Don't let the foxes guard the henhouses

I would like to build on Eric’s post below, but take a slightly different direction. I read in these posting things like “Mad Max capitalism” or “to the right of Genghis Khan” These are interesting metaphors, but wrong. There is no free market in Mad Max’s world, no free exchange. Everything is based on coercion with each group providing its own competing government.

Genghis Khan had no understanding of a free market whatsoever. Everything is the great Khan's world was produced and distributed by government fiat. The man was a totalitarian socialist with a fur hat. Imagine a merchant saying to the Genghis, "Sorry sir, but the horses cost me ten gold pieces, so I can't sell them to you for less than 12 and make a profit. I guess we have no deal."

There is not now and never has been a free enterprise system without strong government to make laws and enforce contracts. The distinctions between business, government and society are false. Business and government work together to create a good society.

Remember that the free enterprise system is relatively new. Until the time of Adam Smith, all governments thought they had the right and usually had the power to regulate everything from the price of basics commodities to who could go into what jobs. Governments controlled competition within their own realms and went to war to control or eliminate foreign competition.

The success of the liberal ideal (in the original sense of the word) was to carve out a private sphere where government couldn't exercise arbitrary power. It was a good thing. Economic freedom is a prerequisite of political freedom and political freedom is required to make sure economic freedom is maintained for all (or at least most) people. It is a dynamic tension that is needed. The established businessman and the bureaucrat are both enemies of the free market. Both like the status quo and are threatened by fundamental changes and innovation. It is only competition and the fear of competition that keeps everybody reasonably honest. That is what we have to maintain if we want to be free to pursue happiness and own property.

Would I trust the business fox to guard the henhouse? Of course not. But I recognize that government is also a fox, just maybe a little scruffier. Our society only functions well if they are wary of each other and we are wary of both.

Posted by Jack at December 23, 2004 4:24 PM