[ Pobierz całość w formacie PDF ]
. No school ofeconomic thought, not even the Keynesian, advocates a big tax increasewhile the economy has not yet recovered from a recession; and yetClintonomics does.But though Clintonomics be madness,  yet there is method in it. Forshining through all the lies and contradictions and evasions, there is onePolitics As Economic Violence 107red thread: government power increases at the expenses of the privatemarketplace.In short, Clintonomics is, in essence, a Great Leap Forward,American style, not toward Maoist communism but toward DemocraticSocialism, toward Marxism without the Leninism.So far, the American public, snowed by the propaganda of Clinton sPermanent Campaign, seems to be willing to accept the  sacrificesinvolved, cozy in the assurance that the rich guy down the block will beforced to sacrifice even more.In the long run, however, Americans willfind soaking-the-rich to be cool comfort, indeed.34Price ControlsAre Back!Bad and discredited ideas, it seems, never die.Neither do they fadeaway.Instead, they keep turning up, like bad pennies or Godzilla in theold Japanese movies.Price controls, that is, the fixing of prices below the market level, havebeen tried since ancient Rome; in the French Revolution, in its notorious Law of the Maximum that was responsible for most of the victims of theguillotine; in the Soviet Union, ruthlessly trying to suppress black markets.In every age, in every culture, price controls have never worked.They have always been a disaster.Why did Chiang-kai-Shek  lose China? The main reason is nevermentioned.Because he engaged in runaway inflation, and then tried tosuppress the results through price controls.To enforce them, he wound upshooting merchants in the public squares of Shanghai to make an exampleof them.He thereby lost his last shreds of support to the insurgentCommunist forces.A similar fate awaited the South Vietnamese regime,which began shooting merchants in the public squares of Saigon toenforce its price decrees.Price controls didn t work in World War I, when they began as selective ; they didn t work in World War II, when they werecomprehensive and the Office of Price Administration tried to enforcethem with hundreds of thousands of enforcers.They didn t work whenPresident Nixon imposed a wage-price freeze and variants of such a freeze108 Murray N.Rothbard: Making Economic Sensefrom the summer of 1971 until the spring of 1973 or when PresidentCarter tried to enforce a more selective version.The first thing I ever wrote was an unpublished memo for the NewYork Republican Club denouncing President Truman s price controls onmeat.I was a young graduate student in economics at ColumbiaUniversity, fresh from my M.A., and I wrote the piece for theRepublican campaign of 1946.Price controls, I, and countless economistsbefore and since, pointed out, never work; they don t check inflation, theyonly create shortages, rationing, declines in quality, black markets, andterrible economic distortions.Furthermore, they get worse as time goeson, as the economy adjusts out from under these pernicious controls.In 1946, all federal price controls had been lifted except on meat, andas a result, meat was in increasingly short supply.It got so bad that nomeat could be found, and diabetics could not even find insulin, a meat-derived product.Radio disk jockeys implored their listeners to write totheir Congressmen urging them to keep price controls on meat, for if notthe price would triple, quadruple, who knows, rise to infinity.(Ignoredwas the question: what s so great for the consumers about cheap meat thatno one can find?)Finally, in summer, President Truman went on the air in a nationwideradio address.Summing up the dire meat crisis, he said, in effect, that hehad seriously considered nationalizing the Chicago meatpackers in orderto commandeer hoarded meat.But then he realized that the meat-packershad no meat either.Then, in a remarkable revelation that few commentedon, he disclosed that he had given serious consideration to mobilizing theNational Guard and the Army, and sending troops into Midwestern farmsto seize all their chickens and livestock.But then, he reluctantly added, hehad decided that such a course was  impractical.Impractical? A nice euphemism.Sending troops into the farms, Trumanwould have had a revolution on his hands.Every farmer would have beenout there with a gun, defending his precious land and property from adespotic invader.Besides, it was a Congressional election year, and theDemocrats were already in deep trouble in the farm states.As it was, theOld Right Republicans swept both houses of Congress that year in alandslide, and on the slogan:  controls, corruption, and Communism. Itwas the last principled stand of right-wing Republicanism, and, notcoincidentally, its last political victory.Politics As Economic Violence 109Truman reluctantly concluded that there seemed to be only one courseleft to him: to abolish the price controls on meat, which he proceeded todo.In a couple of days there was plenty of meat for consumers and thediabetic alike.The meat crisis was over.Prices? They did not, of course,go up to infinity.They rose by something like 20% from the unrealisticcontrol level.The most remarkable part of this affair went unremarked: that PresidentTruman, apparently without knowing it, had conceded the crucial point:that the  shortage was, pure and simple, an artificial creation of his ownprice controls.How else interpret the fact that even he admitted that thelast, unfortunate resort to end the crisis was to abolish the controls? Andyet, no one drew this lesson and so no one initiated impeachmentproceedings.Twenty-five years later, President Nixon imposed a price-wage freezebecause inflation had reached what was then an  unacceptable level of4.5 % a year.I went ballistic, denouncing the controls everywhere I could.That winter, I debated Presidential economic adviser Herbert Stein beforethe Metropolitan Republican Club of Washington, D.C.After I denouncedprice controls, Stein re marked that, in essence, the price controls were myfault, not his and President Nixon s.Stein knew as well as I did that price controls were disastrous andcounterproductive, but I and others like me had not done a good enoughjob of educating the American public, and so the Nixon Administrationhad been  forced by public pressure to impose the controls anyway.Needless to say, I was not convinced about my guilt.Years later, in hismemoirs, Stein wrote of the heady rush of power he felt at Camp Davidwhen planning to impose price controls on everyone.Poor Stein: another victim amidst the victimology of American culture!And now, Bill Clinton is in the White House, and price controls areback in a big way.The FCC has ordered a 15% rollback on two-thirds ofthe TV cable rates in this country, thereby re-regulating communicationswith a bang.The reasoning? Since being deregulated in 1987, cable rateshave risen twice as fast as general inflation.Well: averages usually haveroughly half of the data rising higher and roughly half lower; that s thenature of an average.Are we proposing to combat inflation by going afterevery price that rises higher than the average?110 Murray N [ Pobierz całość w formacie PDF ]