Thursday, June 6, 2013

The Three Invisible Qualities of Interventionism

In the second section of "Planned Chaos", Ludwig von Mises described interventionism as dictatorial, anti-democratic and socialistic. If these descriptions are true, why is it that interventionist policies keep on growing? One reason perhaps is that people are not aware about the real nature of interventionism.

I think even if just one of these charges is true, it is enough to discourage the people to support interventionism. The reason why it keeps succeeding is because people are confused about its existence and unaware about its real nature. Its message is subtle and utilizes popular ideas to achieve its own end. 

Interventionism claims to oppose what people oppose - tyranny, monopoly and socialism. It also shows concern for the things that people are concerned about - the welfare of the poor, social justice and fairer distribution of income. And above all, it claims to preserve capitalism and democracy. Mises states:
"Many advocates of interventionism are bewildered when one tells them that in recommending interventionism they themselves are fostering anti-democratic and dictatorial tendencies and the establishment of totalitarian socialism. They protest that they are sincere believers and opposed to tyranny and socialism. What they aim at is only the improvement of the conditions of the poor. They say that they are driven by considerations of social justice, and favor a fairer distribution of income precisely because they are intent upon preserving capitalism and its political corollary or superstructure, viz., democratic government."

The above paragraph explains why the public find it difficult to decipher the real color of interventionism. People are hearing messages they want to hear, but seeing things they do not want to see. The dictatorial end is the logical conclusion of a series of interventionists policies aimed to satisfy people's immediate concerns. This is a typical example of simply looking at the short-term consequence of a specific policy without considering its long-term impact.  

In the following paragraphs, I just want to cite Ludwig von Mises' other statements proving the socialistic, undemocratic and dictatorial qualities of interventionism.

Mises spoke about interventionism's failure to fulfill its promises and its unnoticeable and gradual step towards dictatorship:
"What these people fail to realize is that the various measures they suggest are not capable of bringing about the beneficial results aimed at. On the contrary they produce a state of affairs which from the point of view of their advocates is worse than the previous state which they were designed to alter. If the government, faced with this failure of its first intervention, is not prepared to undo its interference with the market and to return to a free economy, it must add to its first measure more and more regulations and restrictions. Proceeding step by step on this way it finally reaches a point in which all economic freedom of individuals has disappeared."
Mises emphasized once again the difference between two forms of socialism. Knowing this difference is important in identifying the character of interventionism:
"But when this state of all-round control of business is achieved, the market economy has been replaced by a system of planned economy, by socialism. Of course, this is not the socialism of immediate state management of every plant by the government as in Russia, but the socialism of the German or Nazi pattern."

Again, we read Mises described the enforcement of the will of the police state upon its people.
"What the interventionist aims at is the substitution of police pressure for the choice of the consumers. All this talk: the state should do this or that, ultimately means: the police should force consumers to behave otherwise than they would behave spontaneously. In such proposals as: let us raise farm prices, let us raise wage rates, let us lower profits, let us curtail the salaries of executives,the us ultimately refers to the police. Yet the authors of these projects protest that they are planning for freedom and industrial democracy."
This dictatorial character of interventionism is best illustrated by replacing the plan of individual consumers with a centralized plan. Read how Mises described such replacement: 
"Whatever people do in the market economy, is the execution of their own plans. In this sense every human action means planning. What those calling themselves planners advocate is not the substitution of planned action for letting things go. It is the substitution of the planner's own plan for the plans of his fellow-men. The planner is a potential dictator who wants to deprive all other people of the power to plan and act according to their own plans. he aims at one thing only: the exclusive absolute preeminence of his own plan."
In closing the section, Mises issued a call for everyone to take a definite stand between capitalism and socialism. Interventionism is not the compromise between these two. It is the other face of socialism.
Believing in economic neutrality will not help simply because it does not exist. Let us listen to Mises' solemn warning:
"In this conflict of opinions everybody must make up his mind and take a definite stand. Everybody must side either with the advocates of economic freedom or with those of totalitarian socialism. One cannot evade this dilemma by adopting an allegedly middle-of-the-road position, namely interventionism. For interventionism is neither a middle way nor a compromise between capitalism and socialism. It is a third system. It is a system the absurdity and futility of which is agreed upon not only by all economists but even by the Marxians."
To respond to this call, the role of the intellectuals is critical. Only them have the capability to educate the public about the real identity and nature of interventionism.