Tag: mercantilism

Categories
free trade & free markets too much government

Old Rules Gotta Go

Old hat. Long in the tooth. Creaky as an outhouse door.

These are just some of the expressions that apply to how our cities, states and metro areas are run — by ancient principles that do not serve the common good.

Last weekend I wrote about the ongoing revolution in transit, the peer-​to-​peer online app services offered by Uber, Lyft and the like. These ride-​sharing services allow normal folks to give and receive car rides at great convenience.

They blow mass transit “out of the water” and throw taxi service sideways. Super-​convenient, they make it cheap and safe for people to co-​operate in new and productive ways.

Art Carden, at EconLog, notes the “social waste” that governments add to the system. While the new app-​based services provide true solutions to the high transaction costs of negotiating among many people, governments give us squabbles: “the battle over the rules governing the conditions under which people will be allowed to do certain things is pure social waste,” Carden argues. “The social waste is reflected in the resources consumed in the fight over the rules.”

We’ve gotta have rules, of course. But they needn’t require micromanagement, massive restrictions, or high taxes.

The new era will be run (if allowed) on the basis of convenient co-​operation, transaction costs reduced by communications technology.

The old era that still rules the roost runs on clunky old ideas that Carden rightly calls “mercantilism,” the political ideology that Adam Smith argued against … in 1776.

Government should undergird free markets, not intrude and dominate by licensing near-monopolies.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies too much government

A Million for Each Congressperson

A business filed for bankruptcy last week. 

These have been tough times, so that’s not a shock. What makes the story juicy is that the FBI raided the company’s headquarters two days later.

The company? Solyndra, a solar panel manufacturer. A few months earlier, it had been boasting a profitable return on investment. And, as President Obama had proclaimed the previous year in a visit to the California outfit, Solyndra was precisely the kind of company that deserved federal government assistance. It was so cutting edge, so innovative, that it deserved a huge loan guarantee, to the tune of $535 million. 

The raid occurred on the same day as the president’s “jobs” speech last week. Yet, Mr. Obama neglected to include an update on his administration’s previously self-​praised policy of industrial subsidy pertaining to that very company.

Republicans are making much of this. They are themselves not immune to (indeed, during the Bush years they excelled at) just this sort of corruption.

And it is corruption. The Solyndra deal went down after major investors in the company gave millions in support of the Obama presidential campaign. It was fast-​tracked as part of the federal government’s Keynesian “stimulus” spending.

This is how the politics of modern mercantilism — of systematic “business-​government partnerships” — works. The moneymen support the politicians who support the moneymen.

It’s one way to get rich.

And gain (and maintain) power.

But it’s not good for the country.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

What Not to Blame

You’ve heard the calumny: The current economic debacle is the result of free markets.

This charge — often made with lip-​smacking glee — makes no sense.

I’ve discussed some specifics, before. Here are three more points:

1. We haven’t had a free market. We live in a heavily regulated, subsidized, coddled-​and-​attacked, over-​taxed society. If the current debacle proves any system unfeasible, then the one proven wrong is the one we have. It’s the mixed economy that has proven to have worse than mixed results.

2. Many on the left as well as on the right like to pretend that Republican talk of free markets has been effective. Both sides lie. The alleged party of “small-​government” and “free markets” pigged out at the government trough, increasing the size and scope of government. To not see growth of regulation and spending and government debt under Republican governance is to not see the corpulent elephant in the room. 

3. Blaming free markets is especially galling to actual proponents of free markets for a historical reason, too: Our idea grew up in reaction not to socialism, but to a system of government interference much like what we have today. Adam Smith called it “mercantilism.” Thomas Jefferson called it “Parasite Institutions.”

And it’s the parasite institutions that caused the current mess. 

This is Common Sense. I’m Paul Jacob.