Government Is Not A Business

I originally wrote this piece at RevoluTimes on November 29, 2011

Of all the platitudes offered as campaign rhetoric, the most commonly used reasoning for supporting a candidate I hear (especially among Republicans), is the notion that government should be run as a business. This seemingly insightful suggestion is often presented as a means to cure our economic ills.

As Americans struggle to make ends meet, electing a candidate who knows how to “balance a budget” sounds promising. It should be no surprise that presidential candidates such as Herman Cain and Mitt Romney are frequently touted as men with business experience who can bring a private sector approach to government. Though president Obama deserves much of the criticism he receives for prolonging the current recession, those who suggest it’s due to his lack of experience working a “real job” are mistaken.

The issue is not that Obama lacks the knowledge to manage government as a business; the issue is that no one can manage government as a business.

In a Forbes.com article published earlier this year, Frederick Allen provides criticisms from political scientist Seth Masket and blogger Matt Yglesias on this widely held belief:

Writes Masket,

“To say that governments should be run like businesses is to reveal ignorance about what either governments or businesses — or both — are. Businesses exist to turn a profit. They provide goods and services to others only insofar as it is profitable to do so, and they will set prices in a way that ends up prohibiting a significant sector of the population from obtaining those goods and services. And that, of course, is fine, because they’re businesses. Governments, conversely, provide public goods and services — things that we have determined are people’s right to possess. This is inherently an unprofitable enterprise. Apple would not last long if it had to provide every American with an iPad.”

Remarked Yglesias,

“a state is fundamentally an ethical enterprise aimed at promoting human welfare. A business isn’t like that.”

I’ll give them both credit for at least acknowledging there are distinct differences between the State and a privately owned business. As to what those differences are, both gentlemen completely missed the mark.

Both Masket and Yglesias seem to be under the impression that the State not only has the authority but the duty to determine what things individuals have a right to possess and to promote human welfare. As I’ve discussed previously, no one has a “right” to any thing in regards to a good or service.

Where so many miss the boat with this concept is a lack of understanding that governments produce nothing. Whereas private firms invest their own resources into each business venture, the State operates solely by extracting wealth owned and produced by private individuals. Every program and initiative of the State is an act of consumption as nothing is created by government; therefore even if it had the authority to do so, government “providing” anything would be an impossibility, since it relies entirely on the production and resources generated by the voluntary sector of society.

The voluntary nature between individuals and businesses during commerce is seldom understood or appreciated. This is a significant point because it helps to illustrate why the institution of monopolized force known as government is incapable of being ran like a business. The idea that wise businessmen could possibly create a more efficient government that could streamline us into prosperity is a misconception because the nature of government cannot be altered.

Were Wal-Mart or Apple to hold a monopoly on the use of force to fund themselves, they would find themselves bankrupt as well. Any business that had the ability to spend and borrow at will with other people’s money is inevitably going to take advantage of such a circumstance and abdicate any and all responsibility for any debts aqcuired. The irredeemable nature of man cannot be trusted with such power. As Lord Acton once said, “power corrupts, absolute power corrupts absolutely.”

Yet another reason why proposing to run government as a business is dangerous, is because of the stark difference between who takes the risk in government versus a private firm. Entrepreneurs and CEOs only have the ability to take risks with the resources that have been voluntarily invested in their company, (provided the State does not steal taxpayer money to bailout said company) whereas governments force every citizen to take gambles they would never choose for themselves. Human beings make mistakes on a daily basis, this is unavoidable. Not to say that the private sector is flawless, but aside from the fact it faces competition to incentivize responsibility and improvements, should businesses make fatal flaws in their ventures; millions of Americans are not forced to foot the bill.

The nature of human beings aside, there is a more fundamental economic argument that makes governments functioning as businesses impossible: they lack a price system. As Ludwig von Mises argued, governments, (particularly under socialism) have no price system. The market system of profit and loss accounting is either completely disregarded or in effect eradicated under State control. In the marketplace, individuals and business owners make decisions based on incentives. These incentives direct their actions to account for their profits and losses and mandates that resources are allocated and used in the most efficient manner possible. Governments have no such incentives because of their being an institution of force that faces no competition and also due to the fact that when government uses resources it’s for the “public good”, meaning private property does not exist, rendering a lack of market signals as funds are completely used arbitrarily or attempted to be disbursed to the collective. It should be no surprise programs such as Social Security and Medicare hold unfunded liabilities of over $80 trillion while the U.S. Post Office is $5 billion in the red; and let’s not forget our now $15 trillion debt.

If this is a business, at what point do we give our "employees" their pink slips?

Liberty Rising: A Market Story

I originally published this article at RevoluTimes on November 25, 2011

Being the political junkie that I am, I often find myself debating one issue or another with friends, family and colleagues. This seems to be the trademark of the libertarian. When I’m not being completely denounced as “crazy” or “too radical” and am able to get a word in edgewise, I attempt to make the case for a truly free and voluntary society. The first and probably the most common objection to libertarianism I find is a lack of understanding or support for true capitalism. A frequent question I encounter from detractors is, “How do I hold any power under a free market?” To this I simply reply, “You are the free market.”

Capitalism and sound economics in general are often presumed to be exceedingly complex and confounding to the average person. There’s no doubt it requires vast knowledge and specialized skills to master, but ultimately economics is simply the study of human interaction and cooperation. What is often overlooked is that individuals act because of ideas and the degree to which those ideas shape society; the market is ruled by little else. Indeed, the groundswell of traditional conservatives, classical liberals and libertarians that is sweeping the nation today is nothing short of a market force. Just as all debit cards are rectangles because the market dictates this, (not because of some government regulation) and just as sold-out grocery stores during a blizzard are always re-stocked to fulfill consumer needs, societies respond and shape themselves in order to cater to new and innovative ideas.

Much like the founding of the Libertarian Party in 1971, the current surge in protests, political activism and independent media are acting as a market force to offer an alternative to the status quo. In the winter of 1971, as both major political parties were becoming increasingly authoritarian and the Old Right was vanishing, individualists and anti-statists of all stripes created what has become the nation’s third largest political party. This was all due to individuals taking it upon themselves to act on their ideas and fill a void in society that was needed.

The Libertarian Party continues to grow today, and in 2010 boasted 154 Libertarians holding public office. While their ranks have grown over the years, it has proven to be a long and mostly uphill road that has yielded poor results. Thanks to the advent of the internet, the philosophy of liberty has spread throughout the world and the plea for smaller government and more freedom was finally heard.

No one has taken advantage of the World Wide Web for the cause of liberty better than the Ludwig von Mises Institute. Their website Mises.org is a bastion of liberty and an intellectual powerhouse for the cause of free markets and individual freedom. Providing literally hundreds of books and thousands of articles and podcasts all for free, the site not only talks the talk but walks the walk.

The Mises Institute is yet another example of individuals taking action to provide a good or service, (in this case the scholarship of libertarian ideas) that was necessitated by the market. Founded by author Lew Rockwell with the blessing of Margit von Mises, (widow of classical liberal giant Ludwig von Mises) in 1982 and headed by libertarian hero and Austrian economist Murray Rothbard, (until his death in 1995) the institute’s purpose was to rekindle the old flame of laissez faire economics and to continue the teachings of the Austrian school. Having informed millions around the world with the scholarship of freedom and educated over 10,000 students in its summer Mises University program, the LvMI has proven to be indispensable in the struggle against the State.

In the last few years, organizations such as the Mises Institute and others have become very instrumental in education in the wake of government bailouts, unprecedented spending and endless wars. In 2008, a grassroots movement of the Tea Party shook the political establishment as it began to transcend the one dimensional narrative given by the Beltway talking heads. Inspired mostly by the presidential campaign of Texas Congressman Ron Paul, the Tea Party movement drastically impacted the 2010 elections and continues to be a strong force throughout the nation.

While I vehemently disagree with much of the conclusions presented by demonstrations such as Occupy Wall Street, it is indeed an important conversation to have. These protests, (that by now have likely been largely co-opted by the Democratic Party and professional activists) ironically began as just another example of the very market forces at work which so many leftists denounce. Similar to their right wing counterparts in the Tea Party, OWS was largely started by disenchanted left-liberals who no longer feel their representatives can be trusted and who recognize that the system is broken. Sadly, most are very misguided on how this occurred and what to do about it; but fortunately the market of ideas allows for competing philosophies– and we have history, economics and virtue on our side.

With the 2012 presidential elections heating up in a few short weeks, we may very well be nearing the pinnacle of this very long struggle for individual sovereignty as Congressman Ron Paul is rising in the polls despite concerted efforts to ignore him altogether. Despite the best efforts of the State and its cohorts to silence our ideas, the market has provided outlets for us such as Freedom Watch with Judge Andrew Napolitano, Adam vs. the Man with Adam Kokesh, Stossel, and of course this very website you are reading now, The RevoluTimes. As with all other products of the market that are developed by individuals, if we desire an abundant supply of freedom, we must never cease demanding it.