"This is a world where nothing is ever solved", says Rust Cohle, played by Matthew McConaughey in True Detective. LINK. “Someone once told me that time is a flat circle. Everything we've ever done or will do, we're gonna do over and over and over again.” He was piqued by a grotesque crime, speaking about that and life generally. It certainly applies to collectivist economic ideas.
Correction. I’m talking more about quasi-religious ideas than economic ones. Rent control, government-owned grocery stores and minimum wages are not policies that flow from sensible economic analysis.
As teh wonderful Thomas Sowell says, “Some things are believed because they are demonstrably true, but many other things are believed simply because they have been asserted repeatedly.” LINK
They sound lovely. But always and everywhere they fail to achieve their noble goals. Rent control chases away investment, kills the incentive to maintain and upgrade. Governments do not run grocery stores more efficiently than private retailers. Minimum wages discourage employment, deny the freedom to earn a living, slash supply, benefit a minority (temporarily) and reduce output.
Just some of the technical results of these things: malinvestment; misallocation; supply shortages; rent seeking. None of these is productive. Each can only result in less of the things people want.
All of these things assume central planning can do a better job than individuals making choices that best meet their needs. They distort and mock the magical role of prices. They assume a fixed pie and stand in the way of a growing pie.
Again and again
Yet these ideas never go away. The latest revival is from the man who will likely become the next mayor of New York City, Zohran Mandani. LINK and LINK
He won’t describe it this way, but these policies criminalise certain types of employment and trade. A minimum wage says to the 19 year old who wants to do X work for Y dollars, no, this is banned.
This would hardly be the first time rent control has been tried in NYC. LINK. It would be the next time it fails to help the people who are told it will help.
Some evidence
Rent control
For the ruinous results of rent control, I go back to the great Sowell: LINK
Minimum wage:
Murray Rothbard on the horrors of minimum wages: “In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.” LINK
Conclusion
Being an old, tired topic, I don’t feel bad using an old quote: “Great idea. Wrong species.” - E. O. Wilson LINK. Indeed, there are no examples from history of these admittedly lovely-sounding ideas working. Not for our species.
These ideas will be back again and again. Solving them is never done.