Clemson Stadium Mocks the Fatal Conceit of South Carolina Legislators

Clemson Memorial Stadium fits 81,500 fans, but surely more on major game days. Stop and think about the number, and in thinking about it, contemplate South Carolina Governor Henry McMaster attending a game there.

Let’s imagine for fun that he’s the smartest individual in the stadium. About what’s being imagined, readers (particularly South Carolinians) would doubtless have varying views on McMaster’s genius, or lack thereof. But in assuming he’s the smartest individual in the stadium when he attends Clemson games, stop and think about his genius relative to the collective knowledge of all 81,500 people watching the Tigers alongside him.

Which is the point. While it’s possible that Gov. McMaster is more knowledgeable than every individual inside Memorial Stadium, readers can rest assured that the collective knowledge of every individual at the stadium well exceeds that of McMaster. This isn’t a political statement or a partisan statement as much as it’s a statement of the obvious.

It’s not that there aren’t experts in government, and it’s not as though there aren’t geniuses in the governments of downtrodden countries like Cuba, North Korea and Venezuela. Surely there are. The problem is that the knowledge of one or the genius of the few is nano relative to the combined knowledge of the people. There’s the brilliance of free, unfettered markets for you. It’s very simple. Markets are immense knowledge personified.

All of which brings us to South Carolina in 2024 versus South Carolina in 2004. It’s surely illuminating, and it’s a market story. Formerly sleepy cities like Charleston and Greenville are increasingly bustling, and full of traffic. A major source of the traffic is South Carolinians keeping their talents within the state, but the busy, occasionally clogged streets can similarly be explained by an influx of Americans from well outside the south.

Telling readers what they already know, South Carolina is booming. The roaring economy is plainly a function of the vital few South Carolinians who’ve stayed, but also a function of the inflow of human capital from around the country. Whatever the origin, the cluster of the talented is building on itself. Growth is a magnet for talented people who beget even more growth.

One obvious contributing factor to the prosperity is the state’s pro-business environment. The latter is surely a lure for talented individuals who drive economic growth, only for it to be reinforcing. Capital goes where it’s treated well, and human capital is the most important of all.

Which speaks to a glaring problem right now. Legislators in the Palmetto State are rushing The Farmers Protection Act (H. 5169) to passage. A blatantly politicized bill, this one has South Carolina legislators pushing financial institutions operating in the state around, all based on false perceptions of how they lend. Put another way, legislators in the state claim they’re fighting politicized lending by politicizing lending. Hopefully there’s a pause.

Specific to H. 5169, the perception is that banks in particular are restricting loans to farmers in the state based on a desire among them to avoid financing economic activity that might pollute the air. Banks and other financial institutions are being accused of allowing “clean energy targets” to shrink the flow of funds to farmers. The legislation is flawed, to say the least.

The simple truth that the legislators ignore is that capital follows returns. Always and everywhere. So long as farming activity proves remunerative to financiers, the funds will reach agricultural entities known to be good stewards of capital. About this, even if it were true that banks in South Carolina were restricting lending based on a political agenda, readers can be certain that potential returns would be a lure for financiers from outside the state.

Of course, the good news on the matter of lending to farmers or restrictions of same is that there’s no there there. Financial intermediaries, and the largest U.S. banks in particular, have long been active lenders to the agricultural sector, including within South Carolina. So while politicized lending by banks logically wouldn’t limit the flow of funds to farmers as is, evidence shows that banks are major players when it comes agricultural finance. Which indicates that as opposed to legislation meant to fix a problem, H. 5169 is a harmful solution in search of a problem.

See Gov. McMaster yet again to understand why. The crucial reality is that interest rates are the most important prices in the world precisely because they dictate where capital flows to, along with the price at which it flows and in what amount. At present, lending in South Carolina is once again being politicized by politicians over knowledge-pregnant markets, and when the very few substitute themselves for the marketplace, we all lose.

South Carolina legislators will hopefully internalize this truth. Government control from the Commanding Heights doesn’t take on laudatory qualities when those with a pro-business lean are the ones controlling. Central planning by the few quite simply won’t work in South Carolina for the same reasons it’s never worked anywhere else in the world.