Wednesday, July 21, 2010

Was Jefferson Wrong?

"Were we directed from Washington when to sow, and when to reap, we should soon want bread." --Thomas Jefferson, autobiography, 1821

We have been ‘directed from Washington’ when to sow, when to reap, an much more than that for all my life, and part of my parent’s life-times.  (Note:  I’m 58.)  But generally speaking, we do not ‘want for bread.’  Was Jefferson wrong?

I think not.  Here is the short version:  It is impossible, knowledge-wise, for any government to know more than people in the free market what to make, what to consume, what to save, what to spend, and where and when to invest.  You can read the details – the long version – in von Mises’ still-relevant book Socialism.

So again I ask, was Jefferson wrong?  Most people, even the relatively poor ones in our society, seem to have bread, at least.

The mistake – a very common one when people think about such things – is that, economically speaking, it is easy to forget what might have been.  (Bastiat covers this.)  Think we are relatively rich now?  Imagine how much richer we might have been had not the government destructively interfered with wealth creation.  Consider whole societies that are impoverished just because their governments destructively interfere with wealth creation.

There are many contributing factors to poverty, but one key is interference with the production of wealth on the part of governments.  Thieves, gangsters, thugs, and hoodlums can do this locally sometimes.  Governments routinely do it systemically to whole countries for generations on end.

When governments do this, as they so often have done, they become the moral equivalent of thieves, gangsters, thugs, and hoodlums.  And inevitably, poverty increases.  If you are relatively wealthy, you may not notice it as much.  If you are not so wealthy to start with, you might suffer greatly.  But in any case, Mr. Jefferson is correct.

No comments: