Authoritarianism is incompatible with economic progress

Published on January 7, 2023


through patrick barron.

Is it possible, or even desirable, to reconcile economic freedom and progress with authoritarianism? Although some believe this, it is wrong. Freedom is indivisible. Political freedom and economic freedom are inseparable.

This is the position of Ludwig von Mises himself. In Planning for Freedom, he declares, “Propaganda is the political consequence of socialism as representative government is the political consequence of a market economy. He writes about the citizen’s reaction to such oppression Planned chaos “If the plan of each citizen is to be replaced by the master plan, endless battles must begin. Those who disagree with the dictator’s plan have no choice but to defeat the despot by force of arms. »

Mises compares the tyranny of socialism with capitalism Bureaucracy when you write:

Capitalism means free enterprise, consumer sovereignty in economic matters, and voter sovereignty in political matters. Socialism means the total control of the government over all aspects of the individual’s life and its unlimited supremacy as a central board for the management of production. There is no compromise between these two systems.

Some may object to Mises’s claim. After all, citing an authority, even one as great as Mises, doesn’t prove it right. Some will say that economic progress certainly depends on the security of one’s person and property. “Isn’t it clear that they are saying that authoritarian regimes provide better internal security than their more permissive democratic neighbors, regardless of harsher punishments?” Some authoritarian countries, such as China and some Arab countries, confirm this hypothesis. As long as the rules are followed, the business can thrive. Or so it is claimed. Rather than simply comparing Mises’s claims to those of others, let’s look at other issues related to authoritarianism.

Problems of authoritarian regime

One of the main problems of an authoritarian regime is determining who should elect the dictator.

Western society has moved away from the “divine right” of kings, although noble succession still prevails in some Middle Eastern countries. Most authoritarians justify their right to rule by violently overthrowing the previous regime. China, Cuba, Iran and North Korea come to mind. But this hardly constitutes a solid intellectual basis for current or future power. Mises says that democracy is the best form of government because it allows a peaceful transition between administrations. The people decide who will rule through periodic elections. When society seems headed in the wrong direction, a peaceful change of direction is preferable to a coup attempt.

Dynamism is the essence of a developing economy. It involves adopting new ways to meet consumer demands and abandoning old ways. Joseph Schumpeter called this process “creative destruction”. This is anathema to authoritarian societies. They are supported by incompetent drunkards placed in favorable positions by the dictator himself. But where there is no creative destruction, there is no progress. A visit to the Soviet Union in the early 1970s, when I was an Air Force officer, confirmed what I already knew. The Soviet Union was collapsing from within. Consumer goods were scarce and what was available to the average Soviet citizen was of poor quality, beyond my worst hopes. In a great entry Requiem for MarxYuri Maltsev notes that one of the reasons the Iron Curtain came down was because people simply gave up trying to live in an increasingly crazy society.

Hayek reminds us that an authoritarian has no better idea of ​​how to regulate the economy than anyone else; nor is it possible for a group of planners armed with the most powerful tools. The billions of decisions needed are unknown and unknowable. Few people know more than their industry specialization allows, and the need to constantly adapt to market forces is beyond anyone’s grasp.

To keep up with changing markets, we all need to be willing to let go of the old and embrace the new. The law is “change or die.” Death may be slow or sudden, but nothing can replace change.

The importance of realizing that freedom is indivisible

The five-year expansion of fiat currency has so disrupted economies around the world that a serious recession is imminent. Prices are increasing. World trade is under attack. The world is on the brink of nuclear war. The national debt has reached an absurd level. All these insults to the common people are brought to us by out of control governments with no understanding of real economics and of course no real understanding of wealth creation.

An example of this is that lavish unemployment benefits discourage workers from looking for work. Don’t blame them. It is in the rational interest of millions of people to give alms when they can afford it. Instead, blame the politicians who made it all possible through the expansion of fiat currency. Unfortunately, when the bitter fruits of these failed policies can no longer be ignored, many will demand that the government take matters into its own hands and “do something”. The problem is that the government created the problem in the first place and therefore has no real solution. But this will not stop him. It should give the impression of doing something.

The only answer is total freedom, both economic and political. The economy must undergo difficult adjustments to direct capital to the best use, as determined by consumers, not the government. Reality must prevail. The expansion of money has destroyed much capital by diverting it to less productive uses than the public would determine in an environment of general liberty.

We must resist the temptation to believe that a powerful man can save us. We can only save ourselves. The modern West is characterized by laziness, frivolous spending, and living beyond one’s means. We should do the opposite. Working hard, living frugally, and saving are solutions that everyone can adopt to protect themselves from the encroachment of authoritarianism.

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