While I try to think of another series to write, I have been thinking about an economics piece. In fact, I have a draft of another post explaining some basic economic concepts. But instead of finishing it, more interesting topics came up. In this post, I want to explore how the government uses economics to keep control over the population. There are some certain policies in particular that contribute to the tyrannical overreach of government. The policies include a lot of monetary policy which is primarily the tool of choice. Monetary policy is usually directed through the federal reserve. The other policies include things like minimum wage and industry regulations on banking. Some more unusual measures are ones that we have seen recently in this pandemic like price gouging measures. My point in the post is to dispel some of the myths of benefits of all these measures. Many politicians will claim policies such as these to be in the “best interest” of everyone. But what politicians usually don’t offer is the potential consequences of these policies.
Keynesian Economics
You may have heard of this term “Keynesian”. Keynesian just refers to the name of the economist who came up with this type of economics. The basic principle of Keynesian economics is to control the economy through monetary policy. The monetary policy involves controlling the interest rates of borrowing and savings. I find keynesian economic policy to be quite ineffective for the economy. However, it seems to be extremely effective for tyranny. The federal reserve is responsible for installing monetary policy. Although the federal reserve is not elected, the head chairperson is appointed by the President. One of the policies that keeps tyranny propped up is the printing of fiat currency or dollars. As you are probably know dollars are now backed by nothing after the removal of the Glass Steagall Act which keep the dollar pinned on the value of gold. The dollar is backed up by the credit of the government. Which means if the government goes bankrupt then the dollar loses all its value. (Yes, the government can default, doesn’t matter how money you print) This all means that the government can easily control the value of the dollar. All currency must be limited in supply in order to keep its value. The value of money equates to purchasing power. The over-printing of dollars often devalues the purchasing power. We will talk more about purchasing power when minimum wage is discussed.
Another policy that relates to the federal reserve is bank regulations. Not all regulations are bad, to be fair. But there are specific regulations especially regarding business operations. It has to do more with the borrowing interest rates because the government tries to control how much and when businesses can borrow. But in addition, the banking and industrial specific regulations encourage monopolies. There is a common misconception that government somehow prevents monopolies. But the reality is that government is actually a monopoly in and of itself. Big corporations often use government policies to their advantage. Regulations keep the price of business high, and keep potential new-coming competitors from being able to get in. This occurs in many industries such as energy, telecommunications and healthcare. The government uses the federal reserve coupled with regulations to keep businesses and individuals from being “too successful”.
Minimum Wage
I’ve written about minimum wage a bunch of different times. Its one of those commonly pushed economic policies that are perfect of keeping tyrannical control. Minimum wage is a genius policy because many people buy into it without realizing the dire consequences that occur after its enacted. If you remember earlier, I mentioned purchasing power would come up again in this topic. Purchasing power is one of the main consequences of minimum wage. Its quite ironic that poor who usually support minimum wage often end up being hurt by it the most. If you are poor, it doesn’t make sense to devalue your money. If anything you want money worth more. The way that minimum wage hurts purchasing power is by increasing the wages of the lowest wing of workers. The lowest paid workers have increased wages also causes the workers just above to either increase or become the new lowest wing. In turn, this decreases the purchasing power and value of that wage. Secondary effects include lay offs from smaller businesses, and increased prices. The argument against minimum wage is similar to the one against basic income which does the exact same thing with added bonus consequence of taking away motivation to work. This leads perfectly into the next segment about certain pandemic policies that keep government tyranny.
Bad Pandemic Policy
Some policies like social distancing are good policies but have little to do with economics. But many policies enacted during this time like stimulus checks, bailouts, and price gouging controls are overall bad especially when looking long term. Let’s start with the stimulus checks because I just finished the last segment off about basic income. Although the stimulus checks were only one time, its not a great policy. Like I said, the government just giving out free money causes prices to increase, people to loss jobs, currency to devalue, and lack of motivation to work. Not to mention, it adds to the National Debt which you can see on this page. Stimulus checks help government tyranny by keep citizens loyal. As if government needed to garner more loyalty via big corporations, we have bailouts. Bailouts keep corporations afloat that would otherwise go under. Its perceived by many that bailouts are necessary because millions would lose jobs. However, its a fallacy just like the sun goes up and down, so do businesses. When a business goes under it shouldn’t be bailed out. Failed business means there is another opportunity for someone else to be successful. Its a better policy to let business fail and ensure that good business practices are reinforced. Government allows bad business practices to flourish. This tyrannical tool is often seen in the banking and healthcare industries.
Last but not least we have price controls, particularly against price gouging. We might as well also include anti-hoarding policies here. These all seem to helpful because they make the distribution of goods “fair”. However, this approach is flawed. Rather than letting the market sort itself out by raising prices where demand is highest, instead, goods just run out completely because production of those goods ceases. What incentive do suppliers have to make goods that will be under sold? They are not in business for charity but to make profits. This group of policies has contributed to food shortages and masks shortages. I think these pandemic policies are examples of government tyranny that results in more harm than good.
Conclusion
I think its pretty clear that government tyranny comes in a lot of forms especially with regards to economics. Its a rule of thumb, that most government policies while being tyrannical are also ineffective and inefficient. Thats sort of the irony when talking about the government controlling every aspect of your life. It should make most people consider that most people would be better off making their own decisions. Its really not hard to take care of yourself and your family without government interference. Then add into that non-violent actions and you have the perfect setup for a voluntary society. You also have to remember that economics is merely the voluntary transaction of goods and services between businesses and individuals. I think that this is where keynesian economics goes wrong, they focus on borrowing interest rates and saving interest rates. I don’t believe that interest rates are the right thing to focus on for economic policy. The basis of economics is the voluntary exchange of goods with currency. So its in the best interest to foster that exchange.
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