Category: Internventionism-economic

The Rise or Fall of Socialism

Countries that exert a high degree of control (totalitarian) over their citizens will always experience less “success” than those that exert little control. Less control means greater freedom to innovate and solve problems from the bottom up rather than the top down. Formerly socialist/communist countries (China, Vietnam) that have embraced the benefits of freedom (that is, free vs. state managed markets) within their borders have seen improved standards of living relative to those that have not (Cuba, North Korea, Venezuela).

Honey I Shrunk the Seat!

Such reflexive urges to regulate by those “in charge” of our lives are a predictable outcome of their glaring ignorance of basic economics. It is the usual story: government engages in Practice A which stealthily causes Harm B and so our great benefactors must now step in to save us from the very harm they caused in the first place. For example, the federal government, through its puppet the Federal Reserve, is constantly inflating the US dollar. This steadily erodes the value of said dollar until after many years the drips of annual inflation have carved a canyon of lost value. There are two ways to respond to this declining value: raise prices, or, maintain prices while reducing quantity/quality. For example, boxes of cereal now contain 15% less than they did only a few years ago but are marketed at the same price point. It is a surreptitious form of inflation that consumers don’t immediately recognize but is just as injurious to their buying power as is rising prices.

Muh’ Science!

Even among those that profess a belief in limited government there is an ready willingness to join hands with the big-government progressives on the subject of science funding. I mean, any fool can see we need government to fund science – no profit-oriented business would fund basic science research if the probability of a marketable product resulting were unknown….Truly there is no clearer case of the cart pushing the horse. The increase in public funding of basic science research was not a response to declining private funding; rather, it caused that very decline by providing an incentive for private industry to shift the risk burden onto the public.

Trade Balance

The current trade deficit between the US and Mexico is $58 billion. That means that Americans purchased $294 billion in goods from Mexico but Mexicans purchased “only” 236 billion in US goods. In Trump’s mind (and many others) this constitutes a loss. Well if that is so I guess I had better stop buying my groceries from Publix – my family’s trade deficit with Publix is thousands of dollars every year! Yes, I would be much better off if I grew all my own food, than my trade deficit with Publix would be zero.

Trading Places

Sanctions or trade embargos are often put in place in order to influence the actions of the leaders of another country. Although there is not a single historical precedent for this ever working, it remains the most popular passive-aggressive tool in the arsenal of the state. The language used to speak of such embargos employs the ruse of anthropomorphization (“America” cuts off trade to “Iran”) in order to hide the underlying reality that rather than the target country being harmed it is the individuals that constitute that country that are harmed. See, it’s not millions of people being made to suffer; it’s just a nebulous non-human “country”.

Market Failure is not an option, it’s not even possible

Proponents of state intervention in markets (managed markets) unfailingly assert the legitimacy of their stance by pointing to “market failure.” Yes, yes, they admit, markets are great at delivering goods and services to people, but, sometimes they inexplicably fail and this consequently requires men with guns (the state) to “fix” them. To put it simply, market failure is a myth. There is a failure however, not of the market, but of their own ability to comprehend the complexities of a natural system whose chaos is brought to order through feedback.

Appeals for regulation by some central authority are predicated on the ideal of “fairness” in ensuring that all who use some resource pay for such use. In other words, if one perceives even the possibility of “free riding” with regard to some economic good then this is all the excuse needed to bring in men with guns to ensure all pay their “fair share.” Free riding is the quintessential example of market failure. Now, as they say, time to bust that myth.

Under the Hood

In other words, there are costs associated with everything. If it were up to the individual to decide for him or herself how much more safety risk they are willing take relative to increased fuel economy that would be one thing. However it is quite a different story when the choice is taken away and there is only one option allowed for all. That is what government is: the removal of choice. Bureaucrats decide on the “best” route and make all other options illegal. The same removal of choice is now happening with these automatic start/stop systems. Starting with model year 2016 they are becoming more and more prevalent. Why is this? Because of government fuel economy standards like CAFE (or it’s European equivalent) mandate FLEET wide averages. Therefore the ability by the automaker to extract even a few small percent increase in fuel efficiency multiplied by a fleet of thousands or millions of vehicles helps them meet those standards and avoid possibly millions of dollars in fines.

Do no harm?

Mere “harm” cannot be the nebulous standard by which we invoke the necessity of state intervention. If five people apply for a job then the four that did not get the job are arguably harmed, so, should the state step in and penalize the person who got the job by making him or her share it with the others? When two sports teams play each other is not the losing team “harmed”? Upset fans, potential decreased ticket sales, lower potential ad revenue – all these things constitute types of harm, yet no one is (yet) screaming for the state to step in.

VW: Cookie Thief

Regrettably VW swiftly engaged self-flagellation mode, seeking forgiveness from those that run the many worldwide plantations we today refer to as states. In other words, they quickly went to mommy and daddy and begged to not be spanked too hard if they would just quickly clean up their mess. If only they had stood up to the EPA and told them “Yes, we skirted your stupid rules, we do not recognize your authority, we only recognize the authority of our customers who will buy our products if they meet their standards and won’t if they don’t”. Of course that is not what happened. Instead VW bent over and obsequiously bleated, “Thank you sir, may I have another.” VW’s crime is about as morally significant as a slave stealing cookies from the master’s kitchen. It is but a technical violation of an arbitrary rule with no real victim.

Paddling in Circles

[Trump’s view] presumes trade is a zero-sum game where one side always “wins” and the other side “loses” in the exchange. Indeed this mindset would mean every time we buy groceries the store has “won” and we have “lost.” Trade is always a win-win game; both parties have gained more than they gave up, otherwise they would not have made the exchange.

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