The statists’ argument that government intervention is necessary to correct market failures is easily defeated by asking just this one simple question: how many more architects do we need?
The belief that government must intervene to correct market failures rests on the assumption that government always knows the "right" answer; how else could it determine when the market has arrived at the wrong one? The absurdity of that notion is quite evident when we think about how the central planners would go about determining the “right” number of additional architects we need.
To figure out how many more architects we need, they would first need know how many we have, and how old they are, and when each one will retire, get too sick to work, move, or die. Next, they would need to know how many projects will be proposed and then undertaken in every city in the nation, along with how many hours each will take to be designed. To know that, they would need to know the future building plans and financial condition of every company, non-profit, and person in this nation, along with their style preferences and schedules for starting and completing their projects.
Not to mention the availability and cost of credit to finance these projects, which means they must know what the Federal Reserve and thousands of banks will do with interest rates in response to general economic conditions. This, naturally, means they would need to know what the general economic conditions are going to be, and since the economy is global, that means they would have to know basically everything there is to know about everything everywhere. No doubt that President we-do-big-things Obama would call this massive and futile undertaking an investment in our future.
Since it takes about ten years to educate and field an experienced architect, they would need to know everything about everything for the next ten years of economic activity world-wide. The statist’s first instinct would be to overcome this dilemma by requiring everyone in the world apply for daily living permits that must be approved ten years in advance, and load all of the economic decisions into a massive computer model.
Given the government's inability to forecast next weeks' new unemployment claims, the chances of projecting trillions of variable data points ten years into the future and coming up anywhere remotely close to the right number of architects needed are exactly…zero. And the government would not just get it hopelessly wrong; it would spend hundreds of billions of dollars to get it hopelessly wrong. And we would all spend our entire days filling out the forms it would need to collect all the data required to be hopelessly wrong in the digital age.
Yet markets accomplish this feat day after day with ease. Game, set, match.
Have you ever needed an architect and had to wait ten years for the next one to become available? Are there millions of surplus architects hanging out at Home Depot or perched at traffic islands holding homemade signs that say "will enhance dimensional context for food"? No, you haven't, and no, there aren't. Free markets do not produce chronic surpluses and shortages; it takes government intervention to produce such distortions.
Markets supply the right numbers of architects to the right numbers of firms without anyone forcing anyone else to do anything. How? The same way markets supply the right numbers of thousands of professions to millions of employers every day - by simply allowing people to make self-interested choices of their own volition. The invisible hand of capitalist free markets performs this and every other economic task far better, far faster, and far cheaper than the heavy hand of coercive government.
For nearly a century, government has taken upon itself the authority to intervene and impose its we-know-better judgment on wages, benefits, working conditions, credentials, union membership, and licensure. Along the way it has promulgated innumerable industry-specific mandates and restrictions, and outlawed some professions altogether. The more it tries to “help”, the worse of a mess it makes.
With the passage of ObamaCare last year, the State greatly raised the stakes for inadvisable market intervention; it will soon impose its own judgments over how many doctors and nurses will practice and how much they will get reimbursed for their services. The rationale for this unprecedented intervention of central planning is to "keep the private sector honest", and to correct the "failures of the market".
But before we go ahead and turn over nearly one fifth of our economy - and the labor markets for those professions who will make our most critical life and death decisions - to Mr. Obama's beloved central planners, I think it is prudent to ask him just one question, if I may.
Mr. President - how many more architects to we need?
"Moment Of Clarity” is a weekly commentary by Libertarian writer and speaker Tim Nerenz, Ph.D. Visit Tim’s website www.timnerenz.com to find your moment and order his new book, “Tooth Fairy Government.”