Sympathizing With the Neglected Victims of Statism

Many people seem to sympathize with members of abstract groupings such as ‘The Poor’ and ‘The Workers’. This sympathy leads them to applaud policies that are perceived to benefit ‘The Poor’ or ‘The Workers’, or other favoured groups, while condemning policies that are perceived to harm members of these groups.

While I too sympathize with people who don’t have many material resources and with people who work hard for a living, I also sympathize with some other abstract groups of individuals, groups who not many others seem to sympathize with. These groups include: The Taxpayers, The Victims of Purchasing-Power Drainage, and The Restricted. The interests of members of these groups are often harmed by interventionist, statist policies that seem to be beneficial to The Poor and The Workers. As a result, my sympathies for members of these three groups often lead me to be more critical of such policies than others.

1. The Taxpayers

I have relatively strong feelings of sympathy for people who do nice things for me. It makes me happy when good things happen to such people, unhappy when bad things happen to such people. I think that this trait is fairly common among humans. It gives rise to the popular sentiments of Gratitude and Loyalty.

I know that as a consumer, my standard of living is based on the actions of the producers. The more they produce, the more the money I earn will enable me to consume. It is true that not every producer contributes directly to producing the products that I seek to buy. However, I know that the market system cannot just cater to my demands alone. In order for it to function, it must cater to the demands of all consumers with purchasing power. Hence, in this instance, I tether my interests to those of consumers in general. Whenever a producer earns a high income by producing things that the consumers want, the system of production for the consumers is advanced. The more this system is advanced, the better off I will be as a consumer. Hence, when I see a producer earning a high income through free-market means, I consider them to be a benefactor, and thus I particularly sympathize with them.

The reason why ‘welfare State’ policies are popular is because their supposed purpose is to ‘help the poor with the money of the rich’. As I’ve argued elsewhere, often these policies are highly overrated as means of benefitting the poor. However, many advocates of ‘welfare State’ policies sympathize so much more with The Poor than they do with the richer Taxpayers that pointing this out does little to dissuade them from their advocacy.

People like me who believe that free-market economic theory is correct and who have a penchant for gratitude-based sympathy will take the interests of the richer Taxpayers far more into account than your typical ‘welfare State’ supporter will. While most of us will also sympathize with The Poor, when it comes to evaluating ‘welfare State’ policies, our sympathy for the richer Taxpayers will lead to more balanced out sympathetic considerations than those of your typical leftist. This, combined with our doubts about the effectiveness of ‘welfare State’ policies as means of helping The Poor, and our greater trust in voluntary action to help The Poor, usually leads us to oppose these kinds of policies.

2. The Victims of Purchasing-Power Drainage

Producers who produce what the consumers want are rewarded with purchasing-power, which they can then use as consumers themselves. This earned purchasing-power can be taken away from these people in two ways: the first is via confiscation of earned currency units, or taxation, which we considered above. The second is via the drainage of the purchasing-power of those earned currency units. The gratitude-based sympathy for The Taxpayer that I have thus also extends to The Victim of Purchasing-Power Drainage.

Purchasing-power can be purposefully drained in two ways: via inflation or via restrictions on production and exchange.

Inflation: When the government (or a private counterfeiter) prints/creates more units of currency, the greater supply of currency, other things equal, will eventually act to reduce the purchasing-power of every unit of currency. This does not happen right away though; first the newly-created currency must flow throughout the economy. It starts this flow from the pockets of the government’s central bank/the private counterfeiter, then moves on to the people they buy from, which then moves on to the people that these people buy from, and so on. The earlier on in this flow you are situated, the better off, as when you receive the benefits of the new money, it is more likely that the new money has not yet raised the price of the things that you want to buy. If you are situated relatively late in this flow, or if you have missed it entirely because you have a fixed income, it is more likely that you will receive the benefit, if at all, only after the new money has raised the price of the things that you want to buy. These people are the ones whose purchasing-power is drained by the inflationary policies.

Restrictions on production and exchange: Whenever government policies make it more difficult for producers to produce what consumers want to buy or to get the products to the consumer, the general purchasing-power of the consumer with a given amount of currency will be relatively impaired. Protectionist tariffs or import quotas, which make it more difficult for consumers to buy from international sources, are probably the most obvious example of these kinds of purchasing-power-draining policies. There are many others though. Policies ranging from professional licensing requirements, to onerous labor and environmental regulations, to taxation or other policies that discourage capital formation and investment, all act to drain the purchasing-power, other things equal, of the currency units of the consumers.      

Advocates of inflationary policies and of policies that restrict production/exchange usually focus on the benefits accruing to certain groups as a result of these policies: from the small business owner that can now get a loan due to the inflationary ‘easy money’, to the domestic producer who is now ‘protected’ from fierce foreign competition, to the worker whose working conditions the labor regulations are intended to ‘improve’.

They usually fail to mention the Victims of Purchasing-Power Drainage that these policies create. Ironically, The Poor and The Workers, the groups that get so much love when they are supposed to be benefitting from government interventions, are the groups that are generally the most sensitive and susceptible to these kinds of purchasing-power drains. Members of these groups are often situated late in the inflationary flow of money, and they are more sensitive to losses in purchasing-power because they didn’t have that much to begin with.

Whether Poor, Worker, or anyone else, I sympathize with all Victims of Purchasing-Power Drainage. I am grateful to producers for providing consumers, including myself, with the goods and services that they do, in exchange for the purchasing-power which we give them in return. When government policies drain the purchasing-power that these producers earned, I feel resentment on their behalf, wishing that my benefactors weren’t treated so shabbily. The fact that these purchasing-power drains are done covertly, a kind of robbery by stealth, makes it even worse in my eyes.

These sympathetic feelings that I, and people who think like me on this issue, have, tend to make us more defensive of the interests of the consumer and the inflation-victim. This makes it more likely that we will oppose the kinds of purchasing-power-draining policies discussed above.

3. The Restricted

This group is comprised of people whose non-aggressively-violent freedom of action is restricted coercively, usually by a government. While my sympathy for the first two groups discussed was based on both understanding (ability to imagine being in their shoes and experiencing the situation in question) and gratitude, my sympathy for this group is based solely on understanding.

I am a free-spirited person and when the government coercively tells me that I can’t do something that does not involve aggressive violence, I feel annoyed and resentful. Thus, I can definitely understand the plight of members of the abstract group, The Restricted, and thus I sympathize with them. This holds even if the freedom being restricted is one that I myself would not choose to exercise, such as the freedom to use recreational drugs.

By contrast, many people only sympathize with those whose particular freedom being restricted is one that they too would choose to exercise, rather than with The Restricted as an abstract grouping like I, and other libertarian-leaning people, do. A North American Christian may be indignant about the freedom to practice Christianity of people in China and the Middle East being restricted, but may not particularly care about people whose freedom to practice religions other than Christianity is being restricted. An American Conservative may bellow indignantly if people’s freedom to keep firearms is being restricted, and yet join the chorus of people who want to restrict people’s freedom to ingest the recreational drugs of their choice.

People like me who sympathize with victims of the restriction of non-aggressively-violent freedom of action in general are more likely to favor more consistently-libertarian policies than people who only sympathize with victims of restriction selectively.       

Conclusion

Why do only some people sympathize with these three abstract groups of people while others do not? Is it because our brains are wired differently from one another? Or is it because one group has thought about the issues at hand more, or from a different perspective, than the other? I for one hope that it is the latter; because then there would be hope for a rapprochement between the two sides. If it’s the former, then we will unfortunately have to agree to disagree.