CHOOSE A BLOG
Should the Government intervene in the Economy?Posted on: July 12th 2019
By: Harley Dalton, Area Manager, Greater Manchester.
UK Liberty Party are morally opposed to government intervention in the economy as it is a misuse of the proper power of a legitimate government. However, is there an economic reason that also shows the necessity for government to stay out of the economy? Harley Dalton discusses...
As the saying goes,"anything that can go wrong, will go wrong" This pessimistic statement is known as Murphy's Law, and is also expressed as, "things will go wrong in any given situation, if you give them a chance."
We generally know that the scope of variables that can go wrong in any given situation is much broader than those that can go right, and that the severity of those wrongs can outweigh even the benefits of a best case scenario.
You'll probably be alright crossing a road with your eyes closed, but unless you get to drink from the Fountain of Youth on the other side, the payoff is unlikely to be as equally good as the bad outcome of getting flattened by a truck.
Likewise, I don’t know anyone who has ever been on such a great night out that it was worth them dying of alcohol poisoning.
Because things will go wrong in any given situation if you give them a chance, and because those things can be unexpected and potentially devastating, we adopt behaviours to mitigate risks and to avoid making irrational gambits or harmful trade-offs.
The more complicated and ambitious a plan becomes, the more factors in play, the more likely we are to have made a mistake, and therefore the more care we must take to make sure things don’t go wrong, and the more sensible it becomes to share the workload so as to diffuse the risk.
How, then, does this apply to Government intervention in the economy?
It's worth recalling something I wrote in my last blog post: "Economics considers not only the immediate effect of a decision upon one person or group, but the wider consequences upon all people and groups over time."
The economy is highly complex. You are one of over 5 billion adults working within one of over 200 million businesses, each of which provides an untold quantity of goods and services to an untold number of consumers. Every person acts as an individual unit within this network, each making economic decisions according to their own unchartable sequence of time-sensitive information and preferences, from the simple fact of how much money they have right down to their own natural psychological biases. Individual transactional decisions per day could number in their trillions.
Evidently, it is extraordinarily difficult to know how even simple actions might play out over time, nor how they might filter outwards from you to everyone else. Tracking, charting and planning fully against such an incomprehensible amount of data is usually reserved for Science Fiction like Iain Bank's Culture novels, and for obvious reasons – it would be quite simply impossible in real life.
This, ultimately, is the problem with economic intervention from the government. The complexity of the economy at scale is such that any and all decisions you make are going to inevitably affect something or someone in ways that you can't predict and haven't planned for; the more ambitious your plans, the more factors in play, the more potential for unintended, unseen sparks to trigger raging economic wildfires.
Fortunately, there is a solution. In a free market economy, each individual takes responsibility for their own decisions. They use only the information that is relevant to them, making it a lot easier to apply Murphy's Law to their decision making, to mitigate against risks and to reach more positively balanced outcomes. More importantly, one person acting on their own interests is less likely to cause widespread damage than someone acting within the interests (allegedly) of the nation.
Some people suggest that this is an untenable solution, though – running your own life is very hard, after all. Simple things can often go drastically wrong. You could end up with a Ferrari, but it’s a lot easier and far more likely that you'll become a weed-smoking wastrel instead. Such risk – also known as freedom – is uncivilised. Something must be done!
Maybe these pearl-clutching cowards have a point; even one death is tragedy, and it's tough not to sympathize with human suffering, even that which self-inflicted.
Then again, maybe significantly increasing the risk of accidentally starving millions of people to death, a la Maoist China, Soviet Russia, modern Venezuela and more by giving massive power to some self-appointed experts in government isn’t so great either.
To read more of Harley's thoughts visit his blog https://harleydalton.home.blog
The views expressed represent those of the author and do not necessarily represent the views of UK Liberty Party. UK Liberty Party sometimes publishes articles we may disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.