Isn’t government intervention in the economy always a mistake?

By Gary Shogren, Seminario ESEPA, San José, Costa Rica
Is government intervention and restriction of free enterprise always diabolical? It seems to me we can come up with some positive examples of it: the government regulated banks (Jefferson, Jackson, Teddy Roosevelt, many others); freed enslaved labor (Lincoln); introduced anti-trust law and passed the Food and Drug Acts (Republican Teddy Roosevelt again, one of the great interventionist presidents); created OSHA (Nixon); and the minimum wage acts of 1938 (FDR, one thing of his I applaud); Eisenhower’s Interstate Highway System. All of these seriously limited free enterprise in some way, by telling employers what they could/could not do (what to pay workers, forbidding slave labor, outlawing conspiracy to fix prices, banning the sale of food and drugs without disclosing their contents, allowing unsafe work sites). They cost industry a great deal of money, all probably caused prices of the products to skyrocket, and they generated an extremely anger reaction. All were in my opinion excellent improvements, in the direction of a more just society and in the medium turn a more prosperous one. In addition, there is the federal Fair Housing Law of 1968, which prohibited racial discrimination in housing. It was widely detested: it was thought, correctly or no, that if blacks moved into a neighborhood, the market values of surrounding properties would fall.We take too much for granted today that a landlord cannot put up a Whites-Only sign on his apartment building; that the government shuts down companies that allows rat droppings in the food they produce; that a few company owners can’t try to corner the market in order to drive up their profits. We take for granted intervention that even decades ago would have been thought a fantasy.

I would throw on the pile that people are forced to buy auto insurance and to spend money on car safety seats for their infants.

I could give a list of other acts that I view unfavorably: just a few are the Smoot-Hawley Act in 1930 (both were Republicans), which tried to use trade protection to get the USA out of the stock market crash and arguably caused or greatly prolonged the Great Depression; most of the other New Deal by FDR; Reagan taking away the air traffic controllers right to organize (the PATCO union), a basic right of all American workers; Nixon with his wage and price controls in 1971 – a great idea on paper, maybe, but such a failure that Carter refused to do the same in 1980. There are plenty of others, but perhaps my readers don’t need to see more examples in order to be convinced.

My suggestions: let’s weigh the health bill on its own merits, not on the assumption that all government intervention is inherently harmful to the nation and to its economy or that it has as its primary or even secondary goal to rob citizens of their freedom.


What do you think?

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: