Americans are increasingly in love with big government and believe in its mystical power to fix all things. What does this mean for those of you who are interested in helping society by building wealth? Before answering that, here’s some history.
For the first century of this Republic, government let the people do their business. In fact, the courts widely agreed that the US Constitution forbade all governments–the federal government and state governments–from interfering in private contracts. People were assumed to be capable knowing what they wanted and taking steps to pursue their own happiness. Government was needed only to protect life and liberty, and in fact the coercive power of government had to be restrained from improperly taking those rights.
But then Progressives, led by the likes of Republican Theodore Roosevelt, got the notion that people were actually incapable of knowing what was good for them, and even worse, incapable of taking the proper steps to pursue their happiness. The government was the only means to save the general population from the evils of a modern society. In effect, belief in the government replaced belief in God as the giver of all things good. That marked the beginning of the end of laissez-faire markets.
People who believed in freedom of commerce have been for decades reluctant to be part of the governments–national, state, local, and even school board–that they loathed. The result is that government is dominated by people who religiously believe in government.
Now a century of the religious belief that governments can protect people by tinkering in the economy is giving way to a headlong rush toward some American form of socialism. In fact a majority of all Democrats, and a high percent of all Americans put their faith in the power of the government. (See the Gallup Poll on the allure of Big Government and Socialism at http://www.gallup.com/poll/125645/socialism-viewed-positively-americans.aspx. For an example of a private blog on socialism, see http://pslweb.org/liberationnews/news/why-do-young-people-in-the-us.html.)
One wave of regulation begets more regulations to fix the problems cause by the first wave. Consider the evidence of just the first decade of the Twenty-first Century: As the decade began, government focused regulations on favoring private ownership of real estate, because it was supposed to be good for us. Of course we all know that caused a bubble in real estate. When the bubble burst, government “had to” bail out the big banks with taxpayer money. Not to be seen as favoring bankers, government naturally “had to” regulate the banks while still propping them up because they’re too big to fail.
Not just the financial industry is affected by creeping (creepy?) regulation. Don’t forget that the politicians demean fossil fuels and force us to “invest” in alternative energy; and force us to buy health insurance; and force us to pay for contraception (even if that violates our own religious beliefs, because apparently the religious belief in the power of government trumps everyone else’s religious beliefs). And these are just the industries in the headlines. Government touches every single aspect of our personal and business lives.
If you fear government and put your faith in the “invisible hand” of free markets, then you probably hate those and other exemplars of government involvement in the economy. You would not be alone, or the first, in thinking that. Here’s a quote from an 1815 work called the Principles of Politics Applicable to All Government by Benjamin Constant (see full citation at http://cafehayek.com/2012/04/quotation-of-the-day-250.html):
If the State wished to oversee individuals in all the operations through which they might potentially harm each other, this would amount to restricting almost all freedom of action. Once having set itself up as the citizens’ guardian, it would soon become their tyrant.
You may nod with approval at this, but what you really need to do is wake up to reality: The American people want government regulations more than they want freedom. Voters approve more regulations almost every time they cast a ballot.
So you CEOs need to quit complaining that what the people want is not good for them. If you don’t want to be part of government to try to stop the regulations, then the only question for you now is, “How will I take advantage of an environment where the government uses its coercive regulatory powers to picks winners and losers?”
That is what I want to explore in these posts, and over at my legal blog: www.ArgentPlace.com/blog