Many believe government intervention is necessary for economic stability.  In reality, government intervention is the cause of instability.  It distorts prices, disrupts production, and punishes efficiency.  What is called a “free market” is anything but—it is riddled with taxes, subsidies, and regulations, each one a burden that weakens the economy.  Stability can’t be imposed from above.  It emerges naturally when markets are free to function.

Markets are self-regulating.  Prices, wages, and interest rates adjust according to supply and demand.  When left alone, they correct imbalances, ensuring resources flow to where they are most needed.  This process is not chaotic—it is the natural order of economic coordination.  When the government interferes, this balance is destroyed.  Every tax distorts incentives.  Every subsidy misallocates resources.  Every regulation slows production.  The result is stagnation, inefficiency, and crisis.

Policies designed to “stabilize” the economy create the very crises they claim to prevent.  Central banks manipulate interest rates, artificially inflating asset bubbles that eventually collapse.  Government spending crowds out private investment, diverting capital from productive use to politically motivated waste.  Price controls create shortages and surpluses, forcing producers to either cut back or overproduce.  These interventions do not prevent disaster—they guarantee it.

Inflation is the most insidious form of intervention.  It is unseen theft, transferring wealth from savers to the politically connected.  When new money is printed, those who receive it first— government, banks, and large corporations—benefit before prices rise.  By the time the new money trickles down to the average person, its value has already been diluted.  The public sees rising prices and blames businesses, never realizing that the true culprit is the inflationist policies of the state.

Despite what politicians and economists claim, capitalism has not failed—it has been suffocated.  Every major economic collapse has been the result of intervention, not free markets.  Statism does not produce wealth, it consumes it.  Bureaucrats do not create prosperity, they restrict it.  The more control the state takes, the weaker the economy becomes.  The road to stability is not through more intervention but through its removal.  Stability comes from competition, property rights, and voluntary exchange.  It comes from freedom.

Reference

Ludwig von Mises; Selected Writings, Vol. 2