Saturday, January 24, 2009

The Goods and Bads of 'Do Something' Government Interventions

David Glen Cross writes in The Daily Banter Blog HERE: an angry piece that races along, dripping its anger in every sentence. Here is an indicative taste:

Economics the Hard Way”

“Adam Smith and his “Wealth of Nations,” written in the leading colonial power over two centuries ago, wrote of ethics and the higher aspirations of man while England ruled one third of the world as a hereditary empire. Smith’s rights of man could be condensed down to the rights of wealthy Englishmen.”

“But to name any economist is to have another thrown in your face, like Keynes, Friedman, or even the ridiculous Ludwig von Mises, who espoused individualism over the wellbeing of city, state or national interests. Individualism uber alles, or I got mine so screw you. Defying centuries of human evolution and returning to the days of whichever monkey got to the bananas first, he believed that was the only monkey who deserved to eat. These economists go out of their way to deal in the theoretical and never ever postulate negative consequences to their own theories. Of course they believe that their theories have no negative consequences; they speak instead of economic dislocation or short-term economic distress.

It is ironic that in ancient times rulers dealt in absolutes and not in the theoretical. Pharaoh stored grain against famine because it was his duty to do so. Caesar passed out bread and coin to the poor because famine brought riots and riots brought fire, fire that would exceed ten times the cost of the bread and coin.

Today, economists would calculate the least amount of bread and coin necessary against the cost of fire and ruin. But all economic theories are true and all are false. While there is plenty, they are true; when there is not, they are all false.
Any system that fails to supply the most wealth into the most hands is a failed system. History proves it again and again and that is a fact and not a theory. So as I dabble in human economics, I count not the empty houses but the people made empty by these theories. Theories that fail by leaving out the most important component in economics, the wellbeing of the people. This singular failure is the root cause of most of the world’s misery, of war, rebellion and revolution.

It has fed the guillotine, the gallows, and the pike on Tower Hill. That’s learning economics the hard way.”

It’s beneficial to be brought down to earth occasionally by the voice of the angry past.

Consider, however, that sentence in the penultimate paragraph I quoted above:

“Any system that fails to supply the most wealth into the most hands is a failed system.”

On that basis, every system known to mankind that has ever existed, failed, sometimes severely, often outrageously, and on a few occasions in a few spaces on Earth, marginally. Among the marginal failures we have the relatively opulent areas of the world in the last two centuries during what is known as ‘capitalism’ in its various forms.

I define ‘marginal failures’ as almost reaching general opulence but from continuing long-standing distortions remaining in society, both in the economy and the body politic, while absolute poverty has been eliminated as much as is practically possible, the distribution of relative poverty still leaves those at the very bottom alienated and in despair (anger is a sign of post-recovery of moral strength), as much from tragic events, addictions of various kinds from social, personality, and mental problems, random incidents of the lottery of mindless violence and unsought for tragedy, and the many failings of personal responsibility that may be are impossible to eradicate in any society of humans.

Taking the first paragraph: “Smith’s rights of man could be condensed down to the rights of wealthy Englishmen”, I accept it as a point of view, presumably by a US citizen, but it is, in my humble view, more than a little unfair to Adam Smith, who, incidentally, being Scottish, would hardly be overly concerned with “to the rights of wealthy Englishmen”.

Smith’s Wealth Of Nations is studded with examples of his concern with the rights of the poor majority of British society, most of whom were badly treated labourers, tenant farmers and landless farmhands, with corresponding poverty-level, subsistence only, incomes.

Smith’s mocking contempt for the rich and powerful is only restrained by the necessary proprieties of public discourse in mid-18th-century Britain. It may be taken for granted by David Glen Cross that under US law he is free to write and speak as he pleases to a degree that was not enjoyed by Adam Smith and fellow professors.

That is one of the benefits of liberty, still almost unique in the entire world 232 years later. And bad as life was for David’s parents and grandparents, and during his own childhood years, those of us who taken more dispassionate view of the whole world, have to note, out of respect for hundreds of millions who do not live in North America or Europe and a few other places, the sort of rotten lives lived by the poor in the 1930s US depression illustrated eloquently by David, have been and still are the permanent lot of all of them (except the kleptocratic, hopefully jail-bound, refuse who form their governments and administer their crummy tyrannies).

I include the paragraphs about David’s opinions on Ludwig von Mises, Pharaoh, Caesar, (the last mentione killed a million ‘French’ Gauls in his invasion and sold another million into slavery), and he, or more accurately his successors, financed the bread and circuses for the plebian mobs in Rome from selling millions into slavery, on which basis I would probably choose some other examples as ‘do something’ governments).

But I enjoyed reading David Glen Cross’s punchy and trenchant post, and suggest you do so too (while retaining some modicum of perspective).



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