“Governments must regain supremacy”

“Governments must regain supremacy. It is a fight against the markets and I am determined to win this fight” – Angela Merkel

Despite the bravado of Ms. Merkel, betting on governments against markets is almost always a losing bet.

Markets are nothing more than the actions of millions, hundreds of millions of individuals making decisions. These decisions represent, in effect, votes in the marketplace. They are placed by individuals pursuing what is best for them. These decisions are natural and made willingly. For every transaction, there is both a buyer and seller who believes that he is improving his position.

Governments, on the other hand, represent coercion and force. Laws and legislation (excepting “rules of the road” laws such as fraud prevention, property rights, etc.),  are always unnatural in the sense that they intend to alter the natural behavior amongst citizens. Legislation, in this sense, is unnatural. It prevents willing parties from exercising their freedom.

Merkel’s quote against markets really is an attack on the freedom of citizens to engage in voluntary transactions. It is both anti-freedom and anti-democratic. It is a reflection of the attitude that governments around the world have toward their citizens. It is wrong, and it is a losing strategy.

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