I was very pleased to receive a new ‘think piece’ by Tom C Veblen — yes, he is related to the great Theory of the Leisure Class author, and his daughter worked at ASI for a while too. His piece is called America’s Exceptional Experiment in Self-Government and it imagines a cultural and political revival of that great nation, now struggling through its self-induced cultural and political mess.
Among other things, Veblen cites a guide for surviving a seaplane crash on water. When that happens, they tend to come to rest upside down, so you need to have your wits about you. You must stay calm. Grab your life vest. Open the exit and work out your escape route before releasing your seat belt. If the obvious way out is blocked, work out another before you unbuckle yourself. Don’t let go until you are out. If you are underwater, follow the bubbles to the surface. Then inflate your life vest.
Veblen says it’s an analogy for ‘getting out alive’ from the wrecked political systems we have, and the more you think about it, the more apt the analogy is.
You need to stay calm. Too many politicians see problems emerging — inflation, for example, leading to widespread complaints and strikes over pay, rising borrowing costs, falling house prices and soaring prices for essentials like food and energy — then rush into some ‘quick fix’ solution that actually makes things worse. Like huge domestic heating subsidies to households, both rich and poor, which require vast new public borrowing to finance.
Or windfall taxes on oil producers alongside calls to cap energy prices, which have the effect of driving energy investment out of the country. Or capping the price of bread and milk and other basic groceries, which (as the author of Forty Centuries of Wage and Price Controls can tell you), won’t work and will just lead to shortages.
No quick fixes will get you out of this crash. You need to grab your life vest, the thing that’s going to keep you afloat. And that life vest is what Adam Smith (whose 300th birthday we celebrate this month) called the ‘simple system of natural liberty’. Make sure your money is sound, protect the basic institutions of open markets, competition, individual liberty and the rule of law. Leave people free to go their own way, and they will collaborate and boost value and progress before any government bureaucrat has even got the spreadsheet functioning.
Then you need to work out your escape route. That’s not always easy, as we discovered during the early 1980s, when Margaret Thatcher’s government tried to roll back a bloated state. Efficiency experts were brought in, and when they left again, things reverted back to their sad normal. We needed instead to work out a way to get the all-dominating nationalised industries (utilities, communications, transport, manufacturing and all the rest) out of state protection and into the chill wind of competition. The solution to each was different, and some worked better than others. It’s not easy to find your way out of a crashed state.
Follow the bubbles — look at what other people round the world are doing that actually works, and do that, rather than clinging to some ideological totem pole like the National Health Service. And, when you have done all that, distance yourself from the wreckage and inflate your life vest. Deploy the system of natural liberty, and you can float free.