put that lesson into practice, they often end up learning the hard way why government exists. It’s to solve the Prisoner’s Dilemma: to restrain the choices that are selfishly advantageous but unsustainable if everyone does them.

Water is one example, but there are others. Another is Von Ormy, Texas, a rural community that chose to become a “liberty city” to avoid being swallowed by San Antonio, becoming subject to its laws.

Businesses were supposed to flock to this oasis of freedom, drawn by low taxes and minimal regulation. Instead, because the town lacks a sewer system, it couldn’t attract investment—and anti-tax rules made it impossible to issue a municipal bond to pay for one. With no source of funding, the police department lost its accreditation, the fire department collapsed, and the city council has dissolved into acrimonious infighting.

Or take Grafton, New Hampshire. It’s a tiny town that was taken over by libertarians who moved there en masse to create their vision of heaven on earth. They voted themselves into power, slashed taxes and cut the town’s already minuscule budget to the bone. Journalist Matthew Hongoltz-Hetling recounts what happened next:

Grafton was a poor town to begin with, but with tax revenue dropping even as its population expanded, things got steadily worse. Potholes multiplied, domestic disputes proliferated, violent crime spiked, and town workers started going without heat. “Despite several promising efforts,” Hongoltz-Hetling dryly notes, “a robust Randian private sector failed to emerge to replace public services.”

Then the town was taken over by bears.

That’s not the setup to a joke. Some people were disposing of food garbage carelessly, where the area’s native black bears could get at it. Others were feeding them deliberately (!). Either way, bears learned that humans meant food—and they became increasingly bold and aggressive in their attempts to get it. On top of all its other problems, Grafton found itself dealing with a rash of bear attacks, pet deaths and maulings.

Solitude on a finite planet

Libertarian ideology proposes that humans in a state of nature need never affect each other. Without laws or government, we can all revel in the freedom of solitude, making whatever choices we wish without having to care about anyone but ourselves.

The reality is, we need a society with rules because we all live together on the same finite planet. Like it or not, the choices you make affect others, and vice versa. That’s true whether you’re pumping your neighbors’ aquifer dry or attracting bears to their trash cans. The laws we have are a reflection of that interconnectedness, not the source of it.

In the best case, laws steer people away from perilous courses of action and into mutually beneficial ones. When you remove those laws, the result isn’t a better world. It’s a more chaotic and dangerous world, where people have more “freedom” to make bad choices that harm their neighbors. When you encounter an armchair reasoner who’s certain it would all work out, you can tell him that there’s real-world evidence to the contrary. Libertarianism is a failed experiment.