The Costs of Human Action

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Politics is a means of preventing people from taking part in what properly concerns them.

~ Paul Valery

The study of economics, properly understood, develops an understanding of the role of incentives in human action. Americans who have heretofore focused their attentions on who the next "American Idol" will be, have suddenly been introduced to the cost/benefit considerations of what has come to be known as "health care." Those who approached the nationalization of this major industry with only the superficial awareness provided by politicians and their lapdog media, are now beginning to grasp its broader implications for the control of human life.

The politicians who supported this measure are likewise discovering that the benefits they received — from whatever sources — from this legislation, carry with them costs unwanted by those whose lives will be burdened by it. A number of people — not all of them operating as agents provocateurs — have reportedly threatened these politicos with bodily harm for having supported the measure. With such overwhelming public opposition from their constituents to this bill, it should not be surprising that those who navely assumed that elected officials represented them — rather than the institutional interests that stood to benefit from it — would become angry. What the congressional sock-puppets are experiencing is the social application of Newton’s "third law of motion": that for every action, there is an equal and opposite reaction.

With the government schools performing as they do, it may be understandable that such a basic principle of physics would not have been introduced to them. Nonetheless, life experiences do provide empirical evidence of the universality of such an idea. Intelligent minds have slowly awakened to the role of Newton’s third law in the World Trade Center attacks: if you engage in violence against others, your victims will have an incentive to retaliate. If you contravene the wills of those who elected you to represent their interests, you should not be surprised to discover that they are angry with you!

The response of the politicians to these isolated threats reveals the utterly dishonest nature of all political systems. CNN informs us that "Democrats discuss concerns with police, FBI." If these legislators truly believed that they were acting in the interests of those who voted for them — instead of the corporations and governmental bureaucracies who promoted the measure — why don’t the "Democrats discuss concerns" with their alleged constituencies? Why do they not attend a genuine "town hall" meeting — instead of the staged and well-scripted charades — and explain to an angry electorate how government-controlled medicine will work to their benefit? Perhaps veterans of military hospitals — such as Walter Reed — might show up to relate their experiences.

That congressmen would instinctively call upon the police and FBI for protection is a clear admission of who such agencies are designed "to serve and protect." Media voices — intent on keeping their jobs — warble in unison the refrain "violence, and threats of violence are unacceptable" in society. What this means, of course, is that "violence" and "threats" that have not been sanctioned by the state are "unacceptable." Government is defined as an agency that enjoys a monopoly on the use of violence within a given geographical territory. The state does not operate as a peaceful, voluntary system, a fact that is quickly discovered by the reading of statutes: "violation of any provision of this Act shall be punishable by a fine of $X and/or imprisonment." Every act of government rests on the threat that violators will meet with violence — even death — should they disobey. Try explaining to the men, women, and children of Iraq and Afghanistan that "violence, and threats of violence are unacceptable" to the American government!

It is symptomatic of the pathology of politics that those in authority are unable to grasp the intensity of resentment felt by those they presume to rule by force. The politically-minded — like a physically-abusive parent — must have such self-satisfaction in what they regard as their well-intended motives that they can only dismiss such reactions as being the product of u201Ccrazed mindsu201D or u201Creligious fanaticism.u201D But when Buddhist monks burned themselves to death in protest of the Vietnam War; or suicide bombers carry out their deadly attacks in Middle East and Asian countries, as well as in New York City, London, and Moscow; and when a man in Texas flew his plane into a building that housed IRS offices, one must look for deeper explanations. When men and women are willing to kill themselves to protest governmental actions, you can be assured that the human costs of state action have become intolerable.

I understand the frustration and anger experienced by those who cannot fathom why political systems so consistently and with such indifference violate their wills and impede their interests. I do not, however, share in the idea that violence is an appropriate response to governmental action. I have always rejected violence not because of its illegal nature, or because of the harm it might inflict upon government officials, but because of what such action would force me to become. Life is to be freely and peacefully embraced and enjoyed, and if my response to the psychopathic character of politics was to resort to the same kind of behavior that is destructive of life, political thinking and conduct would claim victory over my very essence.

If I thought that threats and violence were effective methods for achieving my desired ends, I would pursue a political career. I might enlist in the military; or go to work for the NSA, the CIA, or the Justice Department. You might even see me standing outside a grocery store with a clip-board, asking you to sign a petition to get a law passed requiring other people to live their lives as I prefer. But just as engaging in such politically-acceptable violence would contradict my sense of who I am, so would the use of "unacceptable violence" destroy the integrity of who I am. It is what violence would do to me that represents a cost I do not choose to incur.

My philosophy of life is not a set of abstract ideas picked up from reading the works of others. It is, rather, the expression of my subjective sense of who I am, how I choose to relate to others, and how I can integrate living my personal and social nature without contradiction. This is the meaning of "integration": to live with integrity; to live what Carl Jung and others have referred to as the "centered life." To live otherwise is to emulate the reactive, reptilian-brained people-pushers who help to mobilize our dark-side.

It is this inner sense that long ago attracted me to the Stoic philosophers and, in later years, to the works of such thinkers as Krishnamurti. Contrary to the view that would equate Stoicism with passive wimpiness — a willingness to be a door-mat upon which jackbooted thugs could wipe their feet — this insistence upon maintaining the integrity of the inner life requires a highly-energized and continuous awareness of the forces of contradiction that work upon us. It requires those of us who choose not to have our individual sense of being sacrificed to a mindless collective, to purposefully and energetically seek what the late F.A. Harper had in mind when he said: "the man who knows what freedom means, will find a way to be free." When people ask me — instead of asking themselves — "how can we live in liberty instead of oppression?," I respond "that’s right!"

Perhaps as a way of helping to stimulate the alternative thinking that is implicit in this question, I return to the first sentence of this article. To understand how economics is less about mechanistic explanations of how goods and services are produced and exchanged, and more about the motivational processes through which people interact to accomplish such ends, requires an awareness of the nature of incentives. Why is it so difficult to find carbon-paper in a modern office? Why do fast-food franchises attract more customers over the noon-hour than do fancy French restaurants?

One of the major distinctions between marketplace and governmental activity centers upon the role of incentives. A carbon-paper manufacturer who did not see the importance of shifting its production to the manufacture of carbon cartridges for use in computer printers, would have quickly gone out of business, his lament for the loss of his traditional product line notwithstanding. Leonard Read’s wonderful essay, "I, Pencil," or Walter Block’s example of the production of a ham-sandwich are instructive of how the intricacies of a complex world manage to organize themselves through the under-appreciated role of the pricing system. People talk about the processes of "supply and demand" without understanding the dynamics of how they bring together self-interest-driven incentives.

The marketplace rewards those who make decisions that benefit others, be they customers, employees, or suppliers. The incentive to be creative and productive of the values others voluntarily choose to patronize becomes a source of profit.

Political systems operate on the basis of incentives as well, albeit in the form of forcing taxpayers to subsidize goods or services for which those demanding them are unwilling to incur all of the costs of production. The owner of a professional sports franchise would like to move his team to another city, but is unwilling to pay the costs of building a new stadium (complete with enclosed sky-box seats with which to entertain his friends). He calls upon local officials to (a) use government powers of eminent domain to steal the desired land from its present owners, and (b) use taxing powers to pay for the construction of the stadium. This man will always be able to employ an economist who will be prepared to talk about the "market failures" of the people’s unwillingness to pay for things they do not want!

A more ubiquitous form of incentives underlying governmental behavior is found in such traditional systems as government schools, police, and the military. Whereas firms in a marketplace system depend upon their successfully producing the goods and services people value, political systems have a continuing incentive to fail to do so. When government schools fail to meet the expectations of parents, they are rewarded with increased funding! If the police system fails to curtail violent crime, it is given more money and power to continue its unsuccessful efforts. If the most powerful military force in human history is unable to keep America out of wars, there will be bipartisan support for conferring billions upon billions of more dollars upon this corporate-state racket. On the other hand, by undertaking endless wars against endless enemies, the military establishment is also able to persuade the thoughtless of the need for more funding of its activities and research into more powerful weaponry!

There are marketplace alternatives to the police system: private security systems profitably operate on the incentive to prevent their customers from being victimized. Unlike the police system that profits greatly from its failures, private companies would quickly lose their clientele should they fail. With the failure-driven character of government, if violent crime should suddenly disappear, the state would have to invent more "crimes" with which to bamboozle Homo boobus into continuing to support the police function. Indeed, this has already occurred with the proliferation of victimless crimes (e.g., the "War on Drugs") as rationales for leading the rest of the world in prison populations!

With the nationalization of health-care, intelligent minds have begun to wonder if the failure of this system will result in Boobus acceding to the demands for more money and power being fed to it. Will the sheepish taxpayers continue their willingness to be fleeced to underwrite government subsidies to big-pharma’s research into an ever-expanding invention of new "diseases"? Will family members be satisfied with explanations that racial discrimination was not a factor in Uncle Willie’s death from having had to wait three years for open-heart surgery? Will cable news channels provide a platform for "experts" to explain why the shortage of physicians is due to "market failure" — rather than the failure to respect the market — and why it will be necessary to start hiring second-year college biology majors to become surgeons?

Instead of wasting our time trying to modify what will become yet another ruinous governmental fiction, we could take a lesson from the private security firms who profit from preventing crime. Whether apocryphal or historic, there are reported instances of societies in which physicians are compensated for remedies and treatments designed to keep patients healthy; that when a patient becomes ill, the doctor is required to treat him or her without charge. Perhaps physicians and patients alike — who will quickly become disenchanted with the U.S. Post Office approach to health care — may find in such examples alternatives that will involve neither attacking nor reforming government systems, but just walking away from them!

Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law. He is the author of the newly-released In Restraint of Trade: The Business Campaign Against Competition, 1918—1938 and of Calculated Chaos: Institutional Threats to Peace and Human Survival. His latest book is Boundaries of Order.

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