The reason governments fail in economic terms is that economic calculation is never part of their brief, and nor can it be. By economic calculation, we mean taking positive actions aimed at a profitable outcome. To survive and prosper, businesses and individuals must do this all the time — the only exception being when they can rely on the state to underwrite their failures, which is why established businesses encourage statist regulation to place hurdles in the way of upstart competitors. And why at an individual level there is a ready demand for state welfare.
But political objectives cannot involve profit and therefore economic calculation. Instead of economic calculation, a responsible state can only manage its tax revenues efficiently to minimise its impact on the producers in the economy and to achieve affordable social outcomes in the context of a realistic consensus. The problem is deciding where the line is drawn between what is reasonable and what is not. It is also the line that determines who in the distant future will go down in history as a statesman or as a political flaneur.
Political objectives in the narrowest sense were the focus in America until the days of President Hoover, who broadened the political mandate into interventionism, followed by the modern-day hero for socialist economists, Franklin D Roosevelt. Nearly a century of increasing socialistic intervention since Hoover has led us into a socio-political system whose dubious achievements are not much more than monetary debasement and the repeated failure of statist ambitions.
It’s not just America; it’s all advanced nations. Regular readers of Goldmoney articles will be aware of the inflationary consequences of promoting neo-Keynesian interventionism and to where it all leads. But over the last thirty years and more we have seen the same state-sponsoring of self-serving scientists in fields other than just economics. Especially relevant today is climate change, because this highly politicised topic is now determining the course of capital investment in the commercial sector instead of profitable objectives.
Scientists, with no experience of climatology have been jumping on the global warming bandwagon for decades, milking state funds allocated for research aimed at proving that homo stultus is responsible for global warming. And when that didn’t arrive on frequently predicted schedules, global warming was renamed climate change...
- Source, Goldmoney, read the full article here
