Friday, October 27, 2006


There is much trouble with what's been called the interventionist position: the notion that there is a fine balance between capitalism and socialism that we can create by intervening whenever the scale tips in either direction. Political interventionism would be the position of a general equilibrium of government. This is quite a popular position, particularly as professed by so-called "centrists". But this is not possible because you cannot have a system of free enterprise and government ownership of the means of production at the same time. These two things inherently clash. The system will tend to either move towards socialization or privatization of the means of production. The interventionist position inevitably faces the problem of the fact that an economy, a government and a society in general are not static. Things fluctuate: governments have a tendency to expand, the consumer's decisions on the market change, people create new innovations and technologies, political power shifts between different interest groups, etc. It is uncertain and unpredictable as to how exactly such things play out due to the subjectivity of people's value judgements and the limited capacity of our minds.

It is therefore impossible (and undesirable) to create an "equilibrium" - things are always in a state of flux to an extent, so even if you reached such an equilibrium, it would only last for a frozen snapshot in time before the advent of change skewed the results. Both a political and economic equilibrium cannot be made into realities because they require a static atmosphere, which is not possible. The closest way can get to achieving a static atmosphere would have to be though particularly heavy coercion and force, and therefore totalitarianism. But even the totalitarian state is not completely static (because people still naturally exist and therefore still have some capacity to act freely, despite the heavy erosion of their rights - a testament to the fact that freedom is natural rather than a government priviledge) and it eventually is overthrown by a revolution or usurper.

Kings are assassinated by competing families. Revolutions overthrow regimes. Political parties fluctuate in and out of power, and the parties themselves change in their leadership and principles. Various interest groups have numerous and utopian demands of priviledge. New ideas emerge, while old ones are disposed of. Others react to new ideas by trying to reinstate the old ways or old ruling class. Tax rebellions become realities. Wars occur and the post-war nation is never the same as the pre-war nation. One cannot avoid the fact of unpredictability and change. And the most important factor overlooked by the interventionist position is the nature of government itself: namely, to expand. The interventionist wishes to create an equilibrium, but in reality those who possess political power are not going to be particularly restrained. There is nothing the interventionist can do to stop the politician from greatly expanding government power, because a completely static atmosphere does not and cannot exist.

There is a trend that seems rather obvious: the government, generally, tends to enact both the left and right's positive (expansive) agenda while aschewing their negative (reductionist) agenda. Thus, it is fairly inevitable that in practise, interventionism will result in a move towards statism, even if the interventionist has the most libertarian of intentions. Government will not adhere to an equilibrium - it will inevitably be prone to going past our imaginary line. Governments always tend to seek more power. Power corrupts. This is why, by the very least, if we're going to have an imaginary line we better draw it further towards less government. We must truly make our imaginary line function as a limit on the government's power.

If I woke up one day and a magical faerie gave me the choice to live in a totalitarian communist state or a stateless (or heavily minimalist) capitalist society, I would always choose the stateless capitalism. I'm not an anarchist (not too far from it though), but if given such a one-dimensional choice, I choose anarchy. It's a blue pill/red pill situation at least at the dividing line. One has to make the general choice. One has to choose an answer to the question: which means of economic organization is better suited to provide for civilization and wealth, capitalism or socialism? And further, which of these two systems is more consistant with the individual's liberty? To me, these questions have long since been answered; particularly by Ludwig Von Mises, Carl Menger and other Austrian economists (but also by people from the more distant past, such as John Locke, who layed the foundations of these truths).

Capitalism (I.E. the economic economic freedom part of classical liberalism) is simply the most efficient and productive known means of economic organization, and socialism is an unproductive and inefficient system that will inherently fail and crumble. It is no coincidence that some socialist countries have started to de-statize - this is inevitable because a socialist system cannot economically sustain itself for too long. All of the short-term "benefits" that people trumpet become meaningless when the long-term consequences accumulate (and thus their currency crumbles into dust, they suffer from huge food shortages and each individual's upward mobility is reduced to pulp). In terms of individual liberty, the individual's freedom is the very essence of true capitalism (free contract, free exchange, free trade, free homesteading, etc.), while the socialist system seeks to cripple the individual in the name of the chimera of "the collective" - a socialist state inevitably uses the means of force and coercion against the individual to fit them into centrally planned "equality roles".

The interventionist that wants to create some kind of "balance" between these two forces does not seem to understand what private property genuinely means and implies. Certain people give it a different meaning than it initially implies. For example, Bush's plan to "privatize" social security wasn't privatization at all - it would have set up a government-buisiness relationship where people's SS funds are invested for them into the stock market by the government, and thus their investments would be chosen by the government. That's not privatization, that's the very essence of what I describe as being economic fascism: the property may be private in name, but it is then heavily regulated, centrally planned by the government. In short, the initial ownership of the property is doled out by the state in a planned and coerced heirarchy of sorts in which the buisinesses are a middle man between the commoner and the state (neo-mercantalism), and therefore this is not privatization at all.

True privatization of a good or service simply means that the ownership of the means of production in the given area are owned by private individuals; enterprenuers and producers. This requires that the ownership rise through production, exchange and homesteading - it must be justly aquired property rather than confiscation or land monopoly. If the ownership did not come into being through such natural methods as production and exchange, then it is not private property. If the government owns a significant chunk of the means of production, then no genuine capitalism exists, and the state is socialist.

But since the interventionist wishes to merge private property with socialism, they will tend to keep the means of production generally private (in name at least), but they will centrally plan who gets what property (thus violating the requirements of justly aquired property) in an imposed structure, while then heavily regulating the property that does exist. They will use government to artificially bolster buisinesses, unions and bereaucracies, and the bereaucracies will merge with the buisinesses. The interventionist state therefore will often tend to move towards economic fascism by merging the private sector with the state, having the state absorb private property. In communism, the state owns the means of production, so there is actually very little private property to regulate. In the interventionist state turned into a fascist state, since the state does not own the means of production (or too much of it), it will then heavily regulate it.

Alternatively, the interventionist state also faces the possibility of becoming just another democratic socialist state, such as many of the governments in Europe. Such governments may "only" own 15% or 20% of the means of production, and sometimes lesser percentages, but this is in truth a significant part of the means of production. It would be absurd to suppose that such an economic system is "four fifths capitalist"; they are socialist states. It would further be absurd to imply that there is any genuine element of capitalism when the remaining 80% or 85% of the means of production was heavily regulated on top of the socialization - it would truly be quite a totalitarian state at such a point, mixing different elements from socialism and fascism. Conclusively, interventionism, despite the intentions of the interventionists, is inevitably some form of statism in practise.

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