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Myths of the Mixed Economy

This article was originally published by Llewellyn H. Rockwell Jr. at The Mises Institute on September 14, 2006. 

The planned economy was all the rage in 1937 when Prentice-Hall published a 1,000- page tome on The Planned Society: Yesterday, Today, Tomorrow: A Symposium by Thirty-Five Economists, Sociologists, and Statesmen.

The “question that confronts us today is not if we shall plan, but how we shall plan,” wrote Lewis Mumford in the Foreword. All the contributors – Keynesian, socialist, communist, and fascist – agreed with that point, including such luminaries as Sidney Hook, Benito Mussolini, and Joseph Stalin.

But the book was honest. It linked Stalin and Keynes, fascism, and the New Deal. The plans were not identical, of course, but all agreed on government “rationality” versus the “chaos” of the free market.

Most of the authors advocated the “mixed economy,” Mises’s name for an admixture of capitalism and socialism. Such a combination, he showed, is necessarily unstable, and our own mixed economy is tilting towards statism, with such regulatory disasters in the last few years as the Clean Air Act, the Americans With Disabilities Act, and the Civil Rights Act.

Today, no part of the economy is left untouched by the President’s budget and the swarm of regulatory agencies. Buttressed by most of the economics profession, the regulatory state today rules and ruins America. Communism lost, but social democracy won.

In the American mixed economy, it is the job of the planner to: ensure “full employment” (as federal policies create joblessness); encourage technological innovation (not through markets, but through subsidies); ensure a “fair” distribution of wealth (rewarding parasites and punishing the productive); manage international trade (though it needs no more management than domestic trade); keep “public goods” out of private hands (even though public ownership must always be less efficient than private).

The planner has taboos as well. He must never mention private property, praise the coordinative function of prices, criticize pressure groups unless they’re anti-big-government, be cynical about the uses of power, call for a tax cut, or identify the real source of prosperity as the free market.

Charles Schultze, President Carter’s chairman of the Council of Economic Advisers, adheres to these rules and taboos in his book and “guide to macroeconomics” Memos to the President. He sets out these rules for every policymaker to follow in the future.

In the entire work, he has not one good word to say about the market, private property, or the price system. His central assumption is that the government must manage the economy to prosperity. According to Schultze, we should believe that: the Federal Reserve protects the dollar when our money has lost 94% of its value since the Fed was established; the Fed can cure business cycles, when every decade or so, it causes a serious economic setback; the government can create full employment, even as it causes unemployment with such welfare measures as the minimum wage and civil rights; the government can develop new technologies, even though bureaucracy is a proven technology killer; we can trust the government to improve our standard of living, though our standard of living has fallen for nearly twenty years; the government protects us from monopolistic capitalists, even while the government creates and sustains destructive monopolies from the post office to the schools; regulatory agencies do protect us from dirty air, unsafe drugs, and lead poisoning, while everywhere government is biggest, from Moscow to D .C., life is dirty and unsafe.

Naturally, mainstream economists – the useful idiots of the interventionist state – advise presidents on economic policy. Today, these economic planners see their primary task as “keeping supply and demand in balance.” That doesn’t mean allowing the market to work, of course, but rather pushing and releasing buttons on the planning machine.

There are two views on how to do this, one mainstream and one rival. The mainstream view says that a decrease in overall demand causes economic downturns, and so demand should be increased by government spending and money creation. This is supposed to make up for the deficiencies of the private sector.

The rival view says declines are caused by a fall in overall supply, caused by any number of factors, including an irrational fear of investment. So, boosting overall demand through spending or inflation only exacerbates the troubles.

The second view has better policy implications, but both are misguided. They assumed that there is something called overall demand conglomerating the values of consumers and producers alike. This obscures the real economy.

The obscurantist aggregations don’t stop with “supply” and “demand.” The planners also discuss such categories as capital and investment as if they were homogeneous, representing these very diverse groupings as single letters in their macroeconomic models.

Both views also assume that government managers are smarter than the market. Imagine that you had to plan the household finances of your next-door neighbor, with little or no information about their income, tastes, and talents, all of which can and do change. Yet the planners have been trying to do this for decades, to the entire economy.

To explain their way out of this problem, the planners separate the “micro” economy from the “macro” and claim the decisions of individuals have nothing to do with the overall picture. It’s true that no one individual can, for example, change the net rate of savings in the economy, but there would be no net rate of savings without individual decisions.

It is out of the millions of decisions of real people that the economy is created, and it is the job of the economist to understand and explain how that happens, not to encumber it.

The planners of the mixed economy like to talk about supply and demand as if they needed the government to coordinate them. Yet supply and demand describe the natural pattern of economic behavior in the absence of government interference.

If there is a chicken plague, the price of eggs will soar. The consumer doesn’t have to read the “Chicken Health Update” to know that he should economize on eggs. The price tells him that, and he can then look for substitutes.

Conversely, if Frank Perdue genetically engineers a super chicken that lays many more eggs than the normal bird, the price of eggs will plummet. But the consumer doesn’t need to read “Techno-Poultry Weekly” to know that. He need only look at the price.

In a free market, there is no need for planners to bring supply and demand into line. The daily transactions of millions of consumers do so, leavened by the risk-bearing entrepreneurs. It is the mixed economy itself that creates the demand for economic planners to run it. Massive deficits destabilize the economy, leading to calls for the government to stabilize it.

The “entitlement” programs are interventions as well. Government spending may increase the demand for some goods and services, but it drains resources from the private economy just as surely as taxes. Yet the “opportunity costs” of confiscating these resources never factor into the planners’ models.

How much does the mixed economy cost us? We can’t know. Despite the well-intentioned attempts of some economists to figure it out, no one can know the effects of technologies never created; firms never started; people never hired; others hired by government fiat; central bank-created recessions; and higher prices from taxes, regulations, and government-generated demand. We can only know that the effect is gigantic, harmful, and growing.

Government intervention can be criticized on a number of other grounds that the mixed-economy planners do not mention:

First, politicians and bureaucrats are self-interested. In the private sector, self-interest works for the common good. In the public sector, it means expansion of the government’s budget and power, which attacks the common good.

Second, the market can sometimes anticipate the planners, negating the effects of government action. If the Federal Reserve increases the money supply, the market can take account of the likely inflationary effects and prices will rise sooner and higher than the managers thought.

Third, intervention increases the incentive to evade the law, thereby enlarging the less-efficient and the societally unfortunate underground economy.

Fourth, intervention distorts the price system and the interest rate, which work to coordinate the use of resources. Price controls and regulations cause misallocation, and Fed-lowered interest rates cause businessmen to make bad investments.

Fifth, intervention undermines the division of labor, preventing people from doing the tasks they are most suited for because regulation prevents employers from hiring on merit.

If the mixed economy is such a disaster, why do we have one? Because it enables the well-connected to loot the rest of us in a social democracy disguised as “democratic capitalism.” To get away with the looting, the mixed-economy state attacks all countervailing institutions: families, neighborhoods, businesses, private schools, and charitable and religious organizations. The result is the barbarism and increasing poverty we see all around us.

The Planned Society didn’t mention that, but it is the inevitable outcome of what it recommended, and what the U.S. government practiced in 1937, and today.

The post Myths of the Mixed Economy first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

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Residents livid at Democrat-dominated county for considering limits on flags — including American flags — on private property

In Fairfax County, Virginia — a Democratic stronghold outside of Washington, D.C., where nearly 75% of ballots last fall were for President Joe Biden over former President Donald Trump — flags have become an issue.

So much so that the county is looking into enacting an ordinance that would regulate the size, height, and number of flags that residents and businesses can fly, WDVM-TV reported — and that includes the American flag.

Image source: WDVM-TV video screenshot

The station said a public hearing was held on the matter last month.

What are the details?

“We’re not stopping anybody from flying an American flag if they want to,” Leslie Johnson, zoning administrator for the county’s Zoning Ordinance Modernization committee, told the public, according to WDVM. “All we’re doing is putting parameters around the size, the location, and the height.”

But Daniel Gade — a former Republican nominee for the U.S. Senate — wasn’t too understanding. He’s concerned about the proposed flag requirements since they call for smaller flag sizes than those that are draped over fallen soldiers’ coffins, the station said.

“Let’s make a stink about this because it’s ridiculous,” Gade said, according to WDVM. “And the idea that a bureaucrat would tell us how big of an American flag to fly, right here in America, is offensive.”

Image source: WDVM-TV video screenshot

Others expressed similar sentiments at the public hearing, the station said.

“No other flag or display can in any way be equated to the American flag,” Robert Maggi, a county resident, said during the hearing, according to WDVM. “For me, it is the right of every American to fly the American flag on their property. Please ensure this right is made clear in the pending zoning regulations.”

Resident Adrienne Whyte asked “why flags and flag poles were rushed into the agenda. It seems like solution in search of a problem, and I fear the solution could be worse than anything we are experiencing now,” the station reported.

WDVM added that some also have raised questions about why the American flag is not distinct from other flags, as the proposal treats the American flag the same as all other flags.

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The Purge: The Natural Progression Of “Woke” Censorship Is Tyranny

This article was originally published by Brandon Smith at Alt-Market. 

As I have noted in the past, in order to be a conservative one has to stick to certain principles. For example, you have to stand against big government and state intrusions into individual lives, you have to support our constitutional framework and defend civil liberties, and you also have to uphold the rights of private property. Websites are indeed private property, as much as a person’s home is private property. There is no such thing as free speech rights in another person’s home, and there is no such thing as free speech rights on a website.

That said, there are some exceptions. When a corporation or a collective of corporations holds a monopoly over a certain form of communication, then legal questions come into play when they try to censor the viewpoints of an entire group of people. Corporations exist due to government-sponsored charters; they are creations of government and enjoy certain legal protections through government, such as limited liability and corporate personhood. Corporations are a product of socialism, not free-market capitalism; and when they become monopolies, they are subject to regulation and possible demarcation.

Many corporations have also received extensive government bailouts (taxpayer money) and corporate welfare. Google and Facebook, for example, rake in billions in state and federal subsidies over the course of a few years.   Google doesn’t even pay for the massive bandwidth it uses.  So, it is not outlandish to suggest that if a company receives the full protection of government from the legal realm to the financial realm then they fall under the category of public service. If they are allowed to continue to monopolize communication while also being coddled by the government as “too big to fail”, then they become a public menace instead.

This is not to say that I support the idea of nationalization. On the contrary, the disasters of socialism cannot be cured with even more socialism. However, monopolies are a poison to free markets and to free speech and must be deconstructed or abolished.

Beyond corporate monopolies, there is also the danger of ideological monopolies. Consider this – The vast majority of silicon valley companies that control the lion’s share of social media platforms are run by extreme political leftists and globalists that are openly hostile to conservative and moderate values.

Case in point: Three of the largest platforms on the internet – Reddit, Twitch, and YouTube just acted simultaneously in a single day to shut down tens of thousands of forums, streamers and video channels, the majority of which espouse conservative arguments which the media refers to as “hate speech”.

To be sure, at least a few of the outlets shut down probably argue from a position of race superiority.  However, I keep seeing the mainstream media making accusations that all the people being silenced right now deserve it due to “racism” and “calls for violence”, and I have yet to see them offer a single piece of evidence supporting any of these claims.

A recent article from the hyper-leftist Salon is a perfect example of the hypocrisy and madness of the social justice left in action. It’s titled ‘Twitch, YouTube And Reddit Punished Trump And Other Racists – And That’s A Great Thing For Freedom’. Here are a few excerpts with my commentary:

Salon: “Freedom is impossible for everyone when viewpoints prevail that dehumanize anyone. And it appears that several big social media platforms agree, judging from recent bans or suspensions of racist accounts across YouTube, Twitch, and Reddit.”

My Response

Freedom cannot be taken away by another person’s viewpoint. Every individual has complete control over whether or not they “feel” marginalized and no amount of disapproval can silence a person unless they allow it to. If you are weak-minded or weak-willed, then grow a backbone instead of expecting the rest of the world to stay quiet and keep you comfortable.

Remember when the political left was the bastion of the free speech debate against the censorship of the religious right? Well, now the leftists have a religion (or cult) of their own and they have changed their minds on the importance of open dialogue.

Salon: “For those who are dehumanized — whether by racism, sexism, classism, ableism, anti-LGBTQ sentiment or any other prejudices — their voices are diminished or outright silenced, and in the process, they lose their ability to fully participate in our democracy. We all need to live in a society where hate is discouraged, discredited, and whenever possible scrubbed out completely from our discourse. This doesn’t mean we should label all ideas as hateful simply because we disagree with them; to do that runs afoul of President Dwight Eisenhower’s famous statement, “In a democracy debate is the breath of life”. When actual hate enters the dialogue, however, it acts as a toxic smoke in the air of debate, suffocating some voices and weakening the rest.”

My Response

Where do I begin with this steaming pile of woke nonsense? First, it’s impossible to be “dehumanized” by another person’s opinion of you. If they are wrong, or an idiot, then their opinion carries no weight and should be ignored. Your value is not determined by their opinion. No one can be “silenced” by another person’s viewpoint unless they allow themselves to be silenced. If they are right about you and are telling you something you don’t want to hear, then that is your problem, not theirs. No one in this world is entitled to protection from other people’s opinions. Period.

It should not surprise anyone though that leftists are actively attempting to silence all dissent while accusing conservatives of stifling free speech. This is what they do; they play the victim while they seek to victimize. They have no principles. They do not care about being right, they only care about “winning”.

Under the 1st Amendment, ALL speech is protected, including what leftists arbitrarily label “hate speech”. Unless you are knowingly defaming a specific person or threatening specific violence against a specific person, your rights are protected. Interpreting broad speech as a “threat” because of how it might make certain people feel simply will not hold up in a court of law. Or at least, it should not hold up…

Political leftists have declared themselves the arbiters of what constitutes “hate speech”, the problem is they see EVERYTHING that is conservative as racist, sexist, misogynistic, etc. No human being or group of human beings is pure enough or objective enough to sit in judgment of what encompasses fair or acceptable speech. Therefore, all speech must be allowed in order to avoid tyranny.

If an idea is unjust, then, by all means, the political left has every right to counter it with their own ideas and arguments. “Scrubbing” all opposing ideas from the public discourse is unacceptable, and this is exactly what the social justice movement is attempting to do. If you want to erase these ideas from your own home or your personal website, then you are perfectly within your rights to do so, but you DO NOT have the right to assert a monopoly on speech and the political narrative.

Generally, when a group of zealots is trying to erase opposing ideals from the discussion, it usually means their own ideals don’t hold up to scrutiny. If your ideology is so pure and correct in its form, there should be no need to trick the masses into accepting it by scrubbing the internet.

Finally, America was not founded as a democracy, we are a republic, and with good reason. A democracy is a tyranny by the majority; a collectivist hell where power is centralized into the hands of whoever can con 51% of the population to their side. Marxists and communists love the idea of “democracy” and speak about it often because they think they are keenly equipped to manipulate the masses and form a majority. But, in a republic, individual rights are protected REGARDLESS of what the majority happens to believe at any given time, and this includes the right to free speech.

In the same breath, Solon pretends to value free discussion, then calls for the destruction of free speech and opposing ideas in the name of protecting people’s thin-skinned sensitivities. In other words, free speech is good, unless it’s a viewpoint they don’t like, then it becomes hate speech and must be suppressed.

Solon: “Reddit referred Salon to a statement explaining,”We committed to closing the gap between our values and our policies to explicitly address hate” and that “ultimately, it’s our responsibility to support our communities by taking stronger action against those who try to weaponize parts of Reddit against other people.””

My Response

In other words, they don’t like conservatives using their platforms against them, and since the political left is unable to present any valid arguments to defend their beliefs and they are losing the culture war, they are going for broke and seeking to erase all conservatives from their platforms instead. The “hate speech” excuse is merely a false rationale.  Social justice warriors stand on top of a dung heap and pretend it’s the moral high ground.

Solon: “No one who understands Constitutional law can argue that these corporate decisions violate the First Amendment which only protects speech from government repression. Professor Rick Hasen at the University of California, Irvine Law School told Salon by email that “private companies running websites are not subject to being sued for violating the First Amendment. The companies are private actors who can include whatever content they want unless there is a law preventing them from doing so.”

My Response

Again, this is not entirely true. Corporations are constructs of government and receive special privileges from government. If corporations form a monopoly over a certain form of communication and they attempt to censor all opposing views from that platform then they can be broken up by government to prevent destruction of the marketplace. Also, government can rescind the limited liability and corporate personhood of these companies as punishment for violating the public trust. And finally, any company that relies on taxpayer dollars or special tax break incentives to survive can and should have those dollars taken away when attempting to assert a monopoly.

Yes, there are alternative platforms for people to go to, but what is to stop leftist/globalist monopolies from buying up every other social media and standard media platform (as they have been doing for the past decade)? What is to stop leftist/globalist interests from using the “hate speech” argument to put pressure on ALL other web platforms including service and domain providers to cancel conservatives?

Finally, just because something is technically legal does not necessarily make it right. Corporations exploit government protection, yet claim they are not subject to government regulation? The left hates corporate America, yet they happily defend corporations when they are censoring conservatives? This is insane.

The Salon author then goes on a blathering diatribe about how he was once a victim of racism (all SJWs measure personal value according to how much more victimized someone is compared to others). His claims are irrelevant to the argument at hand, then he continues…

Salon: “Trump threatening to use the government power to retaliate against those companies, on the other hand, is a threat to both the letter and the spirit of the First Amendment. He and his supporters are not being stopped from disseminating their views on other platforms…”

My Response

Here is the only area where I partially agree with Salon. All of my readers know I do not put any faith in Donald Trump to do the right thing, mostly because of the elitists he surrounds himself within his cabinet. When it comes down to it, Trump will act in THEIR best interests, not in the public’s best interests. Giving him (or the FCC) the power to dictate speech rules on the internet is a bad idea. Also, for those that think the election process still matters, what if we gift such powers to the government today and then the political left enters the White House tomorrow? Yikes! Then we’ll have no room to complain as they will most certainly flip-flop and use government power to silence their opposition.

Of course, if the roles were reversed and corporations were deplatforming thousands of social justice forums and videos, the leftists would be screaming bloody murder about “corporate censorship” and “discrimination”. For now, in their minds, racial discrimination = bad. Political discrimination = good.

The monopoly issue still stands, though, and an ideological monopoly coupled with a unified corporate monopoly is a monstrosity that cannot be tolerated.  Government can and should break up such monopolies without going down the rabbit hole of nationalization.

Yes, we can go to small startup platforms and leave Twitter, Facebook, Reddit, YouTube, etc. behind. I have been saying for years that conservatives with the capital should start their own alternative social media. In fact, that is exactly what is finally happening. There has been a mass exodus of users from mainstream websites lately. I say, let the SJWs have their echo chambers and maybe these companies will collapse. Get Woke Go Broke still applies.

But, government can no longer protect these corporations, either.  With the government raining down bailout cash and corporate welfare on media companies, voting with your feet and your wallet does not have the same effect or send the same message.

The future of this situation is bleak. I have no doubt that leftists and globalists will attempt to purge ALL conservative discussion from the internet, to the point of attempting to shut down private conservative websites through service providers.  The final outcome of the purge is predictable:  Civil war; an issue I will be discussing in my next article.

Leftists accuse conservatives of hate, but social justice adherents seem to hate almost everything. I don’t think I’ve ever witnessed a group of people more obsessed with visiting misery on others, and they will never be satisfied or satiated. That which is normal speech today will be labeled as hate speech tomorrow.  The cult must continue to justify its own existence.   I for one am not going to live my life walking on eggshells around a clique of narcissistic sociopaths. Cancel culture is mob rule, and mob rule is at its core the true evil here; far more evil than any mere words spoken by any “white supremacist” on any forum or video ever.