In the comments of my last post, commenter Russell Garrard wrote the following:
The Bush-haters will tell us that the supreme head of our government and his minions are supremely sinister and fiendish liars (albeit also moronic bumpkins). Then they turn around and tell us that only government can be trusted to vet what we put in our mouths and bodies. I don’t get it….
The larger argument that Russell is making (and we continued the back and forth in the comments over it) is that the government shouldn’t be trusted to do anything because free market forces will invariably do it better. I’m amazed at how often I hear this considering how much evidence there is that it’s not true in a number of circumstances (see: Larry Kudlow looking ridiculous on his own show when defending free market health care against Ezra Klein). The logic behind it is that companies will be so afraid of the financial ramifications of doing things against the public interest (secretly having bad things in their products or implementing cruel labor practices) that it’s pointless to have any kind of oversight by the government. This ignores a massive amount of history and common sense. Companies pursue profits and there have been many situations where that pursuit of profit has run counter to the general welfare of the citizens.
One of the more common ways in which this has happened is when it comes to addictive substances. From the tonics of the 19th century that secretly contained morphine to the cigarette industry of the 20th, companies have often put their pursuit of profit before the public good. These industries weren’t reformed because the corporations stopped seeing the profit potential of their actions, they were reformed because the government established rules (in the case of morphine, laws were created in the late 1800s that forced manufacturers to identify the ingredients of their tonics, causing many of them to immediately go out of business rather than admit their product contained morphine). Not all of the rules that our government has made over the years are perfect – in fact, some have been terrible – but a society is strongest when it allows for free enterprise, but also ensures that government can act as a corrective mechanism that can establish rules and safety nets for a system that, by design, ends up with winners and losers and a growing gap between the haves and have-nots.
Part of the myth that government is useless and unnecessary is rooted in a belief that any time government spends money, it’s an inefficiency. If there were a real need to spend that money, some say (and please feel free to read through this Sound Politics post and the comments if you think I’m just inventing a ridiculous strawman) that it’s only worthwhile to do if an actual person or company sees a profit potential. In this mindset, no roads, schools, or scientific research should ever be funded unless a company saw profit potential in that investment. Otherwise, it’s a waste. I never imagined that I would encounter so many people believing in such oversimplifications, yet I manage to come across it all the time when looking for things on our local right-wing blogs to make fun of. For all of these people, the moon landing must be the greatest boondoggle of all time, especially since some people still aren’t convinced we really went there.
Like the moon landing, there are valuable things that government can do that don’t provide the kind of immediate direct profit potential that a corporation would be interested in. From building transit to improving park space, there are various things that would give a return on investment for an entire community or even the entire country, but wouldn’t make sense for a corporate bottom line. As a capitalist system grows and matures, I believe that it can eventually allow for more and more of these things to be done by private entities (and this often puts me at odds with many liberals), but a belief that there’s some truism that a corporate entity is always the superior option distorts the proper balance we need to have between having the things we need provided for us by those motivated by money and those motivated by the ballot box.
Going back to the Sound Politics post I linked to, the Edmonds School District administration building obtained an espresso machine. The price tag ($10,000) alarmed the Sound Politics peanut gallery and many wailed about how wasteful government spending has become. The only problem is that the espresso machine was bought so that faculty could purchase their morning brews for less money inside the administration building and the proceeds would go towards the district’s general fund and toward school lunches. The machine was expected to pay for itself in less than two years. If that’s true, and there’s no reason to believe it wasn’t, it was an intelligent use of school budget funds and government doing something smart.
But that’s not how it works among the faith-based capitalism crowd. Whenever government spends money, it’s an inherent inefficiency to them. To demonstrate how this can lead to pure silliness, let’s say there are two cities that each have a park that needs to be refurbished. The first city finds a coalition of business owners and private citizens who pony up the $50,000 for the refurbishing. The second city uses public funds. There’s an argument to be made that the second city is not wisely spending taxpayer money, just as it’s possible that the business owners in the first city might not get what they think they may get back from their investment (good publicity). But what I don’t agree with is the idea that the actual job of refurbishing the park will be done more or less efficiently depending upon which avenue is chosen. The idea that those being paid by a for-profit entity will work harder than those being paid the same rate by a government entity has no basis in any reality that I’m familiar with, yet it’s an article of faith for so many. The issue of accountability usually appears in that theory as well, but anyone who’s ever worked in the private sector can tell you that massive inefficiencies and beaurocracies exist in for-profit entities as well.
Leave it to our friend Stefan to take this idea and go careering over the hills with it.
Last weekend I asked readers to suggest a word to represent the opposite of “Statism”. Thanks to all who participated in the ensuing discussion. Among the best suggestions: classical liberalism, small-l libertarianism, objectivism, Americanism, capitalism. My personal favorite, suggested by Eric Earling, “civic entrepreneurialism”. That best captures the spirit of what I was looking for — civic engagement based on private enterprise, as opposed to state coercion. But I’d still prefer a single snazzy word to represent the concept.
Incidentally, the concept of private initiative in lieu of state coercion is, IMHO, the preferred alternative not only where it is traditionally proposed (e.g. education, social services), but also for traditionally social conservative issues. Take, for example, abortion. This merits a longer post, but if the goal is to reduce the number of abortions, wouldn’t it be more effective for private organizations to deliver positive messages to change people’s minds about the issue, than to expect government intervention to solve the problem?
After I read this post, I sat back in my chair, stroked my goatee, looked up at the ceiling, read it again, thought about driving down the coast this summer, paced around the room a few times, read it a third time, rubbed my temples for a minute and then just turned the computer off. After a few days, I think I’ve got it.
Going back to the example with the parks, Stefan has actually convinced himself that not only can private enterprise refurbish the park more efficiently than government can for that $50,000, but it can do a number of things that government is completely incapable of doing as well.
It’s true that there are a number of things that government can’t do. Following drug policy, I’m well aware of what the limits of government are. Whether it was alcohol prohibition of the 20s or the current drug prohibition, people in our government have been trying to do the impossible. It just can’t deter people from exhibiting irrational behavior, and drug addictions are irrational behaviors. If those irrational behaviors have been shown to be detrimental to others, we obviously demand the government deal with that person, but putting them in jail doesn’t “fix” their irrational behavior – even when the sentence they are given is justified. This is why government-run drug treatment programs have been shown to be very cost effective from a taxpayer standpoint.
But this is very different from establishing rules or openly participating in a marketplace, where people overwhelmingly display more rational behaviors. People may not always make the smartest decisions when it comes to their own finances or running a large corporation, but they tend to have a rational basis for their decisions. As a result, government can be much more effective at using prison or financial penalty as a deterrent and to get people to play by the rules. There will always be a small subset of people who will act irrationally out of greed, and just as those whose drug addictions cause them to violate the freedom of others, they should still be sent to jail (or fined), even it doesn’t deter their irrational behavior without counseling or other psychological help.
For Stefan, and the Sound Politics nut squad, government can’t do anything at all, and beyond that, who knows what things they’ve tried and failed at that the free market can do! People are still having abortions? Hell, we haven’t unleashed the grand power of capitalism at that scourge. A few Wal-Mart funded PSA’s and the abortions just disappear. Haven’t solved drug addiction? Give Bank of America the keys. Can’t defeat terrorism? Try Blackwater (oh wait, we already did that).
Even though government has no ability to make people act responsibly if their motivations are irrational, it does have the ability to be responsible in dealing with those who are acting rationally. In other words, government is mainly useless in changing behaviors done in the pursuit of pleasure, since those behaviors tend to be impulsive or irrational, but it can be useful in dealing with those done in pursuit of profit. The pursuit of profit is a major motivator in life, but it’s not the only one, and government can utilitize other motivators like patriotism, compassion, and scientific curiosity to accomplish things as well. It’s just imperative that we hold the people we put in government accountable for what they’re doing.