Recently I had the privilege of traveling to the great state of Utah to attend a conference hosted by the Koch Institute and the Liberty Fund. The topic was liberty and spontaneous order in society, an examination of what it takes for economies and societies to thrive.
The conference, a proliferation of the free market principles of Hayek, Smith, Locke etc, led me to reflect upon the state of economic liberty in Connecticut.
To get to this conference I traversed the country leaving the forty fifth best state to do business in and landing in the fifth, according to CNBC’s latest study. Driving through Utah one sees a plurality of commercial and residential development, a welcomed sight compared to the abandoned factories and closed strip malls regularly found in Connecticut. However the scenery is not the only reason for Utah’s recent ascension, a combination of business friendliness (#4) and low living costs (#11) have made the state a heavy hitter when it comes to attracting businesses.
Recently Utah has attracted the relocation and expansion efforts of many companies including EA Sports, Oracle, Twitter, E-bay, and Goldman & Sachs. The attraction comes not from the corporate cronyism us Nutmeggers are used to, but from a fair business climate, low tax burden (#10) and a competitive grant program. In this year’s edition of Rich State Poor State, a comparative study produced by the American Legislative Exchange Council, Utah was ranked number one in terms of economic outlook.
Compare this to the state of things in Connecticut, a big government big labor haven, where the cost of doing business (#43), tax burden (#50) and cost of living (#48) have led to a business development program-first 5- that bribes companies about to throw in the towel and leave with low interest loans and grants. The same Rich State Poor State study ranks Connecticut forty third in economic outlook.
Governor Malloy’s First Five program was supposed to be Connecticut’s attempt at attracting businesses. Instead of attracting new business the program, now followed by next five, essentially ended up begging companies which the Governor deemed too big to leave into staying in Connecticut.
Hundreds of Millions of dollars in taxpayer grants and low interest loans were exchanged with companies such as ESPN, CIGNA and others who already called the state home for a vague promise of future job creation. So vague in fact that a Raising Hale investigation into the model used by the state to predict job generation in the CIGNA deal was not at all accurate. A fact the state attempted to cover up.
The great economist Frederick Hayek once said “We can never produce a crystal or complex organic compound by placing the atoms in such a position that they will form the lattice of a crystal based on benzol rings which make up and organic compound. But we can create the conditions in which they will arrange themselves in such a manner.”
Hayek’s analogy attempts to point out the difference between an economic order which is spontaneous or “grown”, to one which is manufactured by some overseer or “made.” When put pro forma onto our contemporary economic situation this analogy describes the differences between Utah and Connecticut.
One the one hand we have a state which has through low taxes, fair regulations and right to work legislation, arranged the conditions for business development and economic prosperity. These conditions allow the Utah market economy to dictate its own needs and weed out any so called losers naturally.
On the other hand we see a tax burdened, overregulated, entitlement soaked state where the Governor acts as the ultimate market overseer, picking winners and losers that he and other appointed overseers deem worthy. The market economy is so diluted with hand out recipients, union monopolies and quasi-public agencies that it is hard for its compass to point true north.
The differences in the “grown” and “made” orders can ultimately show us the differences in the amount of liberty that exists for individuals within each society. In the former individuals are free to make decisions and enter into associations with whomever they please in order to pursue their objectives independent of any overseer. In the “made” society there exists a hierarchal structure in which a supreme authority commands individuals on how to act in order to accomplish ends that he deems necessary. Adam Smith summarizes this contrast thusly:
“The man of system…seems to imagine that he can arrange the different members of a great society with as much ease as the hand that arranges pieces on a chess board. He does not consider that pieces have no other principle motion besides that which the hand impresses upon them. However in the great chessboard of human society every single piece has a principle motion of its own.”
Granted, the situation in Connecticut is not as absolute as one in a completely “made” society, but on which side of the scale between “grown” and “made” societies do we seem to fall? The fact that we are not a right to work state alone means that individuals may be coerced into entering into unwanted associations. The crony capitalistic, union jackbooted policies of this state have certainly failed in comparison to the free market policies of other states. Something to keep in mind as the 2014 election cycle approaches.
Andrew is a political science major at CCSU and a veteran of the United States Marine Corps. Check out his blog Conserve Our Country