Did you read my post “A pinch of communism”? It is one of my favorites because I cannot even imagine a better illustration of Hayek’s pretence of knowledge than the one described there from my personal experience. Reading this week’s Economist I got another dose.
For years I was debating with myself whether I should get a subscription to The Economist. On the one hand, it is an irritatingly statist and arrogant socialist publication while on the other hand it has the widest coverage of things happening around the world and it is the standard of ‘reporting’ the mainstream of political opinion relies on.
My dilemma was solved by a friend who got me a subscription as a present. Just as I expected, it is informative and infuriating all at the same time.
There are three articles in the July 4th issue that got me worked up.
Credit where taxes are due – Reducing wage subsidies would hurt workers more than their employers
A middle class mirage – The president wants businesses to pay more overtime – and
McJobs and Uber jobs – Lawsuits about what it means to be an employee could shape the future of big industries
The first one discusses the pros and cons of wage subsidies vs minimum wage vs earned income tax credits; the second is commenting on a plan of the Obama administration to force businesses to pay overtime rates for five million more workers and the third is lamenting the effects of court challenges to Uber and McDonald.
The common element of these three articles is what is missing from them: any consideration of the possibility that the answer may be to leave the market alone. As if the idea of no intervention could not even enter the minds of the writers of The Economist. The first two articles are all about ways to micromanage the job markets, discussing the merits of the options considered.
All of it is done with a slightly patronizing tone advising policy makers on ways to effectively manage the problems. The Economist fails to mention that most of these problems were created by previous interventions. They dispense advice on reforming labour laws. “America needs to update its employment law to take into account the fact that FDR is no longer president. This will involve some careful balancing.”
The details of these articles bear an eerie resemblance to my experiences with the economists of East European communism. The unshakable belief that we can have full control over the economy IF ONLY we could find the right settings for the knobs on the complex machinery of the economy. The tone of The Economist is not yet that of the Pravda, it is just the tone of arrogance of the overconfident technocrats with aspirations to run the show from behind the curtain.
I don’t know what the ‘right tone’ could be. In order to answer that, we would have to reenter the debate about the role and the nature economics. Libertarians like Hayek and Mises insisted that if economics want to be a science, it has to refrain from being prescriptive. The job of the economist is to describe how the economy works, not to advise on how it should work. Since there is hardly anything in The Economist without voicing policy recommendations, it is fair to ask what its function is. What should it be? It is clearly a political magazine and it may not be fair to expect it to be something else. If it is, however, its stance should be clear.
Where does the Economist stand?
The Economist describes itself as radical centrist:
“The result, “True Progressivism,” was a blend of the two: neither right nor left, but all the better for it, and coming instead from what we like to call the radical centre.”
Wikipedia tends to agree offering a long history of the changes in the editorial stance of the paper.
‘True progressivism’ could be a manifesto of its latest, unflinchingly statist stance. Its model is the macho interventionist Teddy Roosevelt.
The attitude of The Economist is not without criticism, coming mostly from the radical left.
This article from Salon calls its editorial stance ‘doctrinaire libertarian’ and the majority of the people on the left consider it a right leaning publication.
But does it matter?
Really. How much does it matter what the editors of The Economist think? Why does it irk me so much?
I believe it is my deep seated resentment of the communist attitude. The arrogance of the belief that there IS a right way to do interventionism. The editors of the Economist don’t seem to understand that there is no way to be just a little bit pregnant. There is no such thing as a radical centre.
Being a little bit statist (or a radical centrist) is like being a little bit pregnant. You either are or you are not.
As Mises pointed out in his book “A Critique of Interventionism,” the problems created by the first intervention will inevitably lead to the second creating new problems and new interventions until we end up with full-fledged socialism. It is the stupidity of the allure of power, the stupidity of being smart that irks me so much. I saw it in the young communists and I can see it clearly in articles that prompted this post.
Am I saying that you should not read The Economist? Absolutely not. Read it for the news, read it for the numbers, statistics and the data but you can safely disregard anything they have to say about policy. Be sceptical and be critical. Read it as you would read the Pravda.
Larry Allison was quoted in an ad campaign saying “I used to think. Now I read The Economist.”
Noah Smith, who writes for Bloomberg retorted “I used to read The Economist. Now I think.”
I think the two should not be mutually exclusive.
As Aristotle said “An educated mind can entertain a thought without accepting it.”