Economics versus Politics
Economics is not politics, wrote Frank Chodorov. One is a science, concerned with the immutable and constant laws of nature that determine the production and distribution of wealth; the other is the art of ruling. One is amoral, the other is moral. Economic laws are self-operating and carry their own sanctions, as do all natural laws, while politics deals with man-made and man-manipulated conventions. The intrusion of politics into the field of economics is simply an evidence of human ignorance or arrogance, and is as fatuous as an attempt to control the rise and fall of tides. Such undertakings must fail because the only competence of politics is in compelling men to do what they do not want to do or to refrain from doing what they are inclined to do, and the laws of economics do not come within that scope. They are impervious to coercion. Wages and prices and capital accumulations have laws of their own, laws which are beyond the purview of the policeman. FULL ARTICLE
Comments (18)
A great essay!
On The Economist blog a couple of weeks ago, one of the writers asked why so many people reply derisively, "That argument is so Econ 101," when confronted with economic objections to their pet political policies like minimum wages and rent control. And, of course, the reason is that they don't like to be confronted with the immutable economic laws and what they have to say about the consequences of political intervention in economic activities. It also explains why you see so many so-called economists try to rewrite these laws so that they don't apply to this or that political activity.
Published: April 3, 2007 9:10 AM
Dear Frank: The framers understood thre things that werre changed in l913 and will eventually destroy our govt as we know it.
States lost power when the state legis no longer appoints the U.S.Senators we no longer have any say about trade or foreign relations
It is insane to tax ones incentive to work this gives congress complete control over each individual money
The fractional rserve banking system allows every loan the bank does must take money out of 'thin air' which is pure inflation friend
so change the 17th amendment eliminate the 16trh amendment and eliminate the Federal Resrve Act Sincerely, Jack Green
Published: April 3, 2007 10:26 AM
A pedantic observation but I dont see that state power NECESSARILY collapses the society. I respect the history and countless examples but it is a possibility that in a democracy peoples' choice of government ebbs and flows with support for governments that are more like an irritating cancer (although they wont see it that way) rather than a malignant tumour.
Much like the 'crack up boom' Mises followers are still waiting for... it is not a definite outcome. The unnecessary booms and busts caused by funny-money leave the economy worse than where it would otherwise have been but there is no reason to state that this state of affairs will NECESSARILY end up in a crack up boom. It is a likely outcome but not a definite one.
Published: April 3, 2007 10:46 AM
This reminds me of the joke about the politician who spoke about his minimum wage scheme. Someone then asked, "what about the law of supply"? And the politician said, "we will have to repeal that law; we have a mandate from the voters."
Published: April 3, 2007 10:48 AM
Man, this stuff sure makes contemporary versions like Jared Diamond's "Collapse" look like weak soup (which it is).
Published: April 3, 2007 10:49 AM
Frank Chodorov is one of my favorite writers.
Published: April 3, 2007 10:55 AM
My understanding of Mises’s view regarding hyper-inflation is that unless the government at some point slows the rate of monetary inflation or contracts the money supply, hyperinflation will result. And so far in most major countries, this is what the monetary authorities have done; when price inflation becomes too much of a problem, they, for a time, significantly reduce or reverse the rate of monetary inflation. Obviously, no guarantee exists that the monetary authorities will continue to do so in the future.
I also believe Mises argued that in the final phase of a hyper-inflation, the precipitous decline in the demand for money becomes the major factor causing the skyrocketing prices.
Published: April 3, 2007 11:39 AM
In every economic and political system some people are on the bottom of the success pyramid and some on the top. I propose that the nature of the system wil not change the relative standing of the vast majority of the people.
Some Libertarians seem to think that their relative standing will improve if the system changes. Why?
Published: April 3, 2007 1:35 PM
Jonathan,
Here are a couple of items that might change your thinking:
http://www.ramapo.edu/facultystaff/cbpp/pdf/Welfare_Warfare_State.pdf
http://www.abc.net.au/worldtoday/content/2005/s1446716.htm
Published: April 3, 2007 2:03 PM
billwald,
The difference is that the pyramid in a free (stateless) society would likely be far flatter, as the criminality that characterizes statist society would not distort incomes so drastically.
That is, "the economic means" (work) would triumph over "the political means" (theft) -- http://www.franz-oppenheimer.de/state1.htm -- and society as a whole would be better off accordingly
Published: April 3, 2007 2:09 PM
Relative to what? If you mean relative to everyone else (the socialist's egalitarian dream), then no, I don't think most libertarians believe that. Likely, with greater economic freedom, there would be a general shifting of wealth throughout the system as ineffiency is culled and efficiency is better rewarded.
If you mean relative to our current standings individually, I would say that most people would be better off in a more free society due to better allocation of resources and effiency gains in production, not to mention a lifting of the burden of taxes that not only targets an individuals income directly, but indirectly by increasing the costs of production itself. Of course there would still be the very wealthy, but they would be much more likely to have gained that wealth through peaceful interaction rather than coercion.
Published: April 3, 2007 2:09 PM
David,
I am travelling until next Thursday but will take a look at those links on my return, thank you, Jonathan.
Published: April 3, 2007 2:35 PM
Scott D,
It's the "rising tides lifts all boats" idea, that's all. And while there would surely be some extremely wealthy people, you wouldn't have the enormous (and rising) income disparities we have today on account of the corruption of money and the resulting financialization of the economy. Instead, you'd have a large and very solid middle class -- a steep bell curve, if you will -- with the vast majority at the top and far lesser nuimbers of extremes on either side.
And no forced "equality."
Published: April 3, 2007 3:40 PM
Some Libertarians seem to think that their relative standing will improve if the system changes.
This is a tired old ad hominem. I think libertarians, for the most part, want what is good and just, regardless of its particular effects in their lives.
Published: April 3, 2007 4:51 PM
Indeed!
Live free or die isn't just a trite saying.
Published: April 3, 2007 4:56 PM
Live free or die isn't just a trite saying.
Anyone have statistics on how many Libertarians have died recently because they don't believe themselves to be free?
Published: April 3, 2007 5:16 PM
Nelson,
So we are all just to walk bravely into the buzzsaw? Some are -- http://video.google.com/videoplay?docid=-4312730277175242198 -- and they have my admiration accordingly. But are those who organize like www.vtcommons.org cowards for taking this bold but not foolhardy approach? After all, there is not only safety in numbers but power.
And man will either live free, or he WILL die.
Published: April 3, 2007 5:41 PM
Likewise, Ed and Elaine Brown have my extreme admiration.
http://www.keenefreepress.com/mambo/index.php?option=com_content&task=view&id=472&Itemid=36
Published: April 3, 2007 7:14 PM