One of the best features of the holidays is that many government offices are shut down. Peace on Earth, indeed. I’m travelling for the next few days. On the roads, the police presence is minimal to none.
Somehow we all get by. The private sector is humming and happy.
What is the private sector? It is an overarching order that emerges from the cumulative efforts of human actors to cooperate with each other toward the betterment of their lives. It is not only the places we shop. It is also the gatherings in our private homes, the houses of worship we attend, the businesses that give us time off to be with our families. It is the world we construct for ourselves through simple choices we make each day.
This is all part of the beautiful anarchy that human beings build when we are left alone to do so. By anarchy, I don’t mean chaos, but rather the opposite. It is orderly. It meets our needs. It is always developing and serving. And it all emerges without the coercion and compulsion inherent in government policy.
Of course, we take the blessings of the private sector for granted. All these businesses we visit during the holidays are there for us — selling us our turkeys and offering us gifts we can buy for others — and we can depend on them. I knew that as soon as I crossed the border from Louisiana to Texas, for example, I would find an excellent hotel at a great price that I could just drive up to and get a comfortable room in for less than $100 at night. I knew too that I would find a great place to eat.
I had never been to the IHOP in Marshall, Texas, but walking in was like being greeted by an old friend. Why did I come to IHOP? The AroundMe app on my smartphone listed many other local restaurants, but I had never heard of them and I seriously doubted that they would be open on Christmas Day. Plus, with IHOP, I knew what I would be getting. It has a reputation I can depend on. The menu is stable and predictable and the prices are right. Every item on the menu looks amazing.
The waitress was smiling and there to help in every way — hinting to me that I really should choose the ham and egg sandwich over the chicken-fried steak. I took her advice, and was happy I did.
I watched as she worked the room, making sure everyone’s coffee and water were filled, that the kids had their highchairs and that the food was hot and delicious. I asked her if she ever becomes annoyed at all the demands placed on her. She said she was just very happy to have a job.
I pressed further. I pointed out that all these demanding people who would cut her tips if she were only a minute late on filling up a water glass pay up to 40% of their income in taxes and comply with myriad government dictates every day without batting an eye. I asked her if she found it strange that the people in this room are kings while in her restaurant but serfs in their lives when dealing with the government.
She said that this was indeed odd, but that she had never really thought about it.
She added: “Would you like a refill on that hot chocolate?”
Texas right now is unusually cold and I didn’t pack the right clothing. So in a few minutes, I’ll head to Wal-Mart — in a town I’ve never been in — with a plan to buy a new turtleneck sweater for the rest of the drive to see my mother. I know there will be a Wal-Mart nearby. I know it will be open. I know they will have sweaters. And I know they will be priced in a way that will again surprise me for being surprising low. I will again wonder how this place makes money. I will again marvel at how great this store is.
Compare this with the uncertainty from government. One doesn’t know from one press conference to the next what Ben Bernanke is going to do. Every day the situation in Congress changes, and we don’t know for sure how much in taxes we will have to pay. The arbitrariness of government officials is alarming to business owners today. One never knows for sure when or if the bureaucrats are going to move in and shut the place down for whatever reason.
This is a factor that is forestalling economic recovery. On the margin, capital owners faced with regime uncertainty are choosing to hedge their bets. They are reluctant to jump in completely, fearing another crisis and uncertain whether the signs of life in some sectors are actually just signals of another bubble that is going to pop.
Once you see the contrast between the worlds the private sector has created and the mess the government makes, you see the challenge of our time. But seeing it is a problem. Most people go through their lives without taking notice. They shop and worship in the world of human volition. But they are unaware of just how compromised and truncated it is made by government impositions.
None of us is in a position to fully see the glorious complexity and fullness of the private sector that is global in scope. We see only what we ourselves experience. It takes a certain reflection on the bigger picture to get the point.
One of the most spectacular presentations of the sheer complexity of the private sector comes from the writings of F.A. Hayek. In the 1930s, he was teaching in London. The government planners at the time were eager to patch up the economy, which had fallen into deep decline. He tried to explain to them that they were powerless to do good and that their efforts would have only the reverse effect.
The structure of production, he wrote, is far too complex for government officials to control. It consists of an extended order of production and consumption built by heterogeneous plans of investors, each of which is carefully calibrated in time over an uncertain future. The plans are made by following the best clues available in the forms of prices and interest rates and woven together with contracts and expectations.
His diagrams appear in the Spy Briefing Club’s book release this week: Hayek’s Triangles, edited with an introduction by economist Mark Skousen. Reading through this, you gain an appreciation of a different form of beautiful anarchy — the orderly world of macroeconomic planning that occurs without the assistance of government agencies.
It is striking the extent to which the private sector thrives even in the face of so many attacks for so long, and the daily pummeling it receives from regulators, taxing officials, and central bankers. It is particularly poignant this season because the religious themes of this season nearly all draw on the triumph of light over darkness, the will to freedom over the despotic desire to control.
All the major religious holidays of this time of the year are rooted in the ancient practice of recognizing the changing season, when the shortest day of the year gives way to a new emerging light, and the days grow longer and the growing season begins anew. The change in the season occurs outside government control, and the traditions that take note of them are older and more far reaching than any existing regime.
This is another way in which this season should remind us what matters, what is really serving the cause of human flourishing, what is right and true. In the new year, let us all pledge to gain new awareness of the blessings that freedom grants us to claim ever more of those blessings for ourselves and our families.