The Fragility of Statist Societies

Statism: (noun) 1. the principle or policy of concentrating extensive economic, political, and related controls in the state at the cost of individual liberty. [Random House]

New York Times columnist Tom Friedman isn't alone in touting the alleged benefits of authoritarian regimes. A variety of progressives claim that utilitarian arguments show it's practical to have the state control large swaths of citizens' lives. Ethical arguments aside, that view is belied by a large body of evidence.

The recent Russian drought and fires required them to slash exports by 30 percent. China's widely admired infrastructure push has produced widespread dislocations from floods and man-made landslides. Haiti's earthquake that killed over 200,000 will have them reeling for years, even with billions in international aid.

The point here is not simply that natural disasters cause major damage. It's that the recovery time and effort in statist societies is typically longer, more painful, and causes major unnecessary social disruptions.

When there's little freedom or incentive for private individuals to profit from cleaning up a mess, it has to be organized and paid for by the state. But the state always has lots of other financial commitments and priorities, and few reserves. With so many hungering to get a sliver of the spoils and so many expansionist plans always on tap, statist regimes are perpetually short of resources.

By contrast, countries with a much larger ratio of private enterprise to government are better equipped to endure economic shocks without producing national crises.

Private insurance companies, by their nature, maintain large rainy day funds. Despite the severe drains caused by the after-effects of 9/11, Berkshire Hathaway continued to thrive. Many news reports from a few years ago showed that privately run Katrina disaster-relief programs around New Orleans hummed (slowed only by local bureaucracy) while state efforts lagged.

Economists Andreas Bergh and Magnus Henrekson have produced a study showing this:

In wealthy countries, where government size is measured as total taxes or total expenditure relative to gross domestic product (GDP), there is a negative correlation between government size and economic growth -- where government size increases by 10 percentage points, annual growth rates decrease by 0.5 to 1 percent.

Beyond the material and economic effects of poor disaster relief, statist societies are more exposed to wide-scale social unrest -- usually in the form of open violence.

The United States has been in existence for over 220 years in its present form. Much has changed, particularly in the past 40 years as progressive ideas accelerate the weakening of its foundation. Yet through earthquakes, floods, and wars, America remains. Large-scale riots, common in statist countries despite severe repression, are rare here. Nationwide disputes may be noisy in the U.S., but they're typically settled peacefully. (Note how the exceptions occur when statists like the SEIU and G8 protestors are involved.)

During half that same period, Russia and China have had three wrenching shifts from monarchism to communism to the unstable mixed systems of today. Several South American countries have seen a new form of government every twenty years or so, most of them statist. Greece went from a colonial monarchy to a military junta to a welfare state to a basket case. All these events carried with them widespread violence.