There is a vicious cycle
at work in which multiple bad actors seeking to profit from and at the expense
of one another and to protect themselves from competitors have created
conditions which all but destroy the ability for individuals to conduct all but
the simplest transactions apart from regulation and government involvement. That
is unfortunately where this all leads. The various industries press the
government (and effectively buy it) to pass laws leading to regulations that will
protect their industry (and profits) and will bring about stability and
uniformity... the conditions investors and corporate boards want. They can deal
with regulations as long as they know what they are. They can subsequently tweak
and re-tool their models and make money.
Of course they can also
use regulations to drive up costs... which are eventually passed on to
consumers but the elevated pricing also serves another purpose. It destroys
lower-levels of competition. The small and mid-level competitors can't keep up.
This is the irony here. What seems anti-market in many cases becomes a tool of
the market.
It's a corruption of the
market some will cry. It's invalid. Why is that? I think the corporations and
insurance companies will call it something much simpler... winning.
Advocates of the free
market decry government intervention and yet it is the free market itself that
has created this condition. As I have endlessly argued the free market is
something of a pipe dream that can only exist in certain very limited contexts
for small increments of time. As wealth is accumulated those possessing it will
seek to secure it and reduce risk. The idea that they will surrender their
wealth to 'chance' or the so-called invisible hand in order to maintain a market
principle is not only counterintuitive it is contrary to both common sense and
for many people... a competing ethical principle. They believe they are duty-bound
to protect the money of investors and reduce risk. Which commitment takes
precedent? Market orthodoxy does not trump other concerns but is part of a
larger complex of issues.
The idea that selfishness
is self-regulatory is both borne out and contradicted by the reality that
wealth accumulation leads to restriction of the free market. Wealth ends up being
more than capital. Money is but part of a larger equation of influence and
power and those possessing these things will want to protect their treasures
and investments from predators and con-men and perhaps a more dangerous enemy,
that of instability. This at the heart of what we might call financial or
money-ethics. There is a rather poignant and relevant lesson to be found in the
New Testament when it comes to this but it is something completely missed and
misunderstood by most Christian financial teachers.
Corporations want to
operate freely but they want others to conform to the rules and order they
establish. As this power grows it is eventually wed to the political sector, to
the larger economy and eventually becomes part of the system itself.
Free markets are
desirable insofar as they benefit those wielding the power to invest but when
there are questions of risk.... dangers associated with weather, war,
miscalculation and/or the lawsuit... then security takes precedent. The
financial sector seeks to control the risks through mechanisms like building
codes, zoning, contracts, insurance and other financial instruments which
guarantee that losses will be controlled and managed. This impulse creates
government bureaucracies which take on a life of their own but their origin is
not in would-be tyrants dreaming up mechanisms for social control. All too
often (and perhaps counterintuitively) the regulatory momentum is born of
financial concern and a desire to set the boundaries of the playing field.
Lawsuits clog up the
judiciary and potentially impact the whole of society. The government relies
upon the private sector and as a result is quickly drawn into disputes and in
many cases the private sector and the state are not easily separated. Often the
two entities exist symbiotically and thus it was inevitable that the government
would autonomously seek to involve itself in these questions. In addition to
practical financial concerns, the government seeks to control criminal activity
and as society and its economic system grow in complexity the state will
necessarily attempt to keep pace.
This symbiotic
relationship is also demonstrated in that the state will use the corporate
sector to 'police' certain actions. Private companies collect personal data and
keep records. This is true when the bank collects all your personal information
when you open an account and I think of it every time I watch someone hand
their driver's license over to be swiped at a cash register, something I refuse
to do under any circumstance. Granted they don't have to purchase alcohol or
tobacco but the regulation of these goods has become a huge money-maker in
itself... not only the sale, but the regulation. Law enforcement becomes a
business and in some cases takes on a life of its own. Many who decry
government intrusion will at the same time praise and even demand government
regulation when it comes to 'controlled substances' and the like. Of course the
corporations collecting your data have their own self-interested motives in
this as well. We know that Facebook and Google have a profile of you even if
you've never started accounts with them. The convenience store may 'swipe' your
license because they don't trust their clerks to type in a birthday but who
knows how much data they're really collecting from your identification card and
purchases and who knows what they do with it? Can they keep it secure? The answer
is obvious to anyone who watches the news. The law protects them, not you.
As mentioned earlier, the
corporate sector often employs and influences the government to pass
legislation that will help the corporate and financial sectors secure their
interests and make profits. This angle is familiar to the average man on the
street but few grasp how pervasive and deeply rooted the practice really is.
All of these forces
contribute to the burdensome reality of government involvement. If people
didn't file lawsuits, then corporations wouldn't need as much insurance and
insurance companies wouldn't push for so many regulations. But of course if
corporations behaved responsibly and followed the law then in many cases people
wouldn't have cause to seek compensation and redress. The greed is universal
and yet as Christians we can at the very
least avoid lawsuits and avoid being part of this bestial machine.
Why have autonomous
transactions become almost a thing of the past? Why is the government involved
in everything we buy, everything we do to our house and car, the services we
provide and seek? Almost everything you buy has passed through some kind of
regulatory body. Some like ANSI and Underwriters Laboratories (UL) are
ostensibly private civilian organisations and yet I don't think it's possible
to divorce them from the state. Add in factors like the proverbial 'revolving
door' and the lines grow even more blurry.
Why is the government
concerned with every dollar that is transacted?
Greed plays no small
part. More could be said regarding the nature of government bureaucracy and the
desire for security and small-scale power on the part of bureaucrats. This too
plays a considerable role. The nature of the bureaucracy demands that state institutions
seek to acquire power and strengthen their influence. A static existence is (in
the bureaucracy) a sentence of death.
Regulation can be maddening but it's not always due to governments
waxing tyrannical. Certainly there are cases of this but all too often it's
industry seeking a regulatory framework. They want clear boundaries which they
can work with and rely upon. Once the parameters are set they can go to work in
trying to leverage them and use them to destroy competition. Many small farmers
blame the government for their regulatory woes but in most cases it's their
corporate competitors who are really to blame and often the government agencies
are literally manned by those affiliated with the corporate sector. The so-called
revolving door is completely legal but it is also one of the most corrupting
factors within government. Leave the industry, take a government position and
while holding that office or title within the bureaucracy... if you pursue the
interests of the private sector there will be a nice financial package waiting
for you upon your exit. It's totally corrupt and yet totally legal.
And yet others will argue that in complex industries like
finance and insurance, who can possibly understand the system let alone
regulate it except former insiders? This is why some push for higher pay for
these regulatory positions. If they can make $750,000 a year in the private
sector, only paying them $100,000 a year as a government regulator is going to
open them to corruption. Of course many of us would be thrilled to make $100,000
a year, or in other cases even half of that, or a third of that, but what's the
answer? Apart from the rare altruistic or crusading moralist, who is going to
take that job? You might get someone fresh out of university but will they
really understand the in's and out's of these often complex industries?
These aspects coupled with the ever-growing security state
have created a toxic brew which has exacerbated an already frustrating and
oppressive framework.
And despite the protests of the market purists who refuse to
call this arrangement an outgrowth and expression of capitalism, one need only
look to Wall Street. The corporate and financial sector will happily even
enthusiastically inform them that regulated capitalism (as opposed to an
idealist and purist free market) can indeed flourish and in fact may be preferable.
Others will be more honest and say it's the only way a complex market system
can flourish.
But for those of us at the bottom, the barriers are
insurmountable and the fortress represented by the Establishment system
continues to grow more unassailable, labyrinthine and impenetrable as time
presses on.
Continue reading part 3
Continue reading part 3