The impasse of statism

It is time to open your eyes and take a critical look at the matters that are generally perceived as being the truth, one of the most common of which is the market economy, the start and root of all things evil. This assumption is a false belief. If it were the truth, all governments that are reliant on statism would be more successful with most measures than the countries in which their government allows a market economy.

When the matters have been analyzed with the assistance of specific cause-and-effect relationships, it can be shown that the government has a hand in all of the most serious crises of our time. We are in the middle of a statism crisis and social suffering.

One of the aims of Karl Marx was to liberate the poor of all countries from the power of capitalism – the market economy. In countries in which his teachings were literally applied, the governments were unable to live up to their promises concerning well-being and economic development. In countries in which the governments set out to manipulate and control the market economy from a radical socialist market position, the measures generally create more serious problems than to begin with.

It is time to show that in order to function properly, according to the classic principles of liberalism, a market economy needs a functioning government. This is why people are exempt from the false belief that the government, in its present form, is for the good of society and that the market economy is the enemy. At the same time, there is the refutable assumption that social progress springs from a government that is able to control the functioning of its market economy.

Government debt

Government debt can only be plausibly explained by political decision-making, not market forces. The idea of a government as a welfare guarantor has inevitably increased public spending and pushed governments into debt. Governments have for decades continued with their indebtedness in an attempt to subvert the process, not only in Finland, but also many other countries, including the United States and the member countries of the European Union.

Increases in public spending have generally been received sympathetically and have been regarded to be a precondition for development. The opposing views have been ignored, either with a shrug or as political foolishness. According to Karin Svanborg-Sjövall, this is, for example, what happened to the Swedish Social Democrats, who already pondered during the 1980’s, whether the government had become responsible for any and all pater familias (Axess 4/2013). Note should also be taken of a book published in 1994 by Anders Isaksson, Alltid mer, Aldrig nog, in which he showed how easily a government assumes new responsibilities for itself. His book still remains topical.

It is customary to blame banks for a government’s debt. The facilitators of such indictments should, however, take into account three things. First, banks have relied on governments, and secondly, the governments have come into debt gradually over time, without anyone being able to see the future. Thirdly, it is not easy for banks to deny a loan from the government, when it is requested.

The banking and financial crisis

It is true that banks are in serious financial difficulties. However, it is unlikely that the operation of banks can be solely to blame in a market economy. Banks are certainly not free to act as it is customary to assume, but according to rules set by the government. The public regulation of banks is one reason for the consolidation of the banking and financial world.

Banks should not all be bundled into one group. There are banks, whose decision-making belies a political party and trade union movement influence and, namely, these are to blame for the banking and financial crisis. These banks are located, in particular, in Spain and Germany, and they have heavily funded housing, for example. In the United States of America, the low interest rate held by the central bank and the federal goal of having everyone possess their own house explains a significant part of the economic difficulties of the last few years.

It is customary to adopt a critical view of the considerable amounts of money circulating in the banking and financial institutions, as well as innovations in the sector. The traditional notion, according to which, that it is more advantageous for money to be in used in production than to circulate through different accounts and to take advantage of new instruments in order to maintain its value, seems to have lost its importance. Why isn’t money preferably sought for production-related locations? What kind of legal and collective regulations have been practiced in the field of production processes, in which it is increasingly difficult to find fruitful investment locations?

Massive unemployment

Unemployment is a severe and growing problem. In particular, youth unemployment is really worrying, not only in Finland, but also in many other European Union countries. It is a paradox that, unexecuted work can be found everywhere, more than ever, even though unemployment is now higher than for a long time.

It is wrong to blame a market economy for unemployment. If the market would be able to operate freely, everyone who is willing to work would find employment. The main explanation for unemployment is the regulation of collective labour, which determines the establishment of remunerations and employment, as well as conditions for their modification and termination. Unemployment will only get worse as long as it is attempted to be solved by means of collective means, and labour regulation remains disassembled.

The fact is that the easier and simpler it is to establish a working relationship, the more work there will be in the national economy. The simplification of work does not result in anarchy and a despotic working life. It creates new jobs, increases wages and strengthens the workers’ bargaining power in decision-making situations. The collective regulation of working life has created precisely such conditions for economic life, the prevention of which are set in place.

Crony-capitalism

Crony capitalism has a number of hard-recognizable manifestations. Legislation is a good driving force for crony capitalism. A government, which deliberately favours the law towards certain interests, engages in crony-capitalism, for example, by providing protection against competition for some companies and production fields. At the same time, the government is guilty of practicing both positive and negative discrimination. One of the most serious forms of crony-capitalism is manifested in government intervention in the free price system, through various means. The government may also use the law to create a market for some companies, and to guarantee them financial gains.

Crony capitalism is also known as corporate well-being, which governments contribute to in various programs, forms of support forms and tax breaks. It is likely to more common than feared. It heightens the distribution of income and limits the opportunities for equality. It favours interests which have significant resources and are familiar with the path to the core of political power. It distorts the productive conditions of society.

Because people experience benefits from the results of crony-capitalism in their own lives, they blame the market economy in which they occur. They do not blame the policy, because they find it very difficult to see it in action in explaining the negative consequences that they are experiencing.

Prospects and hopelessness

According to communication perceived from many countries, people are losing their faith and belief in the future. That is why they react in an arbitrary and violent manner to conditions in which they feel that they have become prisoners, and which they do not consider that they are able to have an influence on. Arbitrary and violent manners are the reactions of hopelessness and frustration. It is, to some extent, understandable, that when unable to see the real culprit of their plight, they attack the market economy.

It is really destructive to society when people cannot readdress their position by themselves, whilst the future doesn’t also seem to have anything positive to offer them. In relying on the government as a source for social good, people are deprived of their liberty, which is a necessary prerequisite for the emergence of hope, belief in the future and the possibility to have an influence. The government cannot guarantee anything, which is possible with freedom. The government can guarantee freedom for the people, but not the fruit.

Freedom as a condition for all development

People are hungry for freedom everywhere. When free, all people are equal, regardless of their occasional differences. Antti Chydenius, the Adam Smith of the north, wrote that only with freedom is it possible to find solutions to the problems created by a government. Human creativity and ingenuity can only flourish in the soil that is fertilised by freedom.

The government is required to release the people from the yoke of collective institutions. A free society needs a government that understands the immense significance of freedom for human development. It needs a government that dares to oppose powerful social interests in the defence of freedom. It needs a government, whose operation is based on a constitution, which takes care of people’s equality before the law and who understands the dangers of legal activism.

The search for change must start from the reinventing of the government’s role and responsibilities. Failure to do so will push societies towards hopelessness, poverty and deprivation

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