All Commentary
Wednesday, August 24, 2011

Affording It All

People who don’t understand—or who don’t care about—economics say funny things. Well, they would be funny if they weren’t so damaging when translated into government policy. Take Lawrence O’Donnell, host of MSNBC’s The Last Word with Lawrence O’Donnell. He must be a smart guy. He’s articulate. He’s been an adviser to a senator of some intelligence (the late Daniel Patrick Moynihan) and a staff director for two Senate committees. He was a producer and writer for the television drama The West Wing and has been associated with other television programs.

So how could O’Donnell permit himself to say this in a promo that ran on his network: “We can afford anything in this country. It’s just a matter of deciding what our priorities are. . . . There isn’t anything we can’t afford, if we prioritize.”

This clearly is nonsense. He seems to be saying that if we prioritize—ignore who “we” are for the moment—we have the resources to satisfy everyone’s wants. He also might mean that if we prioritize, there isn’t any particular thing we can’t afford. I doubt that’s what he has in mind because it would be far less sweeping a statement. Even so, it would still be nonsense.

We live in a world of scarcity. Individually and collectively we want more than available resources can yield. That will remain true even as the supply of resources expands. That’s how people are. Ends exceed means. Demand exceeds supply. That’s why we economize and always will. That is why human action is choosing. That is why we face tradeoffs all the time. Indeed it is why the discipline of economics exists.

And it is why we prioritize, that is: “arrange or deal with in order of importance.” Since resources and time are limited, we have to rank our ends so 1) we don’t expend resources achieving a less important end at the expense of more important ends, and 2) we don’t achieve a less urgent end at the expense of a more urgent end.

If we literally could afford everything in terms of resources and time, we would have no need to prioritize. But prioritizing doesn’t prevent us from running out of resources.

I assume that Lawrence O’Donnell knows all this. To be fair, tucked in between the two sentences I quoted is this: “If we want [fair and decent health care] we can afford that. It may mean that we have to cut back on something else somewhere else. But we can do it.” But then he immediately forgot he had said this.

I’d guess it was just a demagogic strike at those who think we can’t afford a government that spends close to $4 trillion a year. He apparently wants to say that anyone who believes this is just a stingy bastard, especially when it comes to the poor, the elderly, and the sick.

As a subscriber to the principle of charity, I tried hard to make sense of O’Donnell’s statement. Maybe he really means we can afford everything he thinks is worthwhile. I doubt that’s true, but it takes us into another area of discussion.

Who is “we”? Of course O’Donnell means the taxpayers. It’s quite remarkable how some people sit around casually spending other people’s money. You’d think our incomes were public property. By that logic the government budget isn’t $3.8 trillion. It’s something over $14 trillion—the entire GDP. The 73 percent of our income not taxed is actually a form of government spending because some government could have spent the money some other way but chose not to.

People who think like that (or whose premises logically commit them to think like that) no doubt assure themselves that it’s all for the good of the country. But they can’t escape the fact that their schemes merely empower an elite whose real priority is keeping the corporate state intact. The benefits handed to people outside the governing clique are intended at best to consolidate and maintain power.

* * *

We take the conveniences of modern life for granted, so it is worthwhile reminding ourselves what they are and what makes them possible. Warren Gibson has a go at it.

One grievance of the American revolutionaries was that King George III “erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.” Paul Schwennesen offers two vignettes to illustrate the continuing relevance of the complaint.

For many years most Africans have suffered oppression and poverty under centrally run economies. But deeper in Africa’s history—before Western colonization and modern independence—one finds decentralization, markets, and trade. George Ayittey has the story of Africa’s original liberalism.

This month marks the 130th anniversary of the birth of Ludwig von Mises, the great Austrian economist, political philosopher, and prophet. We commemorate this occasion with a selection of his Freeman writings.

If the Progressive Era stood for anything, it was the proposition that experts know best about everything. What is unappreciated is how widely this principle was applied. Kevin Carson has the details.

To hear most politicians and pundits tell it, the way to solve a problem is to manipulate its indicators. Why worry about the real cause? Richard Fulmer tells why.

Freeing the market will take more than just scraping off a thin layer of government intervention. It will require going down to the roots of government economic distortion and exploitation. Charles Johnson elaborates.

Provocative insights pour from our columnists’ word processors. Lawrence Reed says government should not subsidize the arts. Donald Boudreaux discusses the causes of the Industrial Revolution. Burton Folsom assesses competing strategies for ending the Great Depression. John Stossel indicts occupational licensing. Walter Williams examines the concepts monopoly and collusion. And David Boaz, confronting the claim that drug decriminalization has failed, responds, “It Just Ain’t So!”

Books on the ruling class, neoconservatism, Lysander Spooner, and limited government have kept our reviewers occupied.

—Sheldon Richman
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  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.