The world economy is collapsing as I write this article. This is not in dispute. The question is, “Why is the economy collapsing?” Many of the mainstream voices writing about the issue would have you believe that it is the virus itself, Covid-19, that has caused the economic collapse:
The coronavirus pandemic will push the global economy into the deepest recession since the Great Depression, with the world’s poorest countries suffering the most, the head of the International Monetary Fund said Thursday.
Notice the claim- it is the “coronavirus” that will cause the worst recession in the world since the Great Depression. As if the virus itself were a sentient being plotting world domination like some mustachioed villain of the cinematic past and this is its evil plans coming to fruition. Yet, nothing could be farther from the truth.
The real source of the worldwide economic collapse is straightforward. The reason the economies of every major nation on the planet are in collapse is because of the actions of the governments of the world- i.e. the shutdowns and lockdowns of entire states, provinces, and nations in order to “contain” the spread of the virus. Economies did not collapse on their own. They were forced into collapse when governments forced all businesses they deemed “nonessential” to shutdown and ordered people to stay within their homes. Dr. Antony Davies, associate professor of economics at Duquesne University, explains it perfectly:
All workers are essential. How do we know? Because their jobs existed. Profit-driven businesses do not create non-essential jobs. Those people’s jobs were essential to their employers. Further, those people’s jobs were incredibly essential to the people themselves. They need their wages to pay the rent, buy their food, make their car payments, and for everything else that makes their lives livable.
But policymakers simply declared them non-essential, as if there would be no fallout from that decision.
In the same way that each person is supposedly connected to every other by no more than six degrees of separation, each business is connected to every other in exactly the same way. We cannot declare one business “unnecessary” without, by extension, declaring unnecessary every other business that relies on it, and every business that relies on those businesses. Food is necessary, and because of that delivery trucks are necessary, and because of that engine fuses and wiper blades are necessary, and because of that plastic packaging in which fuses and blades are sold is necessary, and on and on. Our economy is not a series of individual supply chains. It is a single, unified supply web. Cut the web in any place and the whole structure weakens.
And what is the result of forcing millions of people out of their jobs and stealing billions of dollars from the economy in one sharp action?
When you start adding the numbers up you discover that in the last two months of state mandated lockdowns 30 million people have filed for unemployment! What else could be the result? Of course such devastation was going to take place when the government started deciding on its own whim whose job was and wasn’t important, whose ability to feed, clothe, and house themselves and their children was “essential” and whose wasn’t. And on the heels of mass unemployment comes mass famine.
I’m not being hyperbolic. Even the major outlets are starting to report of the dangers of mass starvation to the world’s populations. CNN is warning of famines of “biblical proportions” taking hold in 55 nations all across the planet, threatening the lives of over 135 million people. The New York Times has reported of riots in Kenya resulting in stampedes that have killed people as the rioters chased after trucks giving away food, with similar events happening in South America, India, and South Africa. The UN is warning that hundreds of thousands of children face starvation with the possibility of 42-66 million children falling into extreme poverty. Half of all jobs in the entire continent of Africa are under threat of being destroyed. The reality is that the disruption in local businesses, national business, and global travel and trade, all resulting from government ordered lockdowns and border closings, is threatening to kill hundreds of millions of men, women, and children, through starvation and violence all across the planet.
Now, if you’re sitting at home thinking, “Well, yeah, it sucks to live in a Third World country, but I’m fine here in my first world country,” then you’re in for a rude awakening. The collapse of the supply web in the United States has already begun. Smithfield, the nation’s largest supplier of pork, has had its factories shutdown at government mandate. As the article notes, this is “pushing our country perilously close to the edge in terms of our meat supply,” and these facility closures “will also have severe, perhaps disastrous, repercussions for many in the supply chain.” Beef providers are seeing losses totaling in the billions from the loss of sales in beef. Loss of sales translates into a lack of product- meaning beef shortages across the nation. Tyson, the nation’s largest supplier of chicken, has taken out full page ads in the Washington Post talking about how their factory shutdowns threaten the ability of millions of Americans to buy chicken, the most eaten meat in the nation. And as they point out, it isn’t only chicken that we should worry about:
That means that if you’re one of those people who think these problems only apply to meat -that everyone can just be vegans for awhile and everything will work out- think again. The same kind of shortages we see being caused by government interference in meat production and distribution are also appearing in the growing and selling of produce. MSN News is reporting on millions of tons of food being left to literally rot in the fields. As demand drops because restaurants are being shutdown and transportation suffers as many of the “nonessential” jobs that support transportation are being shutdown, food delivery even to supermarkets becomes problematic and harder to ensure. On top of that, many of the state mandates and curfews whose purpose is to ostensibly keep people safe actually make it even harder to make deliveries of essential goods and services, like food and equipment, which in turn contributes to further shortages. (Thankfully, the federal government has at least helped on this front by lessening some federal restrictions on trucking, though that begs the question of if we don’t need them in an emergency to keep everyone safe then why do we need them ever?) The Idaho News has reported on Idaho potato farmers who have been unable to secure transportation and sell of their normally in high demand potatoes, resulting in the dumping of at least 70,000 pounds of potatoes. Rancher Ryan Elbe (whose family was dumping 220,000 pounds of milk a day because they couldn’t get it transported or sold) summed up the problems very well, “We thought this would never happen. Everybody’s rushing to the grocery store to get food, and we have food that’s literally being dumped down the drain.”
Add to this Trump’s recent restrictions on immigration, and you’ve got a recipe for complete disaster.
While the harvesting of grains like wheat and corn is mostly automated in the United States, fruit and vegetable farmers rely on seasonal guest workers to pick their crops.
“When the process is stopped midstream, it likely means those crews won’t be there exactly when they’re needed, if they get there at all. That means lost crops. That means lost food,” said Dave Puglia, president of the Western Growers Association, which represents fruit and vegetable growers in states including California and Arizona.
“Increasingly… we just don’t have the labor force domestically. We’re turning more and more to H2A workers because there’s no other way to get our crops harvested and packed and off to consumers,” he said.
Robert Guenther, senior vice president for public policy at the United Fresh Produce Association gave this assessment of the anticipated fallout of the new visa policy:
“There won’t be anyone to harvest the crops. It will be devastating to growers and ultimately to the supply chain and consumers. They won’t have the food.”
Supposedly the federal government will be stepping in and providing transport of food across the nation. But, as Business Insider reported, this comes a little too late to help most people. Turns out produce is extremely delicate, prone to rot and spoil easily. It will simply take the government far too long to get the trucks rolling and most of the produce will go bad before anything meaningful happens. So far, the only good news is that, as hobbled as the market is in the US, it has still managed to generate enough surplus that mass starvation has not set in-yet. But those stores will dwindle quickly as hundreds of millions of people depend on them to survive and, at this rate, there will be nothing to replace them.
If this all reveals anything it is this: the government, the organization people want to manage every aspect of life-business, education, healthcare, food, etc.- is so incompetent and incapable of assuming the responsibility of basic distribution of food in a timely manner that it calls into question the government’s ability to do anything else effectively. Its functionaries are so idiotic that they couldn’t see the looming economic collapse that was apparent to much of the public long before these problems actually set in. And even after the problem is clearly recognized, the state is so incapable that it can’t do anything until its actions will accomplish little and the crisis has only gotten worse. A crisis which it, the government, created.
Yes, it is undoubtedly true that some sort of economic recession would’ve occurred without the state mandated shutdowns. But nothing like the chaos we are seeing would’ve occurred. Sweden, who has largely avoided mass shutdowns of businesses and public areas, is projected to see an economic downturn of only about 4%. Compare that to America’s estimated 10% economic decline, with a further 5% decline for every month the lockdowns continue. Combine that with catastrophic job loss that could surge as high as 16% unemployment, higher than at anytime since the Great Depression, and it becomes obvious that it is the lockdowns that are wrecking society, not the virus. The lives of a conservatively estimated additional 84,872 people are threatened by issues solely related to the lockdowns.
In their efforts to “save lives” the governments of the world have initiated an economic collapse that threatens hundreds of millions, perhaps even billions, of people with famine, poverty, and death. And the reasons for this are simple to understand. It isn’t because most of these leaders are evil. It is because what they’ve undertaken to do is impossible. In their efforts to manage everything for the entire population of their nations, and thereby the planet, they have run afoul of what Nobel winning economist F. A. Hayek identified as the knowledge problem. Simply put, the world is too large for any one person or any group to have all the knowledge necessary to understand the complex web of wants and needs as well as the global trade network that makes up the modern economy and as a result whenever they undertake to try and dictate and control them will only ultimately cause more harm than good. No expert or group of experts understand all the connected elements of modern civilization to even pretend to act like they’re worth listen to about how all of society should act or react to anything. The attempt to do so replaces the flexibility and distributed but united knowledge of society with the rigid will of the state bureaucrat. It is a cascade failure waiting to happen- as we are seeing now with the looming collapse of the food supply change in the world and the very serious threat of starvation to millions because of the decisions nations have made to impose economic controls as a response to Covid-19.
So, if nationalization has so completely failed, if the best it can do is offer up a shambling, broken imitation of effectiveness, what is the solution? The answer to that is simple. Privatization. Lift the bans, end the lockdowns, slash regulations, and let people find the best ways to serve one another through the mass cooperation created by the free market.
Just compare the utter failures above and the horrific dangers created by their actions with the efforts of the members of the Church of Jesus Christ of Latter-day Saints to act privately to help serve their fellowman. NBC aired a report exploring the church’s private efforts to provide food, jobs, clothing, and monetary aid to millions of people, as well as aid in times of natural disasters, and just how effectively the church is able to help those in dire need, member of it or not. Where the governments of the world are crippling their food supplies and threatening their people with mass starvation, church farms are looking at producing richly this year. While the governments of the world are shutting down farming and factory production over fears of catching Covid-19, Latter-day Saint farms (both produce farms and ranches) are producing ample amounts of food and keeping workers healthy and safe. And unlike those responding to government mandates and incentives to destroy extra production, the church uses everything it produces to create food for those in need. For example, instead of wasting tens of thousands of gallons of milk the church factories are taking extra dairy and turning it into massive amounts of cheese. Church produced goods, not only food but other necessary items such as clothing or masks, will go to help those in need in 57 countries across the world, from Iran to Uruguay. This even includes financial assistance.
All things considered, this whole pandemic has revealed a few essential facts: The governments of the world cannot do what they claim. Often, in their efforts to do what they claim they create problems just as deadly, if not worse, than the one they claim to solve. At every level and in every way private institutions function far better and they do it without the ever present threat of violence, extortion, and brutality that defines how the state functions. Covid-19 has therefore revealed one truth above all others: that nationalization is deadly and the solution is to deregulate and decentralize, as has already taken place in a number of ways. The only economic system that has the flexibility, creativity, and incentive to meet the needs of the billions of people in the face of crisis, is the free market. The Covid-19 pandemic reveals that we need it now more than ever.