… and forcibly take the rest of us with him.
An opinion piece which caught my eye this week was written by long‑serving economics correspondent at The Sydney Morning Herald, and equally long‑serving proponent of socialistic ideas, Ross Gittins.
The piece, titled ‘Why we can’t give business free reign,’ decries the emergence of a ‘market society’ that threatens traditional norms and values, such as the observance of weekends as rest days devoid of commercial activity.
He also argues that markets are inherently volatile, and ‘so we have to ensure profit‑obsessed businesses work within government‑imposed guardrails designed to protect them and us from their greedy excesses.’
It is here that I seek to respond to these two major themes in the Gittins piece.
The most obvious point to make about the idea that, somehow, weekend trading is corrosive to the soul, or family or social cohesion, is that the emergence of seven‑days‑a‑week market trades does not prevent the deeply spiritual to engage in their religious practices, or prevent agnostics or athiests seeking weekend rest (or rest at any other time of the week) to acquire it.
Indeed, what liberalised trading hours have done has enabled the religious to retain their choice in observing their beliefs, whilst allowing those of irreligious bent the opportunity to relax and/or purchase goods and services under the mode of voluntary, and mutually beneficial, exchange. Naturally, the religious can attend worship services and/or buy and sell, too.
As for the regulatory imposition of penalty rates, as the expression of a desire to see to it that employers acknowledge the sanctity of a ʻcommerce‑freeʼ weekend, well, one might say that is certainly a ʻbaptistʼ interpretation of the matter.
Conveniently, though, Gittins ignores the overly inflential role of the ʻbootleggingʼ trade unions who desire the very same penalty rates as the sanctimonious baptists, but for the implicit purpose of locking out service workers (especially young people) out of the opportunity to provide weekend labour, should they wish to provide it.
As many readers of this blog would be aware, there have been many a story in recent years concerning the pernicious effects of penalty rates shutting down businesses over weekends, particularly in the restaurant and catering industries.
Gittins seems pleased, at least, with the idea of penalty rates, and warns against their prospective dilution in the name of economic reform. However, he doesnʼt seem to mourn the consequently reduced chances for young people to earn an honest dollar, build up some skills, and economically write their own life stories by climbing ladders of opportunity.
I wonder what he makes of other developments, such as the engagement of women in the labour market and out of the kitchen, as it were, which unambiguously promote individual freedom but which challenge traditional norms?
We get some idea when Gittins tries to make a sharp distinction between what he sees as commercial (apparently, at least in some senses, ʻbadʼ) and non‑commercial (apparently, in some senses, ʻgoodʼ) activity.
Making a broader point, the general idea, shared by many socialists and conservatives alike, that market activities are somehow alien to the human condition is an utterly preposterous one.
Production, distribution and exchange activities undertaken within the marketplace can, in fact, be construed as a constituent aspect of that wider, and interlocking, network of human relationships we colloquially refer to as society.
And just what is society? Well, the great, yet underappreciated, French liberal economist Destutt de Tracy profoundly described it as follows:
Society is purely and solely a continual series of exchanges. It is never anything else, in any epoch of its duration, from its commencement the most unformed, to its greatest perfection. And this is the greatest eulogy we can give to it, for exchange is an admirable transaction, in which the two contracting parties always both gain; consequently society is an uninterrupted succession of advantages, unceasingly renewed for all its members.
In its simplest of terms, what de Tracy is getting at is that individual human beings are naturally prone to get together to talk, to laugh, to love, to share, to trade, and they must receive some benefit out of these interactions.
If Gittins, and his like, still find disagreement with my view that to trade, and engage with others through markets, is to be human and thus not incompatible with other social activities, then they might try to explain how it is that evidence of trading activities can be found throughout the annals of recorded history.
These remarks provide me the means to respond to the second general point of Gittins, which is that governments are obligated to provide fiscal and regulatory ʻguardrailsʼ to ensure ʻsafeʼ market activities.
As Steve Kates helpfully, and often, reminds us, in his Free Market Economics book, the misalignment of production and preferences structures regularly do take place, often on a very small scale (e.g., the closed corner milk bar) and sometimes on a very large scale (e.g., economy‑wide recessions).
In no small way, these misalignments often come about because of changing consumer preferences, technological developments, alterations to resource supplies, and other factors which are the direct manifestation of human beings collaborating through the never ending trial‑and‑error processes of the market.
These processes, as affected by the interplay of supplies and demands rendered by innumerable individuals, are, in the scheme of things, beneficial to those participating in them. This is because fallible, yet capable, people get to discover the things that others want, how they want them, when they want them, and even why they want them.
Gittins acknowleges the profit‑and‑loss mechanism provides an important signal directing entrepreneurs to more effectually cooperate with consumers, in turn leading to economic growth, but then qualifies that point to near non-existence by leaning on the perennial, and silly, notion that people who strive to provide outputs for consumers are somehow inherently greedy (note that I happen to disagree with the ʻgreed is goodʼ school of thought).
Gittins qualifies the beneficial aspects of dynamic market processes, implying that the process outcomes are characterised by ʻmarket failuresʼ which, in turn, require government intervention. He puts the idea in this way:
Anyone who didnʼt know before the global financial crisis must surely know now that if you let businesses do whatever they want in their search for greater profits, the system will run off the rails and cause horrific injuries. So we do have to ensure profit‑obsessed businesses work within government‑imposed guardrails designed to protect them and us from their greedy excesses.
The ʻgovernment as guardrailʼ analogy is a useful metaphor for the conception of the public sector that modern socialists, of all stripes, subscribe to, and that is: people in their private capacities cannot be trusted, through ignorance, stupidity or greed, to do the right thing ‑ in this context, to edge towards an ʻecological rationalityʼ in the market provision of goods and services ‑ and, conversely, politicians can be trusted to do the right thing on behalf of untrustworthy private sector agents.
To the classical liberal mind, or at least anyone who understands the institutional legacy of Western civilisational development, the Gittins intimation here is ridiculous, and cannot be sustained.
Sharply contrasting market processes, in which the dissatisfied can exercise their own veto over unsatisfactory productions by exiting consumption or producing their own alternatives, individuals cannot escape (or, at least, very easily or costlessly) the full brunt of regulatory and taxation force imposed over them by people in political offices, with exclusive, monopolistic access to those forceful instruments.
It is in this context that the prospect of political abuse of individual rights to express themselves and enjoy freedoms, including in the economic realm, is magnified. How could a senior journalist like Gittins not appreciate, from everyday newspaper accounts, the truth of what the liberal‑cum‑socialist Pierre Joseph Proudhon said in the 1850s?
To be governed is to be watched, inspected, spied upon, directed, law‑driven, numbered, regulated, enrolled, indoctrinated, preached at, controlled, checked, estimated, valued, censured, commanded, by creatures who have neither the right nor the wisdom nor the virtue to do so. To be governed is to be at every operation, at every transaction noted, registered, counted, taxed, stamped, measured, numbered, assessed, licensed, authorised, admonished, prevented, forbidden, reformed, corrected, punished. It is, under pretext of public utility, and in the name of the general interest, to be place[d] under contribution, drilled, fleeced, exploited, monopolised, extorted from, squeezed, hoaxed, robbed; then, at the slightest resistance, the first word of complaint, to be repressed, fined, vilified, harassed, hunted down, abused, clubbed, disarmed, bound, choked, imprisoned, judged, condemned, shot, deported, sacrificed, sold, betrayed; and to crown all, mocked, ridiculed, derided, outraged, dishonoured. That is government; that is its justice, that is its morality.
As the daily abuses of individual freedom rendered by governmental actions show, politicians and bureaucrats, who increasingly disrespect constitutional and other restraints, undesirably act to, use Gittin’s analogy, progressively reduce the width of the guardrails within which people can move about.
Furthermore, governments routinely use fiscal and regulatory instruments to try to alter the direction in which the guardrail points, nullifying the scope of discretion of individuals to exercise their own choices.
These coercive acts are highly disruptive to free conduct, and in many respects increasingly so, and so the great liberal project of reform to enlarge the scope in which economic and personal freedoms are realised remains undiminished.
Like it or not, we have all benefited enormously from the diversity of experiments in living that Gittins criticises, afforded, in some respects, by the partial rollback of regulations allowing private entrepreneurs to strive cooperating more effectually with the discerning customer.
It is a Great Fact that the outgrowth of decentralised, dynamic market processes over the last two centuries, fuelled by increasing perceptions of dignity attached to the acts of buying low and selling high, have made our material living standards what they are today.
One of the most incredible aspects of this is that the improvements to material living standards have continued to come about, even as economic agents are subjected to routine and increasing political abuses. The spirit of human resilience in the economic domain thankfully remains alive, and liberals must be on guard to ensure that people, with prospectively great ideas, are allowed to chance their arm at serving others, through honest and satisfying market relationships.
In the end, what Gittins is advocating is an unrealistic vision of a benevolent, omnipresent government, which will somehow implement his personal preferences of a quieter, gentler, and less wealthy state of life.
He may not be worshipping Mammon, but let there be no doubt he is worshipping something much worse in its effect: the (partial, to be generous) invalidation of the natural human inclination to truck, barter, and exchange which, ultimately, feeds, clothes, houses, transports and entertains us, however and whenever we want.
For mine, I would much prefer to have no part in the Gittins project, whatsoever.