GUEST COMMENTARY: Will the real Missouri First please stand up?

Wednesday, January 27, 2010 | 12:01 a.m. CST; updated 10:52 a.m. CDT, Tuesday, May 4, 2010

Missouri First has recently been in the news and was included in Gov. Jay Nixon’s State of the State address on Jan. 20.  But wait, there is more than one Missouri First. So, to use a call from the award winning TV game show of the 1960s, will the real “Missouri First” please stand up?

Which is the real Missouri First? Missouri First, Inc., a Missouri corporation that “stands up” as an advocate for free markets and constitutional governance; or, Missouri First, the name for Gov. Nixon’s recently announced plan to retool taxpayer-funded economic incentive programs for Missouri employers considering expansion? A program the governor calls his “loyalty program for businesses that are already here.” The program that could as easily be called “The Newly Minted, Latest Form of Government Intervention in the Market Place to Attempt to Solve Unemployment."

Gov. Nixon may be genuinely interested in solving high unemployment. But the very reason we have high unemployment in the first place is because of government intervention in the marketplace, albeit mostly federal, that has caused severe mal-investment of capital goods, such as overly expensive houses, excess production capacity and too many other capital expansions. These mal-investments, often called the “bubble,” were prompted by the Federal Reserve’s easy money and cheap interest and by excessive government spending. This excess capacity or bubble must be absorbed before real recovery is possible. To add to the mal-investment via state government-directed incentives that seduce employers to expand operations, not justified by free market conditions, is wrongheaded and will only expand the mal-investment. Yes, these incentives might actually create some jobs – but at what cost to alternative uses of the misdirected capital – at what loss of other jobs?

Some may be led to believe that government-sponsored projects advance at no detriment to privately funded projects, and this simply is not true. Since the state has no funds of its own, it must first take the required funds from the wealth of its citizens to capitalize such projects as its “Missouri First” program. Most of us understand that when we choose to buy a new pair of shoes, some other want, need or use of our money goes lacking. It’s no different when government diverts the wealth of its citizens via taxes and spends it on a government-created project. The result is that some other investment or expenditure by the individual citizen goes unmet. In other words, the diversion of wealth via taxes is in reality a diversion of capital, capital that would otherwise seek an investment or expenditure alternative selected by the combined judgment of all Missouri citizens and not left to the limited judgment of government and its agencies.

Besides being in conflict with sound economic reasoning, when the state substitutes its judgment for the judgment of the individual and decides how to spend the individual’s wealth, whether on job creation or some other economic initiative, the state reduces the economic freedom of the individual.  Economic freedom is the freedom of the individual to use, exchange, save or expend their wealth as they choose.  This reduction of economic freedom is in conflict with the Bill of Rights contained in Missouri’s Constitution. Article I, Section 2 of the Missouri Constitution states in part “that all persons have a natural right to life, liberty, the pursuit of happiness and the enjoyment of the gains of their own industry…”

When the state encroaches upon economic freedom, the action impacts all areas of freedom. This point is brought home by a quote by F.A. Hayek, Nobel Prize winning economist, “Economic life is not a sector of human life which can be separated from the rest; it is the administration of the means for all our different ends.  Whoever takes charge of these means must determine which ends shall be served; which values are to be rated higher and which lower…” Hayek also said, “To be controlled in our economic pursuits means to be...controlled in everything.”

Gov. Nixon should not attempt to “determine which ends shall be served” nor “control our economic pursuits,” neither should he substitute his economic judgment for the combined judgment of all Missouri citizens. He should design a plan to phase out economic development initiatives that are in conflict with the free market principles of capitalism, that are detrimental to economic freedom and that are a disruption to the enjoyment of the gains of the industry of Missouri citizens.  

To achieve lasting economic growth for our state, the governor should promote programs that allow the free market to function.  

Bruce Hillis is the director of Missouri First Inc.

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Jo Mama January 27, 2010 | 4:53 p.m.
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