Shomron Center for Economic Policy Research

This section is part of Chapter IV, “Modern Conservatism in Old Democracies,” from the upcoming book “To the Conservative (or Free Man) at the Crossroads: Notes on Poorly Learned Lessons.” It follows the paragraph “The Top of the Federal Bureaucracy in the Mirror of Voting.” All source references not in footnotes can be found in the book’s reference list, available in the downloadable manuscript (in Russian). This text examines the popular idea of limiting congressional re-elections, championed by D. Trump, and compares it to an alternative approach for “draining the swamp” – reestablishing voters’ control over federal Civil Service and drastically reducing the size and power of federal bureaucracy. To be clear, this discussion does not condone abstaining from voting or supporting parties that promote a Hamas-friendly version of socialism, as exemplified by K. Harris-T. Walz. These political forces must be opposed. Rather, the focus is on what reforms might help restore lost freedoms and responsibilities to US citizens.

We have previously discussed ideological indoctrination in public schools (Yanovsky, Zhavoronkov, 2022; Yanovsky, Zhavoronkov, Cherny, Zatkovetsky, 2018, Chapter 8). In public schools and publicly funded universities, youth are taught that the State and Government are indispensable in private life. Young people, often ignorant of human history, are told about the “moral dubiousness” of entrepreneurial success. Frédéric Bastiat warned about the danger of such indoctrination in the mid-19th century in his work “Higher Education and Socialism” (Bastiat, 1848, pp. 186, 212). One consequence of this indoctrination is the diminished prestige of entrepreneurship as a profession in modern society.

Max Weber demonstrated that capitalism and its institutions became possible and achieved unprecedented success only after entrepreneurial success received moral and religious sanction and ceased to be considered reprehensible. Only then did sufficiently reliable protection emerge for two potentially unpopular characters to earn huge amounts of money and calmly pass them on as inheritance. The first is the owner of capital, the “means of production” (resources that generate profit). The second is essentially a specialist in acquiring cheap resources and selling significantly more expensive products created with their help – goods and services.

Without the first, there is no modern capitalism and, accordingly, no mass entrepreneurship that potentially generates economic growth (Mises, 1949/2005, p. 640). The second is a “speculator,” and according to I. Kirzner’s definition (Kirzner, 1978), is actually (in the narrow sense of the word) an entrepreneur. It is his “vigilance” to business opportunities that is the direct driver of the modern economy.”

The role of prestige as an important (and sometimes the most significant) element of reward for work done was shown in great detail and with numerous examples by Adam Smith in his “Inquiry into the Nature and Causes of the Wealth of Nations” (1776) ^[1]. The lack of public respect, honor, and prestige for business and the profession of entrepreneurs can lead to a decrease in the quality of novice entrepreneurs. The low prestige of business undermines incentives to choose risky, innovative strategies for business development, as respect and public recognition are standard compensation for the riskiest occupations (e.g., military, firefighters, rescuers). ^[2]

The indoctrination of children in modern state educational institutions leads to a shift in public opinion and public choice towards parties that support compulsory state care (“left” parties). More votes for such parties eventually lead to a heavier regulatory burden and a weakening of competition. Voting for ideologically “anti-capitalist” parties signals to potential entrepreneurs that they cannot count on public respect and honor for their achievements. It should be emphasized that the feeling of prestige in being an entrepreneur is an important factor in choosing self-employment (Segal et al., 2005).

Murphy, Shleifer, and Vishny, in their seminal article (Murphy, Shleifer, and Vishny, 1991), analyze the factors that determine career choices. The most talented market “agents” can, under certain conditions, achieve success in business by satisfying market demand through organizing the production of goods and services for consumers, thus leveraging their abilities on the largest possible scale if the return on their human capital (talents, abilities) seems fair. Under different conditions, they might use their abilities to seek rent, redistributing wealth and thereby slowing economic growth. Society’s attitude towards business and success noticeably signals whether business rules will be friendly or hostile.

In summary, the hardships of doing business, humiliating inspections based on the presumption of entrepreneurial dishonesty, and lack of respect for business success lead to a decrease in the influx of new innovative firms to the market. Even when the government’s “care” extends to business, it distorts incentives, attracting those who are more likely to find common ground with officials rather than those gifted with the talent to best please consumers. Such individuals use their connections to limit competition and extract rent. In this scenario, the likelihood of mass expansion in the production and supply of new goods and services resulting from the discovery of new technical capabilities is significantly reduced.

If state education becomes almost the only option (Yanovsky, Zhavoronkov, 2022), the alternative to prolonged unemployment becomes mainly the forced transition to unskilled and low-paid work, even for the most educated and qualified specialists from “old” industries. This situation creates a temptation (both for the ruling bureaucracy and politicians and for workers in difficult situations) to sharply expand the layer of benefit recipients dependent on the state.

Bastiat Frédéric, Selected Essays on Political Economy [1848], trans. Seymour Cain, ed. George B. de Huszar,  introduction by F.A. Hayek (Irvington-on-Hudson: Foundation for Economic Education, 1995).

Kirzner I. M. (1978). Competition and Entrepreneurship. Chicago: University of Chicago Press.

Mises L. (1949). Human Action. A Treatise on Economics. Yale University Press, 1949.

Murphy K., Shleifer A., Vishny R. (1991) The Allocation of Talent: Implications for Growth Quarterly Journal of Economics Vol. 106, Issue 2  pp. 503-530 https://doi.org/10.2307/2937945.

Segal, G., Borgia, D. and Schoenfeld, J. (2005), “The motivation to become an entrepreneur”, International Journal of Entrepreneurial Behavior & Research, Vol. 11 No. 1, pp. 42-57. https://doi.org/10.1108/13552550510580834.   

Weber Max. (1905 / 1930). The Protestant ethic and the spirit of capitalism. New York: Scribner.

Yanovskiy Konstantin (M.), Zhavoronkov Sergei. (2022). Universal and compulsory: what has happened to Education and is it possible to restart the motor of Economic Growth?  (Vseobschee prinuditel’noe: chto sluchilos s obrazovaniem I mozhno li perezapustit motor ekonomicheskogo rosta?)  Voprosy Teoreticheskoy Ekonomiki  (Issues of Economic Theory, in Russian) Vol. 6 Issue 4, pp. 57-76.  https://doi.org/10.52342/2587-7666VTE_2022_4_57_76. Yanovskiy K., Zhavoronkov S., Zatcovetsky I., Cherny D. (2018). Strategya dolgosrochnogo procvetania: v poiskah rastayavshego orientira (The Strategy of Lasting Prosperity: In Search for the Lost Constellation, in Russian) Moscow: Delo, 2018. https://www.researchgate.net/publication/366977534

[1] “First, The wages of labour vary with the ease or hardship, the cleanliness or dirtiness, the honourableness or dishonourableness of the employment….  Honour makes a great part of the reward of all honourable professions. … Disgrace has the contrary effect”. See Chapter 10.

[2] See Adam Smith’s observation of young peoples’ readiness to volunteer during the war (chapter 10).

The erosion of public trust in Science since the COVID-19 pandemic is evident. This erosion reflects a natural response to heavy-handed attempts to enforce a singular and unquestionable “truth” through governmental coercion.

Restoring trust requires a straightforward yet lengthy process. The government and its experts must prioritize genuine science, a principle that was neglected in 2020-2021 when China-styled lockdowns were imposed without consideration of human losses as a result of these policies OR

pushing highly centralized solutions of “safe and efficient” vaccination as the only way to protect people from the pandemic, disregarding the choice of patients.

Additionally, governmental experts should disclose any conflicts of interest when their publicly funded research results in policy advice/decisions that allocate more funds and discretionary power to governmental agencies.

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Yanovskiy, M., & Socol, Y. (2023). The conflict of interest that is so grave that we all prefer to ignore it?. Semestre Económico, 12(2), 78–91. https://doi.org/10.26867/se.2023.v12i2.153

Abstract: Conflict of Interest declaration is the default way to mitigate the risk of harm of unconscious or deliberate promotion of self-interest causing misinformation or wrong decision-making. Public attention to the disclosure of interests caused by private sources of research funding results in a routine procedure now. At the same time, very strong interests caused by taxpayer-covered Governmental funding of research are generally badly underestimated. Researchers generally have no idea that taking public funding and promoting policy advice to provide more funds should be declared as a conflict of interest: Promotion of more funds and power under the control of bureaucratic bodies or entities is anticipated to bring more funding for the researchers themselves. For example, the COVID-19 response of most democratic governments, based on the use of emergency powers, enjoys broad support from publicly funded research – though the effectiveness of such a response is not supported by the history of previous pandemics. The explicit requirement to disclose public funding as a potential Conflict of Interest, at least in case the authors promote more power and more funds for the Government, will mitigate risks of one of the potentially dangerous biases both in research and in decision-making.

:”יש ח”כים שחתמו את המכתב לממשלה שכולל דרישת הריבונות, אז מגיע להם “ישר כח

kallner@knesset.gov.il, hmelavitzky@knesset.gov.il,)
(ahalevi@knesset.gov.il, bbismut@knesset.gov.il, danillouz@knesset.gov.il, mosaada@knesset.gov.il

.ויש רוב מהח”כים מהקואליציה וגם ח”כים מהמחנה ממלחתי שבעבר התחסדו כאנשי ימין שזקוקים בלחץ שלנו

:אז בוא נשלח להם מיילים ונדרש תמיכתהם לנצחון, זאת אומרת לריבונות

אנחנו היום יוצאים לפעולה שתוצאתה צריכה להיות בעלת השלכה אוניברסלית, שבכל העולם כולו, כל מי שזומם לעשות רעה ידע שיש דין ויש דיין ולא רק בשמיים אלא גם בארץ.

גם האויבים סביבנו, כולל חיזבאללה, מצרים, אש”פ וערבי ישראל, עוקבים אחרי המתרחש. אם לא ננצח את חמאס הפעם – אז בעיני כל העולם הערבי והמוסלמי נהיה לסמרטוט, לטרף חלש ובזוי, ואף דבר לא ימנע מהם לתקוף אותנו.

הפעם אנחנו חייבים לנצח. אך כדי לנצח ולהביס את החמאס – עלינו להבין איזו תוצאה תתקבל בתודעת אויבינו כתבוסה שלהם. מוות? הם מקדישים את מוות. כל אבידה בחיי אדם שלהם – מתקבלת אצלם כפרס. “הרס תשתיות”? חסר משמעות בעיניהם. אבל, אם אחרי הקרבות, על חורבות עזה יקום לפחות איש חמאס אחד, או אולי איש מאירגון טרור אחר, ויכריז “שהידים שלנו הביסו את ישראל, שמרנו על האדמה שלנו” – זה יתקבע בתודעה כניצחון שלהם.

אסור לנו לאפשר להם את זה.

הדבר היחיד שיכול באמת להכניע אותם טוטאלית, זה אם אנחנו ניקח מהם את השטח שהם שולטים בו היום. עם ישראל מוכן לזה. הממשלה, הצבא צריכים לשמוע לקול העם.

:מקורות – פרושים של

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ר’ אורי שרקי

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