I have figured out that the difference between a libertarian and social democrat lie under one disagreement: social democrats do not take the harm of government failure seriously, libertarians do.
Here's why a libertarian does not take government failure for granted.
When you are spending your own money on yourself, you think about the value of money and your own happiness.
When you are spending your own money on someone else, you think about the value of money and not so much about the other person's happiness (think buying present for a friend you are not close to - if it's someone you love you would be happy when the one you love is happy right?).
When you are spending other people's money on yourself, you only think about your own happiness and not the 'worthiness' (think a spoiled teenager shopping in Paragon).
And lastly, and most evil of all, when you spend other people's money on people you don't know, you do not think about the the value of money nor the happiness of the recipient. This is the case where bureaucrats are spending taxpayer's money fulfilling government's projects.
When bureaucrats have their hands on capital which they do not own, and are not obliged to use it efficiently, not only do they not care about how they spend money and what the resulting welfare will be, they also bring along vested interests such as union politics, family/group benefits, and propaganda. Find out more about the state of State Railway of Thailand (union and corruption), the 23 billion Baht sewage project (pure self interest), or more recently, a meaningless Bangkok Art and Culture Centre in the heart of Bangkok (the picture might look nice but I dare you go have a walk in it and look me in the eyes and tell me you enjoyed it).
What then, justifies governments and bureaucrats pursuing their interests over giving opportunity for ordinary people own these enterprises? The privately owned railway may not be able to serve everyone (although government can fill in the gaps), but at least it is not making taxpayers pay for unworkable rail networks and trains. The sewage project may not have been built or may not be as large, but at least no money have been transferred from poor tax payers to fat cats. For the museum, if the land was sold or lease to private hands, it could become another department store and can generate hundreds (possibly thousands) of jobs!
A developed country might be better off with state owned enterprises. But developed countries are tiny faction in this world. Most countries still have to put up with corrupted governments who DO NOT care about their citizen's welfare. So why let them continue?
Thank God governments fail, hopefully we will see less of it in the future and these countries can finally be set free.
