Though the following article by Walter E. Block focuses on the problems plaguing Chicago, the facts and philosophy he applies is applicable to any and all human societies. I found it quite illustrative of the consequences of state intervention into society and the economy, and of the tendency of people to respond to incentives, and, as I often point out, how people never seem to ask why. They want the issues addressed, the problems resolved, but nobody ever bothers to ask why the problem(s) arose in the first place, or what, exactly is causing the problem(s)?
As I wrote in my article The Fundamental Flaw in Non-Anarchistic Libertarian Thought, all forms of government—from a constitutionally limited, representative republic to socialism to communism—fail for precisely the same reason: they fail to account for human nature:
“America’s constitutionally-limited, representative republic failed for precisely the same reason that other political systems such as Socialism and Communism always fail: they all neglect to account for human nature, which dictates that individuals will generally act in their own best interest—including those individuals which comprise the institution of government—which ultimately translates to the government acting in the best interest of the government.”
Regardless of what the state teaches, or what the church preaches, or what institutionalized organizations expect or demand from their employees or members, the reality is that people will naturally act in their own best interest, and thus they respond to incentives, whether economic, social, political, or otherwise. So understanding and accepting human nature and human action in response to incentives is the key to resolving many of the issues which plague modern society.
Government, regardless of type or construct, fails in this account, for it is premised on the use, or threatened use, of force and/or violence. The people within government want what they want, and are incentivized to pursue their own best interest (and, by extension, the best interest of the government which employs them) and the people in the private sector want what they want, and are incentivized to pursue their own best interest (and, by extension, the best interest of their community, and the company which employs them), thus there is an eternal conflict of interests between the public and private sectors, between the state and the people, which continually manifests as increased force and violence, perpetual growth of government, perpetual reduction of liberty, and, as is always the case under such conditions, eventual economic collapse and its resultant civil disorder.
The market, on the other hand, does account for human nature, human action, because it is premised on economic incentive—for the use of force or violence is prohibited in a truly free marketplace, a truly free society. When one cannot utilize force or violence as a means of garnering the cooperation of others in the pursuit one’s own best interests, then persuasion in the form of economic, social, or other incentives must be offered instead, in exchange for the desired cooperation.
This is why government—the use force and violence, in complete disregard of human nature and incentive—never has, does not, and never will work, and is in fact the primary cause of nearly all of the problems which plague society.
For example, when unemployment is subsidized via state welfare or social programs—i.e., people get paid without having to perform labor in exchange for their paychecks—then what is to be expected, other than a perpetually growing pool of unemployed people—who are merely responding to economic incentives—thus causing ever-increasing costs to the taxpayers as well as economic stagnation and therefore increasing hardship for all?
Or when the supply of product which is in high demand—such as, say, drugs—is greatly reduced via state prohibition, and thus the costs and risks of acquisition are greatly increased, and so the profit incentive skyrockets, and a black market is spawned in which thrives crime and uncontrolled production methods and immunity to legal action by parties who may be injured or killed by faulty or substandard products—then what is to be expected, other than a growing pool of black market drug suppliers—who are merely responding to economic incentives—causing increased costs of both personal acquisition as well as taxpayer-funded state deterrents, increasingly dangerous products, increased violence in the streets, and many innocent people incarcerated and/or their lives destroyed?
So, when addressing societal problems, first and foremost the reality of human nature must be realized and accepted, and then the incentive(s) which are prompting the undesired or problematic behavior must be determined, followed by the removal of those incentives and the implementation of new incentives which will instead prompt the desired behavior—i.e., personal and economic incentives, i.e., liberty and the resultant free-market capitalism.
In the following article, Walter E. Block likewise addresses the issues of the war on drugs, the welfare state, business regulation, labor unions, and gun control:
The following article, entitled “Chicago Shootings, Deaths” by Walter E. Block, was originally published on LewRockwell.com on December 31, 2016, and is licensed for reprint and redistribution under Creative Commons:
Chicago shootings and deaths are in the news once again, thanks to the horrendous numbers in this regard racked up by the Second City. Progressive, liberal mayor Rahm Emanuel is busy wringing his hands and implementing policies responsible for the mayhem in the first place. He is fiddling while Chicago burns.
What would a libertarian do if he were mayor instead?
First, I would analyze the situation, were I in charge. I would ask what causes these debacles, and then try to eliminate them. Needless to say, the causal elements are, in this case, government programs. When they are ended, the murder rate in Chicago will plummet.
What, then are the causes? Let me list them.
First and foremost there is the war on drugs. This boosts the prices and the profits in this industry and feeds the gangsters who benefit from it. An inordinate number of bullet-spraying emanates from Chicago gangs, contending over turf with each other. They often shoot each other, and, as well, innocents who suffer from “collateral damage.” I know full well that legalization is not the province of the city politicians, but, work with me here. I care not what the law is. Indeed, the law, in this case, is the very source of the problem. I am simply trying to come to grips with how best to solve the problem, and I shall not allow a little matter of the drug law being the responsibility of the state of Illinois or of the federal government to get in the way. So, yes, we legalize drugs in the Second City. All of them. Each and every one of them. Not merely marijuana, and certainly not for medicinal purposes only. For all purposes. And all of them without exception: cocaine, heroin, whatever. At one fell swoop this will cut a swathe through gang murders.
Will these worthies then move to other crimes? There is little doubt that they will. However, we can infer from the fact that they are now in the drug business that this is their comparative advantage, at least the way they see matters. If drugs are now provided by Pfizer, Novartis, Merck, GlaxoSmithKlein and other such companies, the drug gangs will have to move not to greener pastures, but to those with lower returns. Thus, their ability to create pandemonium will be lessened. It was the same with the prohibition of alcohol. During that unfortunate epoch, gangs, again, ruled. When booze came to be legally supplied by Coors, Bacardi, Schenley, Annheiser-Busch, Seagrams, Smirnoff and their ilk, the gangs of yore were fatally weakened.
Second is the welfare system. It has not broken up the black family. Rather, it has prevented it from forming in the first place. It has made the pregnant girl a much better financial offer than the father of her child could make, what with its food stamps, housing benefits, medical care, etc. Estimates are that some 75% of black children are brought up without a father in the home on a regular basis. Nor is this only a “black thing.” The white family, too, has been negatively impacted by this pernicious program, albeit to a lesser extent, since they are on average wealthier, and thus less able to enmesh themselves in this horrid extravaganza. Without a father in the home, civilizing young boys, we have in effect a Lord of the Flies operating in Chicago. Single mothers are not as able to deal with teenage boys, as well as dads, whether by example or in any other way.
This, it will be readily admitted is a long range plan. Eliminating welfare will only show benefits a decade or two down the road, after, that is, the culture changes, which may take even more years to get back to that which prevailed up until the early 1960s, when the Great Society programs started to create havoc. But, we want to reduce the murder rate in the Midwest not only now, but also in 2050.
Regulations. There are always some young people on the margin between the gang and legitimate activity. We must tip the balance in favor of the latter. How to do so? This can be accomplished by ending regulations that prevent young people from taking on honest employment. For example, allowing Uber and Lyft to operate, instead of forcing would-be taxi driver entrepreneurs to purchase expensive taxi medallions. Young girls who offer hair braiding services should not be prevented from doing so by being forced to take courses and licensing exams in abilities they already have.
In what other ways are young people prevented from attaining work. Foremost amongst them are union-supported minimum wage laws. Such enactments do not raise wages. Rather, they serve as a restriction on entry into the world of work. If an employer must pay $10 per hour, but the productivity level of a job candidate is only $7 per hour, then any firm foolish enough to put him on the payroll will lose $3 per hour, and eventually face bankruptcy. This is crucially important. For it is rather unfair to kick people off the welfare rolls, and, also, prevent them from gainful employment.
Labor unions must also be quelled. It is not an accident that the rust belt occupies, mainly, the northeastern quadrant of the country. That is where organized labor is most powerful. If the plight of this section of the were really due to international trade, the HARM would be spread more evenly around the nation.
If we want to address a labor force participation rate that has been artificially reduced, we must end, not mend, unemployment “insurance.” This is merely a not so hidden form of welfare, of which we have already had far too much.
Note I have not called for gun controls. When implemented, honest people give up their weapons and render themselves even more helpless against criminals who prey upon them. I have not suggested other “progressive” nostrums such as the city government forming midnight basketball leagues. These young people already “play” far too much. What they need is honest work. I do not propose more city parks, recreation centers, swimming pools. Again, these are beside the point. And I certainly would not implement more “generous” welfare schemes. As we have seen above, these are the source of the problem, not the cure. No, statism has caused these problems in the first place, and it needs to be torn down, not built up.
Will this panoply of public policies be implemented? Not bloody likely. For the people responsible for these difficulties are the ones now in charge. The leopard is unlikely to change his spots. As a commentator, my main interest is to get to the truth of the matter, pretty much ignoring the political practicality of the matter. If these free enterprise policies are implemented, the death toll in Chicago will fall. If they are not effected, matters will continue pretty much along present lines. The fault will lie with those who refuse to see reason in these matters.
Dr. Block is a professor of economics at Loyola University New Orleans, and a senior fellow of the Ludwig von Mises Institute. He is the author of Defending the Undefendable, The Case for Discrimination, Labor Economics From A Free Market Perspective, Building Blocks for Liberty, Differing Worldviews in Higher Education, and The Privatization of Roads and Highways. His latest book is Yes to Ron Paul and Liberty.
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