Intervention by fdjerue7eeu



   彭定鼎 Translation

      a well-known, often quoted to say that: "Possession of the least
government is the best government." I do not believe this is a good
description of the proper functions of government. Government should do all need it
to do --- is to establish a government to do these things. Government should protect
the individual from domestic violence and fraud against the culprits, but also should
protect the country against foreign invaders. These are the young age structure, the
market economy system in the government functions.

     In the socialist system, the Government of course is authoritarian, and there is
nothing out of its jurisdiction. But in a market economy, the Government's
main function is to protect the market economy from fraud and violence at home and
abroad a smooth run.

      government functions that do not agree with this definition one might say:
"this man hate government." Nothing could be further from the
real. If I say that the liquid gas is very useful, has many uses, but I would not drink
gasoline, because I think that petrol is not used to drink, and I am not the enemy of
gasoline, I do not hate petrol. I only said that gasoline is useful for some purposes, but
not all purposes. If I catch murderers and other criminals is a government
responsibility, but operating the railway or for useless things to spend money it is not
liable, then I do not claim it as not suitable for doing certain things to do other things
and hate government.

     said that in the current situation we are no longer a free market economy. Under
the current circumstances we have introduced the so-called "mixed
economy." As a "mixed economy" of evidence, it
pointed out that many enterprises are owned and operated by the government.

      undoubtedly a number of institutions and enterprises run by the government. But
this fact does not change the nature of our economic system. It even does not mean
that in the original non-socialist free-market economy with "a little bit of
socialism"; this is because when these companies in the business subject to
market forces, which means it subject to the consumer. Government - for example, if
it is operating post office or railway - to hire people to work in these enterprises. It
must also buy the raw materials needed to operate those businesses and other things.
On the other hand, it is to the public "sale" of these services or
goods. However, even if it means taking the free economic system, operated these
institutions, the result is always a deficit. But the government can make up these
deficits - at least for government officials and the ruling ... ... staff thought.

     individual is obviously different. Deficit in the ability of individual operators is
very limited. If not quickly eliminate the deficit, if business is not profitable (at least
not occur more deficit), individual bankruptcy, business must close down.

     But the government, the situation is different. Government to operate a deficit,
because it has the right to tax the people. If the taxpayer is willing to pay higher taxes
to the government to losses of enterprises - that is, to the private sector as an effective
way to operate - and if the public accept the losses, then the business course to

      In recent years, governments of most countries has greatly increased the number
of state-owned institutions and enterprises, resulting in a deficit far beyond the tax can
be levied to the citizens. Following approach is not the subject of today's
lecture. That is inflation, I'll discuss it. I mention this only because of the
mixed economy can not be with me tonight to talk about the intervention of the
problem together.

What is the interventionist      it? Intervention means that the government does not
limit its activities to maintain order, or - as one hundred years ago, said -
"create security." Intervention means that the government
wanted to do more. It should intervene in the market phenomenon.

     If people object to the view that the Government does not intervene in business,
people very often replied: "But the government must always interfere.
Street, the police, government intervention. It interfere with robbers looted shops,
intervention bandits stealing cars. "But the intervention and discusses the
meaning of the definition of intervention, we are talking about government
intervention in the market. (Government and police should protect citizens, including
businessmen, of course, its employees, from home and abroad against the culprits,
which any government in fact is a normal and necessary functions. Such protection is
not intervention, because the government only It is the legitimate function of
maintaining security.)

     when we say that intervention of the Government to prevent violence and fraud
to do something other than desire. Intervention means that the government not only
failed to protect the smooth functioning of the market economy, but also interfere with
a variety of market phenomena; intervention in prices, wages, interest rates and

    businessmen at a time when only listen to consumers who would otherwise
choose a mode of operation, the Government has to intervene in order to force them to
adopt a different approach. Thus, all taken by the government interventionist
measures have led to restrictions on the right of consumers first. Government wants to
steal a free market economy, had the power in the hands of consumers - at least some
of their power.

      us to examine an example of interventionism, it is very popular in many
countries, and many government has repeatedly implemented, especially in times of
inflation. I said that price control.

      government issuing currency, after inflation, people will practice on prices
arising from dissatisfaction. There are many price controls failed the famous historical
examples, but I only give you two, because in both cases are effectively force the
government or trying to force the implementation of the implementation of price

     The first example is the Roman Emperor Diaokeli application (Diocletian), he is
well-known persecution of Christians in the last Roman emperor. Second half of 3rd
century Roman emperor who is only a financial approach, which is to reduce the
fineness of the currency precious metals. Before the invention of printing technology
in a primitive age, even if inflation is also original. It takes the lower coin - especially
silver - Condition approach. Government to the incorporation of more and more silver
in copper, silver until the color change, the weight greatly reduced. Mint Condition
and the resulting decline in the quantity of money caused the increase in prices, then
price control edict. Roman emperor who enforce the law from time to moderate; they
think high prices for a person who obtained the death penalty is not excessive. They
imposed price controls, but failed to maintain social. Results of the Roman Empire
and the disintegration of the division of labor system.

      Then, in 1500, the same currency lower purity occurred during the French
Revolution. But this time it adopted a different approach. Currency manufacturing
technology greatly improved. French people do not have to use methods of reducing
Mint Condition: The print money they had. Note Printing is very efficient. Similarly,
the result is an unprecedented prices. However, the highest price is not the French
Revolution to the death penalty Emperor Shen Diaokeli method implementation.
Killing citizens technology has improved. You all remember the famous Ji Luoting
doctors (JI Guillotin ,1738-1814), he spread his name to the guillotine. Although the
guillotine, the French also failed to implement the highest price method. Robespierre
(Robespierre) I have taken on a guillotine, the people shouted: "Cut off
that dirty act."

     I mention this because often said: "If price control orders without
severe penalties only Li law." There is no doubt Diaokeli apply very strict,
the French Revolution is. However, the two times the price control measures are
completely fail.
      We analyze the reasons for the failure. The Government knew that people
dissatisfied with milk prices. Milk is of course important, especially for young people
and children. Therefore, the Government sets milk prices lower than the potential
market for the highest price. Now the Government said: "We make every
effort to have milk to feed poor children."

     The result? On the one hand, the low price of milk increased the demand for milk;
those original people who can not afford the high price of milk required by the
Government is now able to buy a cheap. On the other hand, some milk producers,
who produce the highest cost producers - that is, the marginal producers - now lost,
because the government regulated price below their cost. This is the key to a market
economy. Private entrepreneurs, private producers can not long bear the loss. Since he
can not afford a loss of milk production, he stopped the production of milk for the
market. He may sell some cows to slaughter, or that he turned to selling dairy
products, such as yogurt, butter or cheese.

     milk prices was government intervention will lead to less milk than before, while
demand is relatively greater. Some prepared to pay the price required by the
Government who can not buy milk. Another result is that people quickly rush to the
store. They were at the door. And so long lines in front of the store is always
important to government regulations it considers the highest prices of goods a
common phenomenon in the city. Milk prices are regulated parts of the phenomenon
occurred. This has always been economists predicted. Of course, just being good
economists predicted that the number of people who never small.

      However, the result of government price controls what is it? The Government did
not achieve their goals. It is an attempt to better meet the needs of consumers of milk.
But in fact, they are more dissatisfied. Before government intervention, milk is
expensive, but people can buy. Now the shortage of milk supply more. Therefore,
total consumption decreased. Children's milk had fewer, not more. So the
measures taken by the Government is the quota system next. But the quota system
only means that some people get the privilege of milk, while others are not milk. Who
is who should get the milk is always very casually determined. For example,
regulations may be about 4 years old children should be milk, but more than 4 years
old or 4 years old to 6 years old children should be about 4 years old children receive
half of the milk quota.

     no matter what the government, the fact remains that fewer of the milk. So
people more unhappy than before. Now that the Government asked milk producers
(because the government does not have enough imagination to figure out themselves):
"Why do not you yield much the same as before?" The
government got the answer: "No way, because the production costs higher
than stipulated by the Government the highest price. "So the government
investigated the various factors of production, it found one of the elements in the feed.

     The Government said: "easy to handle, we have implemented feed
controls on the kind of milk. We will require the highest price of feed, after about a
lower price you will be able to lower the cost of feeding cows. Then anything so; you
will be able to sell more milk to produce more milk. "

     But what will happen now? The same thing happened in the feed on, you know,
is the same reason. Feed production decline, the government is facing another
dilemma. So the Government opened the hearing to find out the feed production. The
interpretation of feed manufacturers and dairy producers the same. So the government
was forced to move, because it does not want to give up the criteria for price control.
It determines the feed raw materials needed for production the highest price. So the
same thing has happened again.

     same time, the government began to control the egg outside the milk, meat and
other necessities. Government has always been the same consequences, the result is
the same everywhere. Once the Government to develop the highest price for the
consumer, it must be involved in health products, limit the production price, limited to
those necessary hygiene products, consumer goods prices. Thus, the Government
price controls from the start of several commodities, and then more and more depth to
the production process for all health products have developed the highest price, of
course, including labor costs, because there is no wage controls, the
government's "cost control" on meaningless.

     In addition, the Government can not be limited to interventions in the market
milk, butter, eggs, meat and other items which it considers essential. Control must
include a luxury, because if we do not restrict the price of luxury goods, capital and
labor will shift production from the production of necessities that the Government
considers non-essential luxury. Therefore, one or the intervention of several consumer
prices always lead to - it is important to recognize - not as good as their previous state.

      before government intervention, high milk and eggs; government intervention,
they began to disappear from the market. The Government considers that these
products are too important, the need for intervention; it seeks to increase the number
of improving supply. The results just the opposite: the consequences of intervention is
- in our view - than before the state government does not want to change the situation,
such as. With the government deeper and deeper, finally one day all of the prices,
wages, interest rates, in short the entire economic system of all, by the Government. It
is obvious that socialism.

     I say here, this outline of the theoretical explanation, it is those who attempt to
practice the highest price control of the country is happening, that the government
intransigence, step by step toward disaster. Something like this when the First World
War took place in Germany and the UK.

     We analyze the two countries. Both countries are experiencing inflation. Prices,
both governments have imposed price controls. They start from a few commodities,
milk and eggs from the beginning, deeper and deeper. The longer the war lasted, the
more serious inflation. 3 years after the war, the Germans - has always been so
systematically - to implement a grand plan. They called the Hindenburg plan: when
the German Government believes that all good things are to be known as
Hindenburg's name.

     Hindenburg plan mean that the entire German economy should be controlled by
the government: prices, wages, profits ... ... everything. Government officials
immediately began to implement the plan. But they are completed, disaster struck: the
German Empire collapsed, the entire bureaucracy gone, the revolution brought about
a bloody consequences - things over.

     United Kingdom has also taken the same approach, but after a while, in the
spring of 1917, U.S. involvement in the war and the British supply of sufficient
quantities of material. Thus, leading to the socialist road, the road leading to slavery
were broken.

     before Hitler came to power, Bruening (Brüning) Prime Minister in Germany for
an unusual reason for the introduction of price controls again. But even before the war,
Hitler implemented; because the private sector in Hitler's Germany did not
have no personal initiative. In Hitler's Germany there is a socialist system,
with the only difference is that the Soviet system, free economic system, language and
labels are still preserved. There are still so-called "private
enterprise." But business owners are no longer entrepreneurs, but are
referred to as "managers" (Betriebsführer).

     are in accordance with the German leadership hierarchy organized; heads of state
of course, Hitler, and then there is the size of the leadership at all levels. That is
manager of corporate leadership. Enterprise workers are called Gefolgschaft, said the
word in the Middle Ages the feudal lords of the entourage. All of these people must
submit to the name of a very long body - Reichsführerwirtschaftsministerium [2] -
issued instruction, its leaders are known to wear jewelry and medals of fat, he told

     The name of the long body to give directions to all businesses: what to produce,
what quantity, where access to raw materials, how much to pay, the product according
to what price sell it to. The workers were ordered to work in a factory, they receive
wages stipulated by the Government. The entire economic system is now controlled
by the government every detail.
     manager has no right to the profits into his own; he received the equivalent of
wage income, and if he wants more, he will say (example): "I am very ill,
and require immediate surgery, surgery takes 500 marks. "Then he would
ask Mayor (Gauführer or Gauleiter) can earn more money in addition to the wage.
Price is no longer a price, the wage is no longer a wage, they are the quantifiers of the
socialist system.

     I will now tell you how bankrupt the system. One day, after years of fighting
foreign troops arrived in Germany. They tried to maintain the government-directed
economic system, but it needs to maintain Hitler's cruelty, or it does not

     Germany is that, while the British - during World War II - and Germany have
done the same. British government price control of certain commodities from the start,
step by step (and Hitler before the war have done in times of peace) more and more
control of the economy, the war ended, they practiced almost pure socialism.

     Britain is not being set up in 1945 with the work ... ... the Government to
socialism. Britain during the war, Sir Winston Churchill prime minister in the
government under the leadership of a socialist state. Work ... ... the government, but
retained the Sir Winston Churchill's government has established a socialist
system, despite fierce resistance by the people.

     Britain's nationalization and not very meaningful; the nationalization
of the Bank of England is only nominal, because the Bank of England is already in the
Government's full control. The nationalization of railways and steel
industry as well.

     so-called "war socialism" - meaning that the progressive
introduction of the intervention system - in fact, the economic system has been

     difference between Germany and the UK system is not important, because the
control system of the person appointed by the government, and they must obey the
government in all aspects of instruction. As I said earlier, the German Nazi regime
retained the capitalist market economy, labels and terminology. But the meaning of
these labels and terms are different: they are just the government directive.

     same is true of the British system. British Conservative ... ... return to power, the
economic control of some of those were canceled. In the UK, is now the one hand,
attempts to retain control on the one hand it was an attempt to abolish the control.
(But one must not forget that the UK situation and the situation in Russia is very
different.) That rely on imported food and raw materials which must be the same
countries that export manufactured goods. For countries heavily dependent on exports,
the government control system does not work.

     As a result, as long as the remaining areas of economic freedom (in some
countries still have true freedom, such as Norway, the United Kingdom, Sweden), its
existence is because of the need to retain export. I chose the milk in front of the
example, not because I have a special preference for milk, but because almost all the
government - or most of the government - in the past few decades the control of the
milk, eggs or butter prices.

     I would like to briefly discuss some of the other cases, rent control. If the
government controlled rents, a result that is, those conditions change due to family
originally moved from the big Zhu Fang Xiao housing people do not do, for example,
those children grow up to more than 20 years of marriage, or to other
Chengshigongzuo the family. Such families in the past often change residence, move
to smaller more affordable housing. Unnecessary after rent control was introduced.

     In the early 20s in Vienna, Austria, rent control is very strict control of the next
ordinary rental housing no more than twice the state-owned bus fares. You can
imagine, people have no motivation to change the housing. On the other hand, no new
housing construction. The same situation also occurs in the United States after World
War II, and in many cities continued to this day.

      United States, many of the financially troubled city one of the main reasons is
that they have rent control, so the housing shortage. So the government to spend big
money building new houses. But why does the housing shortage? Occurred because
the housing shortage and the presence of milk price controls, like when the reasons
for the shortage of milk. This means that: Government intervention in the market, the
market was driven to socialism.

     some people said: "We are not socialists, we do not want the
government to control everything. We know that as well. But why is little the
government can not intervene in the market? Why the Government can not eliminate
some of the things we do not like it?" Above so is my answer.

      these people talking about "middle way" policy. They do
not see: an isolated intervention, the economy has come from simply a small Bufen
System in the intervention, the situation of Bi Zheng Fu Zao Cheng - Yi Ji requesting
government intervention Renmen - find more than they want to change the situation
even worse: demands rent controlled apartments and housing shortage has been found
after the enraged.

     But this shortage is a result of government intervention is to limit the free market
level of rent under the control caused.
     third system exists - as its supporters say, between socialism and capitalism, is
different from the socialism is different from capitalism, to retain the advantages of
both avoiding the shortcomings of the system - the argument is pure nonsense. I
believe there is such a myth system people praise the benefits of intervention may
Poetic. We can only say that they made a mistake. They praise the government
intervention will cause their own do not like the situation.

     behind me, one of the topics to be discussed is protectionism. Government tried
to isolate the domestic market and world market. Its tariff, resulting in the domestic
prices of goods higher than the world market price, so that domestic producers can
form a cartel. And cartels with the Government's attack: "In
such circumstances, the anti-cartel legislation is necessary."

     most European governments is the case. In the United States anti-trust legislation
and the government struggles with the specter of monopoly for other reasons.

     Government, through its intervention in the emergence of domestic cartel created
the conditions, this time it pointed to business, said: "These are the cartels,
the government intervention in business is essential." How ridiculous!
Cartels by making it possible to stop government intervention to avoid the cartel is
much simpler.

     government to intervene to "solve" the problem of the
concept in each country have led to at least unsatisfactory conditions are often quite
confusing. If the Government does not stop, intervention will bring about a socialist.

    However, government intervention in business is still speedier. As long as people
do not like this world something, he would say: "The Government of the
measures taken. We want the Government doing? Government to stop it
on." This is typical thinking of the past era relics, I mean the modern free,
modern constitutional government, representative government, or the era before
modern republicanism.

     centuries, everyone believed that a theory is: the king, the king of grease (ancient
king ascended the throne by the ritual anointing, as a divine symbol of monarchical
power - Chinese translators note), is the messenger of God ; He has more than
subjects of wisdom, have supernatural powers. Until the early 19th century, people
suffering from certain diseases is also hoped that the hand of the king's
touch and survived. Doctors usually treat patients more able; but they also allow the
patient to accept the king's touch.

     people affiliated with the government, the royal family with supernatural and
superhuman strength theory started to no longer for people to believe it - at least we
think so. But it revived. A world-renowned German professor Werner Sombart
(Werner Sombart), I am very familiar with him, he is an honorary PhD in many
universities, is also an honorary member of the American Economic Association. The
professor wrote a book, an English translation published by Princeton University
Press. It also has a French translation, and perhaps a Spanish translation - at least I
hope so, because you can verify what I said was. In this book is in our century, not the
Dark Ages, published in this book, Professor of Economics Sombart put it bluntly:
"head of state, our head of state (of course referring to Hitler) it directly
from God bit of the universe, where heads of state to accept the command.

     I mentioned earlier the level of heads of state, I said Hitler was this level of
"Supreme Head of State." However, according to
Sombart's argument, there is a higher head of state, God, the head of the
universe. His argument is that God directly to Hitler's orders. Of course,
Professor Sombart very modest: "We do not know how God
communicating with heads of state. But the fact is undeniable."

     You now know that such a book that people actually can use once praised as the
"land of philosophers and poets," published in the German
language, but also translated into English and French, you will not be surprised, even
a small bureaucracy will think he is more intelligent than the citizens better and to
attempt to interfere with everything, even if he is just sesame official, not all members
of the Sombart Honorary Professor.

     there a way to deal with this all this? I have to say, there are ways. This approach
is the power of citizens; citizens must prevent ordinary citizens from the view that a
higher wisdom than authoritarian regimes. This is the fundamental difference between
freedom and slavery.

     presumptuous claim their democratic socialist state. Russia claims that their
system of democracy for the people; they may think that a dictator on behalf of the
people. A dictator, Argentina's Juan ? Peron (Juan Perón) 1955 was forced
into exile when the end was due. We wish all the dictators in other countries have
been the same fate.

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