As you progress deeper in thought about free markets and the state and the moral consequences of both, you begin to see some of the intricacies of how they work. Prior to this, you were able to see in more and more ways that the state cannot function efficiently, honestly, and productively, but now you can see why there are problems with the state.
The beauty of the free market is that you can apply its principles to essentially any type of decision-making situation. If left free from coercive forces, a person is able to analyze and choose from any and all available and appropriate methods to solve a problem. This problem could be something as simple as deciding what to eat for dinner or as complex as a local business polluting your property. The freedom to be able to solve your own problems does not however guarantee that you’ll find a suitable solution. You’ll likely make choices that don’t fix what’s bothering you, but if everyone is free, you have the ability to observe others and learn from their mistakes and failures.
This leads us to one of the fundamental flaws of the state. The central planning necessary in a state eliminates the ability of individuals to have all of their options available to them to solve their own personal problems and the problems of the communities in which they live.
Let’s say that there is a community of five segments of property. I own one piece of land, you own another, and there are three other property owners. In our community, we discover that some sort of pest is digging holes in our lawn and ruining our yards. Since we’re all neighbors, we discuss the possible sources of the problem as well as ideas to fix the issue. We all agree that it is likely some sort of small animal causing the damage. I decide that I am going to build a fence around my property. You purchase a poison to kill the pests. The three other people, however, decide to purchase cats that will either kill or scare off the pests.
When I tell the others my plans to build the fence, they tell me that the fence might end up being a waste of time and money if the pest has the ability to climb or dig under the fence. They also tell you that buying poison could have negative effects on the plants on your property as well as the safety of your children. They tell us that since they have purchased cats, the problem seems to be going away. You then agree that the cat is the best way to go and buy one for your property. I, however, remain stubborn and continue with the fence.
It’s later discovered that the animal causing the problem is a squirrel, making my fence powerless in defending my property. The cats are working out very well. At this point, I can either learn from my mistake and your success or I can continue trudging hopelessly along with my decision. You originally made a potentially bad decision, but through observing and freely working with others, you ended up solving your problem. You made your own decision for your own life and property.
I also made my own decision about my property and I have to deal with the consequences. My poor decisions, though, do not have any effects on you. If my actions are really based on my own self-interest (this concept of self-interest is key), I’ll set aside whatever was preventing me from successfully fulfilling my desires and attempt different solutions.
Later, you find out that I am allergic to cats, which is the reason I didn’t want to go in that direction. I pursue other solutions and eventually solve my problem.
Let’s apply what happens when a government is involved. First, imagine that we get together and democratically decide to solve the problem. The five of us vote on a solution. The idea to purchase cats wins the vote. This is actually a suitable solution and it has prevented you from making the mistake of poisoning your children, so the democratic decision has worked for you. I, on the other hand, am still allergic to cats. Not only am I being forced to purchase a product that I do not want, I am also being harmed by the decision that was made for me.
The problem of the pest was “solved,” and it may be good for the four of you, but am I to be left in the dust? I now have to suffer every day with allergies because you made me purchase a cat “for my own good.” This case is an example of the utilitarian solution: my suffering is justified because everyone else benefits. That’s fine for you if you’re part of the group that is only benefiting, but what happens when you’re one of the persons whose time, money, and/or happiness is being taken away for the “good” of everyone else? It’s not so great, is it?
A second government situation is that I am slick enough to convince everyone else that building a fence is the way to go and I appoint myself the coordinator of the project. I collect money from everyone to build the fences and hire a business to construct them. The fence, of course, doesn’t work, but I assure you that it just needs some more time to work. You and the other neighbors start to complain, but I reply back that if you didn’t pressure me and block me from doing things the way I wanted to, I’d be able to do things the right way. Then I say I need more money to make the fence better and so I collect more to build the fence bigger and, according to me, better.
The fence ends up being a disaster. Eventually you learn that I own a supply company, and the business that I hired to build the fences was purchasing material from me. I don’t think I need to explain everything that is wrong with this picture.
This is essentially how a centrally planned system operates. Whether qualified to make decisions or not, the people in charge collectively try to solve issues for the community and for individuals. Since people act in their own self-interest, the planners are likely making their decisions so as to benefit themselves in some way. These benefits could take the form of kickbacks or the desire to control and the thirst for power. There can even be a genuine want to help people, but there is always a failure in understanding how to truly help them since good intentions do not always end with good results. Many of us are fooled into believing that government with elements of democracy is “of the people, by the people, for the people,” when in reality it is government of those in power, by those in power, and for those in power.
When the planners are questioned, a number of responses are given. They’ll claim that they’re the ones in charge, so they are therefore the ones qualified to make the decisions, not you. The irony here is that many functions of government today are ones that micromanage an individual’s life, and the micromanagers are bureaucrats who will never actually know you or your personal situation and are sitting in an unknown office building somewhere. How can someone whom you’ve never met know what’s best for you?
Another famous and one of the more annoying defenses of central planning is the “But who will build the roads?” response, or more formally, the logical fallacy of denying the antecedent. Since government is in charge of building the roads, if you eliminate the government from the picture, you eliminate roads. This argument is simply nonsense and is really one of the lazier statist arguments out there. Put another way, the argument is saying that if something’s never been done before, then it is an impossibility. If this were true, then inventions could never exist. Imagine telling the Wright brothers that humans couldn’t fly because it’s never been done before or scoffing at Thomas Edison’s idea to create the light bulb.
It’s always the case that a given government project or program needs more time, money, or resources. “Just give us more time,” they say. “Social Security is having issues because it’s not being properly funded.” We need to stop looking at the funding and timing of these programs. It’s time to look at the actual programs themselves and understand that they won’t work no matter what!
And in this vein, it’s always the fault of someone else that there the proper resources and attention aren’t being received. The Democrats will complain that the government takeover of the healthcare industry isn’t working because the Republicans were “blocking” legislation. And the Republicans will complain that the war somewhere overseas was botched because the Democrats didn’t let the Pentagon spend another trillion dollars.
This is what happens when there’s a lack of competition of putting ideas into action. When one and only one solution is allowed to be enacted, you can never tell how well it actually works because there’s nothing to compare it to. This helps to perpetuate the idea that the central planners have the right solutions, but there are things outside of their control that prevent them from accomplishing their goals.
Government can then never relinquish control of the things they take over. Once they allow the free market to work, people will be able to make their own choices for their own lives and will begin to see that it works better than the government. The realization by people that they don’t need the government is the beginning of the death sentence for the state. This is the reason why despite the United States being a planned economy, capitalism and free markets are always blamed for any problems that ever occur. How many times have we heard a politician say “We’ve tried the free markets and look where it brought us?” And despite adding more regulations to various industries, they’ll spin it to say that issues were caused by market deregulations. The housing bubble and the bursting of the housing bubble are a perfect example of this. The markets weren’t deregulated. The markets were rigged and doomed to failure by actions of the government.
If the state truly wanted the best solutions to be found, they wouldn’t monopolize for themselves the power to try different solutions.