In Part 1, it was noted how astute Henry Hazlitt was some 60 years ago in his “Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics.” In just one passage from his book (which should be required reading for every high school/college student in America), he described why the exact folly that we know today as Freddie and Fannie should be avoided. It’s bad enough when we make a major mistake; it’s much worse when we ignore sage advice that would have allowed us to avoid such error.
In Part 2, a look at yet another economist/writer of the same era shows we have been warned of the folly of the stage we are setting today. The magnitude of government intervention being seen here and across the world, while often well intended, could be planting the seeds for even worse things to come. And the consequences go far beyond economics in terms of money to our way of life.
On the cover of the 1994 edition of F.A. Hayek’s, “The Road to Serfdom: Fiftieth Anniversary Edition” (which should be required reading for every high school/college student in America), there is a review quote that we ignore at our peril: “Nearly half a centuy ago, most of the smart people sneered when Friedrich Hayek published The Road to Serfdom. The world was wrong and Hayek was right.” —Ronald Bailey, Forbes.
As the government does more and more, its growth in power comes at the cost of the individual citizen. At the same time, as government takes on more responsibility — even as it inevitably is unable to fulfill this quasi-omniscient role — the individual willingly or reluctantly loses personal responsibility. This centrality of government planning versus the myriad choices of free individuals is not only the antithesis of the American tradition, it is doomed to failure.
As you read the following excerpt, keep in mind GM, Chrysler, banks, cap and trade, czar for this, czar for that…:
What our generation has forgotten is that the system of private property is the most important guaranty of freedom, not only for those who own property, but scarcely less for those who do not. It is only because the control of the means of production is divided among many people acting indepedently that nobody has complete power over us, that we as individuals can decide what to do with ourselves. If all the means of production were vested in a single hand, whether it be nominally that of “society” as a whole or that of a dictator, whoever exercises this control has complete power over us. (Emphases added.)
If this belief in the need of planning by the government persists and government becomes an increasingly powerful player, then a growing number of people will look to the government to meet ever more needs, to right ever more perceived wrongs.
Once government has embarked upon planning for the sake of justice, it cannot refuse responsibility for anybody’s fate or position. In a planned society we shall all know that we are better or worse off than others, not because of circumstances which nobody controls, and which it is impossible to see with certainty, but because some authority wills it. And all our efforts directed toward improving our position will have to aim, not at foreseeing and preparing as well we can for the circumstances over which we have no control, but in influencing in our favor the authority which has all the power. (Emphases added.)
Of course, for some people this seems to be of little concern. They believe this is right and proper. But the outcome will simply be an ever more powerful state with weaker citizens who are effectively reduced to subjects. Their freedoms will be diminished, if not eliminated, and their material well-being will be worse because, as Hayek explained, “although competition can bear some admixture of regulation, it cannot be combined with planning to any extent we like without ceasing to operate as an effective guide to production.”
“The world was wrong. Hayek was right.” It’s true today, too. Will we listen?
