I am indebted to Samuel Bostaph for giving me an opportunity to clarify my
perhaps-too-cryptic and perhaps-too-caustic criticism of his usage of the
word "intervention". It is the assumptions silently underlying the usage
that need to be excavated and explored. If he is innocent of my implied
criticism I would be delighted, and happy to apologize, and to congratulate
him.

Bostaph refers to "Mises's criticisms of
government intervention into the market process". What's missing here is a
recognition of the role of government in the first place. Adam Smith
observed that the primary role of government is to protect the rights of
property (hence he supported property taxation). He understated the case.
Governments originate first to seize and then to protect and administer
lands and natural resources. "Administering" them entails distributing them
politically, almost always with great inequity and corruption. That is the
great and original and ongoing "government intervention". 

That is not limited to ancient history; it is the history of the U.S. It is
not limited to 19th Century public land policy, as newly appreciated
resources are still being privatized: the radio spectrum, fishing licenses,
water licenses, air pollution licenses, for example. And of course old ones
are defended and serviced and expanded.

What we call markets then entail dealings among people weighted by
purchasing power, much of it derived from rents, rents in turn derived from
the original and ongoing political acts.

There is also a perversion of investment. A part of what we call
"investment" is rather rent-seeking, as when people divert water prematurely
in order to establish prior "rights". They expend real social capital, not
to create new capital but to acquire pre-existing natural resources.

What I believe is "loaded" is to apply the term "intervention" selectively
to efforts to redress the balance, while ignoring the original and ongoing
causes of imbalance.

Mises defines(p. 20)interventionism as "a
limited order by a social authority forcing the owners of the means of
production and entrepreneurs to employ their means in a different manner
than they otherwise would." The silent premise here is that existing
ownerships involved no "intervention". 

We observe in Colombia today, for example, how landownership originates in
or is maintained by force and fraud, including the "intervention" of
governments on the winning side. We observe in the overreaching concept of
"national defense" employed by governments in certain nations an exaggerated
and guilty fear that those whom they dispossessed in their imperialist
expansions will strike back and reclaim their own. (A rather ludicrous but
real example was the Reagan administration's panic that the Sandinista's of
Nicaragua would invade Texas. More widespread is the current apprehension
that destitute and powerless Mexicans who immigrate to work for Yankee
employers at survival wages, and rarely vote, are threatening to repossess
California for la raza.) 

In the U.S.A., almost all land title chains go back to some government,
usually the U.S. government, that appropriated the land originally. Then it
transferred the land to selected individuals (including corporations) in the
manner that the "intervening" government chose. For some details, consult
the extensive works of economic historian Paul Gates, and others.

Note also Mises' key word "otherwise". Otherwise than what? Otherwise than
what would occur given the water supplies, highways, harbors, and other
gifts to landowners of a pork-barreling government whose revenues come from
taxing labor? Otherwise than what landowners choose to do in the presence of
the preferential treatment of unearned increments as "capital gains"?
Otherwise than what would occur absent the present focus of Federal taxation
on payrolls?  There seems to be in the back of Mises' mind a Platonic
prototype of a pure market that antedates and transcends governments - that
is, I submit, a delusion.

The above is probably part of what Lipsey and Lancaster and others had in
mind when they popularized the term "second-best". It is part of what J.K.
Galbraith had in mind with his "countervailing power" concept (although I
think he misapplied it).

Here and there, I surmise, a diligent search would find in Mises and his
allies criticism of the landowners' pork barrel, which is to their credit.
My belief, however (which is subject to challenge and correction) is that
those who use the word "intervention" (to which let us add the sneer "social
engineering") mostly aim their barbs at support for labor unions, minimum
wage laws, removal of tax loopholes for landowners and corporations,
restraints on pollution, etc. "Intervention" has become their codeword -
hence my hypersensitivity to it.

Mises' ally Hayek, whose macro had a lot of steam in the 1920's, and (in my
opinion) a lot of potential merit, rather blew it all after 1929 when he
prescribed lower wages as the cure-all for the depression, overlooking all
of Hoover's cartels, rigid high r.r. and utility rates, pyramiding of
holding companies, employer associations, and other faults of property
owners. I don't know if he used the term "intervention", but his mindset
lives on among many who do.

Veblen insightfully pointed out years ago that a single corporation per se
is inherently a combination of individual "capitals" in collusion, in
restraint of trade. The legal framework for corporations, with their
immunities and privileges, is certainly an "intervention". Yet, only when
several corporations collude is it restraint of trade - and for the last
many years, not even then.  OTOH, before the Wagner Act and after
Taft-Hartley, workers combining in unions are accused of restraining trade.


Enough, already! Thank you for reading so far. 

Mason Gaffney