One of John Maynard Keynes’ criticisms of the market mechanism was what he called “sticky” wages. He claimed that the market for employment does not work as efficiently as previously thought, because employees are reluctant to accept lower wages. He not only claimed that wages failed to respond to supply and demand but that it was a good thing they were unresponsive.
In his book “The General Theory of Employment, Interest and Money,” he said, “It is only in a highly authoritarian society, where sudden, substantial, all-round changes could be decreed that a flexible wage-policy could function with success.” Astoundingly, he thought authoritarian societies were more susceptible to the market process. In an earlier comment, he said that was “because men want the moon. … There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control.” So Keynes thought the role of government was to deceive individuals in the public into making decision they otherwise would not have made. In an authoritarian society, he swooned, there is no need for such pretenses.
Part of Keynes’ confusion was failing to distinguish between the total wage income and the hourly wage rate of an employee. In today’s market, there are all sorts of adjustments that employers can consider when wanting to cut their overall labor costs, such as reducing the number of labor hours and providing fewer health benefits. But those are best achieved in an open, dynamic market process.
Governments, as commonly conceived, are incapable of this downward flexibility because they are anything but open and dynamic. They are a violent assault on reason. Government escalates in a progressively intrusive way, making it what is sticky downward.
For the most part, conservatives, who rightly deplore their stolen tax dollars being redistributed to make welfare recipients more dependent on government handouts, hardly ever talk about reducing government welfare. Not including the automotive and financial industry bailouts, entitlement spending almost doubled under George W. Bush from 2002 to 2009. Instead, conservative politicians look to expand government power in hopes of deterring those who have moved into the country without government permission. They understand how difficult it would be politically to reduce government handouts, even to those without the ability to vote. Their best bet is to advocate for more government power, more police, more laws, more taxes.
Worse still, government is slippery upward. The reason why conservatives do not more vigorously advocate for reducing government welfare is varied. It might be because they do not want to be called racist, or it might be because it would hurt their chances of gaining control of government to impose their own social agenda. It is also not worth much of an individual’s time to lobby congressmen to reduce spending when the extra savings would probably just be spent on some other boondoggle. Violence does not produce positive overall results. It is less than a zero-sum game. In government, you are either stealing or being stolen from. The power of the state is being used immediately for your benefit, or the power of the state is being used against your benefit.
I can understand why conservatives clamor for more laws. On their own, they could not afford to kick out all the foreigners, to hire bounty hunters and deport them. That would be awfully expensive, and people might not look too kindly on using violence against peaceful people, even against those who broke an arbitrary government edict. But somehow, people acquire a different moral nature while wearing a government-issued uniform. If they can lobby for power of their own, they can use the government to achieve something, financially and culturally, not possible otherwise. The government’s monopoly on taxation means they can spend resources they did not have access to beforehand, extinguishing liberty one amber at a time.
We can see why government does not solve problems but only makes them worse. We can also see why reducing government aggression, at least through the conventional electoral process, has been so fruitless.