It seems to me, if we want an economy to provide the standard of living we all desire, government has to be much smaller and far less intrusive, not just into the markets but our lives as well. Of course the first thing we need to do is actually return to a laissez faire economic model. Just the exercise of a return to laissez faire would achieve much of the goal of reducing the size and scope of government. The payoff gets bigger and bigger the more we diminish government, because every action of government is friction to the economy, even and especially, measures taken to improve the economy. Government is the wrong tool to use in improving the economy since all government does is kill the strong to help the weak, crush anyone that doesn’t play along, and take from the growing to feed the obese. That is why in the thousands of years since the invention of writing systems mankind had not progressed until laissez faire became the norm. We all want an improving economy that lifts all boats, the way there is to return to hands off free enterprise, more greasy fingered intrusions by government will only speed up our slide to economic decay.
Today government is the single biggest factor in the success of a firm. Not it’s management structure, ethos, products, innovation or quality, the single biggest factor in whether or not a business is profitable is it’s political favor. That is why a dollar spent on lobbying is worth ten spent on product improvement. That dollar spent wining and dining a senator will get that firm far more profits, from cronyism, than producing the best product for the lowest price point. That competing company that produces the best product for the lowest price can be put out of business by the stroke of a pen. A regulation that doesn’t have to pass Congress, can put any company out of business instantly, and many firms have been shut down just that way. So, under such a regime, it is self interested behavior to play the game, instead of improving products, quality, lowering costs or getting a larger market share through competition. The result is what we have now, a business community that kowtows to every word from the mouth of the President, caring not a whit for their customers, shareholders or employees.
I bet you cannot even imagine your life without the government… or maybe you can. No matter how virtuous you are, you have broken some law or regulation in the last thirty days. No one could possibly know all the regulations on the books today regulating every aspect of our lives. Heck, even if you sit all day in a room, empty except for a hard wood chair you sit on in a nightdress all day, shivering in the cold because you can’t afford to turn on the heat, shades drawn around you, with a single twenty five watt bulb burning over your head all day, without so much as a cigarette to break the monotony, you still have probably broken some arcane regulation! In fact, if you emptied your living room of furniture, you probably still could not fit a printed version of the national register in there! Most of those regulations are so arcane they are almost never enforced, only against people who have angered the elite, generating negative political favor. Since everyone is a criminal, anyone can be targeted for political prosecution by the elite, which makes the Law, a tool for political power. How can you or anyone else focus on your life, starting a business and advancing the interests of the economy and thus everyone’s economic interests, when government could target you at any time. Best to keep a low profile and stay out of the field of fire.
We haven’t had free enterprise since the nineteen twenties. Hoover, then Roosevelt converted our economy to the welfare state, and waves of progressives, dressed as anything else, have grown the state to the leviathan it is now. Despite the economic catastrophe that resulted, (the great depression), the elite have managed, through fiat money, monetizing debt, more and more “clever” securities products and other Enron type tricks… to keep the boat afloat. Every time government intercedes into the market, to help this or that politically favored company, more friction is added to the economy. Friction that raises the barrier to entry for would be entrepreneurs, lowers the profitability for small businesses and distracts people who run companies from their core businesses, to dealing with regulation. That friction does protect older bigger corporations from smaller more innovative competitors.
It’s like taking a tract of forest and cutting all the small trees and bushes only leaving the giant cottonwoods. It looks park like but becomes far less productive. Moreover, once those giants have become too old they must eventually die, and without any small trees started to take their place, the forest dies with them. Like a forest an economy is most productive when it has a mix of old and new, a multitude of different types and where survival of the fittest is the norm. When government uses regulation to kill the fittest so the unfit can survive, stomps out those it dislikes for whatever reason and kills the young to protect the old, that economy will not provide the jobs, quality of life or standard of living that we desire. Such an economy will fall far short of both it’s potential and it’s mean. The way to return our economic forest to productivity then…is to get rid of regulations that kill the strong so the weak can survive, cut taxes that bleed the growing and feed the obese, and get the government out of deciding what industries should flourish and which ones should be stomped out. In short, return to free enterprise, getting government out of our companies and our lives, only then will our standard of living improve while our quality of life rises as well.