Thursday, November 10, 2016

Economic conditions drive politics

From The Road to Serfdom:
A "merely" economic loss is thus one whose effect we can still make fall on our less important needs, while when we say that the value of something we have lost is much greater than its economic value, or that it cannot even be estimated in economic terms, this means that we must bear the loss where it falls...

Economic changes, in other words, usually affect only the fringe, the "margin," of our needs... This makes many people believe that anything which, like economic planning, affects only our economic interests cannot seriously interfere with the more basic values of life.

This, however, is an erroneous conclusion.
Excerpts from The Road to Serfdom by F.A. Hayek, Chapter 7.

Hayek was writing about central planning, in a chapter titled "Economic Control and Totalitarianism". But the objection to central planning is an application of his argument. Don't be distracted. Look instead at the essence of Hayek's argument: Economic issues can and do "interfere with the more basic values of life."

Economic conditions drive politics. But the more we focus on politics rather than econ, the farther we are from real solutions.

No comments: