The Occupy-everywhere protesters’ calls for increased state regulation of the financial sector and demands by the Global Warming lobby for state prohibition of certain energy-production practices are just two recent examples of the persistence with which contemporary, mainstream oppositional movements resort to the state as their default response to crisis. The assumption is that the state must increase, either the number of its functions or the scope of its current functions, because it alone possesses the focus and public-mindedness necessary to overcome individual self-interest and marshal everyone toward the common purpose of overcoming the crisis This tendency though is inherently self-defeating and the only plausible explanation for its salience is ignorance of the paradox of statist crisis-resolution.
The paradox can be expressed thus: There is a direct relation between the increase of state action, for crisis resolution, and the decrease of state qualities that recommended that increase of action. This paradox can be revealed in eight simple steps.
1. The state is defined by its (supposedly) legitimate use of coercion. Where there is no coercion there can be no state. It is precisely the utilization of this coercive power that is being sought by those who propose the state as the solution to crisis.
2. Coercion is by definition the denial of voluntary action. Where there is no coercion, people act free of interference from anyone else. It is precisely this control over the action of others that is being sought in calls for state crisis resolution.
3. The coercive denial of voluntary action by definition reduces choice. Coercion denies people their voluntarily selected choices thus limits the spectrum of possible choice. It is precisely this choice reducing function of state coercion which is sought in calls for state crisis resolution.
4. Limiting the choice spectrum by definition creates rent-generating opportunities. Unlike free markets, where voluntary action allows everyone to freely choose that which best serves their preferences, the limited choice scope arising from coercion means that people are compelled to accept options they would not accept voluntarily. Advocates of statist crisis resolution are indifferent to this fact.
5. Rent-generating opportunities engender rent-seeking action. Economists call rents those arrangements that ensure captive markets. The opportunity to profit without the threat of competition, reducing the customer base or creating downward pressure on prices, thus ensuring the safest maximum return on investment, is an attractive opportunity that few can resist. Advocates of statist crisis resolution are blind to this fact.
6. Rent-seeking practices necessarily distort the best intentions of state public mindedness. Even if we assume the improbable assumption that the state exists to serve the public good, its ability to actually do so is constantly under attack by rent-seekers who recognize the rent-generating opportunities intrinsic to the choice restraining character of the state’s defining coercion, and thus use all manner of corrupting practices to generate and capture such rent-seeking opportunities. Advocates of statist crisis resolution recognize this corruption, but, inattentive to the above two facts, blame this on the rent-seekers while remaining blind to the conditions of the state which give rise to rent-seeking actions.
7. As state coercion increases, rent-seekers’ corrupting influence proportionately accelerates and expands, so that the coercive purposes of the state are ever under rising pressures to serve the more limited, focused, motivated and informed number of rent-seekers, rather than the more expansive, dissipated, conflicted and misinformed general public. Advocates of statist crisis resolution are blind to this fact.
8. As the state is defined by coercion, and coercion-engendered rent-seeking corrupts the state’s capacity to act as a public-minded agent, every increase of state intervention, thus coercion, inevitably entails a further decrease of the state’s ability to serve the public good, since increased coercion must of necessity also increase rent-seeking and corruption.
Thus, to repeat the paradox: there is a direct relation between the increase of state action, for crisis resolution, and the decrease of state qualities that recommended that increase of action.
Until this lesson is learned, those who presume to protest the status quo unwittingly serve it.