In a word, an admirable institution will, from its very inception, be turned into a branch of the police force.

Frédéric Bastiat
Economic Harmonies

This sad forecast was made by Frédéric Bastiat while considering the interference of the government in the management of the Mutual-Aid Societies.

The profound reason he gives through several illustrations is a defective decision process. When receiving his Nobel prize, Friedrich Hayek gave a speech, The Pretence of Knowledge, in which he shows how decisions need to take into account an incalculable number of conditions, a good amount of which are local and cannot be known by a central government. As a consequence, he was very reluctant to delegate decision processes to the government, which ought to create an institutionnel framework for local actors to take their own decisions without encroaching on others freedom.

This is also what today’s quote is exposing – government interference with mutual-aid societies that were then managed locally will, because of centralisation, create side-effects that only the appointment of “various agents, examiners, controllers and inspectors” against all kinds of abuse will allow to reign into.

Unfortunately, neither Bastiat nor Hayek have been heard and government interference is ballooning every day, often in a devious way through regulation. The latter is particularly wicked because it leads companies to be both judge and jury, having to act as the police force against themselves. To do this, the decision process is shifted and the main question to answer is “how to be legally compliant?” before answering the legitimate question “how to meet the clients’ needs”.

Other quotes from Wages:
Middleman – Self-interest – Respect – Perfection – Decision – Responsibility – Inequalities

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