Everything, except perhaps human ignorance, is finite. A telling aphorism for sure, but in the matter of economics and governance, ignorance of finite means to meet our ends is the cause of many bad outcomes.

Modern politics in the post war era, marked as it is by cheap credit, money willed into existence ex nihilo, and massive welfare statism, is at peril of not realising this basic truth.  The eventual degeneration of the democratic experiment into a circus of public entertainment and spectacle has brought with it economic fallacy heaped upon political untruth.  

Promises made by politicos have assured the end of hunger, disease, education. As democracies have advanced, the promises have continued. Water is to be limitless to every house, health care will be both free and immediate, old age shall be pensioned and extended as far as possible, regardless of the high living that should have ended it. Education, although increasingly useless and submerged in social justice, shall be lengthy, grant supported, un-fed and plugged like a mainline into the ever increasing, upwards surging economy.  All of these and more can be granted to you, O’ Citizen, if you just vote the right way and the politicians pass the right laws. We are very close to moving the entire population to the utopia known as Abundistan, where you will never want again.

But of course this never happens. Because abundance is not for this world.  It cannot be socialised or legalised into existence, at least not nationally, and not without a larger trade-off elsewhere in society.  Everything is finite. Our time, our lives, and the means we use to satisfy our ends. Our ingenuity and attention, although springing forth from a deep well of creativity, still has an opportunity cost associated with its utilisation. Ten thousand hours of human time towards cancer research or ten thousand hours of human time utilised in free rubbish bin collections?

In an economy of confused price signals and political interference the answer is not obvious. What has been the opportunity cost of not metering of water to Irish homes? Sure, it now appears that the fluid we all need is abundant and we will have, forever, more than we need – water has been removed from any sort of price based economic calculation. It’s at a maximum abundance, now and forever, by political fiat. But at what trade-off?  It is not known what good or service in society and economy we will have to put up with in less than sufficient amounts to maintain this glib promise, or what advancement or invention that will not be created.

The sad fact is that everything of value must be worked for, and created by someone. The great genius of the capitalist system is that these disparate actors all coordinate their actions to create finished goods and services through the price system.  And this is the great error the left always makes. I have met and spoken with leftists who honestly and tenaciously believe that should the obstacles placed in our way by capitalists/bankers/politicians be removed by the right laws and zealous political will, then Abundistan is just a short distance away.  

In fact, they hold that Abundance, not poverty, is the natural state of man. But the need for obstacles remains as the abundance stays far off, so it’s off to the Gulag with the ubiquitous wreckers, saboteurs, and counter-revolutionaries that seem to pop up in that system, like weeds in an untended garden.

In such ways does the perception of infinite abundance pacify the population into thinking all is well for the moment. It soothes the ill at ease minds of panicked voters. But it leads to the cheapening of democracy, to an ignorance of economics and the misallocation and poor investment of resources. Crucially though, it feels good, and that is what the modern west has been running on. Fake wealth, as money printing and quantitative easing has diluted the wealth to a thin gruel, and the octopus of state interference spreads its tentacles so far and wide in the economy that it’s not obvious if real wealth is being created, at least not the kind of wealth that sees value delivered to one’s fellow man.

Dopamine is the national product of many western economies, the feels must stay buoyed up, the social mood must remain high and the economy not talked down.  The political masters are there to satisfy your needs and the easy money will keep the people glutted and satiated like a diet of cheap carbohydrates. All you have to do is vote with your stomach, not your head. And what could go wrong with that?

Posted by Stephen Murray