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Variations | Human nature being what it is

ECONOMIST Milton Friedman, who received the Nobel Prize in 1976, wrote in 1962 that “there is seldom anything truly new under the sun in economic policy, where the allegedly new generally turns out to be the discard of a prior century in flimsy disguise.”

From the earliest times, rulers had been trying to “control” their nations’ economies and setting “fair prices,” including wages. “For the past forty-six centuries (at least), governments all over the world have tried to fix wages and prices from time to time. When their efforts failed, as they usually did, governments then put the blame on the wickedness and dishonesty of their subjects, rather than upon the ineffectiveness of the official policy. The same tendencies remain today.” That’s from the book, “Forty Centuries of Wage and Price Controls: How Not to Fight Inflation,” by Robert Schuettinger and Eamonn Butler. It was published in 1979.

Another “perennial passion” is economic planning. “Centralized planning regularly appears in every generation and is just as readily discarded after several years of fruitless experimentation, only to rise again on a subsequent occasion. Grandiose plans for regulating investment, wages, prices and production are usually unveiled with great fanfare and high hopes. As reality forces its way in, however, the plans are modified in the initial stages, then modified a little more, then drastically altered, then finally allowed to vanish quietly and unmourned. Human nature being what it is, every other decade or so the same old plans are dusted off, perhaps given a new name, and the process is begun anew.”

For example, FDR’s “New Deal.”

In 1939, two-time Pulitzer Prize-winner and Kansas City Star editor H. J. Haskell published “The New Deal in the Roman Empire” which pointed out a truism that may interest some of our “progressive” friends:

“As civilization has advanced, every government has found it necessary to intervene in social and economic affairs; to undertake various collective services, to assume certain obligations to the unfortunate, to set the rules of the game in private enterprise.”

In Rome in the year 367 B.C., Haskell added, “we have three typical New Dealish measures for the relief of the underprivileged — a debt moratorium, a Small Holdings Act, and a Farm-Labor Act. The results did not come up to the campaign promises. The debt moratorium was useful as far as it went, but it failed to meet the needs of many hard-pressed debtors. As for the other measures, we hear the familiar and not surprising complaint that they lacked teeth and were not enforced…. In 352 B.C. the [Roman] government set up a Federal Land Bank working in conjunction with a Farm Debt Conciliation Committee. In this attempt to deal with the farm debt problem Rome used precisely the method that was adopted twenty-three hundred years later in the period of the New Deal at Washington.”

The Roman government likewise “found it necessary to…set…maximum interest rates. Shortly before the Farm Debt Conciliation Committee started work the rate was limited to a trifle above eight percent. There was still complaint, and ten years later, under pressure of the debtors, the government adopted what seemed the obvious remedy and cut the rate in half. Then a politician, who doubtless considered himself a monetary expert, got through a law abolishing interest altogether. Also, doubtless to his surprise and the surprise of his supporters, the measure failed to work. People who needed money found nobody would lend. The law became a dead letter….”

In addition, the Roman government sold subsidized wheat to its low-income or unemployed citizens — until a smart politician ran on a free-wheat platform, and won. There were other equally smart politicians who “promised impossible gifts of…land to the people and appealed to the hundred-percent Roman sentiment against sharing citizenship with outsiders.”

And then there were the “young men…tempted by public and private doles [who] had come to prefer idleness in the city to a steady job.” The emperor Augustus “was inclined to abolish forever the public distribution of grain, for the people had come to rely upon it and had ceased to till the fields; but he had not proceeded further in the matter because he was sure that, from a desire to please the people, it would be revived at one time or another.”

Alas, people had been “schooled to expect something for nothing.” Said Haskell, “So often do reforms produce unhappy consequences!” He also observed that even in ancient Rome, “the effect of [an] edict was the direct opposite of what was intended.”

But human nature being what it is, the world will never run out of admirable and passionate advocates of social change who care not one whit for the lessons of history.

Still, as British economist Arnold Plant would put it, “Those whose advocacy of social change is powered by strong emotion…would do well to reflect that they would not wish a surgeon to operate on them while his hands were trembling with emotion.”

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