After weeks of lockdown, several states have begun to outline plans for returning to business as usual. The economies in these states don’t need political schemes. They simply need to be released from government chains.
Governments don’t create economies. It’s not only beyond their legitimate functions, it’s beyond their abilities. They need to stay out of the way and let the wisdom of markets steer us back to normal. But some officials see an opening through which they can drive their big government dreams.
For instance elected officials in California, which is likely to be the last state to fully open though it hasn’t seen the most suffering from the COVID-19 outbreak, view the crisis as a means to push the state harder and faster down the Blue State path. When asked by a reporter earlier this month if he saw “the potential, as many others in the party do, for a new progressive era and opportunity for additional progressive steps,” Gov. Gavin Newsom said yes, of course “there is opportunity for reimagining a progressive era as it pertains to capitalism.”
“Absolutely we see this as an opportunity to reshape the way we do business and how we govern,” Newsom added.
A little more than two weeks later, Newsom announced the formation of his Task Force on Business and Jobs Recovery. Behind the official sounding name, and a few non-Democrat token members, hides a plan to use the pandemic as a means for advancing Blue State economic interventions that include: greater redistribution of wealth, higher taxes, bankrupting the oil and gas industry, an “unhinged” green energy program, minimum wage that breaks the backs of small businesses, and more of California’s hostility toward business in general.
Expect Newsom’s task force to draw the blueprint for other progressive states to follow.
The task forces, committees, and other councils across the country that will be charged with reopening economies “didn’t build that,” if we might borrow a particularly repugnant phrase. In fact, there is a certainty the most active of these will take what others built and wring the life out of it.
“Centrally planned economies have a 100-year history of stagnation, inefficiency, and shortages of basic consumer goods,” says the Independent Institute’s Benjamin Powell.
“It didn’t take a global health crisis to empty the shelves in Cuban or Venezuelan grocery stores. Mistakes made by central planners, who hold monopoly power over economic decisions, did that all on their own.”
Art Carden, researcher and Samford University economics professor, puts it another way:
“States are very good at identifying a well-defined problem and rendering a system legible to its functionaries,” he wrote last week. “This is not the same thing as identifying the right problem (or set of problems) and providing anything approximating the ‘right’ solutions. It is just finding something for powerful people to measure and control.”
Business owners and managers, not elected officials, not bureaucrats, not task forces, will know how to reopen their companies, and how best to protect their employees and customers. It’s in their self-interest to succeed.
They don’t need assistance and direction from a government that cannot possibly take in and then disseminate information necessary to set market pricing, manage supply chains, appropriately acquire and invest capital, and efficiently use employees. Nor are businesses aided by politics that eventually produce cronyism, oppressive regulation, and stifling laws.
Maybe the best way to illustrate how a government-led reopening is not advisable is the biting response to a Twitter user who said “I’m moving to an island and starting a new country. I’m taking Bernie Sanders and Jeremy Corbin with me! Who’s coming?”
The reply of the year:
The easily understandable point is that neither Sanders nor Corbyn nor any of those who believe in heavy-handed, top-down policies has any idea how to build an economy. They and their followers would starve on that island in a short time. Using the implied and sometimes applied force of government will never create or foster a thriving economy.
Two years ago, historian Sean Wilentz made clear the thinking of those who wear the label “progressive.”
“Deep down,” he wrote, progressives “harbor the hope that one day, perhaps through some catastrophic event, American capitalism will indeed be replaced by socialism – a system of public property and social ownership that, this liberal notes, has been discredited through all of modern history.”
For many, if not all, progressives, that “catastrophic event” is happening right now.
— Written by I&I Editorial Board