Wednesday, June 19, 2013

The Best Economic Policy

Margit von Mises compiled her husband's lectures in Argentina in 1959. The outcome is the book "Economic Policy: Thoughts for Today and Tomorrow". Regnery/Gateway, Inc., Chicago first published this book in 1979. 

The Six Lectures

After reading the book, I personally believe that Mises' lectures remain relevant for today's audience. Economic policy is sub-divided under six lectures. These are:

  • Capitalism

  • Socialism

  • Interventionism

  • Inflation

  • Foreign Investment, and

  • Policies and Ideas

Understanding the above topics, you will grasp what Mises meant by the best economic policy. In the Introduction, Bettina Bien Greaves gave the overview of such policy in contrast to interventionist policies. 

Interventionism

Interventionism is the most influential economic policy in our time. Bien Greaves describes the characteristics of an interventionist government as doing the following tasks:

  • Regulating production

  • Controlling prices of goods and services

  • Fixing salaries of workers

  • Interfering in business

  • Intervening in imports and exports, and

  • Providing welfare

The mentioned tasks above are indications that existing governments are going beyond their proper role. Bien Greaves claims that the proper role of the government should be confined in making it sure that the market environment is conducive to its free operation. The role of the government is limited in protecting the lives and properties of its citizens both from domestic and foreign aggression. If the government does exactly this, the people are genuinely empowered to take care of themselves. For Bien Greaves, this is the best economic policy. 

However, the limited role of the government is unpopular today. Statist, socialist, welfarist and interventionist dominate the political and economic landscape. They join their voices in unison making the idea of greater government power more popular. 

Personal Thoughts

Reading Bien Greaves' description of our era as interventionist, reminds me of not a few theologians who are passionate to keep their theological reflection atune with the times. Unfortunately, I suspect that just like me two years ago, most theologians I encounter both offline and online have zero idea about interventionism, which I consider the most important context in our age. Sooner or later we cannot afford to deny the existence of interventionism, for unless it is stopped, we will experience its force as it gradually erodes the freedom that we think we have. 

My intention in rewriting what I perceive to be the most relevant parts of the book is first of all to acquaint myself with Mises' basic thoughts (Other two books of Mises that I find helpful to achieve this goal are "Bureaucracy" and "Anti-Capitalist Mentality"). This will serve as my personal preparation in reading his larger books.