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April 2017 Policy Study, Number 17-8


A Commentary on American Public Policy


Part 20



At this point, we must return to a topic that was touched upon earlier.  It is the matter of demand.  To refresh the memory, a previous paragraph has been included here for the reader’s convenience:


There are those who believe that “demand” is the need for, or desire of, goods or services.  Neither the urgent need for nor the simple desire of, goods or services directly translates into “demand.”  There is an additional factor that must be taken into account.  That is the matter of means.  The person or entity with the need or desire must have at their command the economic wherewithal to fulfill the need or desire.  Please notice that it was stated that they “must have at their command,” not “must personally possess,” the wherewithal.


When desires are satisfied through the private sector, the person to be satisfied and the person with the command of the wherewithal are one and the same.  When desires are satisfied through the public sector, the person to be satisfied and the entity (person) with the command of the wherewithal are two distinctly different entities.  The person with the desires to be satisfied may or may not have command of any wherewithal, but it isn’t imperative that he does.  That is because, for all practical purposes, the entity (government) with the command of wherewithal always has command of wherewithal in sufficient value to satisfy the desires (now demands) of the former.  The government either borrows or taxes the producer (someone who creates wherewithal through the use of his own faculties) at a sufficient rate to be of equal value or more value than the value of the demands.  That is, real demand is created because government provides the means to fulfill demand.


With the person having the desires to be satisfied no longer personally responsible for the consequences of his actions and knowing with some certainty that his demands will be met, he demands ever more, and the government makes (fulfills) his demands real.  For all practical purposes, we have created a condition with virtually unlimited demand.  Unfortunately, we will always be subject to the countervailing force of limited supply.  And when supply is limited and demand increases, the cost to satisfy the demand also increases, often dramatically.


And wouldn’t you know it; that is just what happens.  Examine any area where the citizen obtains assistance from the government.  In fact, examine the areas where government assists us the most, and you will find the rate of increase in the cost of satisfying our desires in those exact areas to have increased the most.  Two areas jump immediately to mind.  They are healthcare and education.  Governments, both state and national, have an extremely large interest in each of these areas.  And the cost of satisfying our desires in each of these areas has increased at a much greater rate than most of the other costs of satisfying our desires.  Further, it would be a safe, though probably unverifiable, bet that the cost of satisfying our desires in these two particulars areas has risen both much faster and much higher than it would have if the government had not been quite so “helpful.”


To add insult to injury, one need only recall to mind the old adage, “He who pays the piper calls the tune.”  Government boastfully claims the credit for providing (it actually comes from the producers) the wherewithal; therefore, government gets to pronounce what kind of medical treatment we shall receive and what our children will be treated to for an education.  We have lost our personal, along with our doctor’s, choice in health care.  We parents have lost much of our choice in what our children will receive for an education.  If you have ever wondered why we are losing these two choices, along with far too many others, now you know why.  When you try to use government to satisfy your desires instead of taking responsibility for yourself and using the private sector, you lose control of your own interests.  Money (wherewithal) is power.  And with every dollar you allow the government to extract from you, you are ceding that much power to the government.  When it concerns any of your desires that you can provide for yourself, it isn’t an equitable trade.


Earlier, it was stated that on the surface, the alternative of already possessing the wherewithal to satisfy your own desires would seem to be little affected by the introduction of government in satisfying the desires of others, and that may have been true on the surface.  But as you can see, it did affect you in the form of higher prices and the loss of personal choice.  But it still isn’t done.


The cruelest effect of using government as the agency to satisfy personal desires falls on each and every one of us personally.  It is a pox on us — psyche — mind, body and soul.  Instead of being more than the sum of our parts, the opposite occurs.  We become less than the sum of our parts.  It diminishes us.  It diminishes us both as individuals and as human beings.  And it is this very quality of humanness which makes us susceptible to its pernicious effects.  Some of us succumb sooner, others later.  Some of us succumb to a greater extent, others to a lesser extent.  But we are all susceptible.


What is this pox?  It is the fatal tendency of which Bastiat wrote.  It is the very human impulse to satisfy our own desires at the expense of others.  Bastiat said, “This fatal desire has its origin in the very nature of man — in that primitive, universal, and insuppressible instinct that impels him to satisfy his desires with the least possible pain.”  It’s true that most of us try very energetically to rise above this natural weakness.  Sometimes we succeed, and sometimes we fail; even so, we continue to resist the temptation.  But as we look around ourselves and see that more and more of our fellow men are taking advantage of us, using the agency of government to do their dirty work, it becomes ever more difficult to resist.  We are diminished to whatever extent the diminution of the motivation to satisfy our desires ourselves through the use of our own faculties sets in.  We are diminished to whatever extent we succumb to the impulse to satisfy our own desires at the expense of others.  We fail morally.  It’s true that some people will never give in to the temptation; but they are the exception.  In any event, not everyone must succumb for the consequences to be dire.


To reiterate a previous argument:  there is a point, a critical mass, at which government will inevitably fail because the minority will simply throw up their hands and refuse to support the majority.  The minority will have reached the point at which they will no longer tolerate others (majority) satisfying their desires at their (minority) own personal expense.  Why continue to create with your own faculties when your desires will be fulfilled by a gift, and with certainty?  Why continue to create with your own faculties when your creation, the fruit of your labor, must be forcibly shared with all and no matter the size of the share that you produce, the share which you receive will be no larger than anyone else’s share?  Man will cease to resist temptation.  Now the sweeping majority of people will decide to satisfy his own personal desires with the least pain at the expense of any and everyone else.  They will each demand their own fair share of the lucre. 


At this point, increases in production will cease.  The pie will no longer grow.  We will simply continue to reallocate and consume our already existing resources and reallocate and consume our remaining existing resources until there isn’t enough left to sustain us.  This is why socialist governments fail — it is the method democracies use to murder themselves.  Using government as the insurer of last resort, using government as an agency to satisfy personal wants with public wherewithal, simply cannot be sustained interminably.  The practice will, inexorably and most assuredly, destroy the very government that made it possible in the first place.  The time will have come to pay the piper for our foolishness, as President Adams warned:  “Remember, democracy never lasts long.  It soon wastes, exhausts, and murders itself.  There never was a democracy that did not commit suicide.”  Also, “All governments inevitably fail when the people learn that they can grant themselves largesse [gifts] from the public treasury.”  (Unknown).


I seriously apprehend that . . . [America] will, in some season of adversity . . . do things which will prevent prosperity from returning; that you will act like people who should in a year of scarcity, devour all the seed corn, and thus make the next year a year, not of scarcity, but of absolute famine.  There will be, I fear, spoliation . . . distress . . . [and the] distress will produce fresh spoliation.  There is nothing to stop you.  Your Constitution is all sail and no anchor . . . [W]hen a society has entered on this downward progress, either civilization or liberty must perish.  Either some Caesar or Napoleon will seize the reins of government with a strong hand; or your republic will be as fearfully plundered and laid waste by barbarians in the twentieth Century as the Roman Empire was in the fifth; — with this difference, that the Huns and Vandals . . . came from without, and that your Huns and Vandals will have been engendered within your own country by your own institutions. (Thomas Babington Macaulay in a letter to H. S. Randall, 1857, an American biographer of Jefferson, quoted in Russell Kirk, ed., The Portable Conservative Reader, 1984, excerpted from The Concise Conservative Encyclopedia by Brad Miner).


Two of the three prior quotes give us a glimpse of what their authors believed about governments of the past, as far back as two millennia, and the third is a rather gloomy assessment of our future.  If the past is indeed the prologue to the future, and the author being an avid — if not exactly keen — observer of history, believes that it is, then it would seem that there is not much question in regard to “if our government will fail.” 


The remaining question to be answered is, “When will our government?”  Governments of the people (democracies as opposed to dictatorships) fail because the people fail.  Governments that legalize plunder to be used to provide for the tangible desires of the people inevitably and inexorably promote the moral failure of those very same people.  And if we don’t soon reject this notion of social insurance provided through the agency of government, our failure will be sooner rather than later.  The author fervently prays that it is not too late to chart a better course, to return to the vision of the Founding Fathers for limited, constitutional government.




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