Tuesday, September 17, 2013

"letting the market decide" Means No Political Interference into the Market

Governor Chris Christie recently vetoed a bill that would have ostensibly reigned in tax-related cronyism to attract business, and sent it back to the legislature for revisions. Currently, New Jersey is rife with tax favoritism.

The bill would also have mandated "fair" wages. As the NJ Star-Ledger editorialized:

[T]his legislation got reshaped at the last minute in back rooms, without any public input. Now, the political bosses have effectively broken down the state into geographic fiefdoms — an opportunity to funnel taxpayer dollars into their own towns and districts. We should be letting the market decide where investments make sense, not legislators out for political spoils. 

The editors later said:

Christie struck out one of its better provisions, the language that mandates paying a fair wage to building maintenance and construction workers.

 I thought this was an interesting statement in light of what it said earlier about markets.

Can anyone spot the contradictions here? 

I left these comments:

"We should be letting the market decide where investments make sense, not legislators out for political spoils."

I couldn't agree more. "Letting the market decide" means no coercive government interference in individuals' economic decisions. 

It means leaving productive New Jerseyans free to invest their own money when, where, and how they judge best, which is their moral right, rather than have the state seize it in order to "funnel tax dollars" according to the whims of legislators.

It means letting employers and employees freely and voluntarily negotiate their own mutually beneficial wage terms, which is their moral right, rather than legally impose what "legislators out for political spoils" arbitrarily deem to be a "fair wage." 

And it NJ really wants to "let the market decide," it will drastically reduce and flatten taxes, and eliminate regulations and red tape, so that businesses willingly locate and expand in NJ. 

"Letting the market decide" is really about removing disincentives, not fumbling over artificial political "incentives."

Related Reading:

Why Capitalism Needs a Moral Sanction

Misunderstanding a Free Market

With Defenders Like Arnold Kling, Free Enterprise Doesn't Need Enemies

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