In the past few posts, I sought to draw attention to drift, even on the right to a state-directed economy. This tendency is more pronounced on the left, but this idea is gaining currency. In their genius, government elites will provide better outcomes than market-based solutions. Rather than greedy profiteers who only think about their bottom line making decisions, we accommodate all stakeholders. 

On the surface, this sounds plausible. The best and the brightest of our society are more intelligent than we are, so these “expers” are bound to make better decisions. 

As I pointed out in my series, “The Long Journey to More,” elites’ rule was how we organized settled societies worldwide for thousands of years. A usually hereditary group, generally less than ten percent, controlled the rest of the population. The government, clergy, and military resided here. The masses mostly toiled at subsistence, any surpluses extracted for the benefit of the ruling class. The rest of the people will get their reward in the next world.

As bad as this sounds to us today, this organization made sense. Knowledge of when and what to plant, how to build and maintain irrigation systems, and a host of other things needed exchangeable knowledge, but the costs of literacy severely limited its availability. Putting marks on clay tablets and preserving them is time-consuming. Writing with ink on parchment consumed the lives of many monks—the scarcity of things available to read limited literacy to a few.

Further, the educated class had little incentive to change a system benefitting them with the best things available. Change might upset their position. For this reason, innovation of any kind was suspect and often opposed.

Merchants, on the other hand, are open to anything reasonable to increase their profits. Even when rich, those involved in commerce were hardly ever in the top class.

The upper classes tolerated merchants to supply the luxuries they craved and to provide taxes to sustain their military and government. Merchants were a necessary evil, endured, not venerated.

The 15th Century found Europe decimated by plague and divided into competing, often waring states. Between them and the spices and other goods they desired from the far east lay powerful traditional Empires of the Ottoman Turks, Mughal India, and China. Weakness left them looking for an edge—welcoming innovation rather than shunning.

In one Century, imaginative banking funded the building of ships carrying expanded cargo able to deal with a great range of conditions and spread the use of the printing press. Before the end of the Century, Europeans had reached the New World and rounded Africa. The world had changed.

The Ottoman Turks banned the printing press. No Chinese Junks or Arab Dhows made it around Africa or visited the new world. Europeans ruled the seas. With relatively cheap books, literacy expanded beyond the top 10% to a point where ordinary people had at least a bible. 

Suddenly millions of people without investment in the status quo could combine innovative ideas with access to capital to bring them to market. The market determines success or failure. Rather than a disinterested upper class, the mass of people had access to knowledge and the incentive to use it.

While we respect our well-educated elite, it s best to remember Guttenbury and Edison weren’t products of great universities. The more literate market-connected people we have, the more likely we will get life-improving innovation.

A group of elites serving narrow interests will never out-compete billions of people bringing products and services to participate and abide by the markets. Today’s computers have many times the power of an early Apple to produce results much quicker. So it is with more literate people connected across the earth. 

We see the results of limiting decisions to the same groups, the educated elite and now the new environmental clergy that produced little for thousands of years. The governmental elites so mishandled the Covid epidemic that we will suffer the results, especially our children, far into the future. Others outside the government were just as bright and had better ideas, but only some governors listened.

In the coming election, we must avoid the candidates on both sides clinging to the idea that industrial policy works. How many of today’s politicians claim we will be richer if we produce everything we need right here? Things will cost more, but we offset that with subsidies and tariff walls.

When or where has this worked? Yet we have subsidies and tariff walls built to produce domestic electric vehicles. Trump’s quixotic quest to save the Lorrdstown, Ohio, Auto plant indicates how successful this path is. It recently filed for bankruptcy. It’s only the tip of the iceberg.

We all need to note the politicians attending the groundbreaking for the highly subsidized battery plants springing up in response to Biden’s humorously named Inflation Reduction Act, with the high priests of the environmental creed preventing domestic mining of all the inputs. 

Be on the lookout for those who claim the nations with positive trade balances are ripping us off; paying our tariffs is done by anybody, but Americans, immigrants, and more children will overwhelm our resources. There are those proposing all sorts of “improvements” without a method to do them in a timely, cost-effective manner.  

Jake Sullivan, Biden’s national security chief, has spelled out how the administration views things, “Frankly, our domestic economic policies also failed to fully account for the consequences of our international economic policies,” he said. “In letting globalization and automation hollow out domestic manufacturing, Democrats had been part of a Washington consensus that “had frayed the socioeconomic foundations on which any strong and resilient democracy rests.”

Globalization and automation are just synonyms for trade and innovation, the two ways humanity gains “More” other than taking it from others. Yet, a prime spokesman for Bidenomics tells us curbing these trends is necessary. Simply put, these people are against progress.

Due to significantly increased trade and innovation, eight Billion people live far better today than the 1/2 to 3/4 billion before 1400. Why would we listen to these modern Luddites? 

If you still support this “industrial policy” nonsense, I recommend you read “Superabundance.” by Pooly & Tupy. For those Pressed for time, a good Kindle summary is available on Amazon for $4.99. We have never had more access to information. Please take advantage of it before the elites take it away from you. Whether we end up like Cuba, China, or Venezuela is up to us.