Our group with no name finally met this weekend. (We’re not calling ourselves a book club. And though presently only men are meeting, we are certainly open to women joining us. For some reason, our wives find our topics boring.) We were discussing “Economics in One Lesson” by Henry Hazlitt. I would highly recommend this book, even if you’re not as enthusiastic about Economics as I am. It’s written in common sense language so anyone can pick it up and understand the concepts.
Anyway, lots of great discussion. But I wanted to capture a couple highlights that came out of it. At one point, one friend said something along these lines.
My response was something like this.
We live in an INCREDIBLE time. The free exchange of information is almost seamless. Historically, one of the limitations of economic theory was the flawed assumption of perfect information. So, Supply and Demand curves are fundamental and truthful, but if you’re talking about remote areas where price information is not readily available – you may see behavior outside of expectations. This applies not just to prices and money, but any kind of decision made based on information (eg. elections, civil rights, bad restaurants, good books, etc.).
BUT today with Twitter, Facebook, Google, Amazon, Ebay, etc. – pretty much ANY kind of information is available. And so unlike any other time in history, we are witnessing INSTANTANEOUS behavioral changes based on the availability of information.
Two examples came to mind:
1. JON BON JOVI IS DEAD.
Around the end of 2011, someone started a rumor that Jon Bon Jovi was dead. Not sure who or why. But the lie spread quickly. It was all over the internet, mainstream news, Twitter, and FB.
But something amazing happened.
Jon actually got wind of the rumor and posted a picture of himself, alive and well, in his NJ home.
And just as quickly as the false story spread, it disappeared.
No government agency, internet police or international court had to dispel the lies. People came together and communicated.
2. SOPA / PIPA.
Two separate pieces of legislation were introduced into the House and Senate in an effort to protect property rights. That sounds good, right? House bill SOPA (Stop Online Piracy Act) and the Senate equivalent PIPA (Protect Intellectual Property Act) have been around since early 2011. But had you even heard about them before mid-January? I know I had not.
Again, here’s where freedom of information triumphed. On Jan 18, it looked like these bills were going to pass through without much resistance. But then, Google, Wikipedia, Facebook, and some other big internet players started to share their concerns about these bills. They raised awareness and literally overnight, these bills were killed. Yes, technically they are not dead but chances are most politicians are not willing to risk their political necks to throw their support behind these widely unpopular bills anytime soon.
Look at this graphic:
What’s interesting to me is not so much the ratio of supporters to opponents going down (from 72% to 39%), but that the total number of politicians having an opinion on the bills jumped from 111 to 166. At least 55 more politicians voiced new opposition and net 15 switched their positions.
So what happened? Free people came together, shared information, and changed the course of our country. It didn’t cost most people anything. It didn’t take years of research or PhD’s to understand that the cost of freedom these bills had proposed to protect online IP was too great.
Here’s something to consider. Social planners, whether on the left or the right, are fighting to push through their agendas, to apply force on you and restrict your freedom because they genuinely believe it’s for some greater good — the good of the country, society, the environment, our souls, etc.
But our attention and support, like any other commodity in scarcity, can only allow us to focus on so much at a time. So how can civilized, social planners fairly decide for us which issues are most important and need to be fixed? They can’t. And they shouldn’t.
What Hazlitt brilliantly shows in his book is that good intentions oftentimes backfire because we fail to see all of the unintended consequences of our decisions, particularly when you are making a decision for other people.
“When they say that the way to economic salvation is to increase credit, it is just as if they said that the way to economic salvation is to increase debt: these are different names for the same thing seen from opposite sides. When they say that the way to prosperity is to increase farm prices, it is like saying that the way to prosperity is to make food dearer for the city worker. When they say that the way to national wealth is to pay out governmental subsidies, they are in effect saying that the way to national wealth is to increase taxes. When they make it a main objective to increase exports, most of them do not realize that they necessarily make it a main objective to increase imports. When they say, under nearly all conditions, that the way to recovery is to increase wage rates, they have found only another way of saying that the way to recovery is to increase costs of production.”
The more I study liberty, the more inclined I am to think that the solution to our problems should be discovered in the hands of the affected parties — not well-intending government bureaucrats. But more exciting for me is witnessing people beginning to understand the power of liberty, how we CAN make a difference. The time is right for the voices of true freedom to emerge from the ashes once again.