Central planners rarely guess correctly when they attempt to conjure up the right combination of land, labor, and capital and then impose it on “society” or on a “nation” to ensure prosperity. Their efforts at soothsaying the correct economic recipe to facilitate a happy existence for mankind are doomed to failure.
They do not understand that the benevolent invisible hand of the market is driven by individual human action and cannot be planned in advance by anyone or imposed by “society;” much less by tyrants who have their own hidden agenda for their corralled tax livestock. Unrestrained, voluntary action is what allows the free market to produce the best outcome for all.
Central planners do not know if land should lay fallow or be brought into production. They do not know if more or less labor-intensive production methods should be used. They do not fully consider where resources are located and the most effective method to bring them into use; or whether they should be used at all. They don’t use entrepreneurial insight to determine where production facilities should be located. They do not care that lack of savings results in higher natural interest rates and a necessary market-guided rationing of scarce funds to priority projects. They don’t care that capital in a geographic area with generally lower time preferences can find its way into productive projects in other geographic areas with lower wages due to generally higher time preferences. They just choose to prohibit or subsidize individual action based on always incomplete knowledge and lack of concern about the effects of their market-unfriendly actions.
All of the problems related to economic activity, according to the court intellectuals and the authoritarian tyrants they serve, can be overcome with a little better partitioning of resources, a little more tinkering with interest rates, a few more restrictions on capital, and a little more control on labor. In short, they want to control all three of the economic factors of production—land, labor, and capital.
It is no different when central planners in separate “nations” attempt to calculate the macroeconomic cost or benefit of economic relationships and make these distinctions and impose their edicts in relation to national borders and international relationships. They fare just as poorly as they do when they devise and impose domestic controls. The evil scourge of protectionism results as these nations try to use the weapon of border controls to nominally “raise wages and lower prices” for the corralled populace they deceive for their own profit.
How do these geniuses know what the market really needs in order to provide the best result? They don’t. They leave individual entrepreneurs and laborers scratching their heads when they are hindered in their efforts to voluntarily undertake what the market demands.
If market wages—in their opinion—for a desired service are too low or too high, the geniuses won’t allow that market wage to exist. If different land, different resources, or a different mix of labor would be beneficial, they prohibit the desired utilization while at the same time subsidizing the wasteful use of those same factors of production in other ways. If capital is needed in an area to bring about a result desired by the market, they introduce capital controls; while at the same time creating artificial credit to finance other things not demanded by the market.
And remember, nation-state border controllers (even in the U.S.) often keep people and things in as well as keeping them out of the national collectives they pretend to serve and protect from “evil” foreigners.
Porous national borders are the economic safety valve when the central planners guess wrong. They usually guess wrong. Collective solutions imposed to supposedly benefit “society” or groups, like “nations,” always overrule the beneficial decisions of individual private actors in the market.
Porous national borders allow capital (goods) and labor to move where they are demanded by the market. They allow “nations” to capitalize on their strengths and to take advantage of the strengths of others.
An old lady who needs domestic help that is made prohibitively expensive by the central planners under various schemes in “her nation” can obtain it at a market price when national borders are porous. The family that can’t afford dental care can obtain it if they can cross a border to a place where that service is not so expensive.
An investor who cannot earn a return on his savings in his geographic area can possibly obtain the return he desires if he can make an entrepreneurial forecast and move capital to an area that possesses affordable labor resources, but lacks savings. Or, he may choose to “import” those affordable labor resources to his property in another “nation” so as to meet market demands by providing a product at an affordable price.
Porous borders also allow consumers to obtain desired products like medications, light bulbs, and toilets that are prohibited by the self-proclaimed overlords of the “nation” they live in. I live on an international border and see these voluntary safety-valve actions around me. These actions keep prices low and make people’s lives better.
Some libertarians approve of the voluntary movement of capital and other goods between individual actors across national borders, but draw the line and want to drag in state artillery when labor demands and human movements are being addressed. The usual arguments are that some of those persons represent state-welfare recipients or will interact with the state’s evil but sacrosanct ritual of voting. The obvious position for a libertarian to take on these issues is that state-welfare programs are evil and should be eliminated and that voting is one of the state’s evil liturgical rites that we should abhor.
There are lots of state actions we abhor without advocating other plunder-funded state activities to supposedly mitigate the original state-caused problem.
For example, you may oppose drug-addled lifestyles brought on by state-subsidized unemployment, but you may also be opposed to a state-funded drug war to fight the drug use brought on by the original state action. The principled position is not to support the central planners’ use of tax-funded muscle to implement the state’s master vision as to what the market really needs—or as a response to other bad state action.
And remember, in all of this, that individual private border controls are always in keeping with libertarian ethics. All rights are, in essence, property rights. A private landowner should always have the absolute ability to invite or deny entry to anyone onto his property. I am not advocating porous private borders in this article. That would be evil. Private borders should be inviolable.
I am only talking about the secondary unethical imaginary “national borders” that a collective entity forcefully imposes—without obtaining consent from all the internal property owners—as an additional border layer around the actual private property borders of individual owners. No entity should ever be allowed to overrule the decision of a private property owner and force him to accept entry of anyone he chooses to exclude from his property—or force him to deny entry to anyone he chooses to invite onto his property.
But, that same landowner has no rights over who his neighboring landowners choose to invite or exclude from their property. He gains no rights over his neighbor’s property use by merely proclaiming that his neighbors are members of the same nation-state that he chooses as a personal label for himself. The neighbor may not recognize nor have ever agreed to the authority of that nation-state collective over his life and property. The neighbor may not believe in fictions like “social contracts” that supposedly bind people in a “nation” together unwillingly.
Neighbor “A” gains no authority over neighbor “B” (in the same “nation”) by merely claiming for himself membership in a coercive collective that would like to control neighbor “B.” “B” may not agree to the authority, the legitimacy, or his own membership in that collective. Neighbor “B” has no moral obligation to obey neighbor “A’s” (or “A’s” gang’s) desire to control access to “B’s” property.
As we anticipate the almost certain imposition of further rounds of destructive national protectionism from the state, be glad that somewhat porous borders and incomplete reach by the enforcers still allow you to obtain that powerful 7-watt FM stereo transmitter from China for only $73 for your pirate radio station the FCC doesn’t want you to have.
The state has caused much human suffering. Loopholes that allow voluntary action to occur through state barriers are always beneficial.
