Absent the three Ps of property, prices, and profit and loss, individuals will be devoid of the incentives and information required to continually innovate and coordinate their plans to realize the gains from trade and the gains from innovation.
-Peter Boettke (What Should Classical Liberal Political Economists Do?)
The Left (Socialists, Communists, Collectivists) all consider ANYTHING that an Individual does is “Greed” or “Greedy”. Yet, they themselves conduct themselves accordingly in their own self-interest. They never want to admit that anyone acting in commerce is acting for themselves – it is always and only for the “collective good”. Thus, they demonize self-interest as Greed.
In believing that the Collective should direct all activities, especially those in the economic sphere, PROFIT is just as bad and have demonized it as “stealing”. PRICES should only be set to recover actual costs (and often, only those of Labor, heeding back to Marx) with never a thought that without Profit, there can be no making a product better – or even bringing new products to the market (e.g., Comrade Bernie Sanders telling us that we don’t “need” 53 different kinds of underarm deoderant even as the Market (that would be us) says “Yes, we want it”.
Oh yeah, these same people are just DYING (or having us die) to limit us to what we NEED versus what we WANT. Control to the max, baby!
And nothing bothers these Collectivist more than Private Property. Which, I have said before, is the foundation of Freedom (along with the Right to Free Speech and Conscionce).
Prof. Don Boudreau adds this (emphasis mine):
This point cannot be repeated too often – the reason being that this point is too often never learned, or it is forgotten or ignored. And those persons who are among the most prone to overlook this point are proponents of industrial policy.
Industrial policy, by its very nature, attenuates property rights, overrides market prices, and distorts signals of profits and losses. With industrial policy, owners of inputs are not allowed to sell their inputs as they choose; owners of production facilities are not allowed to operate their facilities as they choose or in ways guided by market prices and the willingness of investors to invest, or not, their own funds. Income earners are not allowed to spend their own money as they choose.
The particular producers who are somehow (we are never told how) divined by industrial-policy officials to be ‘vital’ are protected from losses, or even have their profits topped off with funds taken from taxpayers. One result is that producers who are deemed not ‘vital’ confront artificial barriers in seeking profits or avoiding losses. After all, resources transferred to ‘vital’ firms must come from somewhere; these resources are drawn away from other, less-favored producers.
Note – didn’t we just live through two years of hell with Government deciding who or what was “Essential” and who or what as not? Again, from their standpoint, just a cog in their machine to do with as they like without any thought of what they were doing to those that were judged to be “valueless”.
And of course industrial-policy officials spend other people’s money. These officials have no claim on whatever residual sums are left to enterprises after the enterprises pay their out-of-pocket expenses. Genuinely plausible efforts to improve efficiency – and also to innovate – are thus muted.
And the most salient point of all: NO personal skin in the game in the case it all goes up in smoke. All risk is someone else’s problem and they just shrug their shoulders and move on to their next victim.
Nor do these officials personally suffer monetary loses if the enterprises they favor fail to perform up to these officials’ expectations. Genuinely wasteful ‘innovation’ – or, depending on the officials’ demeanor, genuinely wasteful stasis – is thus encouraged.
Although I – and, with greater clarity, others – have said so repeatedly, industrial policy will work as promised only if and when officials charged with carrying out industrial policy come to have both the mind and motivation of gods. This fact is why all arguments in support of industrial policy are, at root and through and through, religious arguments.
GOvernment should stay in its own lane and leave the rest of us alone.
(H/T: Cafe Hayek)
The post Notable Quote – So What Do Property, Prices, and Profit Have to Do with Each Other? appeared first on Granite Grok.
This content is courtesy of, and owned and copyrighted by, https://granitegrok.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.