Monday, April 7, 2014

Another Evidence of Statist Subtlety?

"The economics of success is clear: higher spending on urbanization, health care, and education, funded by increases in taxes, could simultaneously sustain growth, improve the environment, and reduce inequality. If China’s politics can manage the implementation of this agenda, China and the entire world will be better off." - Joseph E. Stiglitz, "Reforming state-market balance in China"

"Reform" is a popular word subtly used by advocates of statist economic policies. They call such policies as "a better strategy" and "the economics of success." They diagnose that "too much market and too little government" is the source of the problem. The antidote therefore is to expand the size of government bureaucracy funded by greater amount of taxes.

This statement is correct understood in its proper context: "The government is clearly doing some things that it should not, it is also not doing some things that it should." To put it in a different context advocating for greater government intervention is not only a distortion of the real state of the economy, but in the end will result into further economic destruction. Allocating more resources to health care and education, and calling for government to take a "leading role" in these sectors of the economy are typical examples. And yet, they still call it "market economy."

Last December 6, 2013, The Freeman published an article, "Abundance Down There, and Back Up." In it, The Freeman claims that there is an ongoing revolution that is quiet and invisible to many. This revolution is happening in the midst of "The Great Stagnation" as described by intellectuals and economists, and has something to do with "automation of everything" and "nanomanufacturing." As a result of this revolution, industries will certainly benefit, but "the political class" is the primary obstacle for the realization of this vision particularly in sectors of economy such as "healthcare, education, and energy." The favorite strategy of this class is increasing economic regulations. No wonder, products and services in these three sectors of economy "are getting worse, slower, and more expensive." 

The progressives do not trust the market; they actually hate it, but they avoid to clearly express their hostility in public. And so they change their language to make their statist ideas palatable to the people. The most successful among them is given a Nobel laureate in "economics."