Of these effects, the first only is immediate; it manifests itself simultaneously with its cause — it is seen. The others unfold in succession — they are not seen….”

Economics is mostly about “that which is not seen.” In contrast, politics deals with “that which is seen,” and so, all around the world, when it comes to economic issues, many politicians are in favor of the “obvious”:

  • Wages are low? Increase them.
  • Prices and rents are high? Control them.
  • Money should stay here so it can “circulate.”
  • Exports good, imports bad.
  • Trade deficits are bad.
  • Raise taxes to collect more revenue.
  • Natural disasters are good for the economy.
  • People first before profit.
  • “You didn’t build that!”
  • “You don't necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country.”
  • Sincere, well-meaning, highly educated leaders with integrity and political will, a la Plato’s philosopher-king, can solve our economic problems through planning and legislation in close consultation with experts and scientists.

oOo

In “The Myth of the Entrepreneurial State,” American economics professor Deirdre McCloskey (born Donald McCloskey) and co-author Alberto Mingardi, an Italian associate professor of the history of political thought, set out to do what has been done since the 18th century and even earlier: to refute popular but mistaken economic ideas, foremost of which is the undying belief — despite all the contrary historical data available to us — that Government will always do a better job in managing and solving most if not almost all of society’s problems, including and especially those involving economics.

However, as another economist, Donald J. Boudreaux, has noted, it is wrong to assume that “the economy is no more complex than are the words, graphs, and columns of data that are commonly used to describe it.”  He said it’s the “equivalent of assuming that anyone can play quarterback in American football at an elite level merely by observing with the naked eye the play of New Orleans Saints’ star quarterback Drew Brees.”

What human history has so clearly taught us is that Government, however enlightened and well-meaning, is as human as the humans who are running it. And humans, as James Madison once said, are not angels. By threatening to use force, Government can compel us, the people, to do what it says we must do — but Government cannot command the economy to grow. The economy is not a “simple machine with simple output, in which the levers are easily manipulated to achieve collective goals,” McCloskey says. Instead, it is the daily undertakings of hundreds of millions of people who are trying to create value for themselves and those they deal with. In the CNMI’s case, you cannot talk about the local economy without acknowledging that it is intertwined with the economies of so many other jurisdictions and countries. (Whenever I hear folks say that the CNMI “should be more self-reliant” and that “we should live off the land and sea” — I truly wonder if they are aware that the most likely consequences of such measures are hardship, deprivation and the exodus of people.)

“The man of system,” wrote Adam Smith in 1759, “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that…every single piece has a principle of motion of its own.”

According to McCloskey and Mingardi, the statists — the believers in Government — envision governments that are kindly and competent. However, “ ‘kindly’ would not be the first adjective that would come to the mind of anyone who has dealt with, say, the U.S immigration bureaucracy. But ‘competent?’ At what? … Ronald Reagan…once commented that: ‘The best minds are not in government. If any were, business would steal them away.”

No. For a nation of non-angels, McCloskey and Mingardi said, we need restrained government, and “not more schemes…for pushing people around.”

Send feedback to editor@mvariety.com

comments powered by Disqus