Economic illiteracy ranks with constitutional illiteracy
All politicians are economic dunces who pretend the wisdom to turn straw into gold
Politicians are economic dunces.
They are powerless to improve on the laws of supply and demand and open competition. Adam Smith observed centuries ago based on all of human experience, “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
Smith underscored the folly of political interference with free markets in Wealth of Nations: “The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”
But the human susceptibility to delusion in hopes of discovering a free lunch is limitless. Think of the success of the Duke and the Dauphin fraudsters in Huckleberry Finn.
The intellectual universe of politicians is confined to strategies to acquire and maintain power. Nothing else commands a shelf life beyond a nanosecond. Politicians instinctively know the road to success is to distort free markets to favor a select few with the resources and incentive to fund their campaigns at the expense of the many whose individual economic loss is too small to justify entering the political thicket.
The market for sugar is emblematic. Import quotas that shield domestic suppliers from competition elevates the consumer price from 10 cents to 20 cents per pound. But what consumer out of more than 300 million will create or contribute to a political action committee to save a few dollars annually on sugar? Domestic sugar suppliers, in contrast, are a miniscule fraction of consumers and profit handsomely from import quotas and prices double the world price. They predictably enter the political domain and spend lavishly on import quotas. The ROI is worth it.
The distorted sugar market is but the tip of the iceberg. The life of a politician is largely a life of attempting to distort free and open competition in favor of political benefactors. The Code of Federal Regulations currently sports a staggering 200,000 impenetrable pages navigable only by $2,000 per hour legal experts.
The United States prospered during its first century by desisting from economic capers and soared past Great Britain and Germany.
Free and open markets do not yield perfect justice. The difference between riches and penury is occasionally flukish. But all experience teaches that political initiatives professedly to improve on free competition are cures vastly worse than the disease.
But no politician will say the Emperor has no clothes because there goes his campaign contributions and artificial amour propre. There’s too much money in sticking with economic lies in the political domain for truth to be heard.