The particular Post-Pandemic World Is One associated with Widespread Dependence on Government
Fear has been the message that has propelled forms of repressive policies that were not possible before.
The state strives for strength, and what grants power is definitely fear and dependence.
The state is making people dependent upon it, both as means for control and as an outcome of many policies intended to offer relief.
We have seen a lot of fear plus dependence in this pandemic. Anxiety has been the message that has propelled types of repressive procedures that were not possible before. Had anyone suggested only more than a year ago that whole countries, democratic European countries, might close down and quarantine people in their homes many of us would have thought him crazy.
However it happened. Because fear has been drummed up, many populations went along with it. Even though they later protested and resisted, it was too late. A lot of the damage was already done. Not to mention, many feared not only the virus but also the police, which occasionally with enormous brutality damaged down on those seeking the breath of fresh air after weeks stuck in their homes.
It is possible to roll back these policies. Nevertheless , many of them will need to be rolled back again for society to function again. To be clear, it is not possible for the state to keep everyone locked in their homes to get long. This is an overreach plus points to the limit of the state’s power. When the people rise in opposition, as we’ve seen in this pandemic, the state has no power.
Much more problematic is the other side from the lockdown and the damage caused to the economic system. Not only had been people locked down, but society and therefore practically the entire economy was forcefully paused. The problem here is that there is no “ Pause button” for the economy. It may sound easy for politicians, who have no conception of how the real world works. But you cannot simply stop a business. You also cannot temporarily stop the supply chain. Have you ever run a business you know that being an entrepreneur is not a steady state but a altering process. It is a constant find it difficult to get money to come in so that you can cover costs you have assumed long ago. That’s what entrepreneurs and businesses do. They assume costs plus imagine they will be paid for their efforts later, and compensated more than the cost they currently assumed.
Put simply, if you “ pause, ” a business, the costs stay but you get no income. How are you going to pay those people bills when everything is usually on pause? You are unable to. This is perhaps easy to understand … so easy that even several politicians grasp the concept. A lot of countries like the United States have offered relief in the form of loans to businesses. Of course , this kind of schemes come with the usual cronyism and favoritism. The loans often do not end up in the hands of those intended. They also shift power and impact away from the market to the bureaucrats in government. Or to put it differently, businesses survive or even go under as made the decision by bureaucrats, not by consumers.
There is certainly more than simply money. Imagine food processing and the beef character when the politicians press Temporarily stop, which stops businesses from dealing with slaughtering, cutting, digesting, and shipping meat. But it doesn’t stop the farming. The farmer’s animals will not stop growing and will not really stop eating because the economy is paused. The farmer will go bankrupt because he needs to cover their food, water, and care without being able to market any beef. Even if he’s savings to cover the expense, the particular meat will lose quality and value as the cows grow older than their prime. At the same time, no meat is achieving the shelves in the shops. So while the farmer can be stuck with costs he can not cover because he cannot market the meat he produces, consumers cannot find meat in stores. Consequently, we experience a shortage of food, while at the same time farmers and other producers have surpluses that they cannot afford to keep and are not able to sell. What a ludicrous circumstance.
The effect of this is of course that the character will not be able to rise again as the politicians press Enjoy on the economy and meat processing is resumed. He can not have been able to make those continuous investments in his company in order to meet future need for meat. After all, he was stuck with additional costs and no revenue. So pushing Play will not solve the food shortage.
The same story can be told intended for other types of businesses too. You cannot stop the freighter that is on its way around the world. You are unable to store logs of timber waiting for the sawmill. You can not pause mines and smelting plants. And if one job can be paused, it affects the other task in the provide chain. The longer the particular lockdown, the more businesses would have failed and the supply chains lain in shambles. It is really an enormous loss. While it could be rebuilt, it can only be so at an enormous expenditure. And it still requires there are people with the know-how and willingness to start such companies again. Can we rely on them to rise and try again, even after they have been crushed?
The long-term associated with this madness have however to be seen. Even if the virus goes away tomorrow, these problems will remain. They take time to be solved and it takes lots of work to piece things together again even if it is all of possible. The issue here is that this would be a very bad scenario if it were a sudden shock to an otherwise free market economy.
This is simply not the case. These Western nations were hardly free marketplace havens. Rather, they were welfare states to varying magnitudes. In the case of the United States, a welfare-warfare state. In other words, these communities and economies were currently burdened by large and incredibly costly states which were usurping what the market was permitted. What this means is that the market that will existed was already burdened simply by financing the nonmarket.
The state costs money, but the greater burden is certainly loads of people that it relieves from the discipline of the market. In the purely free market, you are paid in accordance with your own contribution to the value caused to the consumers. To put it bluntly, if you produce plenty of value you get paid a great deal. But if you produce absolutely nothing, that nothing might be your own wage.
Of course , there would be systems and establishments in place to care for all those in temporary unemployment and those with lesser fortune. However they would be the exception to the guideline. Most people would be able to find a work but would be paid what exactly is not called a living wage. Prices are overall much lower when we are all producing, meaning our wages can buy many more goods and services. It would be an easy burden to carry and to care for those people who are in need when many people can care for themselves. It is possible and voluntarily. And this used to be the case. With cooperative joblessness insurances and collective sick pay funds, where workers share their risk, which was the case. When the state monopolized these services, it also made them more general, and offered them for “ free. ”
The incentive became to use the system as much as possible rather than help with but otherwise stay from it out of respect of your colleagues. People were trying to stay away from burdening others. Now it is the other way around. This has increased the responsibility and therefore the cost, and also taxation. Then, the state hires a lot more people to administrate these techniques. This was in the beginning, but it continues to be going on for many decades. Their state is an enormous enterprise all through Europe and the West and much of what it does would be to undermine the market by creating incentives to not work, not to produce, and not contribute to joined welfare. The result is that big parts of the population do not actually contribute to the wealth from the nation. This does not only include the sick, elderly, and those taking advantage of the system because they can. It also includes everybody working for the government, who are in fact living from the production that takes place on the market. The government does not produce any value.
While the cost of the state is typically counted towards the county’s GDP, it might make more sense in order to subtract it from the value created in the market. That will give us a good idea of the soundness of the economy. How many financial systems in the West do you think create a lot more value than they use upward? With this enormous burden within the economy, the chances of entrepreneurship to become at all successful diminish. Also to start a business that puts enough food on the table is very difficult. It is made a lot more difficult because of the levies, fees, licenses, regulations, and so on that will politicians and bureaucrats push onto the entrepreneur plus private businesses.
In other words, many opportunities are simply not valuable enough to protect the extra burden placed on entrepreneurship by the state. So they remain unexploited or underexploited. This particular reduces the number of jobs within businesses, which leaves a lot more people without the possibility to create a living. And so, they seek help and therefore turn out to be embedded in the state system. The only way out is to find a job in one of those businesses that are unlikely to be started because the state has made it all too burdensome to run a company.
For every person which no longer works and the living, and thereby no longer contributes in the economy, there is a loss of one in production and an increase of one in problem. For every person who loses their job and becomes determined by the unemployment benefits along with other subsistence, the economy both loses production and must carry a heavier weight. As a result, the economy turns into less lively and modern. There is less entrepreneurship, there is certainly less production, which means there are fewer opportunities for people to find jobs. They become more dependent on the state.
This dependence is a issue for many reasons, especially when people become dependent on the system in the long run. As a brief stop to obtain on one’s feet, the device would do only small harm. It would do exactly what private systems used to do. Yet that is not how these systems work, especially when the state becomes an ever-increasing burden on value creation and the market. People get stuck within the system because there is rarely a way out and because the software has been designed to be good. They are not punishments after all.
Politicians pride by themselves on promising that you will not need to lower your standard of living much when you lose your job. It is a good way to get votes and it enables you to look generous and caring, but it is utterly destructive to pay people as much for not working as for when they contribute to the society’s overall well-being. When folks get stuck in these systems it affects their self-pride. The longer they stay in these programs, the smaller the chances they have a skill or value, a means to contribute, that they can do something that is still of worth. They lose hope, they shed confidence, they become fully dependent on the state, and not just financially. When they start assuming that they cannot make a living by themselves, that they cannot take care of themselves and their families, and when these people conclude there are no work opportunities for people like them, that is certainly when they become lost and prevent trying. After all, what is the stage?
People with this terrible situation are much more prone to be hostile toward those who are not giving them a chance, that is, businesses, entrepreneurs, the market. These are more likely to use their votes to benefit themselves, for which you can hardly blame all of them. The burden of the economy quickly increases, which causes greater complications and more people dependent on their state, and even fewer in placements in which they actually lead. Add to this situation, which been around before the pandemic, the bulk death of businesses following the disastrous policies adopted in order to “ fight the virus. ”
The farmer in my example will not be capable of rebuild his business. Even when he could afford it, precisely why would he choose to construct again what was once destroyed? No one will thank your pet. And it may be destroyed again. Why would he place in all that effort and make that risk when there is small to no gratitude just for what he does? There may not even be much revenue. So , resentment builds, the burden increases, it becomes harder to begin and run businesses. More people become determined by the state and thereby increase the burden to those who are not really. This is a recipe for disaster because it leads us down only one path, which Hayek referred to as “ the road in order to serfdom. ” Their state grows like a disease in the body that is not healthy sufficient to withstand the attack. Politically, this is a path to the all-encompassing state— totalitarianism.
The state needs and is granted more power as more people become dependent on it. That is the unfortunate truth and that is what we are seeing. Those depending on it are all too willing to offer a little more to get the system set. The problem, however , is not the shortcoming of the state. The state certainly not has such ability. The issue is a lack of market, and this absence becomes more present the greater the state grows. This is the reason for pushing harder against the state, but for most the incentives are exactly the opposite, to request more. This is what we are coping with and why we must break people’s dependence on the state.
This lecture was originally published by the Austrian Economics Middle.
Mike Adams Joins Alex Jones to expose the collapse associated with society taking place as supply chains are usually disrupted.