Wednesday, March 14, 2012

Major Statists Admit That Governments Don't Plan Ahead!

Last week I caught a segment on CBC Radio 1 about Ontario Environmental Commissar Gord Miller's Report on Ontario's Plan to Adopt to Climate Change. All that that my American readers need to know about the Canadian Broadcasting Corporation--a State funded media conglomerate--is that it is to the left of NPR.

The mid-day host, Lara Di Batista, introduced the segment by stating that the Commissar "found that the Government could be doing a better job." Of course he did. According to the world view of Statists, the Government, blessed as it is, can always "be doing a better job." That is to say, the Government should always intervene more than it already is. Indeed, Di Batista addressed the Commissar by asking: "You found that there are some things that the government should be doing, but isn't. What are some of your key findings?"

The Commissar, being the faithful servant that he is started off by  pointing out that "overall I was pretty favorable about the plan. There's 5 stated goals, 37 action items identified, but they don't really say how they are going to prioritize." But then he hit on the crux of all socialist programs: "There are budgetary restraints. So, how do we measure if we are going to be successful?" Private enterprises have a very easy mechanism that measures success: the profit/loss scale! If a business is successful in delivering what is necessary and what is desired by the market (i.e. the citizenry), then the scale is tipped in the favor of profits. If a private enterprise is not being effective in delivering the desirable products and services to the market, then it suffers losses, which ultimately drive it out of business.

Governments lack this incentive mechanism because they can always keep financing their projects through violent confiscation of private citizens' property. That is, a project is never self liquidating--witness the Ontario Health Insurance Program, funded by excise taxes in alcohol and gaming.

The word "budget" has two completely different meanings when pertaining to Government and to private enterprise. To a private enterprise a budget is all the money available for a project. To run over budget in most cases means a premature end to the project. To Government, a "budget" is what a "legal drinking age" is in Macedonia: just a suggestion. And this is why a public project never gets completed within the originally set budget.

Back to the CBC Radio 1 story. The startling admission came in the final seconds of the interview.
LDB: Well, we know governments don't necessarily plan 10, 20, 30, 40 years ahead. And this is what you are asking them to do.
GM: You know, they used to. ...We used to take a longer view in our society, and that's what I'm asking people to do. Think about where things are going to be. Interestingly enough, I rely on Government of Ontario research reports. It's their data, their information that tells me what's going to happen, yet they are reluctant to put this in front of the public and say "hm-hm, excuse us, we have to do something different."
The Commissar did his best to remind us that "in the good old days" (which none of us ever seem to remember) Mother Government always took care of us. We're just SOL to be stuck with a bunch bad apple politicians, who, thankfully, are not eternal like the State. Nevertheless, he tacitly agreed with Di Batista's admission.

The fact is that just as governments have no incentive to turn a profit, they have no incentive to take the long view. As Rothbard wisely observed, whatever politician is in office s/he is only concerned with the next election, and the most expedient solution. (Not that I mean to brag, but I came to the same conclusion independently before I familiarized myself with Rothbard. The link takes you to a link of an essay I wrote more than a year ago, but published recently.) For those reasons governments are bad stewards of the environment. In a lecture titled Conservation and Property Rights, Professor Rothbard makes the very reasonable case that by privatizing every square inch of land and ocean, the environment would be best protected from pollution and over exploitation.

Rothbard based his argument on simple economics. Private entrepreneurs would take care of their property (be it a forest, a mine, a parcel of the ocean, etc.) because it would represent an investment--which much like a house, the entrepreneur will have an incentive to have some value to sell off. At the same time, the laws of the interactions of supply and demand (Say's Law) force entrepreneurs to make available only so much of a given product as it is profitable to do so. In other words, the owner of a forest would have no incentive to chop down the entire forest at today's prices and be left with nothing to sell next year or for the next 30-40 years. Thus, s/he plans "10, 20, 30, 40 years ahead."

So, if you really want to protect and preserve the environment, support capitalism.

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