John Hinderaker wrote to PowerLine about the economic disaster unfolding in Sri Lanka. Until very recently, this country was “not only food secure, but a major agricultural exporter” of products such as rice, tea and rubber.
You would think that creating prosperity and lifting millions out of poverty would be welcomed by government and social activists. But no. The government of Sri Lanka has decided to impose new policies inspired not by the recommendations of anyone with experience in industry, commerce or basic economics, but by the howls of environmentalists demanding “all organic” Agriculture.
Despite the fact that more than 75% of Sri Lankan farmers used synthetic fertilizers, the Sri Lankan government outright banned them.
The results were predictable. In one year, Sri Lanka’s rice production has fallen by 14%, forcing the country to spend hundreds of millions to import a product from which it previously produced enough to feed itself and export. Tea and rubber production also collapsed. The price of food has quadrupled and many staples, including the liquefied petroleum gas that Sri Lankans use for cooking, are so scarce that citizens have to queue for them, when they can get them. With its exports down to a trickle, the government of Sri Lanka is now begging the International Monetary Fund for a loan it seems unlikely to get – or be able to repay.
If this pattern looks vaguely familiar, it should. Many of us are old enough to have witnessed the fall of the former Soviet Union, brought to its knees by a failing collectivism. Young people saw in real time the economy of Venezuela, once the most prosperous country in South America, collapsing as a result of the implementation of top-down, command and control economic policies, driven by the socialist gibberish. Inflation there reached 1 million percent in 2018. The Venezuelan currency – the bolivar – is worthless. Nearly 80% of the country now lives in “extreme poverty.”
But the ruling classes never learn. At home, the Biden administration, under the influence of “climate change” theorists, is busy twisting the wheels of American industries as destructively as Hugo Chavez and Nicolas Maduro did in Venezuela and the Rajapaksa regime did in Sri Lanka.
Among President Joe Biden’s first acts in the White House were closing the Keystone Pipeline and limiting the drilling of oil and natural gas on federal lands. These decisions and others like them have sent fuel prices, particularly diesel fuel, skyrocketing, and with them the costs of everything else. Biden refuses to discuss increased production with US companies. Instead, he paid his respects to Middle Eastern countries, begging them to increase production. (They refused.) It also taps into the United States’ strategic petroleum reserve, leaving America even more vulnerable if we encounter a fuel crisis that is not of our making.
None of this should come as a surprise to anyone with a modicum of common sense or any business experience, both of which are rare in government. What is true in Sri Lanka was true in the former Soviet Union and is true in Sacramento. When people who have no idea how to start or run a business decide they will control entire industries, the inevitable result is collapse. The socialists, environmentalists and government officials whose strings they pull are about as economically ignorant as they get. Most have never started or run a business. They have no idea of the actual production requirements. Many cannot distinguish between cost and price. They resent the difference between having to ask people for money (as competitive businesses must) and being able to demand it (as governments do, through taxation).
Progressive activists on all sides say the changes they promote will do business “beholden” and the system more “fair.” None of these claims are supported by evidence.
Too much government control over corporations does not eliminate corruption, but feeds it. Business leaders soon realize that their survival does not depend on satisfying customers, but on corrupting officials. And once producers are no longer accountable to consumers, the quality of products and services goes straight down the toilet. (Assuming, of course, that you can get a toilet. A staggering number of the world’s population – in countries without truly democratic governments or strong, entrepreneurial capitalist economies – still lacks indoor plumbing.)
And, like killing the goose that lays the golden egg, turning the United States into a command-and-control type economy with decisions driven by ideologues advancing scientifically unproven (or worse, disproven) theories will distribute no better or more equitably the goods and services that private enterprise creates. This will slowly restrict the production and supply of these goods and services – just as Biden’s policies are currently doing – until it is no longer possible to produce at all. When this happens, millions of people starve to death. (As seen in another example of failed collectivism, the example of Mao Zedong “Great Leap Forward” in 1960s China.)
There are (arguably fringe) environmentalists who might not be devastated by this outcome. Paul Ehrlich is the author “The Population Bomb” a 1968 bestseller with dire predictions about overpopulation. Ehrlich’s outlandish predictions never came true, but sparked government policies responsible for some of the worst human rights abuses in history. (Author Charles C. Mann laid this out in detail in an excellent 2018 article for Smithsonian magazine.) Despite this, Ehrlich still calls for “a massive reduction in the number of humans” on earth.
Others – hardly less extreme than Ehrlich – describe their ideal system as one of the most “democratic eco-socialism”, where a small group of elites will decide what everyone on the planet will have and do.
Regardless of their favorite theories or why they want to, history shows that central planners and their top-down economy of command and control never work. Their theories are inevitably wrong in ways they did not anticipate; their desired goals do not materialize; and the unintended consequences of their mistakes are even more destructive than the problems they would have sought to solve.
The United States is not — yet — on the brink of collapse. But the economic policies preached by the ignorant and arrogant can destroy our prosperity and our peace, just as they have in countries that have taken this path. Over 100 million people died and untold amounts of wealth were destroyed, proving this point again and again. We ignore the lesson at our peril.
To learn more about Laura Hollis, visit the Creators Syndicate website at www.creators.com.