Please note that this is nothing to do with a debate about capitalism or socialism: they are descriptions of who owns the productive assets in a society. It’s also nothing at all to do with whatever the correct level of taxation, state provision or anything about what redistribution should be in a society. It’s purely a point about how you try to achieve the goals that you’ve set yourself.
It’s entirely possible to alter or ameliorate the outcomes of market process. But the temptation to direct those market processes is where the problems come in. Take Venezuela: as I’ve repeatedly said there’s nothing immoral or necessarily undesirable about increasing the incomes of the poor or of reducing inequality. It’s just that the method that one uses to do this has to be taking money from richer people and then giving it to poorer people. Not, as they have done, attempting to do a whole series of price fixing. This was something that New Labour, under Blair and Brown, largely did get. Allow the economy to hum along and tax it to then pay for the results that you want.
Miliband was arguing the other way. That we should be doing that price fixing, that interference directly into the market, in order to achieve our goals. And that is the Venezuelan mistake.
We do in fact have in front of us an example of what most leftists consider to be a generally desirable outcome: the Nordics. They’re high tax, high redistribution states, oh yes they are. But they’re also, underneath that, markedly more classically liberal than either the UK or the US. That’s what makes the places tick. They don’t have minimum wages for example, let alone price fixing for energy. As Scott Sumner has pointed out Denmark might be the most classically liberal economy on the planet.
The real lesson I think the left needs to learn is that markets work. You can change the outcome through tax and redistribution if you wish: but don’t mess with the workings of the market itself.
Tim Worstall, “Under Miliband Britain Would Have Become Like Venezuela”, Forbes, 2015-05-09.
December 12, 2016
QotD: Don’t mess with the market
Filed under: Britain, Economics, Politics, Quotations — Tags: Denmark, Socialism, Venezuela — Nicholas @ 01:00
Comments Off on QotD: Don’t mess with the market
No Comments
No comments yet.
RSS feed for comments on this post.
Sorry, the comment form is closed at this time.
