The Daydreaming of a Would-Be Despot

Justin Trudeau Backstage with MediaIn an astute bit of political commentary from a seemingly unlikely source, actor Seth Rogan, a Canadian, once remarked that, “where I come from, communism is not a terrible word.”

And based on a recent admission by a Canadian political leader, altogether stunning for its honesty, it appears that we can now add the word “dictatorship” to our nation’s hypothetical list of not-so-terrible terms.

Justin Trudeau is the eldest son of the late Pierre Elliott Trudeau, former Prime Minister of Canada. He is the leader of the federal Liberal Party. He is also currently favoured to become the next Prime Minister of Canada.

During a recent “ladies-night” themed fundraiser, he was asked about “which nation’s administration he most admired.” Trudeau responded:

There is a level of admiration I actually have for China because their basic dictatorship is allowing them to actually turn their economy around on a dime and say we need to go green, we need to start, you know, investing in solar. There is a flexibility that I know (current Prime Minister) Stephen Harper must dream about: having a dictatorship where you can do whatever you wanted, that I find quite interesting.

This statement is a far cry from the aforementioned musings of an unkempt Hollywood man-child. Rather, it sounds like the daydreaming of a would-be despot.

And it couldn’t be more misguided.

The Failure of the Political Means

In 1908, German-Jewish sociologist and political economist Franz Oppenheimer distinguished between the two means of obtaining wealth. In short, he explained that wealth can be created by economic means through voluntary exchange in a free market economy. Alternatively, it can be stolen from others. He appropriately called this the political means.

It should come as no surprise that totalitarian dictatorships prefer to employ the latter method.

From 1949 until 1978, the Communist dictatorship in China practiced socialism. There existed no personal property. Under Mao Zedong, at least 60 million people were killed. And twice that number may have died as a result of desperate economic conditions.

Ludwig von Mises, writing in his 1920 essay “Economic Calculation in the Socialist Commonwealth,” predicted and explained this utter failure. He understood that people make trade-offs because they can’t have everything, and that in a free market economy the price system determines what is produced, how it is produced, and for whom it is produced. Because there are no capital markets under socialism, no one knows what anything should cost. As a result, goods and services cannot be allocated effectively. This is what transpired in Communist China under socialism.

Embracing the Economic Means

Fortunately, conditions began to improve in China in 1978, when socialism gave way to creeping capitalism in small villages like Xiaogang. It was here that farmers, in spite of fears of execution by Communist party leaders, conspired to assign plots of land to families. It was agreed upon that they would keep what they grew in excess of the quota for the collective.

As a result, they worked harder. Farmers who formerly dragged themselves out of bed only when the morning work whistle blew, began to tend to their fields before dawn. At the end of the growing season in Xiaogang, their harvest exceeded the previous five years combined. Nothing had changed but the economic incentives.

It was this newfound degree of output that aroused the suspicion of local Communist bureaucrats. But as luck would have it, the Communist Party leadership, under Deng Xiaoping, decided to embrace the practice, instituting a new policy for agriculture wherein farmers could grow what they wanted and sell their crops to other Chinese without government intervention.

Indeed, the socialist dictatorship had so destroyed China’s economy that the institution of even marginal free market practices triggered the greatest period of economic growth in recorded history.

It is important to emphasize that China’s economy is not without many serious problems. Today, mercantilism rules the day. This will assuredly lead to continued Solyndra-like debacles that politicians of Justin Trudeau’s ilk refuse to acknowledge while they advocate for more government investment in politically-fashionable pet causes.

Conclusion

The China example illustrates that advancing liberty brings increasing economic prosperity. We must abandon the political means in favour of the economic means of acquiring wealth. As Murray Rothbard explained:

On the one hand, when the society is free and there is no intervention, everyone will always act in the way that he believes will maximize his utility, i.e., will advance him to the highest possible position on his value scale… Any exchange on the free market, indeed any action in the free society, occurs because it is expected to benefit each party concerned. If we may use the term “society” to depict the pattern, the array, of all individual exchanges, then we may say that the free market maximizes social utility, since everyone gains in utility from his free actions.

Coercive intervention, on the other hand, signifies per se that the individual or individuals coerced would not have voluntarily done what they are now being forced to do by the intervener. The person who is coerced into saying or not saying something or into making or not making an exchange with the intervener or with a third party is having his actions changed by a threat of violence. The man being coerced, therefore, always loses in utility as a result of the intervention, for his action has been forcibly changed by its impact.

Much to the chagrin of political leaders like Canada’s Justin Trudeau, would-be dictators telling us what to do and what not to do won’t turn our economy around “on a dime.”

But having the freedom to live without their interference just might.

  • Subscribe via RSS
  • About Gregory Cummings

    Gregory Cummings writes about Canadian monetary and economic policy. His writing has been featured at the Ludwig von Mises Institute of Canada and the Ludwig von Mises Institute's Mises Daily publication. Read more.

  • Categories

  • Popular Posts

    Google Analytics Popular Posts Alert :
    Please check/recheck/enter your Google Analytics account details (username and password).
  • Archives