Government as the Agent of Prosperity

by: thomas e. brewton | published: 03 30, 2009

A reader asserts that, in the chicken-or-egg-first debate, prosperity is not possible without organization of the economy by government.

David Airth, a reader who frequently posts thought-provoking ripostes to articles appearing on this website, commented in response to AIG Employees' Side of the Story.

He wrote, in part:

 

It has always been government that first establishes the favorable circumstances and the common sense in which a healthy economy can and will flourish.

The validity of Mr. Airth's assertion depends upon how one defines a healthy economy. If by healthy economy is meant one in which production of useful goods is maximized and individual standards of living rise significantly from generation to generation, then I do not believe one can find any such economy prior to the 17th century. Certainly not always has Mr. Airth's assertion been valid.

Mr. Airth also comments:

 

Today's politicians don't want the job of creating a health economy. They just want to reestablish the environment in which ordinary people will themselves recreate a healthy economy...

Were that true, we would not have President Obama's stimulus plan and his budget, both necessitating a vast growth of government and far- reaching extension of collectivized bureaucratic regulation, funded by the greatest proposed increase of inflationary government deficit financing in world history.

Mr. Airth's further comment suggests that "favorable circumstances and common sense in which a healthy economy can and will flourish" are the collectivized, bureaucratic rule that is socialism:

 

I am thinking of Reaganomics, which virtually laid the groundwork for today's economic crisis, with it supply-side economics. It started the ball rolling towards the excesses that have now hobbled the economy.

The universal political condition prior to the 17th century in England and Holland, was one that gave rise to the view that history revolved in a perpetual cycle, always returning to earlier conditions. While the Catholic Church succeeded in getting temporal rulers in Western Europe to eliminate the slavery that prevailed during the Roman Empire, slavery was replaced by feudalism. Feudalism guaranteed that the mass of subjects, the serfs, would remain perpetually bound to their feudally-granted land parcels, generally groaning under the weight of taxes, in the form of produce and labor, at the whim of the local sovereign.

Mr. Airth's implicit view of government's socialistic role is nearly indistinguishable from the conditions of medieval serfdom. That's why Friedrich Hayek named his well-known and on-target predictions about British socialism The Road to Serfdom.

Collectivistic government of the sort that Democrat/Socialists favor in the United States has always been at the core of socialist doctrine, from its beginning in mid-18th century France: the theory that only intellectual councils have the mental capacity and knowledge to structure an economy that will produce their conception of social justice. Social justice is defined as equal distribution of income and wealth, evidenced in free access by every citizens to the fruits of the economy's labor, without regard to whether those individuals have contributed anything to the production of those fruits.

Prior to the French Revolution of 1789, with two notable exceptions, the prevailing political and economic doctrine was that the ruler's word was law. The boldest statement thereof was in Thomas Hobbes's Leviathan, ca. 1651, in rebuttal to the English Civil War and the English Puritans' execution of Charles I. In that doctrine, as expressed by Hobbes, without the iron fist of the ruler, society would be chaotic, with life nasty, brutish, and short.

Socialistic doctrine substitutes socialist intellectual councils for the iron-fisted sovereign, which opens the door to seizure of power by the supreme political counsellor. Hence the inescapable tendency of socialism is to some degree of tyranny, the extreme examples being the Soviet Union, Hitler's National Socialism, and Mao's Red China.

Anyone who does not recognize that President Obama's budget proposals entail great losses of individual economic and political freedom is blind or self-deluded.

The two notable exceptions to the collectivistic, authoritarian government were Holland, after its 1648 independence from Spanish and Hapsburg rule, and England after the 1689 Glorious Revolution that ousted tyrannical James II and established the principle that even the sovereign is subject to the natural law individual liberties ordained by God.

Thereafter, both nations were increasingly open to individual economic initiative, with a very light hand of government. In England, that took the form of laissez-faire, free-trade economic policies, which are anathema to our own Democrat/Socialists.

First Holland, then England flourished and attained the highest level of economic well-being for individuals ever experienced in history, as individuals' private property rights increasingly curtailed the sovereign's arbitrary power.

Only such conditions qualify as "the favorable circumstances and the common sense in which a healthy economy can and will flourish."

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