A common argument I see in favor of the cruel free-market brand of libertarianism; and against social democracy; is that people should be able to do what they want, without government interference. I sympathize with this argument, since I'm also a person who wants to do what he wants.

The problem, though, is that macro-economically, people are absolutely no good at long-term planning. And it's not even always their fault, since some changes are hard to predict.

Consider the case of coal mining. You can substitute this with any industry that was once prosperous, and has entered a decline. Eastern Kentucky is a place where miners were once prosperous, and drew substantial income. Now the coal mines are in decline; there are no more good jobs to be found; the area has become poor, increasingly full of people with no money and no options; while people in the rest of the state are upset by the increasing costs of social transfers to this area.

The same story repeats itself time and again, from the erstwhile centers of Western steel industry, to the current decline in coal mining. As Shrub74 put it: "This is kind of what my town in Australia is like. Once super prosperous from mining, then mines closed down causing a local downturn, and now everybody does meth."

This happens because masses of people can't plan. If ordinary people could predict the decline of their industry, young people would stop entering the industry before it falls; those with existing careers would have a cushion to fall back on; and have plans for alternate careers, and alternate places to move to.

This doesn't happen. People don't even plan for the future when the future is already here. Take China for instance. Even after the one-child policy had already been in existence for decades, people were still disproportionately aborting girls. As late as 2004, the gender ratio in rural parts of China was as bad as 140 boys per 100 girls. It's not just that people do not adapt when there's a lack of information about the future. They continue to not adapt when the information is already here. It has to actively smack them upside their heads for them to realize that, well gee: maybe aborting that girl; and having a son who now can't find a wife; wasn't so genius after all.

Masses of people will never insure themselves appropriately against large-scale, macro-economic changes. The solution, of course, is not to keep people indefinitely on welfare after the industry in their town has collapsed. However, politics must take into account that people will not, cannot adapt in advance, and of their own accord, to coming changes. Or even after. Programs have to be in place to provide incentives to people, on an individual scale, so as to cause masses to change behavior in ways that avoid disaster.

Or, you can do nothing and then be left with towns without future and full of meth and krokodil addicts.