Agricultural economist Jayson Lusk has a nice discussion of the US government’s SNAP (”food stamps”) program that nicely illustrates Mises’s theory of interventionism. Mises argued that government interventions such as price controls, subsidies, and other regulations not only fail to achieve their stated aims, but also generate unanticipated side-effects, calling for further interventions to address the side effects, generating a new set of side effects, and so on. “If the government, in order to eliminate these inexorable and unwelcome consequences, pursues its course further and further, it finally transforms the system of capitalism and free enterprise into socialism.”
Consider the stated aim of the food-stamps program, alleviating hunger. (Forget for the moment the additional and hidden goal of subsidizing politically connected agricultural producers, processors, and distributors.) By subsidizing food purchases, food stamps also allow low-income consumers to choose particular foods they might not otherwise have chosen, such as unhealthy snacks and sodas. Hence politicians want to restrict food-stamp purchases to eligible, “healthy” foods. As Lusk points out, food-stamp recipients can easily avoid such restrictions by reallocating their spending, using more of their own funds for junk food and saving SNAP funds for eligible items. What’s next? Some politicans are already calling for programs to track food-stamp recipients’ purchases. One can easily imagine further government programs to force “healthy” behaviors. Soon we’ll all be doing our mandatory morning calisthenics under the watchful eye of the telescreen....
