Man, Economy, and State with Power and Market

Intervention is the intrusion of aggressive physical force into society; it means the substitution of coercion for voluntary actions. It must be remembered that, praxeologically, it makes no difference what individual or group wields this force; the economic nature and consequences of the action remain the same.

Empirically, the vast bulk of interventions are performed by States, since the State is the only organization in society legally equipped to use violence and since it is the only agency that legally derives its revenue from a compulsory levy. It will therefore be convenient to confine our treatment to government intervention—bearing in mind, however, that private individuals may illegally use force, or that government may, openly or covertly, permit favored private groups to employ violence against the persons or property of others.

What types of intervention can an individual or group commit? Little or nothing has so far been done to construct a systematic typology of intervention, and economists have simply discussed such seemingly disparate actions as price control, licensing, inflation, etc. We can, however, classify interventions into three broad categories. In the first place, the intervener, or “invader,” or “aggressor”—the individual or group that initiates violent intervention—may command an individual subject to do or not do certain things, when these actions directly involve the individual’s person or property alone. In short, the intervener may restrict the subject’s use of his property, where exchange with someone else is not involved. This may be called an autistic intervention, where the specific order or command involves only the subject himself. Secondly, the intervener may compel an exchange between the individual subject and himself or coerce a “gift” from the subject. We may call this a binary intervention, since a hegemonic relation is here established between two people: the intervener and the subject. Thirdly, the invader may either compel or prohibit an exchange between a pair of subjects (exchanges always take place between two people). In this case, we have a triangular intervention, where a hegemonic relation is created between the invader and a pair of actual or potential exchangers. All these interventions are examples of the hegemonic relation (see chapter 2 above)—the relation of command and obedience—in contrast to the contractual, free-market relation of voluntary mutual benefit.

Autistic intervention occurs, therefore, when the intervener coerces a subject without receiving any good or service in return. Simple homicide is an example; another would be the compulsory enforcement or prohibition of a salute, speech, or religious observance. Even if the intervener is the State, issuing an edict to all members of society, the edict in itself is still autistic, since the lines of force radiate, so to speak, from the State to each individual alone. Binary intervention, where the intervener forces the subject to make an exchange or gift to the former, is exemplified in taxation, conscription, and compulsory jury service. Slavery is another example of binary, coerced exchange between master and slave.

Examples of triangular intervention, where the intervener compels or prohibits exchanges between sets of two other individuals, are price control and licensing. Under price control, the State prohibits any pair of individuals from making an exchange below or above a certain fixed rate; licensing prohibits certain people from making specified exchanges with others. Curiously enough, writers on political economy have recognized only cases in the third category as being “intervention.” It is understandable that economists have overlooked autistic intervention, for, in truth, economics can say little about events that lie outside the monetary exchange nexus. There is far less excuse for the neglect of binary intervention.