One of the fundamental laws of economics is that human beings act on incentives. People make choices to act every day, all the time. The choices they make, are without fail, whether they will be left better or worse off. As a matter of fact, people remain inactive until they have made their choice whether the next action will leave them better or worse off. Consider this, you are sitting in your chair. You’re stomach growls. The choice crosses your mind whether to get up, go into the kitchen and make a sandwich or remain seated and continue to watch the game on TV. Only you know which choice will leave you better off. This is because the marginal value of putting the effort forward to make a sandwich or continue watching the game is subjective. The point is, a choice WILL be made. This is one of the defining attributes that make us human. We act by design, not by instinct.
The Essence of Choice
People choose to go to work not because labor is necessarily fun, but rather, by not working and earning an income people believe they will be left worse off. Working is simply a means to an end. The end, ultimately, is to acquire goods and services. Conclusively, money must be used in order to exchange for those goods and services. Working is obviously just one example of receiving income. Some start a business, some invest and still some choose the immoral path of theft. Whatever choice individuals make, they believe by having an income they are left better off. Even welfare recipients receive a kind of income that will allow them to acquire goods and services. To clarify, most people believe by not having money they will be worse off. Nobody chooses destitution.
Choice involves more than just economic decisions. We make choices all the time about a myriad of things. Should we take the highway or the back roads? Vanilla or chocolate? Remain single or get married? Where to live, what kind of house, rent or buy, how many kids to raise and so on. The choices human beings make any given day are almost endless. Each choice affects the individual directly. Each choice is an act of sovereignty. As autonomous emancipated adults, the choices we make are our own, for better or worse. This is the essence of freedom and liberty.
The question begs, what would life be like if our choices were limited? Other than physical, economic or moral constraints, limiting someone’s choice denies them the very thing that makes them free. It is our choices and what we do with them that define us. When choices are limited, freedom is limited correspondingly. The amount of freedom lost is only a matter of degree in accordance with the limitation. The total absence of choice is a definition of slavery. I repeat, by not allowing your fellow man his ability to make choices for himself, you are in effect subjecting him to slavery.
Loyola University economist Walter Block pointed out that some choose to voluntarily subject themselves to slavery. There are some members of society who would rather have the state make the important choices for them. Some only require room and board for the labor they perform. Yet others believe they are left better off by surrendering their freedom altogether, remain incarcerated, and have the state take care of them like children. There are always those exceptions.
With the establishment of government, one has to contemplate how our choices are limited and to what degree. The state is a monopoly of force within a defined geographical location. The state has no power of force in and of itself. Someone must first surrender that power to the state. Governments are simply a group of people who administer and execute laws, regulations, edicts, and decrees on those who are not members of the government. By participating in an election, the voter is essentially choosing a stranger to make choices for them or limit someone else’s choices. This elected official now has been given the power to limit the choices of his constituents. The voter, in essence, is saying one of three things:
1. “Candidate Jones can make better choices that affect my life.”
This voter hasn’t the ability to make the choices that would leave him better off. This voter has failed to rise to the level of maturity needed to handle the consequences of choices that have gone wrong. The efforts required to either educate himself or acquire the needed skills to leave himself better off are not worth the cost. It’s easier to have an “adult” in charge for this voter to continue playing games and muddle through life.
2. “Candidate Jones is my friend and I will join with him in the theft of my fellow man.”
This voter is either a campaign donor, a friend or decided to live off the taxpayer. The government has no money of its own. The state doesn’t produce goods or services in accordance to the voluntary regiment of the marketplace. In order for the state to function, it must take money from someone else. This is called taxation. The politicians make the “laws” that exempt themselves from the prosecution that citizens would face by stealing from others. Taxation is legalized theft and this voter wants to be in on the racket. Once theft is legalized, it pays for everyone to get in on it.
3. “Candidate Jones will limit the choices of my fellow man.”
This is where most “informed” voters fall. They like the fact that Jones will keep their fellow man from the choices that they would not have made for themselves. The examples are legion. This voter chooses Jones as his agent to wield the force of government over his fellow man. In the name of “it’s for their own good,” this voter trots off to the polls to make that informed decision. This voter is the epitome of what’s wrong with democracies. By granting the power to a handful of strangers in a far away, disconnected capitol, this voter is merely a scaled down version of any historical tyrant. Combine many small tyrants and you get one big tyrant. Thus, democracy is tyranny diffused. This voter only hopes that Jones won’t renege on his campaign promises and will perform as advertised.
These three explanations may seem a bit bold, but boiled down, this is why people participate in an election. Just like any other human action, voters are choosing what they think will leave them better off. The democratic process is tyranny. What about the voters who’s candidate didn’t win? They now have to suffer the decisions the opponent will make until he leaves office. The total imbecility of a politician making that typical “I will represent all of my constituents” post-election speech is an act of futility and deception. Would a politically left politician make right-wing choices so the losers don’t feel left out? Of course not. A majority of voters have just authorized their candidate to lord it over the other voters. Party loyalty aside, one or any combination of the three reasons above are regularly considered.
As Jefferson said, “ The natural progress of things is for government to gain ground and liberty to yield.” With every vote, the citizen is giving his consent, and with it, the power to the state to continue to grow and limit the choices of society. Each new law, regulation or dictate means yet more choices will now be limited. The increase in this limitation is a steady progress toward having no choices at all. The absence of choice is slavery. A slave doesn’t choose to work. He doesn’t choose where to live, whether to get married or raise kids. A slave doesn’t choose what to wear or what to eat. Choices are made for them. A slave must first be granted permission to act on choices. Imagine how free our ancestors were in comparison to society today. Did they seek permission to bear arms? Was the second amendment limited? Consider the steady assault on the other articles of the Bill of Rights. When were the pioneers forced to buy healthcare or forbade from drinking from a big cup? There is nobody innocent here. This steady progression began with our ancestors. It was 1856 when the Whig party died out and the Republican party began. The Whigs allied with the “Know Nothings” in the 1850’s to form a Republican platform that was comprised of the “Three R’s”. That is, a war on Roman influence (Catholicism), Rum (Prohibition) and Revelry (Fun). This notion of saving people from themselves progressed into the monstrous leviathan state we have today. The latest addition in the 20th century was the Wilsonian and neo-con belief of saving the world from itself by making it safe for democracy.
The Economics of Choice
It is clear to see how important it is for a free society to have freedom of choice. The freedom to win or lose. Allowing the state to get involved in the day to day decisions that people must make is lethal. History stands as a witness to the steady progression of ever growing tyranny and yielding freedom. By simply limiting the kind of money consumers wish to use through legal tenders laws, the state has put the economy on a continual downward trajectory. Since money is 50% of every transaction as the medium of exchange, the state restricts every consumer’s choice. The government’s central bank chooses how much value, relative to other currencies, your labor will produce. By controlling the choice of where interest rates will be through money creation, the Federal Reserve has determined how much savers will earn or loose. Through this manipulation, the Fed has chosen to push savers into the stock market and expose them to the kind of risk they would not have had before. For the average person, choosing whether to be left better or worse off has become limited.
When information is skewed by government’s intervention into the market, entrepreneurs and consumers alike cannot make correct choices on what actions to take. Price controls are an example of how shortages come about. Artificially low-interest rates bait entrepreneurs into investing into more roundabout projects that end up going bust. Regulations often cause unemployment as entrepreneurs are choosing to avoid employee litigation. Not to mention the recent developments of the Affordable Healthcare Act’s effects on employers deciding whether to hire more than 50 people or how many hours they can work. Central planners distort incentives that lead to large scale corrections down the road for everyone.
So many choices are made by so many people any given day that goes unnoticed. The importance of acting on those choices is paramount in how people decide they will be left better off. We learned that when governments get involved in this process our choices become limited. This limitation of choice, when unchecked, will lead to a loss of freedom and eventually tyranny. By empowering the state, through the delusion of democracy, voters are limiting the choices of their fellow man.
Chicago economist and Nobel Laureate Milton Friedman wrote a book titled, “Free to Choose,” where he goes into great detail about the importance of choice in a free society. His book and TV documentary inspired millions. As a monetarist, Dr. Friedman overlooks one of the most important choices a free people could have; what kind of money they wish to use. As so many Nobel economists often do. It was Nobel laureate F.A. Hayek who wrote the essay, “Choice in Currency” at the height of the 1970s inflationary crisis. In his essay, Hayek stresses that all people should be free to use the currency of their own choosing. Regardless of if they reject their own domestic currency. This choice puts a check on the central bank’s ability to inflate and thus reduce standards of living. Something as simple as this could be just the reform that is needed today. By allowing people the real freedom to choose societies around the world could make that decision to be left better off.
[image credits: My Year Without Clothes Shopping]
[This article was first posted at The Libertarian Liquidationist]
1 “Toward a Libertarian Theory of Inalienability: A Critique of Rothbard, Barnett, Smith, Kinsella, Gordon, and Epstein” by Walter Block
2 “Origins of the Welfare State in America” by Murray Rothbard