Learning is not necessarily cumulative. Human experience over centuries provides lessons, some clearer than others. But each generation must relearn its lessons, and some do not.
The lessons of history about economic growth are clear. Growth does not happen automatically, and while the few in high positions can accumulate or appropriate wealth, for the vast majority, life has been cruel, brutal and short over the centuries.
The exception, the Great Enrichment, according to economic historian Deirdre McCloskey, began around three centuries ago around the North Sea in the Dutch Republic and England, in societies where people began to respect and encourage trade rather than despise and reject it.
They discovered that economic growth that improved the lives of many, not just a few, was possible when people exchanged goods and services in free markets and property rights were secured by a limited government and the rule of law.
Suddenly, and not just for a moment, the great masses of the population had to live on $3 a day, which was barely enough to survive, and in times of famine or war, not even that, but on $130 a day.
The 20th century has taught us many lessons about how to generate large-scale and widespread economic growth—and how to suppress it. Growth occurs when free markets are allowed to function in societies with high levels of trust and the rule of law.
In societies where governments flood the economy with cash, attempt to control wages and prices, impose centralized economic planning, and prohibit voluntary market transactions, production stagnates and living standards decline rapidly.
Sometimes governments impose such measures temporarily in wartime, with varying results depending on the course of the war. In peacetime, the consequences are destructive – in the Weimar Republic, the Soviet Union, Mao Zedong’s China, and recently in oil-rich Venezuela.
And perhaps in Kamala Harris’ America too. Since President Joe Biden withdrew his candidacy for re-election four weeks ago, the vice president has said remarkably little about what policies she will pursue as president. There is no topic section on her website.
She has answered almost no questions and has not given herself to any extensive interviews with the press. However, most members of the press, in their enthusiasm for her candidacy, have not seemed uncomfortable with her neglect.
It was only last Friday that she began talking about the situation, announcing “the first nationwide ban on price gouging”—she read the word as “rip-offs”—“on food and grocery stores.” Presumably this was an attempt to address an obvious vulnerability for any candidate of Biden-Harris descent: the fact that the administration’s policies, by showering money on consumers already flush with cash accumulated by lockdowns, were fueling inflation the likes of which no voter under 60 had ever experienced as an adult.
But of course that didn’t make sense. The grocery industry is highly competitive and has low profit margins – if one company “rips off” consumers too much, they can go elsewhere. “It’s hard to overstate how bad this policy is,” wrote Catherine Rampell of the Washington Post. “At best, it would lead to shortages, black markets and panic buying.”
Rampell has since taken a different view after Harris deviated from the facts of her campaign in her actual speech. But her initial view remains compelling and consistent with the lessons of history, which includes the price controls imposed by former President Richard Nixon 53 years ago this month.
Similarly economically illiterate is Harris’ proposal to give first-time home buyers a $25,000 government subsidy. Just as colleges and universities have soaked up government-subsidized student loans for their own ends, developers and home sellers will obviously raise their asking prices by $25,000 and pocket the subsidy.
Jason Furman, chairman of former President Barack Obama’s economic advisory council during his second term, said of the announced price gouging: “This is not a sensible policy and I think the biggest hope is that in the end it is just a lot of rhetoric and no reality.”
Can one say, on the basis of a single proposal, that Harris has learned nothing from the grim history of price controls? Yes, if it is the only proposal she has made in an entire month as the Democratic candidate in fact and in law.
And yes, she never personally retracted the similarly outlandish promises she made in her 2019 campaign for the 2020 nomination – banning fracking, defunding the police, eliminating private health insurance, “snatching” patents from pharmaceutical companies. Tweets from anonymous staffers that upend these policies don’t count.
The delicious irony is that the party favoured by college graduates, many of whom are smugly convinced of their knowledge and wisdom, is nominating a candidate who shows no sign of having learned from the grim history of economic ukases. Learning is not necessarily cumulative.
Michael Barone is a senior political analyst at the Washington Examiner, a resident fellow at the American Enterprise Institute, and a longtime co-author of The Almanac of American Politics. His new book, Mental Maps of the Founders: How Geographic Imagination Guided America’s Revolutionary Leaders, is available now.
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