Defense Production Act Coordinator Peter Navarro claimed during a live TV interview on March 29th that “we know exactly what we need” to reduce the spread of the Wuhan Virus and treat infected Americans. He continued, “We have to expand and repurpose our industrial base.” It gets even better, “We have to make sure we’re able to make the medicines we need, the medical equipment, and the supplies. That’s going to create millions of jobs for this country.”
Superficially, this makes sense. After all, the shallow surface is where most public discourse takes place, thanks to compulsory progressive education and national media nitwits. As political economist and Poetic Justice Warrior Robert Higgs explains in his vital 1987 book Crisis and Leviathan,
The most important legacy of the New Deal is the now-dominant ideology of the mixed economy, which holds that the government is an immensely useful means for achieving one’s private aspirations. That one’s resort to this reservoir of benefits is perfectly legitimate.
In the spirit of the public good, it would he helpful to give Navarro’s comments some depth. Beginning with, “we know exactly what we need,” is typical collectivist fantasy. With all due respect, he was speciously correct – for the few seconds prior to the next segment of the broadcast. It featured a new 3D printed ventilator being developed independently at Rice University. While the proper use of ventilators is very complex, this one will cost $300 to produce compared to $10,000 for Navarro’s government approved machines.
To “repurpose our industrial base” is simply authoritarian economic planning, right wing and left wing. Its only a matter of degree. Navarro’s purpose is to “make sure the components are there when we need them.” This sounds good to passive minds, but who or what is “we?”
To the progressively schooled listener it means “the public good.” To active minds, it is evidence of coercive government overreach. The tactic is merely bucolic and ambiguous language to mask the primary purpose of concentrated decision making. As Higgs continues,
To take – indirectly if not directly – other people’s property for one’s own benefit is now considered morally impeccable, provided that the taking is effected though the medium of the government.
Yet Navarro’s poorly trained economic mind claims omniscience over the manufacture and distribution of pharmaceuticals, medical devices, and protective gear for health care professionals. Never mind that it is in short supply because of legacy government intrusion in nearly every aspect of American health care finance and delivery. Combined, they show little regard for specialization, division of labor, and price discovery that are fundamental achievements of Western civilization.
As Higgs explains in his 2002 essay titled The Rise of the West,
The individualism of Western culture, and the political fragmentation of the European peoples in the high Middle Ages, fostered the institutional and technological experimentation by which entrepreneurs could discover how to make labor and capital more productive.
“Going to create millions of jobs” denies reality, government can only create government jobs or get out of the way. Yet this phrase is prized by both left-wing and right-wing political minds, and disregards the real job creators. Economic minds understand employment as Say’s Law, or the Law of Markets – production creates its own demand. It is the foundation of all rational economic theory, and Higgs’ example of economic reality,
Europe’s governments that made life difficult for traders tended to lose their business, and hence a tax base, to competing jurisdictions. Such losses motivated rulers to curb their predation and to allow businessmen room to maneuver.
As illustrated by the Atlas Society, the novel contagion fomented in bat caves in China, ferried to Wuhan’s wet markets, festered in human hosts, and was fostered by its ultimate guardian – the paranoia of China’s totalitarian regime. While Western civilization is built on the solid footings of the scientific method (reason), free markets (purpose), and self-creation (pride); for the East, not so much. As Higgs relates,
In contrast to Europe, businessmen in China suffered an inescapable clampdown. In the Islamic world, an imperial government failed to protect private-property rights. The Soviet empire likewise embraced the imposition of one big bad idea, central economic planning.
In today’s 21st century America, the Crisis is the Wuhan Virus, and the Leviathan is our political, media, and education institutions. However, it’s different this time. Pretend for a second that you’ve never heard that before. During the previous one hundred years, the Leviathan created economic crisis and prescribed economic solutions rooted in the Keynesian myth of aggregate demand, supported by its nonexistent multiplier effect.
Today however, the solution for the epidemic includes castration of supply-side of economic activity. You know, the side that prevents poverty, despair, and death. This stark reality is deeper than a health crisis solved by urgent “flattening the curve” public policy, social distancing, and hygiene. It is the suspension of Constitutional rights and human life-sustaining purpose.
What’s disturbing is the willingness of so many people to accept the repeal of their personal liberties based on projections using unreliable data sets. As Robert Higgs observed,
Few Americans know much about the history of Argentina or Venezuela. But if they wish to know how the people of the USA are ruining their own country, all they have to do is look around themselves, including, in most cases, looking in the mirror.
Media pundits are also vulnerable. Considered predominately right-wing, FOX News is pushing massive government spending to replace individual livelihoods by using the left’s own rationale for social justice: “through no fault of their own.” On the surface, this makes sense because of the government forced shutdown, but ignores the deeper economic and philosophical damage, and merely robs from past and future productivity.
A market’s price discovery mechanism is too complex to mess with, and the longer people are denied the freedom to produce, the longer it will take to rebuild supply chains. The emotional and financial damage to millions of Americans will be inestimable, and is being pumped by shows like CBS 60 Minutes who seem to take pleasure in the demise of the West. In contrast, local news outlets are reporting stories of civil disobedience in their medical and business communities against FDA hegemony, and having wonderful outcomes.
As poetic justice would have it, this pandemic is a lesson in the proper role of government for defending individuals from the clear and present danger of epidemic disease. It is also shining a bright light on the superiority of free-market health care delivery, the generosity of a society rooted in personal liberty, and the ability of minds unleashed by economic freedom to solve any problem. Here, Higgs invokes the combined genius of Enlightenment philosopher John Locke and Austrian economist Ludwig von Mises,
Like all who inherit the Lockean tradition, Mises believed that a strong but limited government, far from suffocating its citizens, allows them to be productive and free.
The popular Western interpretation of ‘crisis’ in the Chinese language means opportunity. Will the breakdown of health care regulations wake America up to their disastrous effects, or we will ratchet up a more powerful Leviathan? Teacher Lisa VanDamme gives us the principled answer, “Extensive knowledge of the consequences of history’s ideas and actions; of the great discoveries of science and what they made possible. These are the raw material from which rational moral principles are drawn.” As Poetic Justice Warrior Robert Higgs advises,
The two issues call forth moral considerations. They involve not questions of what is technically better or worse. Rather, they involve good and evil. Those who propose to deal pragmatically with such questions are doomed to fail.