You’re ‘free’ to do what the state tells you to do. As Alice, of Wonderland fame, might have put it, California Gov. Arnold Schwarzenegger is revealing a curiouser and curiouser understanding of the free market.
The one-time follower of free-market champion Milton Friedman is sounding less and less like the man he claimed to admire.
Schwarzenegger’s recent bow to global warming idolatry reveals his latest misunderstanding of how economies work, to say nothing of his loose grasp of science.
On signing an executive order last week establishing the world’s first “low carbon standard for transportation fuels,” the governor boasted that the mandate “requires fuel providers to ensure that the mix of fuel they sell into the California market meets, on average, a declining standard for greenhouse-gas emissions” and other green-inspired goals.
By 2020, the government directive, according to Schwarzenegger, “will produce a 10 percent reduction in the carbon content of all passenger vehicle fuels sold in California.” This mandate, the governor said, “will use market-based mechanisms that allow providers to choose how they reduce emissions while responding to consumer demand.”
But that’s a long way from how free markets really work.
When government “requires” private industry to do something so that it “will produce” something, we aren’t watching the free market at work.
We’re watching Soviet-style, topdown dictates at work. Claiming that fuel providers “will use market-based mechanisms” to choose how to comply with government demands about what must be sold and manufactured is like saying a robbery victim gets to choose which hand to use to hand over his wallet.
This twisting of the plain meaning of common terms is something we’ve come to expect from government.
Obviously, the economic principle of supply and demand means something entirely different to Gov. Schwarzenegger than it meant to Friedman. In economics, “demand” refers to what buyers request to buy. In Arnold-speak, “demand” means what government insists be sold.
It’s annoying enough that the governor apparently has bought whole hog into global-warming alarmists’ claims of impending disaster.
Our globe has warmed about one degree in the past 100 years, but in the Middle Ages the planet was considerably warmer than today, and 1,000 years ago Vikings farmed in Greenland. Climates change, even without SUVs and factory smokestacks.
Trying to determine the cause and effect between human output and warming is new science at best; formulating public policy on such variable and unpredictable conditions will surely make for bad law.
But it’s also misrepresentation to claim the free market is at work when government demands that private industry must change what it produces and sells.
It all brings to mind the Queen of Hearts in “Alice in Wonderland,” who proclaimed, “Sentence first — verdict afterwards.”