I don’t know how much longer the Onion can stay in business if the mainstream news is going to print headlines like the one yesterday in the Washington Post: “IMF, citing $1.9 trillion in government subsidies, calls for levies to curb use.”
The nineteenth-century sociologist, Herbert Spencer, had it right: there are only two ways to support oneself. One can either work and trade or rob and loot. The first option, the means of production, Spencer called “the Economic means.” The second option, the means of plunder, Spencer called “the political means.”
The IMF is a band of people addicted to the political means.
First we read:
“Governments around the world subsidize gasoline, electricity and other major forms of energy to the tune of $1.9 trillion a year according to a new International Monetary Fund study…”
Yes, this is true and it is a problem. First of all, those subsidies come out of the pockets of taxpayers. Basically, middle class people pay for cushy salaries and huge bonuses for people in the oil industry. So people we think of as producers—as those who rely upon “the economic means”—are actually hiding the real source of their livelihood. They are dependent on “the political means.”
Secondly, if those subsidies are used to make gasoline cheaper, they also tend to promote over-consumption. The price mechanism, if left alone, would allow society to balance the need to sustain non-renewable resources with the energy needs of consumers. Third, even though I doubt it is yet time to heavily invest in alternative energy, the subsidies will distort the economic information. When we do reach that point, we won’t notice. It should happen when energy becomes too expensive from the old sources so that people are willing to pay for new sources. But subsidies hide what is going on.
So naturally, once they exposed this problem, the International Monetary Fund called for an end to subsidies. They said the states should stop plundering their people in order to enrich a few friends in the energy industry.
Ha! If only!
No, having hurt taxpayers once, the only way to correct the damage, as far as the IMF is concerned, is to hurt them again a matching amount. So the first sentence of the article reads in full:
“Governments around the world subsidize gasoline, electricity and other major forms of energy to the tune of $1.9 trillion a year according to a new International Monetary Fund study that calls for that amount to be offset through carbon taxes or other means to battle climate change and other social problems.”
To be fair, some statements indicate that the IMF thinks the first set of subsidies might eventually be phased out. But even so, if they admit that one set of policies distort investment decisions (as they do) then why not just end the distortion. Why do more distortion in the other direction.
The IMF doesn’t even consider an end to subverting market processes, even though doing so would easily solve many of the problems they see. No matter what, the politicians must always be getting their slice.
And the taxpayers must always bleed.