Economics Dictionary of ArgumentsHome
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| Interventions: An intervention in politics is any action taken by one actor to influence the political process in another state. There are military interventions, diplomatic interventions, or economic interventions. See also Internventionism._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Friedrich A. von Hayek on Interventions - Dictionary of Arguments
Boudreaux II 55 Interventions/Hayek/Boudreaux: For government to ensure that some producers - say, wheat farmers - suffer no declines in their economic well-being requires that it restrict the freedoms of consumers, of other producers, or of taxpayers. Special privileges granted to wheat farmers must come in the form of special burdens imposed on others. >Production, >Consumption/Hayek, >Interventions. Boudreaux II 56 Consequences: Other people - either as consumers, as producers, or as taxpayers - are also made a bit less free by government’s effort to protect wheat farmers from the downside of economic change. Wheat farmers will indeed each be noticeably better off as a result, while almost everyone else - as individual consumers or taxpayers - will suffer so little as a consequence that the pain might well go unnoticed. >Taxation. Politics: Politicians will receive applause and votes and much other political support from wheat farmers without suffering a corresponding loss of popularity, votes, and political support from non-wheat-farmers. Politicians will then find it easy and attractive to gain even more political support by granting similar protection to some other producer groups - say, to steel workers or to airline pilots. Regulation: As government exempts more and more producers from the rules of the market - that is, as government relieves more and more producers from the necessity of having to compete, without special privileges, for consumers’ patronage, and to enjoy the benefits of their successes andsuffer the consequences of their failures - the total costs of such protection rise and, hence, become increasingly noticeable. Boudreaux II 57 Economic growth: The slowdown in economic growth for ordinary men and women becomes conspicuous. People grow more concerned about their economic futures. Seeing government spread its protective net over an ever-increasing number of producers,those producers who haven't yet received such protection naturally begin to clamour for it. 1) First, these producers understandably feel as though government is unfairly mistreating them by not granting to them what it grants to so many other producers. 2) Second, the greater the number of producers who are protected from the downside of economic competition, the greater the negative impact of that protection on consumers and the relatively few producers who are not yet protected. If the full burden of adjusting to economic change is focused on an increasingly smaller number of people, the extent to which each of those people must adjust is greater than if the burden of adjusting to economic change is spread more widely. Government policy/freedom: If government remains committed to protecting from the downside of economic change all who clamour for such protection, the powers of government must necessarily expand until little freedom of action is left to individuals. It is this stubborn commitment to protect larger and larger numbers of people from the negative consequences of economic change that Hayek argued paves the road to serfdom.(1) Protection: That government must have extraordinary discretionary power over vast areas of human action if it is to try to protect large numbers of people from the downside of economic change is clear. Any time entrepreneurs invent new products that threaten the market share of existing products the owners of the firms that produce those existing products will suffer Iower demands for their services. So, too, will workers in the factories that manufacture those existing products. The incomes of these owners and workers will fall, and some might lose their jobs, as a result of the introduction of new, competitive products. Economic change/technical progress: The very same process is true for any economic change. New imports from abroad threaten domestic producers of products that compete with these imports. Labour-saving technologies threaten the livelihoods of some workers whose human skills compete with the tasks that can now be performed at Iow-cost by these new techniques. Demography: Changes in population demographics - say, an aging population - cause the demands for some goods and services (for example, baby strollers and pediatric nurses) to fall as they cause the demands for other goods and services (for example, large sedans and cardiac surgeons) to rise. Even simple everyday shifts in consumer tastes away from some products and toward other products unleash economic changes that inevitably threaten some people's incomes and economic rank. Boudreaux II 58 Totalitarism: Regardless of the particular methods it employs, a government that is resolutely committed to protecting people from any downsides of economic change requires nearly unlimited powers to regulate and tax. Economic growth: Unfortunately, because economic growth is economic change that requires the temporarily painful shifting of resources and workers from older industries that are no longer profitable to newer industries, the prevention of all declines in incomes cannot help but also prevent economic growth. The economy becomes ossified, static, and moribund. 1. Friedrich Hayek (1944). The Road to Serfdom. In Bruce Caldwell (ed.), The Road to Serfdom, Il (Liberty Fund Library, 2007)_____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Hayek I Friedrich A. Hayek The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) Chicago 2007 Boudreaux I Donald J. Boudreaux Randall G. Holcombe The Essential James Buchanan Vancouver: The Fraser Institute 2021 Boudreaux II Donald J. Boudreaux The Essential Hayek Vancouver: Fraser Institute 2014 |
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