Saturday , October 19 2019
Home / Mises Institute USA / “The People” Probably Don’t Want that New Government Tax or Regulation You Think Is So Great

“The People” Probably Don’t Want that New Government Tax or Regulation You Think Is So Great

Summary:
Anti-market pundits and politicians have long claimed that unregulated markets are damaging to communities, and therefore must be regulated, restrained, and made to fit our policy preferences. “Market capitalism is a tool, like a staple gun or a toaster,” conservative talk show host Tucker Carlson declared last January. The implication being that markets can be ...

Topics:
Ryan McMaken considers the following as important:

This could be interesting, too:

Don Boudreaux writes Pittsburgh Tribune-Review: “Talk about the trade deficit”

Tyler Durden writes Medicare-For-All Is A Plot To Pillage You

Tyler Durden writes ‘WhatsApp Revolution’ Protests In Lebanon Turn Violent With Fires, Road Blocks; Multiple Dead & Wounded

Tyler Durden writes The Late Great State Of California

Anti-market pundits and politicians have long claimed that unregulated markets are damaging to communities, and therefore must be regulated, restrained, and made to fit our policy preferences.

“Market capitalism is a tool, like a staple gun or a toaster,” conservative talk show host Tucker Carlson declared last January. The implication being that markets can be directed by government to do what Carlson wants them to do.

Pat Buchanan has expressed similar sentiments, asserting in 1998 that the "economy exists for the people. ... it is the market that must be harnessed to work for man – and not the other way around."

And in describing a new and much-applauded book by New York Times editor Binyamin Appelbaum, Vox columnist Jared Bernstein champions Appelbaum's position that “Communities can decide what they want from markets.”

In all three cases, these pundits are addressing a problem in which they see policymakers as far too laissez-faire when it comes to markets. Buchanan and Carlson even allege that scholars and policymakers "worship" markets. Appelbaum, for his part, contends that Americans have, for far too long, been in the thrall of the economists who allegedly insist that markets must be left alone and left unregulated.

The solution, we are told, lies in abandoning the idea that consumers and producers ought to be allowed to buy and sell what they want, when they want. That is, "we" must take charge of markets and instead use government coercion to force market participants to do "the right thing."

Who Decides?

But who is this "we," we keep hearing about? Who exactly is "the community" or "the people"?

In practice, of course, when a pundit says "communities can decide," what he really means is politicians shall decide in accordance with one or more pressure groups and which portion of a population shall be favored at the expense of another portion.

When Pat Buchanan says the economy must be regulated to benefit "the people," what he really means is certain people he likes — at the expense of other people.

For example, when protectionist conservatives insist that Americans want more government taxes on imported goods (i.e., tariffs), what they really mean is that politicians ought to implement a policy that will benefit some Americans.

In the case of steel tariffs, for example, there's no denying many firms that make steel benefit from a tax on foreign steel. This will also benefit certain employees who may then receive higher salaries as a result of working for the firms that benefit from government favors.

At the same time, however, firms that use steel products will have to pay more for steel. Auto manufacturers, for instance, or small businesses that rely on steel products in producing their own products and services. As a result, businesses other than steel-producing firms will see their already razor-thin profit margins evaporate. They will go out of business. Small business owners will lose their livelihood and their investments in their businesses. Their employees will be laid off.

Moreover, support for laws that protect certain industries are likely to vary with geography. States and regions that have traditionally relied on the steel industry may be heavily invested in supporting laws that favor the steel industry. Other regions, though, may only experience the downside.

A similar situation arises from immigration restrictions. The economic argument is largely the same as with tariffs. But even if we ignore that argument, we can still see a fundamental conflict between different factions of the population. Some portions of the population are untroubled by the presence of immigrants for cultural reasons. Other portions find it disruptive for their own cultural reasons.

Attitudes toward immigrants vary wildly from place to place. In some states, a large majority of the population is indifferent. In some states, the population is overwhelmingly against.

Obviously, then, when a politician or pundit claims he's just doing what "the people" want, he's only describing a certain number of people in a certain region. Many people in other regions may feel very differently.

Another issue is mandatory "public accommodation" that overrides the religious views of private business owners. Perhaps the most famous example of this in recent years is the Masterpiece Cake Shop case in which federal appeals courts determined it was unlawful for the Christian baker to refuse to produce a cake for a gay wedding based on his religious views. Indeed, "civil rights" workers in this particular case openly declared that attempts to invoke religious views at all are "despicable" acts.

Advocates for these sorts of anti-discrimination laws insist that "we" have decided that business owners must not be allowed to use their property in ways that comport to their value systems. This is to be done in the name of equality.

But who exactly has decided this? Certainly, many people have contempt for the views — and for the freedom — of Christians like the cake shop's owner. These people likely support laws that prohibit the exercise of religious freedom in this way. For many others, however, forcing a property owner to perform services against his will involves an unacceptable attack on personal freedom.

Moreover, as with tariffs and immigration restrictions, support for laws restricting the exercise of religion are likely to vary by region and demographics.

The Bigger the Community, the Less "the People" Agree

For the sake of argument, however, let's say that widespread approval for a policy — but not necessarily universal consensus — is sufficient to justify a new government tax or regulation.

For policies like immigration control and tariffs, one is unlikely to encounter a widespread consensus across a jurisdiction as large as the United States. Culture, politics, and economic realities differ greatly across geographical areas and demographic groups.

Thus, the idea that "the community" can agree on what policies benefit "the people" becomes less convincing to the point of total implausibility once a community becomes sufficiently large. There is no doubt that some communities of Americans believe that protectionism benefits them. But even if a majority of Americans believed protectionism is good (which does not appear to be the case) is there a nationwide consensus as to what form that protectionism should take? What goods and services should be taxed? And to what extent? The idea that a "community" composed of 320 million people can agree on such things is absurd.

Theoretically, this problem could be mitigated through decentralization. That is, it would be easier to claim a working consensus if trade policy, immigration policy, and public accommodation policy were decided at a more local level. The regions with a lopsided majority that wants more immigration control could adopt their own policies. Those areas that want less control could have their own policies as well.

But, of course, we rarely hear calls for decentralization from those who want more active government control of the marketplace. From conservatives like Buchanan, to leftists like Appelbaum, the cry is always for more national policy.  We are told these issues are decisions "we" must make as a nation. From the right, this anti-localist approach is justified with platitudes about patriotism, the constitution, and national unity. From the left, we're told that we can't let the rubes in flyover country decide for themselves because they'll decide "wrongly." But whatever the justification, the centralist approach ensures that declarations about what "the community" or "the people" want is generally nonsense and wishful thinking.

At this point, of course, some readers may insist "but McMaken, you're just pushing your own preferred policies! You want to force your free-market dogmatism on the rest of us!"

There is, of course, a key difference here. The laissez-faire position doesn't attempt to foist a new tax or a new regulation on anyone. It seeks only to remove the government policies that forcibly transfer wealth and economic advantage from one group to another. It is a policy of leaving people to decide for themselves. After all, in the absence of coercive state policies, consumers are still free to refuse to buy foreign goods. They're free to refuse to employ foreigners. They're free to boycott and drive out of business entrepreneurs who don't want to "bake the cake."

On the other hand, using government policy as a "tool" to obtain what "the people" supposedly want from markets requires government force. This is force necessary to implement and enforce government policy based on taxing and regulating all members of a society — including those who just want to be left alone.

By portraying such policies as merely the benign wish of an invisible will of the community, advocates for such policies indulge in a very fanciful idea of the state.

Ryan McMaken
Ryan W. McMaken is the editor of Mises Daily and The Austrian. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014.

Leave a Reply

Your email address will not be published. Required fields are marked *