Friday, October 17, 2008

The "anarchy" of Government

The word anarchy conjures up certain images in the minds of most people. Images of riots, violence, and madness. The implication, which is learned early on in government schools, is that without the stabilizing presence of the state, people would immediately revert to their basest instincts. Despite the fact that this is historically unproven, and that some of the expected loss of civilized behavior would be based entirely on the previous reliance on the state, most people immediately assume this is what you mean when you say anarchy. In fact, in practice, this is what they mean when they say anarchy.

So then when referring to the recent FBI investigation into voter registration they would use the word anarchy. When referring to the repeated jailing of innocent people they would use the word anarchy. And when referring to the chaos in the stock markets and prices they'd probably use the word anarchy. But the reality is quite different.

Voter registration chaos is a predictable result of a system based on the tyranny of the majority. When only the majority gets a voice, those in the minority will predictably attempt to inflate their numbers, it's their only option. Remember, in our current system, there is no minority voice. Even where so called “minority” candidates are elected, they are the majority locally. Only the majority in any election gets a role in the decision making process.

Humans make mistakes. Whenever you have a system where a small number of people are theoretically tasked with the protection of a much greater number of people you will have errors. Compound that with the enormous number of non violent financial disputes that officers of the law are required to enforce and the possibility for error increases based solely on their case load. Combine that with the very real possibility of corruption and it should come as no surprise that there is chaos in our legal system.

Where you should have some predictability and stability is in the markets. Prices should naturally go up and down in accordance with supply and demand. The value of individual companies should be related to the value they offer to the consumer. Unfortunately, when the government interferes that predictability is lost. The reason the stock market and commodities prices are wildly fluctuating isn't because people can't determine the value of beans or corn or computers. It's because they can't predict the effect of government interference. The government has said that they will “inject liquidity” into the market place, but so far, they've been vague on where, how much, and specifically to whom. How can investors make even reasonably accurate predictions about the future value of companies when they don't know which companies will be allowed to fail, and which will be buoyed up by the state? Once again, we have chaos.

But chaos is not anarchy. Anarchy is at its heart the absence of the state. Chaos is not a natural or necessary result of that. In fact, it is the state which creates much of this chaos. They use this chaos, and the feelings of insecurity it creates, as a tool to encourage people to rely more and more on them. It is the state which makes the future unknowable.

And it would not be unknowable without state intervention. When there is excess inventory, there will be decreased production. When there is a state system which requires production to subsidize non production, there will be failure and suffering. One of the richest men in the world, Warren Buffett, is right in saying that this happens in free markets, and it's not a disaster, it's an opportunity. This is not mad science, this is not insanity. The absence of government would not make a system less predictable, but rather more, because there would be fewer artificial influences on that system. When constrained only by natural laws, systems are efficient and highly predictable.

People need to eat, so there would be a market for food. People need shelter, so there would be a market for houses. People need clothing, so there would be a market for clothes. People would get sick, so there would be a market for health care. With or without government, these things are still true. The difference is that government interferes and attempts to act as an agent of social change. Historically however, they have rarely if ever truly single handedly been the agent of that change, and attempting to do so, they often replace one evil with a far greater one.

It is not the work of good to do evil in its pursuit.

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