An Economist Rebukes The Economist


There are but two ways that man can deal with man: reason and force. Reason includes invention, design, entrepreneurship, finance, borrowing and lending, construction, production, manufacturing, mining, farming, trade, marketing, distribution, sales, and contract.

Force is when someone picks up a gun. The gun is used to override the reason of the victim with the whims of the gun wielder. Criminals use force to steal and otherwise harm people. But criminals are only bit players. The main force-wielding actor is the government.

Economics is the study of people using reason to drive their activities, as listed above. Force is the negation of economics. There are several ways to see this.

How Force Negates Economics

One is that force attacks the mind. Those who act under compulsion, at gunpoint, are deprived at least partially of their use of reason. They may be aware of what they think is best, but this course of action will result in a bullet. So they take (at most) the second-best action. And often, those who are under duress experience some degree of mental paralysis as well. Especially over long periods of time, the mind trains itself to skitter away from the area of compulsion, like a bead of water on hot cast iron.

Two, force is not creative. It is destructive. Whereas people generally want to produce, save, conserve, accumulate capital, and live better, force pushes them to destroy, waste, eat the seed corn, and become impoverished. This is precisely why force is advocated by those who seek to wield it: to make people act in uneconomic ways.

Three, force causes economic discoordination. When spreads in the market become narrower, it means that coordination is increasing. Think of the spread between the price of eggs in a farm town and in a city 30 miles away. If people are able to coordinate their activities efficiently, there should not be a big price difference. But if you observe that the price of eggs in the city is a hundred times higher, that means that people are prevented from distributing eggs.

Whenever the government uses force to interfere in markets, it promises improved outcomes. However, the opposite inevitably occurs. In my dissertation, I proved that every such instance causes wider spreads, and hence decreases coordination. The egg farmer earns less, and the city consumer pays more. Everybody loses.

Four, the follow-on effects cause economic retrogression. Farmers are ruined, and egg production is reduced. City workers go hungry for lack of eggs. Trucks that were purchased for egg distribution are wasted, possibly abandoned to rust or, at best, converted to a lower use. The scope of civilization is reduced.

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