May 23, 2020

More central economic planning is not the solution to the government induced unemployment amid coronavirus. Only the market process allows individuals to navigate the unique challenges.

Socialists have a perverse outlook on what “us” means.  They tend to present absolutes by using terms like we, all, and every so as to subtly influence others into buying off on a socialist program.  The socialist wants to convince the masses that “we’re all in this together” and the socialist intellectual vanguard will advance their interests if only they will submit to central planning. 

Political-economists understand that all experiences are subjective and individuals can only speak from their own slice of reality.  Individual subjectivism also applies when looking at policies that affect broad swaths of society, understanding that productive decisions and actions are made, not categorically, but on the margins.  

It is always necessary to evaluate policies first in terms of whether they will accomplish the intended results and second to evaluate the costs of obtaining the desired ends.

As always, the task of economics is to examine how a policy impacts not only those it is intended to assist but also the second and third order effects on those at the periphery, or even outside, the scope of the program.

Take, for instance, the recent distribution of Economic Impact Payments in response to the COVID19 crisis.  The very notion of governments handing out money to people and corporations “each according to their needs” plays into the hands of state power at the expense of individual liberty and private property.

Limiting state power is the only way to limit the abuse of state power.  

Socialists at one time claimed to offer a withering away of the state, yet their programs entail centralization of state power to redistribute private property and determine working arrangements by interfering with labor contracts.  

As the economic historian Ralph Raico stated, “…things cannot be directed without directing people, and the processes of production are sets of series of acts by people.”  

The very notion of politically orchestrated bailouts is contrary to limited government operating under contractual authority to protect life, liberty, and property.  The whole effort is socialist central economic planning from its inception.

It doesn’t need to be this way.  Governments could respond to coronavirus by getting out of the way of responsive market activity.

One course of action could be to offer relief to those impeded from working during the government imposed shutdown by halting tax confiscations.  This would encourage productivity by allowing people to keep the income they generate.  

Tax amnesty for productive people is akin to the huge gasp of breath human beings instinctually take when released from being held underwater.  

Yet such a policy denies socialist central planners the ability to direct resources to politically connected firms or the special interest groups that they believe will vote to keep them in power.  

Therefore, any policy proposal that runs contrary central economic planning will be criticized by the socialist and they will use deceptive language to do so.

When the socialist writes, ending taxation wouldn’t help “at all” they are engaged in linguistic trickery.

By “at all”, the socialist means the segment of the population that choose to sit idle and live off a dole from the public treasury.  Yet, for the rest of the population, those that seek new opportunities to serve others through employment and entrepreneurship, the most supportive policy would be to stop robbing them of their productivity.  

To be clear, the state of unemployment related to COVID19 results from deliberate government policies to inhibit market activity and not the result of any virus.  The antidote for this unemployment is to cease government imposed blanket restrictions on people to produce according to their individual assessments of risk, opportunity, and reward.

 As economist Richard Ebeling writes, there will be no recovery without production:

"...we need markets to be open and free, now, for people be make their own best decisions about the trade-offs and risks to protect themselves and their loved ones from the dangers from catching the coronavirus, and in that process to free the supply-sides of the market from government shutdowns so people may earn the means of demanding what others produce..."

The socialist is correct to criticize government induced unemployment.  Yet, as always, the solution is not in giving government more central economic planning to redistribute resources in favor of non-production, and the non-productive, but to allow individuals to decide how to navigate the coronavirus challenges by way of the market process.

One crucial step is to see through the deceptive aggregations and absolute terms socialists use promote centralized control.

Liberty Dojo

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