Quote of the Day: Economic output as weapons of national policy

All nations seem to assume that a public energy policy will bring their citizens and industries cheaper and more stable energy.  The opposite, of course, always happens.  This is just the latest example of government meddling in a key sector of the economy.  Germany’s government has chosen to close its nuclear plants.  It subsidizes windmills.  Germany’s green movement is very powerful and exerts a negative influence on Germany’s ability to exploit domestic energy sources through new techniques, such as fracking.  As a result, energy prices in Germany are approximately double those of the US and it is dependent upon supplies from political dictatorships like Russia.

In a free market for energy firms would rush to fill energy orders when a rival supplier appeared to be unreliable.  In a free market for energy a Russian cut off of natural gas would result in a permanent loss of customers to rival suppliers.  The current situation is made worse by US law that prohibits exports of natural gas.  In an unhampered market, US firms would be free to sell gas to the highest bidder and there is little doubt that Europe would negotiate alternative sources with a threatened Russian supply cutoff.  A Russian embargo would permanently damage its natural gas industry by proving it to be an unreliable supplier, costing it the loss of business for many, many years.

Unfortunately, all nations use the economic output of their citizens and firms as weapons of national policy, even in the absence of war.  The result is the opposite of their intentions, which should surprise no one.

This is from Patrick Barron at the Ludwig von Mises Canada.

It's sad to see how most people have been deceived to see governments as the answer to social problems, when in reality, governments have been the major sources of the vast majority of society's ills. Worst is that the public have been unwittingly held hostage by many governments, where in the latter's desire to force their will upon other governments, increases the risks of military conflicts or wars. In short, the more the politicization of resources, the greater the risks of violent (inhumane) outcomes.