Quotation of the Day…

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… is from page 88 of the 1992 Transaction Publishers edition of Wilhelm Röpke’s 1946 book, The Social Crisis of Our Time:

Everything which heretofore belonged to the “economic” sphere of private enterprise and private law, is now transformed into something “political”; the market becomes a government agency; every purchase becomes a state transaction; private law becomes public law; “being served” in stores is replaced by “being dealt with” by civil servants; the price mechanism is controlled by decrees; competition becomes the struggle for influence and power in the state, for party offices and government jobs; the supply of raw materials becomes a question of political spheres of influence; property becomes a concept of state sovereignty; business decisions are turned into governmental act sanctioned by penal law; foreign currency transactions become capital offenses. Henceforward the population has to use its productive capacities in a manner deemed suitable by the group dominating the state.

DBx: Such is the terrible end point of the road down which proponents of industrial policy wish to travel.

It is undoubtedly true that few, if any, proponents of industrial policy want to travel down this road quite this far. And it is surely possible to end the journey down this road well before reaching this end point. But every step down this road nevertheless does incrementally replace the private with the political; the choices of free individuals with the commands of ruling government officials; the allocation of resources generated by market prices with the allocation of resources imposed by state diktats; the competition of producers for the patronage of consumers with the competition of interest groups for the patronage of politicians.