Trying Is The First Step To Failure
Ah, the wisdom of Homer Simpson. Over the years, Homer has offered up such prescient one-liners as:
"Alcohol is the cause of..... and solution to ..... all of life problems."
"Boy, you tried your best and you failed miserably. The lesson is.... never try."
But my personal favorite is the title of this blog post, and its a lesson that Ben Bernanke, Hank Paulson, George Bush, John McCain, Nancy Pelosi, and now, Barack Obama have never learned.
Direct your attention to Dare's recent post about the latest "Government Boondoggle Package."
If we can somehow block out all the Red State / Blue State, Republican / Democrat, Conservative / Liberal bickering about the best way to stimulate the economy, we can discuss some fundamental questions that neither political party ever addresses.
In order to understand why Homer Simpson is smarter than your average politician and why, for instance, it would be better for them to get drunk and do nothing than try to "stimulate the economy," we must start by answering this: Why do humans act? Why does a human choose action over inaction? Why does a man rise from the couch and take to the streets armed only with his mind and his will? Why does a woman forego her family for hours, days, and years to build a powerful enterprise?
Humans act because they are never fully satisfied. Humans act because they are not content with their current state of affairs. The human that is content takes no action, at least no purposeful action.
"Action is purposive conduct. It is not simply behavior, but behavior begot by judgments of value, aiming at a definite end and guided by ideas concerning the suitability or unsuitability of definite means. . . . It is conscious behavior. It is choosing. It is volition; it is a display of the will." - Ludwig Von Mises, The Ultimate Foundation of Economic Science
What type of action does the economy require in order to bring about purposeful ends? Only the type of action initiated by those who are not content with their current state of affairs. Those that are content with their current situation are likely not to act, or more specifically, not to act purposively.
With this understanding we can discern the fallacy of the current, and previous, economic stimulus packages. Let's use as an example Amtrak. As noted by the WSJ, Amtrak has failed to turn a profit in over 40 years yet is set to receive $2 billion of our money. From the perspective of human action, it is easy to see that the officers in charge of Amtrak do not suffer from a lack of contentment. Their livelihoods and jobs are secure, indeed prosperous, no matter the ultimate outcome of their operations. Without the need to improve their financial station the officials of Amtrak are not required to make judments of value, aiming at a definite end.
The concept of Human Action, more fully developed in Ludwig Von Mises' magnum opus of the same name, allows us to look beyond the superficial banter of the major news networks (government's giant keyboard.) Now we can debate the merits of all of the Economic Destruction Packages recently passed on whether or not the people employing the capital will be using it for purposeful action. I assert that the answer is emphatically no.
In fact, armed with this knowlege, it is only scratching at the surface. Von Mises, and later Hayek and Rothbard, have made impressive arguments against all forms of government spending (Rothbard going full anarchistic in Power and Market, while Hayek in The Road to Serfdom, and Mises remained committed to representative government).
In summary, there should be no question of what government should do to fix the current economic crisis. They should simply follow the advice of Homer Simpson: drink heavily and do nothing. Let those who are compelled to act do so. Allow those with the will to act do so. Allow the actors in the market economy: the consumers, the entrepreneurs, the investors, and the bankers make the subjective value decisions about the suitability or unsuitability of definite means. Allow these humans of action to live, succeed, and fail.
For these humans are you and I, and your brothers and sisters, and your family and neighbors. These are the ones who will act. These are the uncontented ones who will save the economy.
David in Qatar