The pampered Queen
In Brian Greenspun's latest column on the auto bailout (see our blog post, Big Three Theft about it), the Las Vegas Sun editor relies on an interesting take on history to paint the senators who voted against the bailout in a bad light.
Greenspun says that the bailout's failure in the Senate produced "a shining moment for the people in Congress who hung tough for ideological reasons."
Actually, preventing a failed industry from being allowed to keep failing while causing Americans to pay more per car is less about ideology than it is about fairness. But we digress.
Greenspun continues: "Marie Antoinette did that a long time ago, suggesting that people too poor and destitute to afford one square meal should instead eat cake – as if they even knew what that was."
Greenspun, it seems, could benefit from a history lesson:
- Marie Antoinette was Queen of France at a time when aristocrats not only believed they were entitled to everything, but believed the reason they were entitled to everything was because God willed it (kind of like wealthy Americans who expect taxpayers to bail them out every time they lose billions of dollars).
- Antoinette's famous quote is alleged to have been a response to the rioting of starving Parisians over bread shortages – and yes, her intent was to be cruel and dismissive, suggesting that instead of eating bread they could just eat cake.
The French were doing several economically foolish things at the time. Among them:
- French laws created an incentive for government agents to compete with each other in buying up grain. The government buying up grain at a rapid rate caused a shortage of grain for private consumption. Riots ensued.
- In Paris, the government responded to the shortage by subsidizing flour, making it artificially cheaper. Bakers from neighboring towns flocked to Paris to purchase artificially cheap flour, causing a shortage of flour in Paris. Riots continued.
- The national government responded by putting a maximum price at which farmers could sell their grain (a price control). As we all know now, maximum price controls create shortages, and that is exactly what happened in France. Riots continued some more.
- The government responded by expanding price controls to other products. Naturally, this led to shortages of those products well. Riots culminated in the ruling aristocrats losing their collective heads.
Greenspun believes that the people of 18th Century France couldn't afford bread because they were poor. Interestingly enough, poverty had nothing to do with their inability to buy bread. The blame belonged to price controls, a foolish government policy that interferes with the free market, creates shortages and, in this case, led to starvation and the public anger that took down the monarchy.
The failure of price controls in this case is not surprising. Not even the Harvard-educated have been able to reverse 4,000 years of price control failures.
Marie Antoinette wasn't sticking to her ideological guns, as Greenspun would have us believe. She was a pampered, privileged queen who lived outside the rules everyone else had to follow, and she was ignorant as to the economic devastation the government of France was causing for its people. Interestingly, the devastating economic policies of France at that time were the same policies the socialists, communists and Keynesians would try in the 20th Century, and that Hawaii, with its price controls, would try in 2005.
If Greenspun wants to make a fairer, more historically accurate comparison, he shouldn't compare Antoinette to those who opposed the bailout. Instead, he should recognize that Antoinette had much more in common with those today who fail to understand the dangers of governmental tampering with the free market.