This week’s “Mondays With Murray” will focus on two timely topics: The libertarian view on voting and the enforcing of price controls and gas rationing by the government
As we have already bandied about here, there is ample reason not to vote at all in this year’s presidential election. As liberty minded thinkers, both of the primary party choices are unpalatable, and some libertarians insist that to vote signifies tacit agreement with State governance. However, Rothbard disagrees.
Many anarchist libertarians claim it immoral to vote or to engage in political action–the argument being that by participating in this way in State activity, the libertarian places his moral imprimatur upon the State apparatus itself. But a moral decision must be a free decision, and the State has placed individuals in society in an unfree environment, in a general matrix of coercion. As Lysander Spooner pointed out, in an environment of State coercion, voting does not imply voluntary consent. –Murray N. Rothbard.
As my colleague Marc mentioned to me while we were discussing this edition of “MWM,” voting in this instance is akin to a prisoner who is forced to live within a system voting to improve or avoid a worsening of his situation. He isn’t casting a vote in favor of the prison itself. He has a choice between Warden A, who is pro-stick and Warden B, who is pro carrot, and he’ll cast his ballot within the system to benefit his situation in the best way possible
The second item ties in directly with the price controls and gas rationing that is currently occurring in the aftermath of Superstorm Sandy. The government is stepping in, just as it did in the 1970s during that particular energy crisis. This excerpt from Rothbard’s 1974 Essay “Energy Fascism” sheds some light on how the government’s intervention only makes situations worse both in the immediate future and also brings with it long-term negative economic impact.
The major evil stems from the government’s policy of price controls below the free market level. There is one and only one possible cause of the phenomenon of a shortage, and that is government price control below the market. There are myriad actions of the government, which have made energy fuels artificially scarce: but a shortage can only be caused by price control.
Economists define a “shortage” as a condition where consumers are not able to find the product. Regardless of how scarce the supply of a product may be, there is never any need for a shortage, for a disappearance of the product from the shelves. For on the free market, if a product becomes more scarce, the price rises until the market is “cleared”, i.e. until there is sufficient supply available for those who wish to purchase the product at the market price. And so, if the free price system is permitted to operate, increased scarcity will cause a higher price, but not an outright disappearance, or “shortage”, of the product…
If the price system is allowed to function, then the free market quickly wipes out any shortage as the price rises, to “clear” supply and demand on the market. Shortages under price controls persist and get worse, there being no market mechanism to remove them. If prices are allowed to rise, then the price increase performs two important economic functions: (1) the “rationing” function, as buyers voluntarily restrict their purchases, in accordance with each individual buyer’s needs and abilities; and (2) the incentive function, the higher price stimulating increased production and supply over a period of time. Price control prevents both of these crucial functions from being performed, smoothly and voluntarily; instead, shortages persist and intensify.
In such a shortage situation, there must be some way of “rationing” the short supply. With prices not allowed to perform this task, other, arbitrary methods come into play: e.g. lining up for gas for several hours, or selling to favored purchasers. The next step, which has already occurred, is for the government to step in to ration by coercion, to allocate supplies in ways that it sees fit – ways that are always uneconomic and irrational as well as coercive and despotic. We already have gasoline rationing at earlier than retail levels: pace the government’s arbitrary shutting off of fuel to the private airplane industry. And even at the costlier and more complex retail level, gasoline, for example, is already being “rationed” by arbitrary restrictions, and by official rationing in several states (at this writing Hawaii, Oregon, New York, and New Jersey).
There are two major problems with all these rationing schemes: (a) they are arbitrary, irrational, and. totalitarian, and (b) they freeze the shortage, since they fail to allow prices to rise to induce greater supplies of the product.
Take, for example, the arbitrary shutdown of filling stations on Sundays. All that this accomplishes is to cause a rush on gasoline on Saturdays, as well as levying great hardship on drivers who have to travel somewhere, say in a sudden emergency, on a Sunday. How many potential hospital patients have already been injured or even killed by the blunderbuss orders to shut down on Sundays? The next step taken by our all-wise rulers was to impose maximum limits on each individual purchase of gasoline. The result, as could have been foreseen, was an uneconomical inducement to stop at a whole slew of filling stations until the desired amount is purchased. Since Christmas, the New Jersey Turnpike has imposed lunatic maximum limits on each car’s purchase of gas: such that it is impossible to drive over more than a small fraction of the Turnpike. Each Turnpike ticket is stamped so that no more gas can be purchased. The result, of course, was that cars have been getting off and on the Turnpike repeatedly, picking up a new ticket along the way and getting the allotted amount at each turn. This absurd harassment is typical of the consequences of government intervention.
Furthermore, the gasoline scare – the fear that no filling stations may be open or available further down the road – has led everyone to keep their gas tanks as filled as possible, thus increasing the total purchase of gasoline as the average “inventory” of gas in the tank has risen. Now, the governments have reacted to this development by beginning to impose minimum limits on the amount (in gallons or dollars) of gasoline purchased, so that no one may keep his gasoline inventory high. But minimum limits, by their very existence, seem destined to lead, in their own right, to a higher consumption of gasoline.