Friday, April 08, 2011

My Growing Impatience With the (Hopefully) Willfully Ignorant

Lately I've felt considerable impatience with those who defend Marxism, socialism, or even various forms of interventionism. There was a time when it was reasonable to believe in socialism, even if there were equally reasonable arguments against it. Theorizing in ignorance, many Marxists really believed it would bring a more just, equitable world. Socialists really believed that one could engage in economic planning and eliminate all the perceived inefficiencies and market failures.

Of course, Hayek and Mises laid bare the fact that economic planning was impossible -- meaning it could not achieve what socialists claimed possible. More, history laid bare the fact that central planning does not and cannot work. And is demonstrated in no uncertain terms that Marxism not only will not bring about a more just and equitable world, but that it creates one of the most unjust regimes ever known to man. Mass murder and mass starvation were the norm -- with the latter finally being eliminated through even the smallest reforms in favor of markets. Since an economic system cannot change human nature, but can only emphasize the nature we have in particular directions -- meaning institutions matter a great deal -- cronyism prevailed (and prevail) in socialist countries. If there is someone in charge, they face incentives to engage in cronyism and to exercise the power given them. Thus, under communism, not only was it "He who does not obey shall not eat," it was also "He who I do not like shall not eat, and he who I do like shall get double rations." The fact that there were rations, that there was rationing and long lines to get the most basic necessities, gives the lie to the argued efficiencies of such systems.

All of these facts being well-established, how can anyone continue to support such systems? How, especially, can anyone be a Marxist? It either requires an extreme amount of willful ignorance or an actual desire to have exactly the kind of systems which emerged. There is no excuse for the former, and as for the latter, it is an expression of the worst kind of will to political power and is thus a bald expression of evil intent.

You won't find too many economists arguing for socialism anymore. There is more humility in the field than there was in the early part of the 20th century. This, of course, does not prevent anti-economic thinkers from nevertheless embracing socialism for reasons utterly different from the reasons originally developed. The original socialists thought that central planning was superior to messy free markets, and that it would improve mankind overall by eliminating greed, want, and poverty through a fair distribution of wealth. Today's socialists know nothing about economics, and don't seem the least interested in learning anything about it. They aren't interested in improving mankind, either. They only want "fairness." Whatever that is depends on the person you ask, and is typically achieved through superficial means, like political correctness. To justify their positions somewhat (when they bother), they rely on bizarre interpretations of history, where conspiracy theories abound. Considering the fact that socialists of all stripes believe the world has to be ordered by an orderer of some sort, this is not in the least surprising. They attribute all order to there being an orderer. This inevitably leads to conspiracy theories, especially when one has given up belief in God (either explicitly, or at some fundamental personal level).

Note I have left out the interventionists to this point. The interventionist acknowledges that socialism does not and cannot work, that central planning is indeed impossible. However, they are still driven by the same idea that markets are fundamentally flawed and unfair. Thus, one has to intervene and regulate, redistribute wealth (but only a little bit). Ultimately, they are anti-economic thinkers as well. They reject the fact that prices communicate accurate information when left alone, and are always advocating for various price-changing interventions. Wage and price controls have proven over and over to cause shortages or excess production -- and we have seen less of that over time (until recently, with the health insurance law) -- but we still have price-distorting subsidies, third-party payers, and minimum wage laws. The distortions caused by each intervention causes people to call for more interventions, mistakenly thinking the problem is with the market and not the last round of regulations. Mises argued that interventionism would lead inevitably to socialism for this very reason. Unfortunately, the distortions can so easily be attributed to the market, the greed of this or that group, etc., that the public's economic ignorance, resulting in the widespread continued belief in folk economics -- accepted by almost everyone in government, and promulgated by Keynes, whose policy suggestions are rather convenient for politicians, who prefer controlling mercantilist policies over free market ones -- allows for the continued creep of interventionist policies.

There should be no excuse for economists, who are supposed to be able to engage in economic thinking, to accept interventionist policies. They no doubt do so because of lingering fallacies in mainstream economics, the mathematicization of economics such that too many think such precision is possible, residual folk economics, acceptance of the theories of defunct economists, and outright desire to have political power. All but the latter are excusable to some degree.

The latest recession has caused a degree of soul-searching among macroeconomists. Not enough, though, as we still have people like Krugman promulgating the same policies that got us into the mess in the first place. I have grown weary, too, of such demagogues as Krugman spreading economic ignorance for . . . what? Demagogic power? That seems a pretty pathetic reason to keep the masses in economic ignorance.
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