Some people imagine that there is a third way between the market economy and socialism, and in a sense they are right. But the way to it does not lie with government programs. Before I explain that, let us consider the unseen effects of substituting government means for voluntary human energies.
We often use the word voluntary to identify charitable actions taken in society that do not result in profit. But consider that profit in a market economy also results from voluntary actions. They involve willing buyers and willing sellers, willing workers and willing capital owners. All “capitalist” acts result from volitional choice, a decision by individuals to make exchange based on the forecast that doing so will improve their lots in life. A better term for charitable activities, as distinct from commercial ones, would be non-pecuniary activities.
So by voluntary human energies, I really intend to sum up the whole of economic affairs insofar as they do not involve forcing people to do things they would not otherwise do. This includes activities ranging from the small scale transactions of the peasant farmer to the complex financial transactions of Wall Street. All involve individuals choosing to trade to improve their standard of living.
We can contrast this with government means, which always involves an element of force. Whether it is taxation, regulation, or restrictions on consumption, all government programs are designed to thwart what would otherwise be voluntary decisions. Whether you believe some intervention is necessary, let us be clear that an increase in government management of the economy always means an increase in the use of force.
I am not ready to wholly endorse his argument, but it is well written and provides important ideas to ponder. It is a good follow on to my earlier post on the EEOC.