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Tuesday, August 1, 2006

Cleaning Up After the Elephants

I detect a pattern in the challenges hurled at liberals on nearly every issue. The opponent of liberalism 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. 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 held against liberalism.

An example of this is medical insurance. Government has regulated and heavily financed 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.”

This, I submit, falls short in the logic department. If the present statist course is headed toward continued and increasing 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 state interference with our peaceful productive 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 pragmatic man 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 abolition of all intervention, abolition all at once is unlikely to happen. (Although we can hope, can’t we?) But while gradual liberalization is likely, it doesn’t follow that we should advocate gradualism. As the great slavery abolitionist William Lloyd Garrison understood, “Gradualism in theory is perpetuity in practice.”

* * *

The United States never had wholesale government ownership of the means of production, but that doesn’t mean there’s no central economic planning. Just look at what goes on in the name of development at the municipal and regional levels. Steven Greenhut reports. Even in a mixed economy business success is not guaranteed. John Semmens looks at the fluidity of the Fortune 500.

A popular fallacy today equates democracy with liberty. But as James Bovard shows, the two couldn’t be further apart.

There’s danger in picking out one part of society as the most important, as Victor Jacobson explains in this month’s FEE Timely Classic.

Can economists give public-policy advice without compromising economics as a value-free discipline? Israel Kirzner begins an exploration of this question in the first of a three-part series.

President Bush claims the authority to eavesdrop, without warrants, on telephone calls between suspected terrorists in foreign countries and U.S. residents. Is that claim valid? Robert Levy takes up this critical matter.

In the columns department, here’s what we find: Richard Ebeling explains why political trends are misleading. Lawrence Reed takes a swing at governments that run golf courses. Thomas Szasz explains social control through psychiatric diagnosis as an imposition and assumption of roles. Burton Folsom shows the connection between war and debt. Walter Williams concludes his Economics for the Citizen series. And David Henderson, reading the claim that no one is getting wealthier but the already-wealthy, responds, “It Just Ain’t So!”

The book reviewers render verdicts on works about the bombing of civilians, the Progressives’ remake of the Constitution, an environmentalist’s second thoughts, and the words of Ludwig von Mises.

  • 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.