Thursday, June 24, 2004
Why this raving socialist distrusts government regulation of the economy
The year was 1991. Or thereabouts. I needed a line to open this entry, and "The year was 1991" sounds better than "The year began with 199, or maybe 198". Besides, if your humble pundit cared about factual accuracy he never would have listed that fictitious PhD work on his resume. Anyway, my brother and I had just, within the last month or so, completed a game of Risk (for the record: I won. I assume), which means that all of the pieces were scattered over my bedroom floor.
I will pause here, for reasons that will fast become apparent to those of you stupid enough to have not yet stopped reading, to explain that the version of Risk I have is the third version. The pieces are made of plastic (not of wood, as in version one), and they're not the little cubes of version two, but neither are they the little infantrymen, horsemen, or cavalry of version four. No, the armies in the version of Risk that I have are pointy little stars - essentially, colour-coded plastic caltrops.
Anyway, so there were dozens of these little caltrops scattered about my bedroom floor, when my brother - who will probably grow up to be either the next P.T. Barnum or the next Don King - saw the potential for some amusement.
"Stephen," he said (my immediate family all calls me "Stephen" rather than the more popular "Steve" and "S. Murray"), "I will offer you five dollars to jump off of your bed onto the Risk pieces."
Now, I may have been nine years old (or the thereabouts), but I wasn't stupid (I didn't become stupid until about 2001, at the same time as the rest of the world became smart). I knew that landing, with my bare feet, on the Risk pieces was going to hurt - hurt more than an affront to one's legislative talents, almost. I knew that, if I accepted the offer, there would be pain exchanged for the gain. But where I come from (Peace River, Alberta), we have a saying: "No pain, no gain." (For what it's worth, this saying isn't unique to Peace River. But I'm almost sure that I heard it there at least once.) Upon evaluation, I decided that the five dollars was worth whatever pain and suffering I would inflict. I jumped. It hurt.
In a true market economy, the government's only role is to enforce contracts (actually, it probably has a few more that I haven't thought of, but my sentiment on the matter is that if God had wanted us to be thorough, She would not have given us Mustafa). In a true market economy, freedom to contract is absolute - economic players can make whatever deals they deem to be in their interest. My house, as I was soon to discover, was a very pale imitation of a market economy.
I cannot remember exactly how my parents came to find out about the little bargain made between my brother and I, though I suspect my sister (who, for the benefit of any English majors reading this, is probably a metaphor for organized labour, or something). Anyway, one parent or the other comes storming into my room, and sets out the following regulation:
i. No person shall contract another to jump off a bed onto Risk pieces.
ii. Any contract purporting to obligate one party to jump off a bed onto Risk pieces shall be null and void, even if already fulfilled.
The aim of this regulation, of course, was to "protect" me from my own stupidity. The thing is, I wasn't being stupid - even today, if you offered me five bucks to jump onto a bunch of Risk pieces with my bare feet, I'd do it. I had taken advantage of my assumed freedom to contract to make a deal that I considered advantageous to me. But my parents (English majors: the state) stepped in to prevent me from benefitting from the deal. Worse yet, they did so retroactively.
Over the longer term, I was no better protected by this regulation than I was without it. The effect that it *did* have was to shake my confidence in the state's willingness to enforce (or, at the very least, not quash) my freedom to contract, which made me more reluctant to enter into contracts. Effectively, then, all this regulation did was suppress legitimate economic activity.
And that's why I think the government should stay the hell out of the economy.
Addendum: it occurs to me that, in a true market economy, it's entirely possible that the state wouldn't even enforce contracts, and trust would become currency. Far out.
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The year was 1991. Or thereabouts. I needed a line to open this entry, and "The year was 1991" sounds better than "The year began with 199, or maybe 198". Besides, if your humble pundit cared about factual accuracy he never would have listed that fictitious PhD work on his resume. Anyway, my brother and I had just, within the last month or so, completed a game of Risk (for the record: I won. I assume), which means that all of the pieces were scattered over my bedroom floor.
I will pause here, for reasons that will fast become apparent to those of you stupid enough to have not yet stopped reading, to explain that the version of Risk I have is the third version. The pieces are made of plastic (not of wood, as in version one), and they're not the little cubes of version two, but neither are they the little infantrymen, horsemen, or cavalry of version four. No, the armies in the version of Risk that I have are pointy little stars - essentially, colour-coded plastic caltrops.
Anyway, so there were dozens of these little caltrops scattered about my bedroom floor, when my brother - who will probably grow up to be either the next P.T. Barnum or the next Don King - saw the potential for some amusement.
"Stephen," he said (my immediate family all calls me "Stephen" rather than the more popular "Steve" and "S. Murray"), "I will offer you five dollars to jump off of your bed onto the Risk pieces."
Now, I may have been nine years old (or the thereabouts), but I wasn't stupid (I didn't become stupid until about 2001, at the same time as the rest of the world became smart). I knew that landing, with my bare feet, on the Risk pieces was going to hurt - hurt more than an affront to one's legislative talents, almost. I knew that, if I accepted the offer, there would be pain exchanged for the gain. But where I come from (Peace River, Alberta), we have a saying: "No pain, no gain." (For what it's worth, this saying isn't unique to Peace River. But I'm almost sure that I heard it there at least once.) Upon evaluation, I decided that the five dollars was worth whatever pain and suffering I would inflict. I jumped. It hurt.
In a true market economy, the government's only role is to enforce contracts (actually, it probably has a few more that I haven't thought of, but my sentiment on the matter is that if God had wanted us to be thorough, She would not have given us Mustafa). In a true market economy, freedom to contract is absolute - economic players can make whatever deals they deem to be in their interest. My house, as I was soon to discover, was a very pale imitation of a market economy.
I cannot remember exactly how my parents came to find out about the little bargain made between my brother and I, though I suspect my sister (who, for the benefit of any English majors reading this, is probably a metaphor for organized labour, or something). Anyway, one parent or the other comes storming into my room, and sets out the following regulation:
i. No person shall contract another to jump off a bed onto Risk pieces.
ii. Any contract purporting to obligate one party to jump off a bed onto Risk pieces shall be null and void, even if already fulfilled.
The aim of this regulation, of course, was to "protect" me from my own stupidity. The thing is, I wasn't being stupid - even today, if you offered me five bucks to jump onto a bunch of Risk pieces with my bare feet, I'd do it. I had taken advantage of my assumed freedom to contract to make a deal that I considered advantageous to me. But my parents (English majors: the state) stepped in to prevent me from benefitting from the deal. Worse yet, they did so retroactively.
Over the longer term, I was no better protected by this regulation than I was without it. The effect that it *did* have was to shake my confidence in the state's willingness to enforce (or, at the very least, not quash) my freedom to contract, which made me more reluctant to enter into contracts. Effectively, then, all this regulation did was suppress legitimate economic activity.
And that's why I think the government should stay the hell out of the economy.
Addendum: it occurs to me that, in a true market economy, it's entirely possible that the state wouldn't even enforce contracts, and trust would become currency. Far out.
