Mixed Economy and Why It Fails

Democracy and a mixed economy cannot be put into one basket. Most of the pressing and important issues Mongolia has, such as corruption and poverty, can be traced to the political and economic arrangement we have at present.

If you believe that an individual has the right to his own choices and how much he earns should be determined by his degree of productivity, the current policies will not serve your best interests.

Today the government and the parliament can make decisions like regulating the timetables of major businesses such as Sunday Plaza and Narantuul Trade Center, favouring a particular business by giving subsidies or taxing companies that they deem beneficial or harmful to the national interests.

One thing that everyone should understand is that the government has no money because it does not produce anything. There are governmental organizations that offer services but they are not profit based, meaning that their services are paid for by the government or better yet the public through tax.

Every time someone asks for money from the government, it has to take that money from somebody else to give it to them. Is this fair? How does your or anybody’s need of money or investments justify the forceful taking of money from everybody else. And yet all we hear is that the government is investing into this and that and borrowing left and right – a debt that has to be played by us the people. The reasoning the government is always the same – for the public interest.

Ayn Rand, the Russian American author and philosopher, once stated: “There is no such thing as ‘the public interest’ except as the sum of the interests of individual men. And the basic, common interest of all men—all rational men—is freedom. Freedom is the first requirement of ‘the public interest’—not what men do when they are free, but that they are free. All their achievements rest on that foundation—and cannot exist without it. The principles of a free, non-coercive social system are the only form of ‘the public interest.’”

In case you don’t know what I mean by freedom, because the term has been used so promiscuously by savage gangs, cult leaders and totalitarian dictators, freedom in a political context, means freedom from government coercion. It does not mean freedom from the landlord, or freedom from the employer, or freedom from the laws of nature which do not provide men with automatic prosperity. It means freedom from the coercive power of the state—and nothing else.

Since there is no such entity as “the public,” since the public is merely a number of individuals, the idea that “the public interest” supersedes private interests and rights, can have but one meaning: that the interests and rights of some individuals take precedence over the interests and rights of others.

So long as the government and the lobbyist hold power such as to tax and subsidise, then all individuals and all private groups have to fight for the privilege of being regarded as “the public”; to be regarded as someone whose interests are vital to public welfare. The government’s policy has to swing from group to group, hitting some and favouring others, at the whim of any given moment—and so grotesque a profession as lobbying (selling “influence”) becomes a full-time job. If favouritism, corruption, and greed for the unearned did not exist, a mixed economy would bring them into existence.

This is where we are headed if government and the economy are not separated. This is the reason Europe is in a recession, because their governments were big and tried to regulate everything. This is where USA is headed too. They now have a central medical care system, the government taxes and subsidises as it pleases and their foreign policy is too meddlesome in other country’s internal affairs which have lead them to war on several occasions. Since Obama gained office 2008, not much has changed in their economic status. The USA is falling into debt faster and deeper than ever and nobody is doing a damn thing about it.

This is most tragic as USA’s economic and foreign policies affect the world more than any other country. The dollar is the international currency but its value will not sustain if their debt issue is not handled.
The third party presidential candidate Gary Johnson said that for every dollar they spend, 43 cents has to be borrowed.

At the moment, Mongolia is prosperous only because of its large reserves of natural resources. As a Mongolian myself, I feel that this provides enormous potential for growth but with any potential, it can work both ways. While this may seem farfetched to some, the increasing attention Mongolia is receiving from the superpowers of the world could lead to a tag of war that might have disastrous consequences.

What I advocate is the free market. In a free economy, where no individual or group of men can use physical coercion against anyone, economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade. In a free market, all prices, wages, and profits are determined—not by the arbitrary whim of the rich or of the poor, not by anyone’s “greed” or by anyone’s need—but by the law of supply and demand. The mechanism of a free market reflects and sums up all the economic choices and decisions made by all the participants.

Rand stated, “Wealth, in a free market, is achieved by a free, general, ‘democratic’ vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and needs. No one has the power to decide for others or to substitute his judgment for theirs; no one has the power to appoint himself ‘the voice of the public’ and to leave the public voiceless and disfranchised.”
Ones who oppose the free market are people who are dependent on others for their livelihood. It will mean that they will lose their sole means of income – the social benefits.

Social benefits and care are not an efficient method of distributing wealth, because he who can beg and scramble the hardest and prove that they are incompetent gets the most. It encourages dependency, and dulls creativity and productivity.

Those who have the ability produce the highest quality product and sell it for the lowest price will prosper in the free market. The lazy and incompetent have no place in the free market.

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