Monday, September 13, 2010

Mismanaging the Economy

Jacob Hornberger writes:

What’s the real solution to America’s economic woes?

It lies in asking ourselves a fundamental question: Should the role of government in a free society be to manage an economy?

The answer is: No, absolutely not. The government has no more business managing an economy than it does managing people’s religious activities.

After all, what is an economy? It’s really just people sustaining and improving their lives and interacting with others in economic matters. It’s an intricate and complex process that involves countless people producing goods and services and exchanging them with others.

So, when the president purports to manage the economy, what he’s really doing is attempting to manage, control, direct, or influence the economic decisions of hundreds of millions of people, each of whom is trying to plan and direct his own affairs. In other words, one man — or group of people in the federal government — purports to plan, in a top-down, command-and-control manner, the economic decisions of countless people, a phenomenon that the Nobel Prize winning libertarian economist Friedrich Hayek called a “fatal conceit.“ It cannot be done, and in fact all that it produces is crisis and chaos.

The problem Americans face is not that President Obama is mismanaging the economy. The problem is a systemic one, one that delegates to the president the authority to manage the economy.

The solution to America’s economic woes lies not in getting better people in public office who can better manage the economy. The solution lies in prohibiting government officials from managing the economy. Managing the economy is not a legitimate function of government in a free society, and in fact is the root cause of a nation’s economic woes.

The French have a term for this: “Laissez faire, laissez passer.“ Let it be, let it pass. Leave people free to manage their own economic affairs. Separate economy and the state in the same way that our American ancestors separated church and state.


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