San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Friday, September 14, 2012

Essential Services: Firemen And Police?

Perhaps no aspect of the theory of market failure creates more emotion than the doctrine of essential services.  Anybody who dares to question the necessity for government to provide fire and police services is considered to be from another planet.  Anybody who believes that the free market can do a better job providing fire and police services is frequently lambasted by the more "patriotic" members of society for not supporting our heroic classes.  Let's face it.  Police officers and firemen have done an extraordinary job of promoting themselves.  Police officers and firemen have successfully turned their professions into careers designed for people who desire to be adored as heroes by the rest of society.  Police officers and firemen have convinced the great majority of the citizens of this country that their services are essential, that the free market cannot provide them, and that government is the primary wellspring of our physical protection.  All of these ideas are wrong.
As is the case in other alleged examples of market failure, people are unable to conceive how fire and police services could be provided more efficiently by the free market primarily because they refuse to even consider the possibility.  There is something decidedly unpatriotic about even allowing oneself to consider the possibility that fire and police services could be more effectively and efficiently provided by the free market.  These professions are filled with men and women who are worshiped as heroes by other members of society.  Asserting that the free market can do the same thing as government provided firemen and policemen, only better, certainly takes the luster off the epaulet.  But it is true. Once again history has a lot to tell us.
Volunteer fire departments were the norm in this country for most of our history.  These associations of individuals did a good job of providing fire fighting services to most people.  A professional class of tax supported firefighters was not considered necessary by most Americans until recently.  It is certainly only in recent times that we have come to see tax supported fire protection as an essential government service.  Why must firefighting services be provided by government?  Why can't the free market do at least as good a job in fighting fires as our present government provided firefighters?  I suspect you all know the answer that is immediately brought up.  If we allow the free market to provide firefighting services some people will choose to not utilize the services of any fire fighting company.  When those who have chosen to not contract with any firefighting company have a house fire, nobody will come to their rescue.  The home will burn down.  People might be killed.  In the United States, we are told, nobody should ever have their house burn down because they could not afford to pay for a private firefighting service contract.  The free market has failed, just like it did in education, because it has not provided fire fighting services to all people for free. This argument is utter nonsense.
The belief that every person who owns property has a right to government provided fire fighting services is equivalent to the belief that every person who owns property has a moral claim on a part of my money to provide that service for him.  Nobody has a moral claim on my money to provide personal services for him.  No moral or constitutional argument can be made to advance that claim.  If you choose to assume the risk of not having a fire fighting service contract with a fire fighting company, that is your business.  The situation would be similar to a homeowner today refusing to purchase fire/liability insurance on his home. Nobody argues that I have a moral and civic duty to purchase my neighbor's hazard insurance.  Why should I be forced to purchase his fire fighting service contract?   If you cannot afford to pay for the fire fighting service contract you should have considered that prior to purchasing the property.  In fact, considering the cost of a private fire fighting contract would be an integral part of the purchasing process.  If you choose to ignore that part of the process, that is not my problem, it is your problem.  I am not responsible for your foolishness.  Furthermore, since I rent my home and have no real property, why should I be forced to subsidize the costs associated with protecting your real property from fire?  That is totally unfair.  It is nothing more than a forced redistribution of wealth away from the poor (those who rent) to the rich (those who can afford to own real property).  Government has no business being involved in the business of fire fighting or income redistribution.
Police services are probably the most emotionally explosive of all government provided services.  To suggest that we do not need taxpayer financed police forces is unthinkable.  I must be a communist to even conceive of the possibility of free market security services.  But think about it for a moment.  The police allege that they exist "to serve and protect" the citizenry.  Their definition of "serving" consists mostly in writing tickets for violations of an ever expanding body of nanny-state rules.  Moreover, by definition, the police can do nothing to protect us from real physical harm.  All police activity is required, by law, to take place only after the commission of a crime.  The police cannot provide personal body guard services for you.  The police cannot guard your home from intruders.  The police are only called in after you have been assaulted or killed.  Police services are utterly incapable of providing protection for citizens.  We are responsible for providing for our own physical protection.  Private security companies are perfectly equipped to provide those services on our behalf.  When it comes to physical protection, the free market can get the job done.
So what, exactly, do the police do?  For the most part they take reports from citizens about crimes that have already been committed.  Sometimes, if they are important enough and if the police have the time, they will follow up and investigate the crime.  More often than not, the report is filed in some warehouse and that is the end of the matter.  It is not hard to conceive how this service of criminal investigation could be more efficiently accomplished by the free market.  For a fee, good criminal investigators working for a private company would search every nook and cranny in an attempt to provide the desired outcome for the customer.  Criminal investigators would have a strong incentive to be very good at what they do.  The more they can successfully solve crimes and recover stolen property, the better their business will be and the more money they will make.  As more people enter the profession of criminal investigation the overall price for the service would drop.  Everybody would be happy. 
Notice that I am not saying there is no place for a police force (although I am saying that there is no place for a fire fighting force).  We would need a skeleton crew of police officers to come in and introduce the privately apprehended criminal to the criminal justice system.  Once the private investigator has finished his job, he would hand over the criminal to the police and the district attorney who would then charge, arrest, indict, and try that person for his alleged offense.  The size of this police force would be miniscule in comparison to the paramilitary organizations that exist in our cities today.  The cost of this police force would be tiny in comparison to the runaway budgets of modern police forces. Imagine a country in which we are responsible for social cooperation on our own initiative.  Imagine a country in which we have incentives to get along with each other. Imagine a country in which there are not policeman on every corner, watching us for violations of the rules.  Imagine a truly free country.
The free market can provide what are today considered to be essential services.  I have no doubt that the services provided by the free market would be far superior and at much lower cost than those provided by our taxpayer financed fire and police forces today.  Nobody has a constitutional right to fire and security services.  Those services come at a cost and each citizen has to make the decision whether to purchase them or not.  Most certainly it is true that I have no right to force my neighbor to pay for my personal fire and security services.  That is nothing more than an act of theft and theft is always wrong, even when conducted by majority vote. 

Thursday, September 13, 2012

Monopoly

One of the alleged evils of an unregulated free market is the monopoly corporation.  Proponents of government intervention in the marketplace routinely tell us that the unfettered free market will create behemoth companies that will squash competition and harm consumers by charging higher prices for goods and services.  In other words, we are expected to believe that the free market fails to deliver the lowest possible prices for goods and services because it fails to regulate itself and prohibit the establishment of greedy monopolistic corporations.  This notion, although common, is totally in error.
A monopoly is not determined by size.  Companies grow large because they serve the greatest number of consumers.  The more the consumer is served, the larger the company becomes.  Sheer size tells us nothing about whether the company is a monopoly.  Great size only tells us that the company is highly successful in satisfying consumer wants.  Monopoly is properly defined as any company that can successfully create barriers to entry into its business.  A monopolistic company is able to create barriers to entry that forbid competing companies from producing similar goods and services that would take away the larger company's market share.  When defined properly it becomes immediately apparent that there are no real monopolies in the free market.
Every time I make the assertion that there are no monopolies in the free market I am met with howls of derision.  In distant times past the howlers would say, "What about Standard Oil?"   Later the howlers came to say, "What about AT&T?".  More recently the howlers said, "What about Microsoft?"  Today the howlers say, "What about Apple?"  The mere fact that the howlers have changed their tune with respect to the allegedly monopolistic company should be sufficient evidence to prove that none of the aforementioned companies were actually monopolies.  If a company rises to the point where it has monopolistic powers, it should never go out of business.  Of course, the argument that I hear next is that the government did do something about those companies.  Or, at least, the government broke up Standard Oil and AT&T.  That is true.  Given the fact that there is no alternate universe where a controlled study could have been conducted in which the government did not intervene to destroy two successful companies, it is impossible to know if the intervention made things better or worse.  I would argue, of course, that it made things worse.  As far as Microsoft is concerned, who today claims it is a monopoly?  Nobody that I am aware of.  Now that it is no longer the dominant player in the software universe, those envy-filled competitors who wanted to use government regulations to slow them down have moved on to other pastures.  The future of Apple remains to be seen.  Be sure of one thing however.  The larger and more powerful Apple becomes, the more envy-filled competitors will clamor for government intervention against them.  It is an inviolable rule of sinful human behavior that the more successful one becomes, the more envy-filled people will seek to destroy that success.
Wal-Mart is frequently hated by those who love government intervention.  Wal-Mart, we are told, comes into small towns and destroys small family businesses by exercising monopoly powers over small retailers that cannot compete against Wal-Mart's lower prices.  The problem with this theory however, is that once the small retailers are driven out of business Wal-Mart does not raise prices in order to gouge the consumers and expand profits.  In fact, Wal-Mart continues to lower prices and drive other companies out of business.  Expansion by Wal-Mart into the grocery and gas business has resulted in continuing lower prices for a multitude of goods.  How can this be if Wal-Mart is really a monopoly?  Answer: Wal-Mart is not a monopoly.
A free market company cannot create a real barrier to entry against competitors.  The old truism is true.  "Build a better mousetrap and the world will beat a path to your door."  If a small company can find a way to produce a good or service at a cheaper price, that company will get the business that previously went to the larger company.  Once the larger company realizes that it is losing business, it has two choices.  It can lower its own prices in order to try and put the smaller company out of business or it can drop that line of goods and leave that line of business.  Here is where adherents of government intervention cry out for governmental action.  They tell us that the large company can afford to sell some of its goods at a loss for a short time, thus driving the smaller company out of business, and then jack up the prices when the competition is destroyed.  We therefore need the government to step in and make a law prohibiting the larger company from selling goods at a loss.  Those who believe this myth have never operated a business or they would know better. 
Now this creates a very strange scenario.  People who allegedly want the low prices associated with competition are crying out for the government to artificially raise prices in order to stifle competition.  They can't have it both ways.  For some reason that I do not understand (maybe because most people have never owned or operated a profit seeking business), most people seem to believe that companies are in business to lose money.  May it never be.  If a company has to suffer a loss to momentarily drive a competitor out of business, how long do you think it will be before two competitors return to take up the fight?  Once the word gets out that profits are to be made, hundreds of competitors will spring up.  One piranha cannot consume an elephant, but a thousand piranhas can.  The first piranha that attacks the elephant might very well get squashed.  The thousand that follow will not.  As more companies, in search of profits, enter into competition with the "monopolistic" company that is forced to suffer losses to stay in that line of business, it only becomes a matter of time before the "monopolistic" company gives up.  No company is in the business of losing money.  It has nothing to do about ego or power or control.  It has to do with profits. If profits cannot be realized over the long term, the venture will be dropped.  That being the case, it becomes obvious that the business was never really a monopoly in the first place.  As always, the free market wins.
Sadly, there are real monopolies in the world.  People are not served.  Prices are jacked up.  Barriers to entry for competitors are constructed.   In all cases of real monopoly, however, it is very important to note that it is only because of government intervention in the marketplace that true monopolies exist.  Everybody's favorite whipping boy, and mine as well, is the Post Office.  By law no other company can deliver first class mail.  Does anybody in the universe think that a private company could not do a better job at delivering first class mail than the USPS?  Does anybody in the universe think that a private company could not show a profit delivering first class mail?  How about AMTRAK?  This government subsidized monopoly in the business of railroad travel would have disappeared decades ago if it had to compete in a free market.  What about the American Medical Association?  Fees paid for doctor's services would be much lower if it was not for the presence of the government cartel granting monopoly privileges on medical services to members of the AMA.  The same holds true for the Bar Association.  Attorney fees would be much lower and legal aids would be making a nice income if the government had not granted a monopoly to lawyers that allows them to charge extortionate fees for their services.  The USPS, AMTRAK, the AMA, and the Bar all prohibit free access to competition.  They are real monopolies.  They are all created by government intervention.
I conclude that the issue of monopoly is a serious problem.  Because of the presence of monopolies almost all of us are forced to pay higher prices for goods and services that we want.  Because of monopolies we are forced to deal with companies that we would avoid if we could.  Make no mistake about it.  Monopolies and monopolistic privilege are real problems in this country.  However, the solution to the problem of monopolies is not government intervention.  The solution to the problem of monopolies is the free market.  Once again we see that the free market can solve the problems created by government.  The free market will give people what they want, when they want it and at a price they can afford.  Why does the free market have such a bad reputation, given the fact that it delivers the goods to consumers on a regular basis?  Because the proponents of government intervention are far superior in the skill of propaganda.  The free market is far too busy doing what it does best.  The free market spends all of its time developing, manufacturing and selling goods to the public.  It has no time to extoll its own virtues.  Government, on the other hand, has unlimited amounts of time and unlimited amounts of taxpayer dollars to spend.  Government propaganda mills routinely spew forth economically ignorant information about how government intervention is good for us all.  Politicians reinforce this erroneous world view.  Sadly, most people believe the lies.  We  are all worse off because of government intervention in the economy.  But, we vote for these jokers.  Indeed, I suspect we vote for them because we want to be on the receiving end of the spoils of political war if we can just get a majority to agree with our position on an issue.  In the end we all get what we deserve.

Wednesday, September 12, 2012

Education

There is nothing the free market cannot provide more efficiently and in greater abundance and variety than government.  Yesterday I wrote about the common misconception that national infrastructure construction requires government intervention because the free market is incapable of raising enough capital to complete infrastructure projects.  Today I address the issue of education.  Just like infrastructure, most people believe that education is an example of market failure.  In other words, most people believe that the free market cannot provide educational services.  Hence, they cry out for government intervention in the educational services industry.  Government schools, in all their mismanaged, money wasting, failure to educate glory are the result.
Unlike infrastructure, where proponents of government intervention assert that the free market fails to deliver the goods, when it comes to educational services the argument made by those in favor of government intervention does not have to do with the ability of the free market to provide those services.  Both sides recognize that the free market can provide a massive array of educational services.  The problem, according to the interventionists, has to do with the failure of the free market to provide those educational services for "free".  For some strange and inexplicable reason, the majority of the citizens in this country believe that educational services, at least at the K-12 level, should be "free".  Somehow people have looked at the Constitution and determined that it contains a clause about each citizen's right to a free education.  Since the free market must charge for the services that it provides, it is determined that the free market has failed to deliver educational services to the consumer.
When my child gets up in the morning I consider it my responsibility to pay for his breakfast cereal.  When he pulls on his socks and shoes, I consider it my responsibility to pay for them. I am responsible to pay for the bed in which he sleeps.  I am responsible to pay for the gum that he chews and the movies that he views.  I am responsible to pay for the car and the gas that I use to drive him to his baseball games.  Indeed, I am responsible to pay for his baseball glove, bat and ball.  I never believe that my neighbor has a responsibility to pay for his haircuts, bicycle tires, or wagon wheels.  Yet, somehow, mystically and magically, as soon as it comes down to paying for his teacher, my neighbor is now responsible for that expense.  But it is even stronger than that.  According to President Obama, my neighbor has a civic and moral duty to subsidize the educational costs of my child.  I can even go so far as to assert that I have a  moral claim on some of my neighbor's income that must be used to defray the educational expenses of my son.  If my neighbor greedily and with tremendous malice decides to shirk his civil responsibilities and not subsidize the educational costs of my child, I will gleeful observe as the long arm of the omnipotent and beneficent state comes in and seizes his property, throws him out on the street, and labels him a tax criminal for refusing to pay my educational bills.  Something is very wrong here.
The fact of the matter is that I am responsible for the education of my child and there is no such thing as a "free" education.  Those who believe that the state has a duty to provide "free" educational services  are dead wrong.  First of all, nothing is free.  When the state provides a service, the money paying for that service is first extracted from someone else.  Second, the Constitution of the United States says nothing about authorizing the state to conduct educational services for the benefit of some citizens.  Third, I have no moral claim on your money to fund or subsidize any of my activities.  I can't force you to pay for my son's educational costs any more than I can force you to pay for my doctor bills or my daughter's abortion fee.  The citizens of our land have become wildly schizophrenic when it comes down to things like education and health.  Suddenly, principles that are understood by everyone are jettisoned and new moral laws are created that grant one group a right to expropriate another group's property.  No matter how you slice it, it is still theft.
I know, I know....I can hear the bleeding hearts right now.  They are saying, "But.....but.....think about the children!  Think about how poor children will not get as good an education as rich children!  Think about how children with religious parents will be indoctrinated in their parent's religion rather than receiving a high quality secular education from the state!  The state must provide educational services for all children.  After all, they are our future!"  Help me.  Gag.  Gag. Gag.  I have only one thing to say to bleeding hearts and liberals.  I say this with utmost sincerity and with extreme forcefulness.  Mind Your Own Business!
Who are you to tell me how to educate my child?  Who are you to say what the content of my child's education should be?  Keep your hands off of my child's body!  Who are you to say that a poor person, such as myself, cannot educate his child as well as a rich person?  I am personally offended by everything intimated by the liberal pronouncement that the state must educate my child.
If I want to teach my son that the sky is green, the moon is made of cheese, and a spaceship is waiting on the other side of the sun to whisk us away to Blisstonia, that is my business and my business alone.  Keep your nose out of my business.  If you want to teach your child that the state is supreme, that democracy is good, that the majority has a right to take the property of the minority, that he evolved from a slime mold, and that politics is the most sacred calling in life, that is your business and, besides feeling very sorry for you and your child, I will leave you alone.
Teachers need to be freed from the shackles of government education.  The constant refrain of teachers is that they are insufficiently paid.  I do not doubt that that is true in some cases.  In other cases they are grossly overpaid.  The problem is that in the absence of a free market there is no way to tell who is good and who is bad.  There is no way to determine what a teacher should be paid without the free market in operation. Teachers should compete with each other in providing educational services in the exact same way any other businessman competes.  Those who are good at what they do will realize profits.  Those who are bad at what they do will be driven out of business.  The consumers, in this case the parents of children, will determine what good and bad educational service is.  There will be no fighting at school board meetings over what is to be taught in the schools.  There will be no bond issues to be debated.  There will be peace and harmony as the free market works its magic in the realm of educational services.   Is that not infinitely superior to the system we have today?  
Education is not an example of market failure.  The free market provides educational services of an amazing variety and quality.  However, like everything available in the free market, those services must be paid for.  The free market operates to make a profit.  Those who provide the best services, according to the consumer, realize the greatest profits.  Those who religiously believe in the need for government intervention in the educational services marketplace do so almost exclusively because of the sinful emotion of envy.  They want something for nothing. They want somebody else to pay their bills.  They may gussy up their argument with talk about "social justice" and the "public welfare" but it all boils down to they want somebody else to pay their freight.  The real world does not work that way.  Keep your hands out of my pocket.  Educate your own children.  Let's make a deal.  You leave me alone and I will leave you alone.  You mind your business and I will mind mine.  How about it?

Tuesday, September 11, 2012

Infrastructure

The free market can provide any potential good or service better than any command economy.  No form of interventionism can even come close to the free market when it comes to efficiently providing goods and services to the people of a particular geo-political zone.  Indeed, there is no economic activity that government can do better than the free market.  It therefore follows that all forms of interventionism are harmful to an economy and the people who work within it.  It further follows that the government that governs best is the government that governs least.
Every time I write or say something like the previous paragraph I receive a predictable response.  Someone will raise his hand and ask me, "What about market failure?"  Market failure, for those of you who do not know, is the presupposition that there are just some things that the free market cannot do.  In those cases, the market will fail to deliver the goods.  In those cases the government will be forced to step into the picture and provide the goods and services to the populace.  The belief is that if government does not do it, it will not get done.  Whenever somebody brings up the issue of market failure I always ask him the same question.  Where does the market fail?
Once again, with complete predictability, the answer to that question is, "Infrastructure".  Infrastructure is the word used by most people to describe those things built by government that generally involve transportation of one sort or another.  Obama's famous "roads and bridges" comment is an example of infrastructure.  Earlier in the history of our nation the idea of infrastructure revolved around navigable rivers, roads, canals, and railroads.  The argument of the interventionist is simple.  The free market cannot build infrastructure because the capital requirements for efficient infrastructure construction are too large.  Only government is large enough to build an interstate highway system.  Only government is large enough to build a cross-continental railway.  Only government is large enough to send a man to the moon!
It is extraordinarily difficult to convince someone who is already convinced that the market will fail to produce infrastructure that the market can, in fact, produce infrastructure.  These folks, which include just about everybody who is alive, find it impossible to conceive that private enterprise could accomplish the great building projects of government.  Since the days of Pharaoh and the great pyramids, it seems that people are incapable of even conceiving of the possibility that the free market can create grand structures.  It may be true that private enterprise cannot create the same grand structures that government can.  That, however, is only due to the fact that the consuming public would not want those structures. Why should the free market build a pyramid to honor a dead politician?   In every case where the public actually wants something, the free market can provide a superior version of it, even if it is a capital intensive project like infrastructure.  Let's look at a couple of arguments to try and expand the minds of those who believe in the doctrine of infrastructure market failure.
First, everyone must read The Myth of the Robber Barons by Burton Folsom.  I cannot even begin to approach the wealth of historical material found in Folsom's book in this short blog posting.  If you really want to know how private enterprise can accomplish fantastic feats of infrastructure construction, read this book.  Folsom describes how the early American businessmen were responsible for the construction of roads and highways.  The roads and highways were built by businessmen because they wanted and needed to provide access to their business for their customers.  Associations of businessmen were responsible for building the first roads through the mountains (Appalachians).  Businessmen were responsible for building the amazing canal system that zig-zagged throughout the northeastern United States.  Both people and goods were transported along these canals.  However, it is probably his description of the railroads that is the most interesting and informative.  Here Folsom tells the story of how free market entrepreneurs had built and were building railroads all around the country.  These railroads were operating for a profit and providing transportation for people and goods all across the country.  When the federal government got involved in the railroad business everything changed.  The feds determined that a trans-continental railroad must be built, regardless of cost or need.  Lands were nationalized and then distributed to politically favored parties.  Taxes were collected and then dolled out to politically connected parties.  Monopoly privileges to build and operate the railroad were given out to politically connected parties.  Construction began and eventually the trans-continental railroad was complete.  Unlike all of the railroads built by men operating in the free market, the government operated railroad never showed a profit.  It was subject to cost overruns due to extreme maintenance requirements because it was built in such an inferior fashion.
The simple truth is that if one is willing to examine the historical evidence for infrastructure it becomes immediately apparent that the free market has always done a better job delivering what consumers want.  Yes, the government has delivered some fantastic programs.  The tax-payer funded interstate highway system and the mission to the moon are two examples.  But, did the consumers want these programs?  We will never know.  Consumers were not given a choice in the matter.  Taxes were extracted and the programs were begun.  I believe that neither program was desired by the consumers.  I further believe a convincing argument can be made that the interstate highway system fundamentally changed the business of transportation in this country.  In the absence of an interstate highway system the United States most likely would have developed a system of rail shipping similar to that found throughout most of the rest of the world.  The interstate highway system allowed for the rapid evolution of the trucking industry, which is unique to America.  In essence the taxpayers have subsidized the trucking industry by way of the interstate highway system.  Or put another way, the trucking industry is profitable because of the tax-payer subsidized highway system.  In the absence of tax-payer subsidies it is highly unlikely the interstate highway system would ever have been constructed.  Furthermore, although we all enjoy using it today, it does not follow that market demands would have brought about its construction.  Since government became involved in the project it is impossible to ever know what might have happened in the absence of government intervention.
As far as the mission to the moon was concerned, it was a complete boondoggle.  Sometimes people try to justify it because it "gave us so much new technology".  The free market did not embark upon a project to send a man to the moon because nobody wanted to do so.  US politicians, however, wanted to strut about and thump their chests and posture in front of the Russians by being able to claim that we had sent a man to the moon, no matter how much it cost.  The Russian politicians, of course, were doing exactly the same thing.  So, what great technology did the moon mission give us?  We got a pen that can write in zero gravity.  All it cost was months of research and development, plus about a million dollars.  The Russians solved the problem of writing in zero gravity for twenty five cents.  They threw away the pen and took a pencil.
Have you ever been to Dubai?  How about Las Vegas?  Have you ever seen the Alaskan oil pipeline?  Have you ever seen a map showing all of the oil pipelines in the country?  Have you ever sailed on a luxury liner?  Have you ever seen a map of all the airline routes in the world?  Have you ever been to Silicon Valley?  Where did the Internet come from?  Who mapped the human genome?  Have you been to Disney World?  Have you ever flown 30,000 feet over the pacific on a clear night with a full moon?  All of these things and millions more have been accomplished, more or less, by the free market.  There was no lack of capital available to entrepreneurs to build all of these things when the consumer wanted them built.  There is no item of infrastructure that cannot be created and maintained more efficiently and fairly by the free market.  Nobody will have their property stolen under the guise of eminent domain.  Nobody will pay to subsidize someone else's building project.  Everyone will get exactly what he wants and how he wants it.  That is what the free market does.  When it comes to the construction of infrastructure, the free market cannot be beat.  When it comes down to infrastructure that the consumer really wants, the free market can always build it.  No exceptions.

Monday, September 10, 2012

Interventionism

I went to a wedding this past weekend.  The wedding was held in Gillette, Wyoming.  There is not a whole lot to do in Gillette other than go to weddings and talk politics.  I had one discussion on politics in which the topic of socialism came up.  I was told that communists, fascists, Marxists and Democrats are all essentially the same thing.  In contradistinction to that uniform group, I was told we have the Republicans. The Republicans, I was instructed, believe in the free market and laissez faire.   Although this is a distinction that is familiar to me, I have to disagree that it is an accurate portrayal of the political spectrum in this country today.
In reality there are only two forms of government.  There is limited government and there is unlimited government.  Presently all political parties in this country espouse some form of unlimited government.  Allow me, or rather, allow the Constitution of the United States to define what limited government is.  According to the Constitution, government may enact laws to protect the life, freedom and property of its citizens.  Any law that is enacted that infringes upon the life, freedom or property of a citizen is, by definition, unconstitutional.   The right of government to take action against its citizens is severely limited by the provisions of the Constitution.  It was universally understood by those who wrote the Constitution that the federal government should never be in the business of taxing any more of the wealth of the citizens of the United States than was necessary to maintain the bureaus and government institutions responsible for protecting the life, freedom and property of its citizens.  In other words, tax dollars would be spent to maintain and cover the expenses of the federal judiciary, the federal legislatures, and the executive branch of the federal government.  In addition, a militia would be maintained to protect citizens from foreign invasion and domestic insurrection.  Beyond those limited functions, the federal government was to be neutral.  The federal government was to stay out of the economy.  The federal government was to leave people alone unless they broke the law by harming others or violated the terms of a voluntarily entered into contract. 
In direct opposition to the theory of limited government, the primary characteristic of unlimited government is the philosophical presupposition that government has the right, and oftentimes the moral duty, to tax the wealth of its citizens in order to transfer that wealth to other citizens in the country.  This quasi-religious belief that the primary goal and purpose of government is to take from one and give to another is what characterizes all political parties that are established upon the principle of unlimited government.  This wealth transfer can be done under the guise of "public service", "public health", "justice", "equality", "job creation" or "economic stimulation", but it is always done with the expressed intent of taking from one person in order to give to another.
It does not take much study of recent history to discover that both Democrats and Republicans are in full agreement on their right to tax and redistribute wealth.  The only real difference between the political parties is how the largess is to be divided up.  Both parties are in full agreement that they have a right to tax the citizenry in order to pay for programs that effectively transfer money from one group to another, politically connected, group.  Economically speaking, all political parties in this country agree that the role of government is to intervene in the economy and direct it to some predetermined end.  That belief is known as interventionism and interventionism is the basis for all modern political action in this land.  All of the speeches delivered at both political conventions that just wrapped up were based upon the belief that whichever party wins in November will receive a mandate from the people to intervene in the economy and redistribute wealth to their favored groups.  It is all theft, of course.  It is all wrong, of course. But it is the way of unlimited government.
We can therefore see that there are really only two forms of government in the world.  Either one believes that government should intervene in the lives of its citizens in order to bring about some predetermined end or one believes that government should leave people alone to do whatever it is they want to do.  Marxists, communists, socialists, Democrats and Republicans all agree that government should direct the lives of its citizens.  Democrats and Republics both agree that they can and should direct the economy to some predetermined end.  Democrats and Republics, quite stupidly I might add, both believe that they actually can direct the economy of this nation.  The ends to which they would direct the lives of its citizens and the economy of the land are different, but the belief that citizens and the economy desperately require government direction is absolute and shared by all parties. 
Under interventionism, there is no such thing as a free market.   There are varying degrees of freedom in the marketplace but interventionism is defined by the fact that some parts of the market will be controlled by government.  Government control can be direct, such as in a nationalized company (GM, AIG).  Government control can be indirect, such as in a regulated company (banking, agriculture, manufacturing, pharmaceuticals, indeed, this list can go on forever).  Any time a person has a government rule that he must comply with in order to go about his business, we have an example of government control and interventionism.  Taxi drivers are government controlled.  Doctors and lawyers are government controlled.  Barbers and hair stylists are government controlled.  Garbage men are government controlled.  The cable guy is government controlled.  It is extraordinarily difficult to find any job in this land that is not subject to some sort of government control.
As I sit here trying to come up with an example of something that is not government controlled I am unable to do so.  I used to be able to use the example of the kid's lemonade stand on the street corner.  That, as most of you are aware, is now subject to government control.  I am sure there must be something out there but I am unable of coming up with any example right now.  All of these rules and regulations have been imposed upon us during both Democratic and Republican administrations.  That, of course, is entirely predictable because both Democrats and Republicans believe in their right to regulate and control the economy.
Belief in the free market must be complete and total or it is not belief in the free market.  There are only two choices.  One either believes in the free market or one believes in some form of interventionism.  The free market leads to peace, cooperation, justice, and economic expansion.  Interventionism leads to disputes, factions, hatred, injustice, and economic harm.  Today almost everybody believes in interventionism.  I suspect that is the case because almost everybody is incapable of seeing government as anything less than the single most important institution in life.  I don't share that perspective.  I believe in the free market.  I oppose interventionism in all of its forms.  I will spend the rest of this week posting to this blog in defense of the free market.  My goal is to get you to throw off the shackles of government intervention and embrace the fresh air of freedom and personal responsibility.  It is a frightening and difficult thing to do when one decides to come out from under the protective hand of an allegedly beneficent, omniscient, and omnipresent government.  But it must be done if one is ever going to grow into adulthood.