As we are all now aware, the $700-billion bailout has become the law of the land. A lot of people are, understandably, upset about this and are pointing out the flaws of this legislation: that it is, ultimately, unfunded; that it rewards failure and penalizes success; and that it represents an increase in government's control over the economy unseen since the Great Depression.
All valid arguments, of course - and totally irrelevant: Such critiques miss the crucial point completely.
The root issue, our political "leaders" tell us, is corporate greed and corruption. Most of us on "Main Street" have swallowed that line as well. The reality is that nothing could be further from the truth.
In order to understand the essential problem underlying America's economic crisis, however, it is first necessary to draw an extremely important (and, today, largely evaded) distinction between political and economic power.
Political power is the ability to wield force: to ban, to legislate, to impel. It is the power to coerce at the point of a gun. Economic power is the ability to produce goods and services: to build hotels, to write new software code, to sell automobiles. It is the power to create and trade wealth.
In a free society, political power is strictly limited to the protection of private-property rights: the coercive power of the state is placed under objective control and its use of force is limited to retaliatory force only, and only against those who initiate its use. In such a society economic power poses no threat to anyone. A man can earn a trillion dollars and be as greedy as he likes - what can he do with it? Build more shopping centers and buy more yachts?
But in a mixed economy, where the state possesses the legal ability to regulate noncoercive economic activities, that objectivity and those limitations are blurred and/or eliminated; political power suddenly becomes arbitrary and capricious - and something that dollars can buy. This is known as political lobbying, a phenomenon everyone seems to decry and no one seems to understand.
It is not coincidental that the practice of lobbying (and of all the briberies, kickbacks, and corruption that come with it) has increased in step with the rise in the level of nonobjective legislation: the former is, in actuality, directly proportional to the latter and would not be possible without it.
As Ayn Rand once noted, "It is not a matter of accidental personalities, of 'dishonest businessmen' or 'dishonest legislators.' The dishonesty is inherent in and created by the system. So long as a government holds the power of economic control, it will necessarily create a 'special elite,' an 'aristocracy of pull,' it will attract the corrupt type of politician into the legislature, it will work to the advantage of the dishonest businessman, and will penalize and, eventually, destroy the honest and able." ("Notes on the History of American Free Enterprise," 1959.) What we are witnessing today, half a century later, are the final predatory steps of that process.
This is the threat posed by the mixed economy: not "greed," as such, but the fact that dollars have acquired the ability to buy votes, corrupt politicians, and influence legislation in a manner they could never achieve otherwise. This is the root issue that explains our current crisis: that the integrity of our money and banking system have been sold off by our elected officials to the highest bidders.
To advocate more economic control, in such a situation, is such an enormous default on solving the problem that it can only be compared to the "solution" of doctors who, when confronted with hospitals full of bubonic-plague patients, opt to "protect" the surrounding communities by releasing the diseased to stagger around the streets and stores of our towns.
In the real world, any doctor proposing such a course of action would be laughed out of the medical profession. In economics and politics, however, our standards are nowhere near as rigorous: Such "doctors" are re-elected and it is "business as usual."
For awhile, that is ... until the bottom really falls out. And when that happens and production and trade screech to a halt - as they must, unless the controls are repealed and the arbitrary political power lying at their root is abolished - whose "greed" will you be blaming then? The chances are greater that you will be wondering how to feed yourself and your family.
Bradley Harrington is a former United States Marine and a free-lance writer who lives in Cheyenne, Wyoming.
