Government versus the Invisible Hand

The 'invisible hand,' as explained by economists, is theoretical force built into the 'free market' that prevents companies from getting too big or getting away with ethical abuses.
 The hand halts the growth of companies when they are not making a useful or ethical contribution to society.  The hand is an arbiter of healthy competition, and an important notion, since it justifies the idea that Government regulation of corporations (and private enterprises in general) should be rolled back or eradicated.  The invisible hand is the alternative to Government, say some, and it's already built into the way the market works.  The hand makes it okay for services like health care social security benefits to be tied into the private sector ("privatization").

Worried about consumer fraud?  The invisible hand discourages it.  Worried about a for-profit agency not keeping your best interests in mind, but the interests of its CEO and shareholders above yours?  Talk to the hand.  You are told the invisible forces at work in the market will ensure that any companies that exploit consumers in this way are not sustainable.

There is a sentiment taking hold in parts of the country claiming Government wastes taxpayer dollars and generally mucks up in trying to provide particular public services.  Consequently, there is an increasingly vocal movement that feels Government needs stay out completely.  The invisible hand is an important component here, because belief in this hand provides Capitalists with a belief that a free market self-regulates, and by turn, does not require Government regulation, or taxpayer money to pay for it.  Let's not pretend that this isn't about taxes, because most anti-Government sentiments - including the historical roots of 'tea party' activism in this country - stem from a sense that we are being taxed unfairly without proper representation.

Getting to the bottom of this whole Libertarian discussion going on in our country - and all over the mainstream press - about the need for Limited Government and a hatred of taxes demands a closer look at that fear of Government, where it comes from, and how mistrust of Government regulation has managed to supplant mistrust of Corporations in the minds of many.

Libertarian solutions to complex problems typically branch out from this core of Libertarian philosophy - a hatred of taxation and a sense that private investment does a better, more efficient job at improving society.  There is a sense among a lot of people, particularly those here in the Valley who are in the midst of a resurgence of growth capital, that tax revenue is largely wasted on unnecessary bureaucracy.  Paired with this pro-business, anti-regulation mindset is an often unspoken - but nevertheless very embedded - trust in private industry, from small business to large multinational corporations, to 'get it right.'  Nowhere here will you find virulent distrust of the Corporation, but instead a compare/contrast between "Big Government" and specialized, for-profit companies who 'at least don't tax you to death.'  It's an oversimplification, but a potent one, and you'd be hard pressed not to find a fervent free market advocate within spitting distance who's up for a robust debate on the subject.

Keep in mind: this debate about whether Government either has or hasn't the right to take aware our income is a moral, ethical, philosophical one, and cannot be solved by just discussing policy.  I hear political speeches and pundits and think tanks on the daily news making factual, policy oriented cases for Libertarian fiscal policy, and it frustrates me as a listener because the larger philosophical divides, while immensely relevant to the subject, are out of bounds. The mainstream media is so concerned with maintaining the illusion of objectivity that discussion of morality and ethics is not considered relevant.  But when you aren't discussing someone's social or political philosophy - what role Government should play in our lives - and letting them spout of facts without context, then the discussion doesn't go anywhere.  Without context, it's just another interpretation disguised as factual analysis.

I'll admit, it's tempting to want Government out of the picture when you surmise that Education, Healthcare, and any number of Federal Social Services we use, might, if efficiently channeled to the Corporate Sector, become these more flexible, more open, cheaper, competition-fueled, growth-oriented experiences.  I think there is some truth to this.  Private enterprises are, if anything, quite efficient... efficient at creating streamlined user models that function to give the citizen more choice and less hassle.  Arguably, this is because their interests are ultimately their own growth (the services they provide are a byproduct of this growth).  Contrarily, Big Government, for all its foibles, exists 'for the people.'  It doesn't always work out that way, and its inefficiency, oddly enough, is a component of its lack of a profit motive.  That it is sometimes wasteful is obvious.  But to surmise that large abuses don't take place in the Corporate World is ridiculous.  Manipulation of markets (housing and energy come to mind) have arguably resulted in some of the worst economic downturns in distant memory.  This was due to deregulation.  Where was the invisible hand?  Did a few bad apples slip by its grasp, or is there a deeper toxicity to the way Corporations work?  How is it that people can be calling for even less Government regulation, when rampant deregulation in the last decade got us into all kinds of terrible trouble?

Unfortunately, the court of public opinion on this issue and others like it is often shaped by generalization and ignorance about the complexities of the issues.  For instance, most people, when polled, agree that Government is wasteful and feel that the bloat could be scaled back.  When confronted with a list of programs on the chopping block, however (for instance, Social Security, Medicaid/Medicare, etc.), the same people have a difficult time letting go of these.  Also, in reality, this is not an issue of Government versus Corporations.  It's not that simple.  There is a lot of overlap (see Government contracts, particular in foreign wars, for a great example of this).

I don't have any answers, but I am frustrated that we're not asking enough questions - or the right questions - or getting straight answers from our President, our Senators, or Representatives or our Governors about what exactly is going on.

What about you?  What news sources do you turn to for information that helps you sift through the political rubble?


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