I was watching a panel discussion on C-SPAN awhile ago, in which a person declared that the Democracy movement needs to join forces with the anti-corporate, anti-capitalist, and anti-globalization movements. If that isn’t a loaded proposition, I don’t know what is.
First of all, we’ve already considered what Democracy is, be it representative or popular. Those in the citizenry who think that they can get government to perform their particular version of aggression on the rest of society ought to consider what that means morally. Basically, it entails using force rather than persuasion, force that’s funded by further force, reflecting the preposterous claim that a popular majority or plurality can influence politicians to do something good via immoral means. Such a process is not rational, moral, or just.
Naturally, many Americans are frustrated with governmental intrusiveness, waste, corruption, and ineptitude. Rarely do most people wholeheartedly endorse the particular policy direction of government during any given election term. Yet, few ever challenge the immoral means of government. Instead, like the person on C-SPAN, they challenge the right of people to be productive and freely trade, that is, capitalism and globalization. They’d rather use the tools of government to structure commerce as they see fit, not as the actual participants in trade see fit.
Close inspection reveals that the various Democracy movements, which advocate “taking back” their governments, are simply dissatisfied people wanting to impose their values on the rest of society (and the world). Seldom do they speak of liberty in the rational sense of being individually free in the marketplace to make your own choices with your own property. Instead, they speak of corporate greed and corporate injustices, and then they run to the State in search of remedies.
Corporations: The Semi-Good, The Bad, And The Ugly
Let’s delve into the nature of corporations a bit, starting with their semi-good aspects. True to form, the current anti-corporate ideology reflexively makes Wal-Mart one of its main targets. Some think that the largest retailer in the world is too big and should be restrained through more regulations; there was actually a show on CNBC in 2005 about this. Wal-Mart is the largest retailer primarily because people who seek affordable goods favor its particular assortment of products and prices. Otherwise, it would be just another Kmart. Basically, people working at Wal-Mart engage in voluntary trade with their customers, trading value for value.
But what about, for instance, Wal-Mart’s “exploitation” of cheap labor in China, or the advantages it obtains from the lack of workers’ rights and pollution regulations there? This question obviously overlooks the pervasive state of poverty in rural China, which tends to make working in a factory in the city more appealing. Most people on the other side of the planet don’t like being dirt poor and living hand to mouth either.
Of course the Chinese government remains guilty as charged. It’s tyrannical system keeps hundreds of millions of Chinese impoverished. And some of its rights-violations and aggressions against free speech, free press, and property in general are on a par with the worst totalitarian regimes throughout history. However, this isn’t exactly Wal-Mart’s fault or responsibility.
Wal-Mart’s executives simply use the economic disequilibriums that currently exist throughout the world to their advantage. Chinese labor and manufacturing costs are much lower than in the U.S. If Wal-Mart didn’t capitalize on this situation, its competition surely would continue to. Further, the more capital investment in manufacturers that Wal-Mart extends oversees, the faster those companies can become part of the developed world. Over time, costs should seek equilibrium. More economic wealth tends to enable more freedom, and vice versa. Eventually, more efficient and effective technologies for dealing with waste and pollution in China will arise. The Chinese State may or may not hinder their implementation.
Regarding Wal-Mart contributing to “trade imbalances” and “outsourcing,” those who believe that they should keep their particular jobs despite market pressures and market changes will be perpetually dissatisfied. Their calls for all sorts of regulations, as well as union pressures for Wal-Mart to alter its employee relations, seek to make Wal-Mart less productive, less competitive, less satisfying, and more costly to its customers. Regulations interfere with more productive business methods, essentially market processes that seek higher and higher levels of productivity. From a moral standpoint, of course, regulations also violate individual rights and property rights. We also need to keep in mind that the money people save by shopping at Wal-Mart is used in all sorts of other ways that benefit individuals, the economy, as well as other industries.
But that’s mostly the economic side of the business of international trade, not of the corporate structure itself. As usual, the political side is much less savory. If only the anti-corporationists, anti-capitalists, and anti-globalizationists would make this necessary distinction. Perhaps the most difficult thing for all of us who grew up in statist economies to recognize is the difference between a free market and an unfree one. A free market, that is, capitalism, is thought to exist presently, and it’s typically blamed for all sorts of economic troubles. Much of statist indoctrination, so-called public education, consists of informing students about the market’s various failures and how government’s job is to step in and fix things or make things right.
Similar to the time of Marx and Engels, business and trade aren’t taking place in a free market world. Unfettered capitalism is so far from present that proponents of today’s marketplace often do more harm than good to the cause of liberty. Businesses everywhere are tangled in a seemingly unending web of governmental interventions.
However, corporations more resemble the web-spinners’ helpers than their hapless victims. The corporate structure is actually a “legal fiction” created by laws and molded by successively more ridiculous court rulings, and then maintained by governmental officials and their cronies on Wall Street and elsewhere. Corporations exist legally for various purposes that have changed since their inception. Originally, they were granted by state governments to do “good works” for the “general welfare” of the state (definitely a deal with the devil). Big companies become corporations today typically to lower overall business owners’ liability and acquire more capital at lower risk and cheaper rates of interest.
Corporations are treated as individuals in and of themselves (“corporate personhood”) with rights granted to them by government, and with an existence apart from the original private company’s owners. Most of today’s major corporations have quite intimate relationships with law makers and regulators. Thus, they’ve become extensions of the statist system, which enables them to use governmental force to gain competitive advantages over others in the marketplace, or to simply shut out competition entirely (as is the case with various local utility monopolies).
So-called free trade agreements between rulers of States reflect the major influences of multinational and transnational corporations. Many corporations tend to be notorious for shirking responsibility and externalizing various costs to governments, which of course externalize those costs to the people. Corporations also foster separation of ownership from management (and ownership from labor), which doesn’t bode well for personal and professional accountability either. Corporate ownership by still other corporations as well as stock ownership by mutual funds and pension funds, that is, by investment corporations, are also invariably State-facilitated arrangements. Such is the bad and the ugly of corporations.
Of course, limited liability is especially appealing in today’s corrupt and unjust justice system. Yet few businesspersons realize that to submit to the State through the corporate structure is to slap Lady Liberty in the face. Even though various liability/insurance policies can be set up by businesses, these should not make investors immune from, for example, the consequences of bad debt or defaults, or irresponsible and immoral management. The best check on these consequences resides in heeding the inherent free market risks in doing business and making investment decisions.
Moreover, can you think of a good reason (other than financial, of course—and there’s the political rub) for a competitive company to formulate such cumbersome things as articles of incorporation, bylaws, and a board of directors, as well as ridiculously burdensome accounting procedures? These are essentially governmental hoops to jump through in order to attain a specific tax and regulatory status. Anyone with good business sense understands that these devices can severely misdirect one’s energy and hinder managerial decisions. They can also give investors a false sense of security, encouraging them to think that government has designed it so that they’ll be protected. But regulations are no substitute for freedom to make good and bad decisions.
When the two founders of Google went public, for instance, they realized that this issue of choice would become compromised. Essentially, they wouldn’t be able to make quick, rational decisions on the fly anymore. They were going to become constrained by a committee of board members and their shareholders, and thus less streamlined and less flexible from a managerial standpoint. Contrary to corporate dogma, a managerial standpoint is one of the main considerations for business viability and, thus, satisfied customers; it’s not to maximize shareholder wealth.
We must acknowledge the fact that the State has basically won when businesses use statist mechanisms to do business. Fascism and corporate welfare then become effectively entrenched, and business is done by permission and assistance from bureaucrats, both political and corporate.
In a just legal system, this unprincipled, pragmatic behavior would definitely fade away, and reputation and responsibility would be greatly revitalized. Currency that’s grounded in, for example, the gold standard, would be readily available at market rates, determined by buyers and sellers at market-created and market-regulated—meaning consumer-regulated—financial institutions.
Certainly, agencies such as the Securities and Exchange Commission and the Federal Trade Commission represent the giant elephants in the room in today’s securities and investment banking markets. Until these beasts are slain, along with the other beasts in the room—the U.S. Treasury, Federal Reserve System, and all its assorted financial and legal instruments—we can only speculate how financial and big business markets would shape up. Currently, they are a cesspool of corruption and a labyrinth of legal complexities, devised by politicians, regulatory officials, securities lawyers, and their accomplices on Wall Street, essentially financial enterprises in the business of lobbying for governmental policies and regulations in their favor—in order to become even more filthy rich.
The general legal framework involving our print-on-State-demand fiat currency fosters, among other sordid things, an over-extension of credit and accumulation of debt. The average CEO’s multi-million dollar salary and stock options ought to make one follow the money trail in these matters. Additionally, the various exchange rates for American and foreign fiat currencies reflect what happens to monies controlled by governments.
This takes us back to the Wal-Mart phenomenon, arguably the largest business on the planet. Perhaps a major factor in people shopping at Wal-Mart for the lowest possible prices is the nature of the present economy. Big box stores in general have thrived as people have found it more cost effective to be “prosumers,” or do-it-yourselfers, rather than paying for professional services or for better customer service and higher quality products, which smaller businesses might offer.
Standard of living and real wages haven’t really increased over the last few decades, when you crunch the numbers in a fair way, and personal debt (both credit card and mortgage) has ballooned into the many trillions of dollars; a negative savings rate accompanies this unfortunate situation. So, a couple significant things are probably helping to keep the American economy from overtly tanking: advances in computer and information technologies and Wal-Mart’s enormous economies of scale, which depend heavily on the former; their finely tuned computerized inventory and cost management systems are case studies in efficiency.
Maybe in the truly free and much more prosperous economy of the future, more consumers would shift their focus away from price as the primary factor in their buying decisions, to other aspects such as impeccable quality or a sublime shopping experience. Or, more consumers may base their purchasing decisions on the reputations of each manufacturer’s employee or supplier relations (and relations with other States). However, successful companies such as Wal-Mart, absent their corporate structure, might likely respond to these shifts in consumer preferences. The free market always encourages businesses to become as efficient as possible, which entails implementing the technologies to do so.
Well, that’s the mixed bag of corporations. Rather than clamor for more regulations on them (in the name of social responsibility, community interests, and environmentalism) activists should seek the discontinuance of State-created corporate structures entirely. Those who malign corporations must first challenge the institution of the State and its practices that have spawned them. After all, we can always decide not to do business with various corporations, and they won’t come to our doors demanding unearned money. The same can’t be said of the State.
Let’s explore the nature of regulation further. Although, at this point, you might want to put on some rubber gloves and firmly affix a gas mask.
The Sand And Molasses Of Statism: Regulation And Preventive Law
Ah, the alphabet soup of regulatory agencies: The IRS, FDA, EPA, USDA, DEA, FBI, DHS, NSA, CIA, FBATF, ICE, SEC, FTC, OSHA, TSA, NHTSA, DOT, FEMA, etc.—ad naseum. If only we could keep them stored in a glass jar somewhere, as a showcase of not-so-well-intentioned iniquity. Then again, maybe such a jar just belongs in the trash can.
A simple Web search for statist regulatory bodies will reveal the entire list of ingredients in the alphabet soup. It’s a concoction potent enough to make your eyes water and head ache, filled with countless departments, committees, boards, commissions, bureaus, services, administrations, authorities, corporations, institutes, offices, and agencies. Sorry, no Ginsu knife set is offered with this mess of goods. But wait, there is indeed more, because this is only a quick mention of what’s on the federal level. We shouldn’t forget the state, county, city, and town organizations in all their busybody forms and fashions, intent on meddling in all aspects of commerce and trade—from whom and where we can buy a gallon of milk, to how much money gets taken from us in taxes with each gallon of “boutique” blend of gasoline we pump, to what sort of media content we can see (endless murders and violence on TV, fine; naked people, typically a no-no unless they’re being murdered, of course). Trillions of dollars are spent performing these “services” for the public. The various governments of the United States devour probably half of the many trillions of dollars circulating in the American economy. And since our medium of exchange is printed by the State, it thereby demonstrates that it can do more than just regulate our monetary system. It can fully communize it!
Ronald Reagan famously noted how government views the economy: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Perhaps those in government are most aware of its methods of operation. President Reagan definitely had firsthand knowledge.
Regulation attempts to replace the judgment of property owners and free market processes with the judgment of bureaucrats. Not only is this like pouring sand and molasses into the gears of a finely tuned machine. It also leads to the creation of machines that are less efficient, less functional, nonfunctional, or that produce the opposite of what one wants—Rube Goldberg contraptions gone haywire. Many great machines never even get made, which is the end of the road of the destruction of capital by government.
Preventive law is the mainstay of regulatory bodies. After all, who could regulate if there were no laws to generate all that sand and molasses (as well as the regulatory bodies themselves)? Preventive law, that is, enacted legislation that seeks to prohibit or direct behavior of individuals in the marketplace before they do anything “wrong,” equates to deeming people perpetually guilty. “Guilty” under such a legal system has virtually nothing to do with injuring others or infringing on their rights.
Thinking of installing some plumbing or electrical work in your new home? You’re supposed to study the laws (building codes) first, and don’t forget the inspectors. Thinking of hiring a couple new workers for a project? You’re supposed to check into what the Equal Employment Opportunity Commission and the U.S. Citizenship and Immigration Services (and various others) have to say about that. Thinking of selling a new product or service? You’re supposed to investigate how many governmental agencies are in charge of that particular line of work, and the reams of forms to fill out, rules to abide by, and fees to pay. Thinking of purchasing a weapon for extra security? Well, with any luck, you’ll be able get out of that tangle of red tape alive.
Of course, once you inspect the laws in any particular area of your life, you quickly realize that you’re only looking at the foot of the legal monster that looms above you. So here’s the bottom line: If you’re thinking of doing something—anything rights-respecting—maybe it’s best not to see how many laws you’re going to break, lest your plans are foiled.
Unless you stay in bed all day, you’re likely to violate some regulation on some level during your routine activities. Essentially, under a regulatory system, aka the nanny State (no offense to real nannies), people aren’t allowed to make independent decisions. They’re instead given governmental mandates with penalties for disobedience. This is the nature of regulatory control, and it’s supposedly for the common good, once again. Hence, rather than administer justice for particular right-violations, which is the sole purpose of a legal system, regulation focuses on preventing certain courses of action that law makers and bureaucrats have declared unacceptable. Law makers and bureaucrats then rely on law enforcers to do the dirty work of aggression for them.
If those in government strictly focused on the issue of justice instead of trying to control people’s lives, they’d face a considerable downsizing of their workforce. Certainly those in a regulatory system wouldn’t want to design it to create more efficiency and higher productivity—to ease up on the influx of sand and molasses. Obviously, only those in the marketplace who rely on profits and customer satisfaction have such goals in mind.
Preventive law is an inversion of the concept of justice, because it creates myriad crimes out of nowhere, crimes that violate no one’s rights or property. This stands to reason, because government is an entity that pretends to operate outside the bounds of property rights (it being “public property”); naturally, all its regulatory edicts reflect its lack of jurisdiction in the realm of other people’s property.
Ultimately, regulation thrives in a society that either agrees with its contradictory premise that some adults must treat all other adults as non-adults, or that fears too much the consequences of non-compliance, which ultimately entails rejecting one’s status as an autonomous, self-owned adult.
The key question then is this: By what right, by what code, by what standard (to reiterate an Ayn Rand character’s words) do these organizations of people believe that what they’re doing is just and proper? One of their answers might be “By the consent of the governed.” Fortunately for the governors, most of the governed are too busy working and playing to really care about the immense rights-violations being perpetrated on their persons and property. It seems easier to conform.
As mentioned earlier, one could argue that the laws and regulations in a country are basically reflections of the ethics of the general populace. If the general populace believes that being dishonest or unreasonable is helpful in order to run a business, for example, then that belief will be reflected in how regulatory agencies operate (guilty until you prove your innocence). Even the apathy that people show towards governmental corruption reflects their view of the virtue of integrity, at least on the political level, the level where most people remain resigned in the belief that nothing can be done.
I’m not going to bore us by citing more of the sordid and voluminous details of the Washington racket and our closer-to-home rackets. Many astute libertarian and even conservative thinkers have covered that ground like a herd of angry buffalo. Not even the most virulent weed could survive such a thorough trampling. Yet, those in Washington and those who support them in the several states act as if they’re immune to such intellectual stampedes. They proceed onward, routinely smug in the thought that they’re doing the public’s duty—and that people are following their orders.
Well, all really bad things must come to an end sometime, especially if they’ve been created by humans. No better time than the present, as far as we’re concerned.
Basically, the State’s regulatory programs manifest a huge contradiction operating in our society—that people don’t have full right to use and/or dispose of their property as they see fit; instead politicians, bureaucrats, judges, police and others in institutions of “authority” are to intervene in some form or fashion in virtually every human exchange and interaction. Supposedly, we should be comforted or at least kept from rebelling by being told that this is for our own good, or that we can’t comprehend the valuable reasons for such interference. Death and taxes…right.
Moreover, governmental regulations act as smoke screens between companies and market assessments of their credibility. Because most people assume the nanny State is watching out for their interests, they fail to put company claims about products and services to the accountability test. Naturally, in a truly free market some organizations would be keen on providing such tests in an independent fashion, much like Consumer Reports and Underwriters Laboratories attempt to do today.
Without regulations, companies would have to take full responsibility for their trades; regulatory agencies couldn’t interfere with their thorough evaluation by the marketplace. Further, without the great leveling effect that regulations have on competition in the marketplace, in which every business is supposed to conform to the same rules, consumers would find many more choices regarding who they do business with. Stagnant companies that favor the status quo because of their governmentally regulated market positions would have to change, or lose customers.
Yet, we are told that the market sometimes fails, that the market is inadequate for addressing true human needs, and that some market processes are distasteful, corrupt, bad, or wrong. Again, people are “selfish and greedy.”
For Whom The Market Fails
For whom does the market fail? That’s the question overlooked in these various false accusations. Who exactly is the victim in voluntary exchanges of goods and services between and among volitional beings? Clearly not the individual decision makers in the marketplace, who obtain what they want and pay for it. Since society is composed of countless such individual interactions, it certainly can’t be society that’s harmed. And since the alternative to voluntary exchange is forcible exchange, and forcible exchange violates rights and therefore choices, it can’t possibly be a better way to “get things done” in society. Again, to accomplish things by coercing or destroying the very entity capable of making rational choices—a human being—is to contradict the human method of functioning, in favor of something witnessed on The Animal Channel during predator-and-prey night. In the realm of rights and ethics, there’s simply no room for such glaring inconsistencies. Self-ownership and its moral implications for property aren’t open for debate.
But the institutions of government, being one massive coercive redistribution scheme, dare not pursue this line of logic. That would be equivalent to saying that each individual is sovereign, would it not?
Only one correct answer exists to the question of who is harmed by the market: those who want to impose their wills on others. If one’s method of operation is to force others to do things, then banning that method is definitely going to cramp one’s style. Town, city, county, state, and D.C. officials rely on regulatory opportunities to take from taxpayers through bloated salaries, pensions and welfare benefits, cronyism, private kickbacks, etc. Regulation can also satisfy various power and control cravings or even lessen feelings of occupational unimportance, by constantly monitoring other people’s occupations.
Does anyone seriously believe that unjust power doesn’t tend to corrupt even the most well-intentioned and honest individuals? If the money you’re spending doesn’t come from your own bank account or even your company’s bank account, what incentive will you have to monitor the balance? Further, if you can print and loan yourself funny money and adjust its rates of interest (essentially, it’s time value) why care about financial responsibility?
Consider this: If the market were allowed to be free, that is, if individual choices and property were fully respected, then there would be no need for public policies, politicians, elections, bureaucrats, lobbyists, ridiculous rules and regulations, and, for that matter, 90% of the news! Obviously then, the unrefined sensibilities of those who would otherwise wield coercive power would be harmed; their “well-meaning” desires to control others would be thwarted; and, their supposedly grand plans for society would be nixed. They wouldn’t have the option to run the unjust organizations of the State anymore. Further, all the intellectuals who spend most of their waking hours analyzing, theorizing, recommending, and justifying “better” governmental policies or maintaining the status quo would be left up a specific creek without any paddles.
If only they realized that something new and brilliant awaits everyone who chooses to be productive and live by their own efforts or, under certain circumstances, by the charitable efforts of others who are free to offer help (rather than forced to offer unaccountable, indirect help through taxation). The marketplace welcomes those who take responsibility for their actions and function as independent beings—as adults—able to make good decisions for themselves. Again, a free market provides things in abundance for anyone who accepts the trader principle.
It’s no surprise that the wealthiest economies in the world are also the freest economies, or at least they’re still running on capital accumulated from past economic freedoms, such as our US of A. The poorest people in the richest countries are better off and have many more opportunities than those in less free countries. A truly free market will offer the poor and the not-so-poor a standard of living that they can only yearn for now, as well as enable them to migrate more easily to ever higher levels of income. In contrast, the more controlled an economy is, the more difficult it is to move up the income ladder.
Imagine A Free World
We really can’t overestimate how much regulations negatively affect our lives, liberty, property, and pursuit of happiness. In this day and age of computer gadgets and every (presently) conceivable technological gizmo within reach of individuals with even modest incomes, you might think it’s possible to exaggerate this point.
But my point is not that we can’t afford many of today’s conveniences. Most people can afford an assortment of devices for connectivity, productivity, and entertainment. Instead, my point is that we could afford so much more if we had a non-regulated economy and monetary system that was basically immune to inflation, devaluation, and economic recessions and depressions (the so-called business cycle). In other words, by now, our current state of knowledge and technological capabilities would be far more advanced, perhaps similar to living a few hundred years in the future! Today, for instance, many tech savvy persons desire better Internet access and Web capabilities. While ubiquitous WiFi with more bandwidth and convenient interfaces would definitely be great in so many ways, why settle for less?
Imagine quick remedies for the injuries and diseases that currently ruin people’s lives. Imagine perfect health for you and your loved ones, defying the typical aging process at the cellular level. Imagine everyone being rich (clean rich, not filthy rich) and able to afford, for instance, without incurring any debt, spacious, custom-designed, energy-efficient, self-cleaning homes. Imagine gourmet meals in the time it takes to press a few buttons, or utter a few voice commands. Imagine the time you’d save to spend on whatever really fun and challenging things that you probably have on “the back burner.”
Imagine faster, safer, more affordable and convenient travel to most places on our planet. Imagine an altered landscape of transportation with nonpolluting engines. Imagine no more traffic jams. Imagine flying cars. Imagine luxury vacations in Earth’s orbit or sightseeing on Mars, for instance, a trip to the top of the Mt. Everest-dwarfing Olympus Mons or to the abyss-like edges of Valles Marineris. Imagine a week-long astronomy class on the dark side of the moon. Imagine spectacular and thriving cities of new commerce and entertainment on (and in) the oceans.
Imagine human-simulated computer mentors that could answer nearly any question posed by learners of all ages. Imagine personalized computer “therapists” that could appropriately sense your moods and help you gently relieve stress, or amplify your happiness, through a variety of ingenious methods. Imagine being able to be immediately connected to anyone who shares similar experiences, desires, interests, talents, or goals. Imagine a much more informed, interested, harmonious, and happy society (the kind central planners can only dream of—or rather, have nightmares about). Imagine the synergistic effects of these and many other wonderful progressions and innovations. I’m sure you have your own variety of great things to add to this list. Regardless of whether or not they’re presently achievable, many brilliant advances will certainly be achievable in our lifetime, once we generate a society of complete liberty.
And even despite political changes for the better, such technological advances may be somewhat inevitable, given the human discovery process. According to proponents of extropianism and transhumanism (future and human potential philosophies), which include artificial intelligence researchers and optimistic theorists such as Ray Kurzweil, this century will actually be the one in which humanity moves past its prior scientific obstacles and engineering difficulties. Kurzweil’s vast, future-oriented technology website covering all aspects of this argument iswww.kurzweilai.net. He and many other futurists assert that a “technological singularly” will occur once computers surpass the computational abilities of our own brains, a point in time beyond which it’s anybody’s guess as to what amazing innovations will arise.
In relation to these fascinating ideas, John Smart, who’s incidentally a friend of mine in southern California, has developed the Acceleration Studies Foundation (ASF), an organization dedicated to analyzing such predictions and various future-related trends, so as to help people better understand and potentially benefit from them. www.accelerating.org and www.accelerationwatch.com are Smart’s websites, which contain a wealth of information. The members of ASF realize that people who are keen about what’s possible in their lives tend to alter the economic and social landscape for the better. Such people enthusiastically and responsibly embrace each new beneficial human achievement. In other words, they’re prepared for the future, and they’re happy about change.
By the end of this century we just might have radically new energy devices, thousand year lifespans, and virtual reality machines that simulate anything convincingly. These, of course, would be in spite of the government’s regulatory system, not because of it. Moreover, to think about all the persons who are currently suffering and dying—as a direct or indirect result of our politically created conditions—makes this insight even more poignant. We simply don’t have centuries or even decades to deal with the extremely important political problems that face us.
Technology basically empowers you to pursue a better, healthier, more productive, and more fun life. Regulation retards this empowerment. Retardation is the name of the government’s game, coupled with destruction of possibilities and thwarting of individual choices. The various dystopian worlds we tend to see in science fiction movies are usually the result of some combination of futuristic technologies and modern day regulatory thuggery. This is obviously a very bad mixture. To leave power in the hands of those who are unaccountable is to invite an Orwellian police State into our lives. A nanny State is deplorable in itself, but a police State with advanced technologies to monitor and control Americans is absolutely intolerable, especially for those who understand individual rights and seek a better future for everyone.
Effects Of Government On Producers And Consumers
As a result of fearing the worst about government’s potential dissolution, some might feel inclined to run to its rescue. Some are quick to overlook the unavoidable political contradictions of statism by listing all the services that government offers its “customers.” Okay, so let’s examine the idea of customers a bit more. We should first reflect on the fact that whatever the government does that’s considered useful, the market can do it better, at a fraction of the cost. With government, there’s no profit motive; consequently, there’s no proper allocation of resources and management of costs.
Whether or not we’re consumers of governmental services, the control of our property through taxation and regulation hurts each and every consumer of any product or service. It also hurts the homeless, because they typically live on the no-man’s land of public property, which is entangled by a welfare bureaucracy that encourages self-disempowerment and dependency. Consumers represent all who participate in a market economy, spanning all levels of income.
Certainly, producers are the prime movers of any civilization. Inventors, designers, researchers, engineers, entrepreneurs, industrialists, as well as all those who directly and indirectly assist them, contribute to enormous increases in productivity and innovation, regardless of a civilization’s stage of development. They create an economy whereby more work can be done more quickly with less labor and resources and capital investment, thereby creating more money for reinvestment and thus more capital for creating still other goods and services. Capitalism, after all, is the economic system of free trade that generates more and better items for the production process—more capital that facilitates more products and services in the market. A great deal of time is saved in this process, time that can then be spent on many other activities.
Advances in productivity are really something to behold. A glance at our world’s population statistics and mortality rates over the last few centuries reveals the power of capitalism—or rather, semi-capitalism. As we’ve noted, we also see the effects of a free market most readily in the technology sectors, particularly computers and information systems, as well as the biotech fields that make use of them. The Internet and all the industries involving information technology contribute to massive productivity effects. One might even contend that they provide a counteracting buoyancy to the giant lead weight of government around our economy’s neck; without them, we might not be able to keep our heads above the waters of economic ruin.
Each producer, from a graphic designer to a peanut farmer, is also a consumer. Aside from basic economic laws such as supply and demand, the prices and available variety of what we can consume are determined by two things in our present society: what government has done to our money, and what government has done to impede, redirect, or stop the flow of information, goods, and services in the marketplace.
The State can only be a negative on the economy—which means that it can only be a negative on our individual lives. It doesn’t matter if we’re picking produce in southern California or composing a symphony in Michigan. The potential for profit, saving, and investment is greatly diminished in an economy that’s prevented or diverted from what it would otherwise do—freely trade.
But many still don’t believe this. Given that the vast majority of us attended State-run schools, it’s not very surprising. Some act as if there were a viable alternative to private property and voluntary exchange, as if there were some middle-of-the-road approach that doesn’t cause us too much trouble. Invariably, they want to be able to use the State’s tools of force—which, again, translate into guns pointed at resistant people and jail for the nonconformists at some point—in order to create their version of a so-called fair and level playing field. Those who want to impose economic “fairness” through politics usually don’t care how they achieve it or what this idea really means. It certainly doesn’t mean using rational tools of persuasion and example.
Schemes Of Villainy
Some people don’t see the benefit of trading in a free and voluntary market. Probably while the ink was still drying on the final draft of the Constitution, unscrupulous individuals brought their particular “interests” to government to gain advantages. Here’s an apt quote by the eloquent 19th century legal scholar Lysander Spooner, writing to then President Grover Cleveland (the 22nd and 24th president). It should give us an idea of how far we haven’t progressed politically:
[Competing interests]…will be “persistently” clamoring for laws to be made in their favor; that, in fact, “the halls of national legislation” are to be mere arenas, into which the government actually invites the advocates and representatives of all the selfish schemes of avarice and ambition that unprincipled men can devise; that these schemes will there be free to “compete” with each other in their corrupt offers for government favor and support; and that it is to be the proper and ordinary business of the lawmakers to listen to all these schemes; to adopt some of them, and sustain them with all the money and power of the government; and to “postpone,” “abandon,” oppose, and defeat all others; it being well known, all the while, that the lawmakers will, individually, favor, or oppose, these various schemes, according to their own irresponsible will, pleasure, and discretion,— that is, according as they can better serve their own personal interests and ambitions by doing the one or the other.
Was a more thorough scheme of national villainy ever invented?
Sir, do you not know that in this conflict, between these “various, diverse, and competing interests,” all ideas of individual “rights”—all ideas of “equal and exact justice to all men”—will be cast to the winds; that the boldest, the strongest, the most fraudulent, the most rapacious, and the most corrupt, men will have control of the government, and make it a mere instrument for plundering the great body of the people?
A better way of describing the situation can’t be found. Spooner was a fierce opponent of injustice, and there was plenty of it in America throughout the 1800’s. In many respects it’s gotten much, much worse.
Between the years 2000 and 2005, the number of registered lobbyists in D.C. doubled, to over thirty-four thousand. Have you ever heard of K Street? It’s the place where lobbyists (many formerly “connected” bureaucrats and politicians) hang out to feed at the State’s trough and peddle their influence.
The billions spent on lobbying and the money that politicians pocket is disturbing to say the least. Most contend it’s the cost of doing business with the State. As the well-worn phrase notes, politics is definitely war by other means. The absolute power granted to the institutions of government through taxation and monopolization becomes alluring to those who dispense with free market principles and decide to make immoral deals instead. Politics in midstream becomes a way of life.
The greatest disaster is the effect all this has on capitalism’s producers and consumers. Many businesses and groups lobby to pass legislation in their favor, to grant subsidies, or to prevent competition. Big businesses, especially corporations, have a long track record on this account. Very few have ever lobbied for more competition, that is, a freer marketplace. Once again we would be wise to follow the corrupt money trails here. Usually, the well-established corporations seek to maximize their market share by way of all-expense-paid vacations and other perks for bureaucrats and legislators, as well as specially devised last minute insertions of pork—rather than through voluntary association with potential customers. After all, if government is the biggest bully on the block, and it makes all the rules, then you either join it by buying it, or beat it by defying it.
Few ever entertain the latter possibility, of taking a moral stance on behalf of reason, liberty, and the ideas of self-ownership, personal sovereignty, and property rights. Even the companies who solely lobby to remain competitive, for example, by getting their tax burdens and regulations reduced, soon find themselves in a sick world of compromise, corruption, lying, and pleading—as if they never had a right to exist for their own sake.
To make money is definitely not worth the sale of one’s soul; a lucrative deal is not worth the forfeiture of one’s mind and moral life. Imagine if those in business (and business schools) decided not to concede the statist premise anymore. How long do you think the corrupt system would last then? Not very long. Or, what if consumers fought for their inherent right to engage in trade and commerce unimpeded by the State’s instruments of force? Would this not expose the con game of various special interests that use government to regulate under the guise of promoting such things as “public safety” or “consumer protection” or “a level playing field”? It assuredly would.
This is a really old racket that goes back to the guild system (a topic of the next chapter), which excluded cheaper and better competitors’ goods and services from the market. The same phenomenon can be found with the opponents of “globalization,” or free international trade. Similar to those in developed countries, local producers in most developing countries organize and lobby for laws to prevent competition from entering and offering more appealing products and services at better prices. Political corruption runs rampant, and a toxic combination of a Fascist and Socialist police State perpetuates itself. This creates entrenched class or caste societies with little outside investment and choices in the marketplace. “Poverty, filth, and wretched contentment” (to borrow from Nietzsche) become the norms. Panhandlers and peddlers of all wares who live at merely subsistence levels become commonplace; entire economies stagnate in a depressing status quo.
Incidentally, this is the main reason why “The American Dream” remains unattainable for most people throughout the world, regardless of how plentiful their natural resources are. In statist guild systems, outright political and business corruption, constant bribery, strong arm police tactics, and kangaroo courts reign. Instead of going from rags to riches, nearly everyone’s rags get dirtier and more torn. Rather than being able to produce, save, invest, and consume, most are relegated to barely surviving, left bowing in homage to their present day feudal lords.
So, all of us are unfortunate consumers of politics, and the vast majority of us on the planet get the really raw end of the deal. Although the rawness tends to be especially noticeable in poorer and developing countries, the developed world reinforces their bad ideas and behaviors.
Politicians love to talk about the ills of special interests, attempting to assure a dissatisfied public that they themselves aren’t part of the problem. It’s such an unpleasant aspect of politics that Ross Perot was really able to tap into Americans’ frustration about it (as well as the debt and deficit) during his first run for the presidency. He might have actually won the 1992 election if he hadn’t stepped out of the race for a few months prior to that November Tuesday. Perot based his campaign on a promise to get rid of lobbyists in “thousand-dollar suits and alligator shoes” walking the halls of Congress, as well as on a pledge to deal with the immense federal debt piling up. He wanted to run the Executive branch like a business, for he himself was a successful billionaire. Needless to say, this resonated with the American public. Heck, I even voted for the guy, back in my naive days, of course, a year before reading Atlas Shrugged.
Upon reflection, however, Perot’s rhetoric exposed one of the biggest fallacies about government. Even if you have the most consistent political principles (and Perot certainly didn’t, for instance being for various taxes and regulations and againstaspects of global trade) there’s a fundamental difference between the way a business works and the way government works: Businesses seek profits and rely on good reputation, whereas government forcibly takes money from its “customers” and depends on its coercive monopoly status to stay in “business.” Not even the most erudite business owner can manage such an immoral organization properly.
The only proper thing to do is to devise a plan to close up the whole coercive shop and ask one’s workers to find productive work—in a marketplace now yielding plentiful opportunities for creative projects as diverse as one’s interests, passions, talents, skills and abilities. Only then will both producers and consumers be free to gain and keep values as they see fit, according to their own needs and interests.