Other high state interventions
This article is part of the Basic Liberalism Course -> Module 7: Distortions of the Free Market
Last updated: 2026-06-06
It is advisable to remember two important things:
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It is not only quantity, it is quality. A repeated “low-medium” intervention usually generates an interventionist dynamic that pushes towards higher levels (Mises called it the “logic of interventionism”).
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The most important qualitative leap is not between “medium” and “high”, but between any intervention that distorts prices and full socialism, where the Price Mechanism disappears and Economic Calculation becomes impossible.
Other interventions not named
Only listed
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Subsidies and transfers → Very common at medium level. Distort incentives and resource allocation.
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Regulations and licenses (barriers to entry) → Often more harmful than price controls because they prevent competition.
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Nationalizations and state-owned enterprises → Can be “medium” (some industries) or “high” (most of the economy).
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Expansionary fiscal policy (high taxes + chronic deficit) → Usually accompanied by inflation.
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Interventionism in foreign trade beyond classic protectionism (quotas, import licenses, capital controls).
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Broader labor interventionism (unions with legal privileges, very high severance pay, etc.).
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Progressive and distortive taxes: A State may not control prices by decree, but if it takes 50% or 60% of your profits through taxes, it is intervening massively in the allocation of resources, deciding for itself how the money is spent instead of leaving it in the hands of the creator of wealth.
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The Welfare State: Direct subsidies, nationalization of health, education, etc. This fits perfectly into the category of medium-high intervention.
This article is part of the Basic Liberalism Course -> Module 7: Distortions of the Free Market
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Last updated: 2026-06-06
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