Friday, August 13, 2004

Chess and Socialism

This blog entry by Madson Pirie combines two things I approve of to great effect in a single post: chess and libertarian thinking.

In classical chess players fought to occupy the centre. They advanced King’s or Queen’s pawns, knights and bishops. He who had gained the centre could attack from there. Hypermodern chess, pioneered by Nimzowitsch, Alekhine and Reti*, sought not to occupy the centre at once, but to control it from afar. It was often characterized by fianchettoed bishops controlling the long diagonals across the centre from the knight's second square.

The new Socialism echoes this approach. It no longer nationalizes industries into state ownership, but seeks to control them through new regulatory bodies which have great powers to circumscribe their activities. It does not need government itself to raise spending into a recession if it can manipulate its private citizens to do so by stimulating them to borrow and spend.

It can use bodies which it controls to stipulate in minute detail the activities of business. It can determine the hours, conditions and sometimes even the pay of its workers. It can stipulate not only the targets to be attained, but the technology used in the process. Like a hypermodern chess master it controls from afar, without actually occupying the central territory of business.

A problem is that capitalism depends on the enterprising mind and the innovative thinker, and on the freedom to try out the new.
This is a very keen insight, and its importance cannot be overstated. The problem with focusing solely on tax cuts, as the GOP is currently doing, is that it ignores entirely the even larger burden on economic activity imposed by regulations; for instance, the European Union's Working Time Directive is as anti-growth a piece of regulation as they come, even though it adds not a cent directly to anybody's tax obligations. Similarly, one great advantage of starting a business in Britain or the United States, as opposed to doing so in continental Europe, has nothing to do with tax rates as such - in both countries it takes only two or three steps at the most to be in business, and these can be undertaken in the space of a day or two if need be, while such a breezy start would be unimaginable in countries like France, Italy or Germany.

*So know you know where that part of my blog's URL comes from ...