Hands off or hands on?

Gary Childress

Student for and of life
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Below is an essay, short or long, I don't know, depends upon how one views essays. I wrote it just now based upon idle reflections. I'm curious how others react to what I have written. If you do want to post a response, please read the whole essay before responding. Of course you are perfectly free to comment on parts if you wish. I can't stop you and will probably equally respond to those who comment on parts as to those who comment on the whole.

Please tell me what you think.

By Gary Childress
December 23, 2011

Back when I was, for a short while, an economics major in college I was taught that Laissez-faire capitalism basically meant "hands off" the economy. In other words the economy is something which when left alone is guided by supply and demand and that these two facets seek to achieve a comfortable equilibrium, when left alone, whereby everyone lives a life of relative bliss.

According to the Laissez-faire capitalist, when people try to artificially regulate or mess with the economy by creating laws that is when things run sour. The economy should be allowed to run its course via the "invisible hand" which constantly keeps it corrected and in equilibrium, supply meeting demand and demand meeting supply.

Now I can see some sense to this in a theoretical, purest sort of way. Laws can create artificial supply and/or demand for certain things. If the government writes a law that makes it profitable to build houses and we overbuild, then it creates a "bubble" or momentary period of prosperity which will "burst" when the market reaches a point where it begins to radically dysfunction.

So now we have houses galore! But no one can afford to buy them. Ironically we live in a society where houses are vacant and yet at the same time more and more people have become homeless? How can this be? How can we build enough houses so that there is a surplus and yet at the same time have people homeless? We need to find some way of getting all these homeless people into those houses. Apparently this is not so easy. Now an alien observer may look at us and think to itself, "How stupid are these humans? They want houses, they have houses and yet they are not allowed to occupy them because other humans called bankers will call the police to evict these homeless people from getting into the house. Somewhere we have a disconnect. We have an empty house and maybe a 100 yards away, on the street corner we have a homeless beggar asking for a dime.

Perhaps that creates an interesting solution to the problem. The government could enact a kind of "housing amnesty" whereby excess houses (older homes) are artificially destroyed and the occupants are artificially moved into some of the vacant newly built homes. At the same time those without homes would be moved into the vacant homes. This would seem to make rational sense from the perspective of a central planner. If someone is homeless and you have a vacant house somewhere, doesn't it make sense to have the homeless person occupy the house?

So this perhaps introduces the other side of economics...the "hands on" approach. This I might call socialism, communism or whatever. It would involve "rational planning". Let's say I live in a society of 1000 independent families. Obviously these families need to live somewhere. They need houses. Ideally a rationally planned economy would build exactly 1000 houses to house these independent families. This seems easy enough.

Let's say I'm a democratically elected big chief of the central planning bureau and I want to get re-elected by my people. In order to get re-elected I need to make them happy. so I order the managers of the homebuilding industry to build exactly 1000 houses to house my peeps. I don't want to overbuild because not only do shiny new houses make my peeps happy but also the less work I make them do the happier they will be. So far so good, what could possibly go wrong here?

I suppose, now, we no longer have the fundamental principles of supply and demand seeking equilibrium with each other in an unregulated market. Rather we have consumption and labor competing with each other, seeking equilibrium in a planned economy. I want a house but I don't want to be worked like a slave, I want some leisure. Both of these things are "goods": products of labor and leisure which I seek. But they are mutually exclusive goods. I cannot have much of one without excluding much of the other.

Now we have the problem of trying to reach consensus in this planned society. How do we all agree on the number of houses that should be built versus the amount of leisure we have? There is the incentive for me to shirk my duties in favor of allowing someone else to do all the work. So I call in "sick" to work all the time while my other co-workers slave away building a house that I will someday live in. It's a win, win situation for me if I can do almost no work and at the same time have a house. So soon my co-workers catch on to my little trick and they start calling in sick. Now we start having problems. How are we going to build those 1000 houses if no one is working on them?

Obviously there needs to be some incentive to get me to work. In a capitalist society I am (at least in theory) not allowed to occupy that house unless I earn it. But what about all those dislocated workers from the building industry who are now homeless? Didn't they work to earn those houses which they are now not allowed to occupy? And how can they earn those houses unless there is someone out there with the ability to hire them to do work? It's not their fault that there are no jobs which would allow them to occupy that house.

So let's go back to the centrally planned society. What incentive is there for a person to work to earn his house? Well, I suppose a law could be enacted whereby a person must work X number of hours a week in order to be allowed to occupy their house. If they drop below X then they will be forcibly evicted from their house until they agree to work the hours. Now some capitalists out there might scream that such a law would have to be upheld through violence and having a police force available to evict those people. But if you think about it, this is no different from the fact that if a homeless person in our capitalist society decided to just occupy an empty house he too would be evicted by the capitalist police force. So there isn't much difference there. Both systems need police and coercion in order to function properly.

Let's look at another possible failing point of the planned society. How would the police be managed such that no single individual or group of individuals could come to monopolize their use? So for instance, lets say I am elected chairman of our society. According to the rules of our society, Elections must be held (let's say) every 2 years so that the people can judge my performance. If I don't provide my peeps with the right amount of leisure and products of labor they will vote me out of office.

Now let's say I have grown accustomed to being in office. I like the power, the prestiege, the travel, having other friends in my cabinet of officials. So maybe I recruit some of my friends from the army and the police and the media and I make myself permanent dictator. How do I do this? Well I make friends with my fellow bureau managers. We come to realize that since we call the shots we can monopolize the necessary components to stay in power.

I need the army and police to quell unrest and keep myself in power. But how do I get enough people to join the army and police so that I can use them to control the masses? Maybe I tell my friend and conspirator in the media bureau to flood the airwaves with messages about what a great guy I am and how those who wish to overthrow me are really terrorist subversives. How do I keep my friends loyal to me? I reward them with the products of the labor of my people. Be loyal to me and I will give you a mansion, a limo and with that you can attract a beautiful female and live a life of comfort and prosperity. So now we have greed and corruption playing a role in our planned society. Now my friends begin to recieve the most of my planned society's most precious commodities, leisure AND products of labor.

So now this "rationally planned" society begins to look a lot like the society we currently have. We have abuse of power which perpetuates itself.

Now I'm sure that a rationally planned society need not necessarily turn out this way but I can certainly see how people like Kim Jong or Pol Pot can come into power and through ruthless, evil, brutality use the instruments of society against the people themselves.

The next question is, how would our rationally planned society prevent this from ever happening? IMO the answer is that it can't. There are no guarantees. Yes. We could put laws against abuse of power in place but as soon as some charismatic individual breaks through the checks and balances, that individual could re-write the laws to favor himself. And why would an individual NOT seek to make society his personal empire? Why would an individual NOT seek to enslave those around him to serve his purposes so that he may bask in leisure and at the same time possess all the commodities of labor his heart could desire.

I don't pretend that this is an airtight strike against "rational planning" ala socialism and communism alone. Indeed any society, whether it starts out Laissez-faire capitalist or socialist can fail and become a tyranny. I don't think there are any guarantees, no laws that could be enforced or beliefs that could be instilled in people that would guarantee us against falling into a tyranny. Perhaps I should pull a Nietzsche and wait for the "overman" to come and pose a resolution to all our problems once his inferiors have been extinguished to the dustbin of history. But isn't it just as bad to be driven to extinction by an overman as it is to be driven to extinction by a dictator?

In conclusion:

Tyranny is the enemy of us all. But we can only know this so long as there are people who are free to tell us this. Once the tyrant takes charge and has the ability to quell his dissenters, then we are all in trouble.

All the above is perhaps the view of some but not all of us. There are also times when I think it is not so bad to live in a corrupt society if you simply do what the corrupt want you to do. If I follow the CEO's orders I may get promoted. That's not such a bad thing. Why doesn't everyone simply cooperate with those in charge. Then there would be less friction and less problems. Of course then I become simply a sycophant of those in power and therefore an instrument of maintaining their power. Perhaps North Korea was full of people who thought they would just appease their leader and prosper under his rule.

So where does that leave me? Am I simply an instrument of those who oppress us? Or maybe those who seek to overthrow their oppressors are merely "hulligans" who self fulfill their own dellusions of persecution? But maybe this is blaming the victim?

Why fight the system? You say because the system is injust and hurts certain individuals. So I say,why do you want me to go rush the machine guns so that I can save you or someone else from persectution? You say because maybe someday I may be the one facing persecution. So I say if I go and fight for you that will only guarantee that I become one who faces persecution also. So what has been gained. If I go along with those in power I prosper until something happens and those in power decide they no longer like me, or perhaps you get into power and decide that you don't like me because I didn't fight for you. Then I become a victim because I didn't help the other victims. But if I help the other victims I am almost equally guaranteed to become a victim myself, unless we win and seize power for ourselves.

If I back those in power I may or may not find myself on the wrong end of a firing squad. If I fight against those in power I equally may or may not find myself on the wrong end of a rifle squad. Either way it is a gamble. Either way, there are tyrants and there are those who might overthrow them to become tyrants themselves. Or perhaps there can also be utopias consisting of benevolent, leaderless societies. This one might call "anarchy". Since it seems that power is a root of evil, then doesn't anarchy make sense? What could possibly be wrong with a leaderless society? Well, maybe the thing wrong with a leaderless society is that they are unsustainable against a soceity with a leader. The Eurpoeans largely destroyed North American Indian cultures. The Spanish "Nationalists" largely destroyed the "anarchists". Or maybe the anarchists weren't really destroyed. Maybe they simply continued to live out an anarchist life under the very noses of the tyrants. Where is the tyranny? If the police aren't actively rounding us up then maybe we are living a satisfactory life as anarchists. Perhaps as a "self styled" anarchist I am king of my own little world around me.

You? You on the other hand can continue to fight against the "oppressors" of others, like Don Quixote attacking ferocious dragons. In the end you will eventually die and in the end I will eventually die. That is all that is final and absolute...oblivion.

Thanks for reading.
 
Sorry, you lost me at the first mention of the word "economics." My brain is geared toward visiting my dad for Christmas and making sure I get there and home in one piece because the city doesn't believe in sanding most streets.
 
sanding, not salting? :confused:

on the topic of the article... decent enough, though I confess my eyes glazed over once or twice. As outlined in the article, I'd prefer more of a hands-off approach, at least for America :shake:

I prefer a socialist style government on the whole though. To clarify, I don't trust American politics/politicians of being capable of running a good socialist government, at least not for many decades.
 
Sanding was deemed environmentally safer, since the snowmelt ends up in our creeks and river in the spring.

cardgame said:
To clarify, I don't trust American politics/politicians of being capable of running a good socialist government, at least not for many decades.
Their government skills need improvement, no matter what kind of system they try.
 
Right, good catch. I should review my posts more thoroughly before publicizing them :p
 
To be honest, I'd describe it as "hands on", which is better termed "interventionist" I believe, if the government actually enhanced the creation of the housing bubble through law-making.
Which leads to the opinion that one intervention ends up requiring another in time, if the first intervention was applied too extremely. But then hindsight is 20/20.

A more meaningful criticism would examine the actions individually in the context they were made. Why did the government want to improve the rate of housing creation? (reason: IIRC it was to improve minority share ownership of the houses). What was the economy and politics like back then? Etc...etc.. Without context and history, the criticism is superficial.

I like how you describe a series of interventions leading to a planned economy, which in turn change the way the economy operates. It loses a sense of free market (i.e. some people buying multiple houses because they can gives way partially to some people getting a house "free" in part).

I also like how you suggest that a planned economy might provided disincentive to work. You ignore the issue of what value is the money in the money in the economy which is a contrary viewpoint. Some might argue that intervention in housing is needed because the backbone labor of the economy isn't housed, while the people who earn money based on financial transaction alone can afford multiple houses. How stable is that for an economy? it might have strength in a global economy, but those are vulnerable to political realities.

I don't quite like how you leap from a couple of government interventions to a state of tyranny. If that were the case, then government services (interventions themselves) are leading to tyranny.

I think your essay is the start of something interesting, but needs more depth and research put into it. Currently it looks like a blogger's (well-written) rant to me.
 
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