Misconceptions of Interventionism

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In most democratic nations, interventionism has become the norm. For those who aren’t intrinsically anti-state, government intervention is an effective way of getting some things done right. 

Sometimes the logic path is unquestioned. If we want workers to earn a “living wage,” then the state must mandate higher wages. If we want to stop gun violence, then the state must ban guns. It’s as simple as that.

Other times the thinking is more complex. If we want to help those in need, the state should establish a welfare system that those in need can rely on. We will then look at different forms of welfare programs to see which ones have the greatest positive impact. Some programs are greatly inefficient and can’t work. Others are unsustainable. But that system which is sustainable and impactful should be established.

These two lines of thinking comprise the thought process of the vast majority of interventionists. Either A is assumed to lead to B, or A might lead to B, so we need to look at the data and confirm this is true. 

The latter process is certainly preferable to the former, but it’s still not enough. It’s only focusing on a single cause and effect. This is the trouble with interventionism. If program A will have an effect B, and we want effect B, then we should support program A. This line of thinking seems uncontroversial to most people. And there’s nothing wrong with it as long as it’s not the only line of thinking.

The trouble is, for a lot of people, that’s the extent of the thinking. No wonder interventionism is so popular.

Sure, there are many examples of the government aiming at a goal and achieving the complete opposite. But there are also many examples of the government aiming at a goal and actually achieving it. So long as program A sometimes leads to effect B, interventionism is an available option. This is the recurring argument from advocates for interventionism. If A leads to B, then A.

Many opponents of interventionism (especially those of the Austrian school) have pointed out the flaws of this thinking. Let’s assume A leads to B, and we want B. But what about C? Evidence shows that A leads to C as well as B. Although B may be a good thing, C is a really awful thing. 

For the sake of argument, let us say that A leads to only B and C, and not also D, E, F, or any other number of other effects. We now have to weigh the benefits (B) and consequences (C). If we can all agree that the consequences are far worse than the benefits in one instance, we’ve shown the flaw in the initial line of thinking (A leads to B) in that instance.

Most advocates of interventionism don’t seem to think this far. It is not enough to look at what we expect to see (B), but also what is not seen (C).

For example, let’s say we implement government intervention A that leads to fewer traffic fatalities B. We can all agree that B is a benefit that every decent person would like to see. Now, given that government intervention A is banning all automobiles, we can save lives. 

However, it’s pretty clear that there are numerous extreme consequences to banning all automobiles. We don’t doubt that it would reduce traffic fatalities, and would likely have other positive effects as well, but no sane person would advocate for this intervention because the consequences are incredibly significant and incredibly obvious.

Finding these hidden effects of interventionism is what many economists (and others) devote so much of their time to. Charles Murray’s book Losing Ground documents the many lesser known effects of the welfare state. Bastiat’s famous parable of the broken window points out the unseen consequences of the broken window after initially stating the benefits. 

When acting ourselves, we weigh the odds. When we devote time to one thing, we forego the opportunity to do other things. This same approach must be taken regarding interventionism. It is not enough to say that an intervention led to a good outcome. We must look at all of the outcomes, especially outcomes we wouldn’t expect at first, to see if the outcome really is positive.

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Nathan A. Kreider is author of the Misconceptions column for Being Libertarian, and has written for the Austrian Economics Center, the Foundation for Economic Education, and the Liberalists. He also occasionally publishes a blog and video content, including short book reviews, which can be found on his website, nkreider.com. He can be contacted by email via [email protected]