Thursday, January 17, 2013

Causes Run Deeper Than We Suppose

And now remains

    That we find out the cause of this effect;

    Or, rather say, the cause of this defect,

    For this effect defective comes by cause.

    Shakespeare, Hamlet

  An ancient hindu myth has it that the earth is held up by a gigantic elephant. But what holds up the elephant? A still more gigantic turtle! And what holds up the turtle? Oh, it’s turtles all the way down!

  Or, refer to the Maya of Yucatan of some thirteen centuries ago. They “caused” the much-needed rain by weird offerings to their Rain God: tossing virgin maidens into deep wells.

  But let’s not laugh too heartily at the ancients for their childish conclusions as to causes. What causes high prices? Less than two centuries ago:

    The washerwomen of Paris, finding soap so dear that they could hardly purchase it, insisted that all the merchants should be punished with death; . . . Marat [Member, National Assembly] declared loudly that the people, by hanging shopkeepers and plundering stores, could easily remove the trouble.

  And only recently, newspapers across America displayed pictures of women toting placards, parading in front of stores as pickets are wont to do, demanding lower prices. As if the retailers were responsible for their budgetary problems!

  Parenthetically, suppose the chain stores were to yield to the pressure of such publicity and reduce their prices by 2 per cent (their average profit on sales is about 1 1/2 per cent), they would be forced out of business. The paraders’ victory would consist of round steak ground, for instance, at $1.22 1/2 instead of $1.25 per pound, but only for the brief period that a losing business could keep its doors open.

  Wrong Methods Widely Used

  But here again we must not be too harsh on les femmes of Paris or our own placard bearers. Politicians in high places, as well as Ph.D.’s, labor officials, clergymen, and even businessmen are guilty of the same offense; they refuse to probe below the surface; they ascribe as causes no more than “effects defective” and, by so doing, aggravate the very ills they would remedy. Price, wage, rent, interest, exchange, and production controls are all of the same pattern, as are the so-called “guide lines.” Economically, such measures are as inept and harmful as our women on parade with their placards, or as the demagogue’s plan of hanging the shopkeepers.

  The shopkeepers are far less responsible for high prices than are their customers; they are not the cause. The retailers are the ones who first confront the consumers with the bad news; they bear the sad tidings, the ill consequences, of uneconomic policies framed and carried out previously by others who, more than likely, received praise and votes for their unwise actions. Observe the politicians asking acclaim for bestowing this and that on everybody and then the merchants getting blamed for the inevitable aftermaths of the giveaways! Very well. If not the shopkeepers, who or what does, in fact, cause rising prices? How deep lies this cause?

  The high prices of the 1790’s in France, in Germany following World War I, in most Latin American countries during the last three decades, and the rising prices in the U.S.A. today are the result of a dilution of the medium of exchange, in a word, inflation.

  Spending and Inflation

  But merely knowing that our rising prices are caused by inflation isn’t all we need to know. We must probe deeper and ask, what causes inflation? The answer is simple enough: excessive governmental expenditures.

  The next underlying cause must be uncovered: why do excessive governmental expenditures cause inflation? The answer is no secret: whenever the costs of government—federal, state, and local—rise to that high mark where it is no longer politically expedient to defray the costs by direct tax levies, governments have throughout history resorted to inflation as a means of financing.

  To probe still deeper, the next logical question is, what causes governmental expenditures to reach that high point where explosive inflation ensues? The answer appears to be that those favoring excessive government spending exercise more political influence than do those people who oppose such spending.

  What, then, causes so many people of influence to favor excessive government spending?

  Any honest investigator must confess that he’s in trouble here. His plan of putting his finger on causes that underlie “effects defective” comes to a sudden halt. No longer can he precisely identify the next underlying cause. The problem, at this point, is to find out why human beings behave as they do. Here, instead of a single track to follow, the analyst is faced with literally millions and billions of more or less blind alleys. Why, for instance, will people who decry personal theft approve feathering their own nests at the expense of others, provided the government will do the looting for them? Is it a deficient sense of justice and, if so, why the deficiency? Or is it a stultified moral nature, faulty education, economic ignorance, an inability to see beyond the moment, materialistic mania, a declining self-reliance, spiritual arrestment, an inferior concept of human destiny, no sense of process,4 energies expended destructively because creative release is hampered, or what?

  Growth Comes Through Effort

  The case of rising prices and their causes has been used for illustrative purposes. Take any social ill—communism, crime, wars, or whatever—and pursue the causal sequence. Finally, in every instance, the investigator will come to an analytical wilderness. To go further in depth is speculative at best. For the whole cosmic enigma confronts him. The message he gets is almost one of defiance.

  To me, the message reads something like this: Go ahead with your attempts to unravel Creation’s Scheme. You will never find the answer; it isn’t within the ken of man nor will it ever be. But try, everlastingly try, for it is the trying that stimulates individual growth in awareness, perception, consciousness, conscience. While you will never discern precisely all the causes of things you think wrong, you will come upon ever so many behaviors and practices that are identifiable as things not to do.

  Things not to do! Some twenty-five years ago a dozen of us had gathered for an evening of discussion with Ludwig von Mises, our first meeting with the distinguished economist. As midnight neared, a guest posed the final question: “I’ll agree, Professor Mises, that we are headed for troublous times. Now, if you were the dictator of these United States and could impose whatever corrective measures you think wise, what would you do?” Quick as a flash came the evening’s final answer, “I would abdicate.”

  Dictating how another should live his life—authoritarianism—is a thing not to do.

  Self-Control Can Change the World

  Recently, a scholar of note recommended a technique quite at odds with FEE’s self-improvement methodology, but which he thought would assure putting our ideas into practice. Assume his claim to be valid. Should FEE make the change? No, this is a thing not to do. Were my ideas to govern the nation or the world, the situation would be tragic. No such wisdom exists in any person, and it seems unlikely that it ever will.

  Wisdom, such as mankind acquires, can be likened to an over-all luminosity that derives from a host of tiny, individual enlightenments in complex interchange over space and time. The brighter the glow, the more and better can each of us see his way. Neither I nor anyone else can manage the over-all luminosity, but I can attend to my own wee candle.

  Cervantes’ “The road is better than the inn,” should serve to remind aspiring men that there isn’t any inn for them, but only the road, now and forever. It is the effort along the trail that matters.

    The following chapters, all but eight of which have previously appeared in The Freeman and Notes from FEE, are small gleanings from one person’s search for understanding as he journeys on the road. And the next chapter explains why understanding has not been sought in that dark area of authoritarian or coercive arrangements. It is my conviction that what cannot be found in human freedom cannot be Truth. . . .

Deeper Than You Think - Digital Book

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