Unintended Consequences of Progressive Policies

Capitalism isn't about morality [or immorality] it is about investing capital to gain returns. It requires free interaction between human beings, and property rights. Its roots are (written, the philosophy predates it) Adam Smiths, but the word itself was a disparaging word put down by Marx. The basic idea of it is simple, human beings when allowed to function for their own interest, and when allowed to keep fruits of their labor will contribute to wealth generation of the society and thereby enrich the whole society. ... When there are finite resources (which means everywhere), a resource used in one place can not be used in another. To put it in layman terms that means simply that when someone spends resources, whatever they may be, in one area they can no longer spend it somewhere else.... If a company can not compete it must fail, so others can raise up and take its place. When there is failing industry (such as whale oil for instance) it must fail and be replaced by others. If something is artificially maintained the cost of that is not only what you pay (such as bailout)* but also inability for others to use those resources and be able to help the customers. Temporary and visible benefit of few jobs, is offset by a long term productivity and resource loss.

(quoted from a response to a review of the book The Morality of Capitalism: What Your Professors Won't Tell You, which is .99 on Kindle.


*Bailouts, and also all the 'green energy' plans that only are able to survive because they are heavily subsidized- and often foolishly subsidized as well. Do you know how much coal it takes to produce solar power?

This is really just another way of explaining the Law of Unintended Consequences, or the Broken Window Fallacy. Take Cash for Clunkers as an example. The press keeps telling us what a great success this program was. However, it caused the cost of used cars to go up approximately 30%, which hurt the poor most of all.

This weekend we were visiting with a family from church- his business is working with cars. Until Cash for Clunkers he was able to support his family of four with his own business.  His biggest customers were car lots- he had contracts with four different lots, each of which sent him an average of five cars per week to fix up for resale.

Between Cash for Clunkers and the government takeover of the auto industry, his business dried up to one car per week.He says it was almost an instantaneous cut off of his business.  Cash for Clunkers destroyed his livelihood, and raised the cost of living for thousands of lower income families who needed transportation.