Wednesday, November 30, 2016

If x were true, the World would have imploded by now.

This essay, Why Libertarians Should Support Many Forms of Government Intervention, showed up in my Facebook feed recently. It was shared by a woman I met at FEE's "Advanced Austrian" (economics) seminar back in 2011. In our back and forth she threw this out:
As Frank argues above, if every regulation were the path-dependent slippery slope that some folks suggest, the world would have imploded a long time ago.
My response was as follows:
I think that I will have to write an essay on that--"If x were true, the world would have imploded a long time ago." My standard for "implode" may be a little lower than Frank's. It seems we had an implosion as regulations like Smoot-Hawley Tariff created/extended the Great Depression. There was an implosion in the 1970s that led to wage/price controls and "stagflation." There is the current Great Recession brought on by bank/housing/security regulations, and the "recovery" hampered by even more regulation and Federal Reserve policy. Was the U.K. before Thatcher an implosion? Have Argentina and Brazil imploded? Venezuela?
And if you set a higher bar (civil war, violent regime change, etc.), the Soviet Union didn't "implode" for over 70 years. Millions of people systematically starved to death and murdered, but it didn't implode. Cuba and North Korea haven't imploded. I guess that they all must be happy that they arrested the slide down that slippery slope!
And finally, if it is truly the world that is the criterion--that the world must implode--then even the deaths of 262,000,000 people at the hands of their governments in the last 115 years didn't cause the implosion ( The world still turns, and people still live their lives.
My real problem is that the people who say such things as "if x were true, the world would have imploded a long time ago" have no suggestion as to the negative feedback mechanism that will stop that from happening. Their only negative feedback mechanism IS the implosion. All their platitudes about how they are "libertarians" and worry about excessive regulation will have little effect as the fall from a great height nears its end.
Her answer was to ask me if I had ever been to Cuba (I have not), never responding to my post.

Ludwig von Mises's argument was that each intervention would lead to additional interventions in order to correct the unintended consequences of previous interventions. The alternative would be to reverse the intervention. Certainly, the first intervention is not the guarantee of a collapse, just as the ingestion of the first gram of lead does not lead to the death of a child. At any moment there might be the reversal of an intervention or a number of interventions, and society makes a bit of recovery--see for instance, Margaret Thatcher. But without the realization that interventions upon interventions produce a steadily worsening situation for society, the end is clear--if not implosion, then widespread misery and stagnation.

No comments: