May 21, 2003

Austrian Economics The Drive Thru

(D'ya Want Fries With That?)

One is altogether justified in calling our age the age of capitalism, because all that has created the wealth of our time can be traced back to capitalist institutions. It is thanks to those liberal ideas that still remain alive in our society, to what yet survives in it of the capitalist system, that the great mass of our contemporaries can enjoy a standard of living far above that which just a few generations ago was possible only to the rich and especially privileged. --Ludwig von Mises, Liberalism

Professor Mises was F.A. Hayek’s mentor and is still a Libertarian icon. In his 1927 masterpiece, “Liberalism,” he predicts almost every significant 20th Century event. The entire text is available online and I highly recommend it. It’s a great book for little-l libertarians, although if you get it from the website ( you will run into big-L material from Lew Rockwell. Don’t say I didn’t warn you…

The Austrian School of Economics fought centralized command and control; fought it tooth and nail, fought it before it was cool. Of course, to however an extent free market economics is cool, much can be traced to Mises and Hayek.

I like to think Professor Mises would be satisfied with the progress to date. The Soviet Union has been defeated and their people mostly freed. Both Hayek and Milton Friedman hold Nobel prizes; there’s really no need to tell Herr Professor about President Carter or Yasser Arafat. Hayek’s Mont Pelerin society continues and is held in high esteem. The Internet’s reaching critical mass and the concomitant expansion of wealth: all this should be greeted warmly.

The sad news, and I’m sure he’d understand, is that even in victory, so few people “get it.” We have watched centralized command-and-control fail numerous times but there is always a congressional committee or progressive thinker ready to try it one more time. Jeremy Rifkin was on Public Radio International’s “Marketplace” a few months ago, pontificating on the foolishness of having automakers compete to build a Hydrogen car, when they could make much more progress working together.

You always know when I am listening to “Marketplace.” I am in the car with the windows rolled up, screaming. This time I was screaming: “that’s why the Soviets pioneered such innovation in automobiles. They all worked together! The stupid Americans and Japanese and Swedes and Germans were competing with each other! That’s why the Yugo is so desired today – of course, let’s work together to build the fuel-cell car!”

Let’s set aside discussion of Hydrogen cars, together with Japanese, Swedish and German concepts of free market automotive production. I want to talk about the marketplace of ideas and I am going to have to mention Dr. Atkins again. The centralized command-and-control folks have failed once with the Four Food Groups, and they have failed another time with the Food Pyramid. A few years following the food pyramid and I began to resemble it, geometrically.

Well now we have federal bureaucrats in confederacy with the trial lawyers to take the food pyramid from a recommendation to de facto law (Was it Madison or Jay who thought the government should tell us what to eat? Was that in Federalist No.11? 74?).

It seems young people are obese. It seems many young people have an affinity for fast food. It seems that there may be some overlap between these two groups. I can see the problem – my fear is that I am starting to see the solution: why, we could have the gub’mint fix it!

Americans chortle at the idiocy of blaming restaurants for obesity: this will never pass a vote in Congress; this won’t go anywhere. No, it wouldn’t -- but legislation and adjudication are passé. There are new coercion weapons in the government arsenal: the leaked memo and the threat of class action lawsuits. New York Attorney General Eliot Spitzer got $1 Billion out of Wall Street firms without a conviction and without the evidence to dream of a conviction. Merrill Lynch could hold out as long as they didn’t mind embarrassing emails being leaked to the NY Times.

Now this weapon will be turned on McDonalds and Burger King, who will settle by giving the lawyers some money, adding a few salads and posting nutritional guidelines. The guidelines will fail the few who follow them. I’ve lost 40 lbs. on Atkin’s: I can eat a double whopper if I don’t get ketchup or eat the bun. Some think it’s crazy but it has worked for my wife and me and it has worked for several journalists I read, and it is starting to be proven in some medical studies.

The guidelines and all the new posters and the new “Healthy Kid” logo on the menu (you can see it already, can’t you?) will all highlight low fat, high carbohydrate foods. I should take consolidation that nobody will pay much attention to these, but some people will and their health will be worse because of government intervention.

Let the marketplace decide on nutrition, it’s what works. If you think I am crazy for bucking conventional medical wisdom and following Dr. Atkins, fine. That can be discussed, just like my preference for Mises over Lord Keynes. But let’s not allow the feds to give us one side, and then use threat-of-lawyer to force their advice on everyone.

Last week: State Coercion Every 4,000 Miles

Next week: The Best and the Brightest

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