Social Engineering

Name nearly any major issue we face today, whether it be joblessness, state deficits, federal deficits, unfunded liabilities, social unrest, the mortgage crisis, health care costs, or the unsustainability of Medicare or Social Security, and the answers to solve these problems will rest on the principles of Individual Liberty. The solutions may not come about as fast as some people will desire, but they will be forged in the time tested crucible of experience.

We have seen in each of these issues, that the answers provided by principles that rest on a concept of "social justice" will so increase the bureaucracy devoted to defining the problem, devising a solution, and managing the outcome, that the bureaucracy itself will become an impediment to a truly "just" solution. Impediments to genuine solutions will exist because infinite rules and controls will be introduced to correct or prevent the occurrence of events seen as unfavorable to the "defined" solution.

Time after bloody time, we painfully relearn the lesson that no matter how smart the technocrats/politicians/leaders we place in charge are, men are simply incapable of taking into account the myriad unintended consequences of their actions.  Sometimes we come close and prevent major damage.  Most of the time we wreak havoc on the economy and our culture by chipping away at Liberty.

Here is the typical sequence of events as illustrated by the housing debacle:

We decide as a society that it is a good idea if most of the population owns a home, we have seen through innumerable studies that homeowners are far more likely to raise law-abiding children, cost society less, and contribute more to their communities.

Lawmakers then propose and pass legislation reducing the cost of home ownership.

Bureaucrats then determine the implementation of the law via the guarantee of loans, the reduction of equity required,  reduction of banking reserve requirements for those willing to make the new loans, and not least the coercion of private banking enterprises through the granting of privilege to expand their operations.

The huge new amount of debt instruments introduced into the economy find most buyers willing to take only the best and consequently, in order to sell the higher risk mortgages, financiers bundle batches into combined classes of risk.

The sheer volume of these new debt instruments becomes so large that the degree of separation between ultimate lender and borrower becomes infinite and the huge volumes necessitate international trade and whole new classes of financial instruments are created to enable the market to absorb the volume.

When the whole program crashes, Americans are aghast.  How could this happen?  Where were the regulators?

If have followed the underlying logic so far, you can apply similar reasoning and eventual outcomes to virtually every major social program.  To reiterate:  Society defines a goal,  legislators enable the goal,  bureaucrats interpret the legislation and enforce its implementation.  The major problem then occurs when the coercive power of government is used in the absence of that power being specifically granted by the society that defined the original goal.  In other words the politicians hand off the rule making responsibility to the executive branch.


Ultimately your Individual Liberty was reduced because your elected officials and their appointed technicians
obligated you for the failure of their policy implementation.


Who could argue that greater home ownership was not an admirable objective?

Greater home ownership was and is desirable.  The important point is we must let the general increase in wealth generated by policies which encourage free enterprise, individual liberty, and rule of law drive our social aims.

Steve