INTERMEDIATE

Ratchet Effect

A term coined by economist Robert Higgs that describes the problem in governance that arises when government intervention increases during crises such as wars, natural disasters, or economic depressions.  After the crisis government meets resistance in reversing the intervention, creating a situation where government intervention rarely returns to pre-crisis levels, which lead to a constant ratcheting up effect in growth of government intervention over time.

 

Robert Higgs - Liberty and the Long Run Growth of Government

Related Publications

ARCHIVE

Then Truth Will Out

AUGUST 03, 2009 by LEONARD E. READ

Related Freeman Articles

ARTICLE

The Great Depression and World War II

MAY 21, 2009 by ART CARDEN

What about World War II? Did it end the Great Depression? More generally, is war good for the economy? I answer both in the negative and borrow here from Ludwig von Mises: "War prosperity is like the prosperity that an earthquake or a plague brings." As Higgs points out, because of the array of interventions in the wartime economy, war materiel was valued incorrectly and therefore the GDP data overstate economic conditions. Moreover, conscription and arms production gave a misleading employment picture

ARTICLE

Frank Chodorov: Champion of Liberty

Chodorov Was a Formidable and Prescient Critic of Statism

DECEMBER 01, 1996 by AARON STEELMAN

ONLINE EVENTS

FEE offers live online events for people new to the economic, ethical, and legal principles of a free society.

CURRENT ISSUE

October 2014

Heavily-armed police and their supporters will tell you they need all those armored trucks and heavy guns. It's a dangerous job, not least because Americans have so many guns. But the numbers just don't support these claims: Policing is safer than ever--and it's safer than a lot of common jobs by comparison. Daniel Bier has the analysis. Plus, Iain Murray and Wendy McElroy look at how the Feds are recruiting more and more Americans to do their policework for them.
Download Free PDF

PAST ISSUES

SUBSCRIBE

RENEW YOUR SUBSCRIPTION

img E-mail Subscription

VIEW PRIVACY POLICY