One of the liberals’ favorite justifications for more government is that free markets can’t regulate themselves. This argument betrays a fundamental ignorance of markets and a fundamental delusion about government.
And placing our economy in the hands of ignorant and delusional people explains how we arrived at our current economic quagmire. In fact, it would have been quite the miracle if a century of increasing government interference into markets could have ended any other way.
The truth is, we haven’t had free market capitalism in this country for several decades now; in fact, the word “markets” is thrown around as an epithet by the anti-capitalists who dominate the Democrat Party and is shied away from in polite Republican company. It is rather silly to point to this or that catastrophic economic event as evidence that markets don’t work, since we don’t have markets.
If anything, the periodic meltdowns caused by our centrally controlled economy and money monopoly prove that government is a poor substitute for the best of all regulators – free markets. The idea that markets – the M word - need to be regulated is itself redundant. Markets are a regulating device; that is what they do, and that is all they do.
In free market capitalism, the individual actors – buyers and sellers – act of their own volition in the marketplace. Markets regulate the behavior of the free agents by reporting the results of thousands or millions or billions of people making choices in their own rational self-interest. There is no question that billions of people need to be regulated; the question is only whether markets or government does it better.
Markets establish prices for things, and the movement of those prices tells suppliers what to produce more or less of and signals buyers to buy or wait. Markets tell us what things are truly worth; they decide what we value and what we do not. Markets tell us what quality is acceptable, what quality is not, and what level of exceptional quality is worth in terms of price premium. Markets determine safety tolerance and risk, performance and technical preference.
Markets are near-perfect regulators. They are swift to punish inefficient producers, stupid consumers, unethical traders, and stubborn inventors too proud of their own ideas to give people what they want. Bad actors are quickly swept from the marketplace and new competitors arise to take their place. A fool and his money are soon parted, as the old saying goes, and no more effective mechanism for incenting prudent economic behavior –a.k.a. the public good - has yet been invented.
Governments, by comparison, are dreadful at regulating economic transactions. When government interferes in markets, it protects inefficient producers, encourages stupid consumers, indemnifies unethical traders, and dictates to people what kinds of products and services they can buy, stifling innovation. When government does the regulating, other people and their money are soon parted by the regulations of fools. No more effective mechanism for incenting loopy economic behavior has yet been invented.
Off the top of my head, I can’t think of any three more heavily regulated industries than education, health care, and Defense; there has not been a free market in any sense of the word for half a century in any one of these sectors. And aside from government itself, I can’t think of three more dysfunctional industries. What does it tell you about government regulation when the most heavily regulated industries are the most screwed up?
The liberal fetish of telling other people what to do (regulating) has now spilled over into the private sector with boycotts and buycotts and demands for removal of products from shelves over ideological differences of opinion. Apparently we are supposed to check with Planned Parenthood now to see what soda is acceptable for purchase…or is it Americans For Prosperity on soda and Planned Parenthood for dish soap? I get so confused…
President Obama recently announced another regulation (because we so desperately need more) that will instruct federal agencies to give preferential bid treatment to bidders who demonstrate a commitment to his administration’s policies in the fields of environmentalism and nutrition. This politicization of procurements is inevitable whenever and wherever government regulates; he is certainly not the first anti-capitalist to impose ideology into the regulatory process.
The federal government already requires bidders to hire union workers on some contracts, pay prevailing union wages on others, enact affirmative action programs, etc. Preferences are already given to firms who are owned by minorities, women, disabled people, and veterans, or who locate operations in historically underutilized economic zones. The Code of Federal Regulations (FARS) covers every aspect of contracting imaginable and compliance with those burdensome federal regulations is why hammers cost $750 when the government buys them.
More importantly, those FARS are why there are still 135,000 bridges in need of repair in this country that are not getting fixed. The cost of fixing bridges is prohibitively high because of the regulations and risks that are imposed on contractors doing the work. So bridges go unrepaired while special interests lobby for more transportation funding.
Someday, one of those bridges is going to come down on a busload of special needs kids coming home from field trip to a Walker recall rally and liberals are going to come unglued; it will be my fault that us uncaring libertarians left those poor children defenseless in a dog-eat-dog world where unregulated libertarian bridges come down and kill them. I don’t know why it will be my fault; but that is the price to be paid for the increasing popularity of this little hobby blog.
How about we try a little caring right now, BEFORE the next bridge comes down and somebody in a short bus dies? Why don’t we suspend all the those ridiculous FAR regulations and let eager, qualified non-union companies go out and fix those bridges without having to write up climate-change plans and hold mandatory all-hands training on how to steam broccoli the Michelle Obama way?
Better yet, how about we take Act 10 national and liberate local units of government and local offices of federal agencies from the FARS and give them the flexibility to use taxpayer dollars wisely and let choice and competition – the M word - bring down the cost of necessary services like bridge repair.
We could fix twice as many bridges at half the cost if we would let markets work. Or we could just keep talking about our crumbling infrastructure and the need for more government to regulate markets and protect us from ourselves.
And placing our economy in the hands of ignorant and delusional people explains how we arrived at our current economic quagmire. In fact, it would have been quite the miracle if a century of increasing government interference into markets could have ended any other way.
The truth is, we haven’t had free market capitalism in this country for several decades now; in fact, the word “markets” is thrown around as an epithet by the anti-capitalists who dominate the Democrat Party and is shied away from in polite Republican company. It is rather silly to point to this or that catastrophic economic event as evidence that markets don’t work, since we don’t have markets.
If anything, the periodic meltdowns caused by our centrally controlled economy and money monopoly prove that government is a poor substitute for the best of all regulators – free markets. The idea that markets – the M word - need to be regulated is itself redundant. Markets are a regulating device; that is what they do, and that is all they do.
In free market capitalism, the individual actors – buyers and sellers – act of their own volition in the marketplace. Markets regulate the behavior of the free agents by reporting the results of thousands or millions or billions of people making choices in their own rational self-interest. There is no question that billions of people need to be regulated; the question is only whether markets or government does it better.
Markets establish prices for things, and the movement of those prices tells suppliers what to produce more or less of and signals buyers to buy or wait. Markets tell us what things are truly worth; they decide what we value and what we do not. Markets tell us what quality is acceptable, what quality is not, and what level of exceptional quality is worth in terms of price premium. Markets determine safety tolerance and risk, performance and technical preference.
Markets are near-perfect regulators. They are swift to punish inefficient producers, stupid consumers, unethical traders, and stubborn inventors too proud of their own ideas to give people what they want. Bad actors are quickly swept from the marketplace and new competitors arise to take their place. A fool and his money are soon parted, as the old saying goes, and no more effective mechanism for incenting prudent economic behavior –a.k.a. the public good - has yet been invented.
Governments, by comparison, are dreadful at regulating economic transactions. When government interferes in markets, it protects inefficient producers, encourages stupid consumers, indemnifies unethical traders, and dictates to people what kinds of products and services they can buy, stifling innovation. When government does the regulating, other people and their money are soon parted by the regulations of fools. No more effective mechanism for incenting loopy economic behavior has yet been invented.
Off the top of my head, I can’t think of any three more heavily regulated industries than education, health care, and Defense; there has not been a free market in any sense of the word for half a century in any one of these sectors. And aside from government itself, I can’t think of three more dysfunctional industries. What does it tell you about government regulation when the most heavily regulated industries are the most screwed up?
The liberal fetish of telling other people what to do (regulating) has now spilled over into the private sector with boycotts and buycotts and demands for removal of products from shelves over ideological differences of opinion. Apparently we are supposed to check with Planned Parenthood now to see what soda is acceptable for purchase…or is it Americans For Prosperity on soda and Planned Parenthood for dish soap? I get so confused…
President Obama recently announced another regulation (because we so desperately need more) that will instruct federal agencies to give preferential bid treatment to bidders who demonstrate a commitment to his administration’s policies in the fields of environmentalism and nutrition. This politicization of procurements is inevitable whenever and wherever government regulates; he is certainly not the first anti-capitalist to impose ideology into the regulatory process.
The federal government already requires bidders to hire union workers on some contracts, pay prevailing union wages on others, enact affirmative action programs, etc. Preferences are already given to firms who are owned by minorities, women, disabled people, and veterans, or who locate operations in historically underutilized economic zones. The Code of Federal Regulations (FARS) covers every aspect of contracting imaginable and compliance with those burdensome federal regulations is why hammers cost $750 when the government buys them.
More importantly, those FARS are why there are still 135,000 bridges in need of repair in this country that are not getting fixed. The cost of fixing bridges is prohibitively high because of the regulations and risks that are imposed on contractors doing the work. So bridges go unrepaired while special interests lobby for more transportation funding.
Someday, one of those bridges is going to come down on a busload of special needs kids coming home from field trip to a Walker recall rally and liberals are going to come unglued; it will be my fault that us uncaring libertarians left those poor children defenseless in a dog-eat-dog world where unregulated libertarian bridges come down and kill them. I don’t know why it will be my fault; but that is the price to be paid for the increasing popularity of this little hobby blog.
How about we try a little caring right now, BEFORE the next bridge comes down and somebody in a short bus dies? Why don’t we suspend all the those ridiculous FAR regulations and let eager, qualified non-union companies go out and fix those bridges without having to write up climate-change plans and hold mandatory all-hands training on how to steam broccoli the Michelle Obama way?
Better yet, how about we take Act 10 national and liberate local units of government and local offices of federal agencies from the FARS and give them the flexibility to use taxpayer dollars wisely and let choice and competition – the M word - bring down the cost of necessary services like bridge repair.
We could fix twice as many bridges at half the cost if we would let markets work. Or we could just keep talking about our crumbling infrastructure and the need for more government to regulate markets and protect us from ourselves.
I say let's go fix some bridges.
“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 Tim’s new book, “BRING IT!
“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 Tim’s new book, “BRING IT!
