Politics and Corruption

June 29, 2010

This is a follow up to my previous blog post about the perceptions of Libertarianism, and specifically how Libertarian ideas compare and contrast with Socialism.

The blog generated a couple questions:

What do we do about those who would gain wealth by exploitation?

How does the free market mitigate greed and corruption?

Before I get to those, I want to make a point about the perceptions we sometimes allow ourselves to have of other people. I don't think I have ever met anyone, Socialist or Libertarian, who isn't searching for ways to improve the world. As a Libertarian, I am disappointed when I am called to defend exploitation as my world view. I assure you that it is not.

Although not a fair question, but by way of demonstration, I could ask of a Socialist: Why do want to give control of the country's resources to an elite few who have already demonstrated an eagerness to support the very type of exploitation you want them to fix? Why do you want more of that type of gross mismanagement?

Now, I know that those questions are full of invalid assumptions and misstatements about Socialism, and they do not represent the thinking of someone looking to make a better world. Assuming that a Libertarian is selfish or all about the individual or doesn't care that people are exploited is just as invalid. We may be wrong, but we're not bad.

The truth is, we are wrong, and so are Socialists, because whether you are looking for honor and goodness in the free market, or in the state control of the nation's resources, you are imagining an ideal world that is far removed from the one we actually have to deal with.

The trouble comes from the fact that people with extensive power and influence will control any economic model to their advanatage. That is, if production is owned by corporations, they will control the corporations. If the means of production are controlled by the state, they will control the state.

Or, as we actually have, both.

To believe that any economic theory can change that reality is probably not a very useful starting point. Rather, let's consider what form of society and economy can provide the most barriers to such exploitation and provide each of us the best opportunity to succeed.

But to the questions: What do we do with those who would gain wealth by exploitation? The answer is to prosecute them for breaking the law. If they are breaking the law the government has the ability to put them out of business. When control of production is in the hands of the government, and the government uses exploitation for whatever reason, who is there to shut them down?

Capitalism is not anarchy. For a free market to operate well you must have an agent, the government, to settle disputes and punish crimes and exploitation. When one company lies or uses intimidation or force to gain an unfair advantage, the government's role should be to punish such behavior specifically so that other companies, their competitors, may operate freely.

When government fails to prosecute corruption, or specifically allows and rewards it as happened with the bank bailouts, this mechanism is broken. This is specifically why encouraging the government to operate companies without direct oversight, that is Socialism, can be so dangerous.

But even the government can't be everywhere, which is why we want to have a system that is vibrant, free, and open enough that when someone feels he is being exploited by an employer, he may find a different job, get student loans and go back to school, or even start his own company.

And this answers the second question: How does the free market mitigate corruption? It does this by providing more options to more people. If one company is corrupt, don't do business with them. If the government is corrupt, you have fewer options. If a company breaks the law, you may bring a lawsuit against them and use the force of government, the police, and the courts to seek justice. If the government breaks the law, they simply write a new law.

But let's bring this to a more personal level. I think much of the debate is not about economic theory, but what it's like to actually live in the economy, especially during times like this.

Both Socialists and Libertarians are focusing on values. These values should not be thought of as contradictory, but perhaps complementary. Consider the issue of social help for those who need it, what we might call the distribution of wealth issue.

There is a spectrum of how much help to give and to how many people. Socialists and Libertarians place the point on that spectrum in different locations. Socialists tend to move the point toward helping more people, even at the risk of giving some help to those who don't really need it. This value says that we would rather have some people take advantage of the system to make sure that we don't leave behind the truly needy. Libertarians point to the grifter and cry foul.

The Libertarians will set the point farther to the other side, even if it will make it more difficult for some people to find the help they need. The value here is that part of being a mature adult in a free society is to have the motivation and means to care for yourself and your family, and that holding this as a virtue will lead to a stronger, more robust nation overall. Socialists point to the deserving poor and cry foul.

Where you place the point on this spectrum is a choice only you can make. I choose the Libertarian side, specifically because I believe that it provides a better mechanism for separating those who have genuine need from those who simply want to live off of the efforts of others. I believe it is more honest, more mature, and a more stable approach than depending on centralized planning to make equitable wealth adjustments.

I believe that freedom, in both the market and in our personal lives, actually provides more options for the needy and the poor, and that fixing poverty with money, rather than teaching the necessary skills to make and manage money, will tend to keep people more impoverished and dependent in the long run. It's not selfishness or greed, but it might be fair to call it tough love. I do truly want to see more people genuinely successful, and I believe Capitalism offers many more degrees of freedom and opportunities.

What we need to work on, together, Socialists and Libertarians, is doing whatever we can to undermine the ability of powerful individuals who are willing to exploit everyone else as much as they can. Considering the recent collusion between government and business, and the easy trillion dollar welfare to billionaires, I think the last thing we want to do is turn over our entire economy to these people.

Rather, we should be trying to limit the power of the federal government and putting more power back into the hands of the states and to the people. Some states will push the line more toward social help. Other states will push the line more toward corporate solutions. We have a unique heritage and opportunity for all voices to be expressed in these United States.

Bottom line: more freedom helps more people, and the role of government should be to limit and punish exploitation, not be a part of it.