INTERVENTIONISM: AN ECONOMIC ANALYSIS OF PRICELESS RESOURCE ALLOCATION

Abstract

The present paper is going to build upon the Misesian theory of interventionism by presenting it in the light of property economics. We will argue that all forms of government interfere with the workings of the market can be counterfactually analysed by contrasting them with the voluntary order of laissez-faire capitalism. Interventionism is presented as a partial order, situated on the continuum between laissez-faire capitalism and socialism. The article argues that the limits of interventionism can be understood as a direct consequence of its functioning under the aegis of fiat property. Because the state can unilaterally decide the extent to which an individual is entitled to his private property (involuntary co-ownership), interventionism replaces the rational entrepreneurial order of the free market, which is constrained by the price structure and is directed by economic calculation, with the arbitrary value judgments of a single entity. This more general re-statement of the Misesian theory of interventionism from the point of view of property economics has the benefit of covering all possible policy measures while deducing the implications from an a priori perspective. From a methodological standpoint, this approach provides a more realist account of the implications of government involvement in the workings of the market as it does not require any unrealistic assumptions like: perfect information, equilibrium and dead weight loss comparison, or postulate a certain type of behaviour - benevolence, narrow self-interest or ideological error.

Keywords

• property economics
• interventionism
• fiat property