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Friday, June 22, 2012

Cleaning Up After the Elephants (and Donkeys)

Rigging the policy debate.

A version of this TGIF, the first, originally appeared May 12, 2006.

I detect a pattern in the challenges hurled at (genuine, or classical) liberals on nearly every issue. The opponent of liberalism (the statist) describes a problem, invariably with roots in a government infringement of freedom. In response, he prescribes more government interference with freedom, at which point the liberal interjects that the best and only just solution is the repeal of the culpable State power. The statist replies that this will not do because the liberal’s proposal won’t solve every related problem and may even reveal hitherto overlooked problems. Undo still more government action, the liberal replies. But this brings the same criticism.

Here’s what’s going on. The exercise of State power for many years has created gross distortions in incentives, consumer preferences, and investment, leading to the problems under discussion. In other words, the politicians and bureaucrats have made a royal mess of things. Then liberals are faulted for not being able to clean it up tidily with the wave of a hand. That they can’t make everything right at once is then held against liberalism.

An example of this is medical insurance. Government has regulated every aspect of medicine and insurance for years. As a result, demand and hence prices have gone up past the point they would have gone in a free market, pricing some people out of the fettered market. When a liberal advocates removing the tangled web of regulations, taxes, and subsidies, and letting the free and competitive market operate, the statist objects that this idea won’t immediately enable everyone to have affordable health insurance and medical care. The same argument is made about Social Security.

Translation: My side bollixed things up terribly, but since your side can’t resolve everything smoothly and painlessly by tomorrow, my side should continue calling the shots.

New Course

This, I submit, falls short in the logic department. If the present statist course is headed toward disaster, then we need a new course. That the freedom approach can’t make everything new overnight, or even in the next few years, is hardly an argument against it. The fact is, what we’re doing now is causing misery, insecurity, and advancing serfdom. To add insult to injury, that very misery and insecurity are made to justify more measures that will only add to the misery and insecurity, not to mention the serfdom. One of two things will happen: Either we’ll end up with complete central planning (the abolition of freedom) in which everything not prohibited is required, or we’ll settle into a wretched, stagnant social equilibrium short of totalitarianism and muddle along indefinitely. Desiderata these are not.

The only hopeful alternative is freedom, the progressive removal of the many levels of sSate interference with our peaceful activities. The State’s coercion has created untold dislocations, including some as yet undetected. Thus as power is peeled away, problems will be revealed that were not apparent before. It is not liberalization that will have created those problems. On the contrary, persistent liberalization will solve them.

If you want an idea of what to expect, read Henry Hazlitt’s novel, Time Will Run Back. In Hazlitt’s story, a pragmatist acquires the top job in a worldwide totalitarian state. Seeing that people are inconvenienced by the rationing system, he proposes what looks like a minor adjustment. He had no intention of making any big changes, but, in a reverse of Mises’s critique of interventionism, the little change creates new problems that the commissar sees can only be solved by further liberal tweaking. The logical destination is laissez faire.

That is the route we hope to begin traveling as liberal ideas become more prominent in our culture. While we should advocate quick abolition of intervention, abolition all at once is unlikely to happen. (Although we can hope, can’t we?) But while liberalization is likely to be gradual, it doesn’t follow that we should advocate gradualism. As the great anti-slavery activist William Lloyd Garrison understood, “Gradualism in theory is perpetuity in practice.”

  • 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.