A recent post related the story of a well-intentioned mandate from a state government to all nursing homes that, naturally, had the unintended consequences of hurting the very people it was intended to help. While not the main lesson, it was perhaps a subtext.
Of course, from a libertarian perspective, I’ll also suggest that it is simply a microcosm in the larger battle of Socialism vs. Capitalism. (Hang with me here.) 🙂
While I’ve compared the two “isms” in previous posts, this case simply points out – again, on a small scale – why central planning of any kind is so counter-productive. How, by its very nature, it must be.
Consider: every day, billions of tiny, small, medium, and large transactions take place between two or more willing parties, each making their decisions based on what they believe is best. It may not always work out correctly, but that’s part of living in a free society. However, if you want a whole bunch of decisions that are often much worse, ask a centralized government to make all of those decisions for us.
Even with good intentions, a relatively small group of bureaucrats in Washington, DC simply cannot know what’s best for hundreds of millions of individuals.
Now – and this is where it gets scary – consider all the rules and regulations handed down by our “lawmakers” on both sides of the aisle, not with good intention but rather the result of special-interest lobbyists having bought and paid for those regulations, laws, etc. And, this is far more often the case.
Yes, placing the decisions and well-being of hundreds of millions of individuals in the hands of a centralized few ends up working only for the ruling elite.
Capitalism, on the other hand, works for the benefit of all. Even the poor are significantly better off in a truly Capitalistic society than are their counterparts in less economically free countries. And please, before you write an angry letter asking, “what about corporations buying government favors?”…that is not Capitalism; it is Corporatism, and it is just as bad.
Only true Capitalism – where government’s limited and legitimate functions are protecting its citizenry from force and fraud – has proven to provide an opportunity where people – both as individuals and as a society – can thrive and reach their greatest potential.
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Great post Bob. I am a marketing consultant and tend to work with lots of folks in the “spiritual” community. These are some of my best friends and most are incredible people. However, what puzzles me is that so many of these people say things like “we are free to create our own reality”, “we are responsible for our own lives” etc., yet most tend to vote as extreme liberals for big government and high taxes. As a small business owner, I find that to be quite a dichotomy. Oh well, I would like to see an honest level playing field created where others parties actually had a chance…hope Ron Paul has enough left in his tank 🙂
Hi David. Thank you. And, yes, I agree, that is a huge and very frustrating connect. And part of that disconnect is their simply not understanding that government – at its core – is force, which is actually contrary to most people in the spiritual community you work with. Again, it’s a simple lack of understanding and nothing more. Once they really understand the concept of true economic Liberty (they already identify with personal liberty), they embrace it. The very best book I’ve ever read in this regard – and which will most likely greatly connect with those you work with – is by Dr. Mary Ruwart, and it’s called “Healing Our World.” While you can purchase the most recent edition, her previous one can be downloaded free of charge. She has a very nice, kind way of answering the most difficult questions people have about liberty vs. aggression. The website for the book (and it’s free downloadable version) is http://www.ruwart.com/Pages/Healing/
Interesting post, Bob. I am not too big on politics but can identify with a few of the views stated. It seems that we all want an ideal government/society that can help its citizens and improve the quality of life. I could not help but think of the book, “Animal Farm” by George Orwell LOL I will have to ponder more on this topic… Thanks again for another great post and keep up the wonderful job!
Thanks for your well-written post, Bob, about “Centralized Government and Unintended Consequences” – your post tells of an incident in which, if we had had Open Government in place, the incident would not have happened. Open Government, also known as Gov 2.0, is on a mission to transform government with the use of technology and citizens.
More and more cities are using social media to engage with citizens. When taught how to do it correctly, city staff can set up Facebook fan pages and Twitter profiles to monitor and engage with citizens, asking them basic questions, like “how can we improve our snow removal process?” to informing them about upcoming events, road construction, park maintenance, etc. Or even asking them what their favorite memories are of growing up in that city or asking them to share pictures or videos of their favorite park or favorite trail (attracts people thinking about raising kids there).
When citizens are engaged, listened to and followed up with, how can we not have a better city government? Social media provides a way for that to happen.
You mentioned that “placing the decisions and well-being of hundreds of millions of individuals in the hands of a centralized few ends up working only for the ruling elite.” – you’re so right. With Gov 2.0, we can get rid of bureaucracy and embrace technology, citizens and common sense to solve problems more quickly.
Here’s one definition of Gov 2.0, from the a thriving social network of Gov 2.0 folks over at GovLoop (http://GovLoop.com): “Gov 2.0 embraces the use of new and old tools, changes of employee and contractor culture, and improvements in processes that make government more transparent, collaborative, and participatory–enabling citizens and others to gain more efficient access to data, information, and services through the sharing and distribution of information within and throughout the government.”
Not exactly socialism and certainly not centralization, Gov 2.0 folks are passionate about using technology, social media and people to solve problems more quickly. I agree wholeheartedly with you when stated: “Only true Capitalism – where government’s limited and legitimate functions are protecting its citizenry from force and fraud – has proven to provide an opportunity where people – both as individuals and as a society – can thrive and reach their greatest potential.” – I think we’re on our way to that ideal government now that we are starting to embrace technology and collaborating with the very people who will benefit from that technology.
Thank you, Lori. I agree; the more transparent, the better. Combine the technology you are referring to with a citizenry understanding the importance of valuing/protecting their “rights” (as well as valuing/protecting the rights of others – even those others with whom they disagree) and we would have an extremely prosperous and fulfilled society. Utopia? No way! But, close enough LOL. Thank you for sharing.
Thank you, Chi Chi. I appreciate your comments. The way that an “ideal government can best help its citizens and improve the quality of life” is by simply ‘creating the environment’ where people are free to live their lives and conduct business however they see fit, providing they don’t infringe upon the right of anyone else to do the same (protecting against force and fraud are indeed legitimate functions of government). to the degree this happens, the economy flourishes, jobs are created, the standard of living increases and even more charity dollars are available and provided to help those who truly cannot help themselves. As our Founders rightly admonished, “The government that governs least, governs best.” It’s up to us as citizens to peacefully (and through persuasion, not force) to take our country back from the politicians on “both sides of the aisle” as the politicians and those who buy their influence have now become like the characters in Orwell’s “Animal Farm” (as you pointed out above) where, “All animals are equal, but some are more equal than others.”
Thanks so much for the link Bob! I’m going to get the book.
Great post Bob! You are the master of taking a strong stand in the most gracious way. The message resonates. Applauding this one from Texas!
Dondi, that is such a kind compliment. Thank you. That’s exactly what I’m trying to do as I believe the subject is so important, *and* must be communicated with respect toward all.
Bob, thanks so much for explaining the difference between capitalism and corporatism. So many folks miss this – and it’s an important distinction. Great post! Bonnie
Bonnie, thank you. I appreciate that. Yes, that’s so very, very misunderstood. Even by those whom we’d think would know better.
Really enjoyed this. I’m sure by now through our online communication, you have notice I am engaged in the political world. This is an excellent piece, explaining the importance of capitalism, but without the common bashing of others who might disagree. This is a true talent of yours.
I believe that most people who were for “big government” in the early days of progressives, were driven toward helping the less fortunate-which is an important aspect of liberalism to keep in context. However, they were erroneous in their assumption that “Big Government” is the solution. I recently heard one of the great minds of the left, Bob Beckel, say that he believes that the left began the bug government solution out of concern for the greater good, but that they have failed, because (this is where I had to sit down) they created a generation of dependence instead”
Thank you for being a voice that resonates, and I can’t wait for the roller coaster ride that we are about to jump on in 2012-I believe it will be one to remember forever!
Thank you, Steve. I appreciate your very kind compliment. And, yes, there is no reason for “bashing.” Generally speaking, I find that people who believe in big government do so because they genuinely believe it will help the less fortunate. The fact that it has the very opposite effect doesn’t change their benevolent intent. This is where positive persuasion come into play and helping them to see the actual results. I’m very impressed by what Mr. Beckel said. Of course, would have been great for him to have discovered this sooner but, hey; it is what it is. Regarding 2012, my concern Steve, and I’ve said this before; and that is, while Republican politicians are associated with small government, they have never consistently shown that they are true to it. 2000-2006 was certainly a strong reminder of that. If it does happen that 2012 brings us a small government congress and president, it will be up to “we, the people” to constantly remind them that they work for us; not the other way around.
Dave, that’s awesome. I believe you’ll enjoy Mary’s book and find it to be of great value.
Appreciating your wisdom and applauding your passion Bob. Tnx for stimulating the political grey cells. Now, don’t forget it’s Valentine’s Day. Life is all about balance … and in and of giving in every respect … be sure to turn your passion elsewhere today too 🙂
I think what most people don’t understand is that real Capitalism requires an exchange of value that both parties consider just. If one feels like they are taking advantage of the other, that is not Capitalism. If one feels like they’re getting taken advantage of, that’s not Capitalism either. And in neither case should the transaction take place! We have so many options but most of us choose not to exercise them. For example, people feel they “don’t have a choice” when choosing their cable provider. Yes, you do. choose NOT to buy. I will buy paid television programming when I don’t have to buy more of what I DON’T want than what I DO want just to get what I do want. To me, satellite and cable providers are not providing fair value for what they are asking in payment, so I choose NOT to buy. That is a choice. That is a transaction that satisfies both parties. There is very little that we NEED to have at the expense of choice, and we CAN support the mom and pop stores rather than WalMart. After all, we DID support them before WalMart came to town, so how did our money diminish with the building of a new store?
The wanting of something for less than fair value is the drive behind the lottery, behind digging for discounts, behind soak the rich tax policies, behind professional jealousy, and the refusal to take responsibility for one’s own actions and choices is the drive behind the drive.
*whew* I’m out of breath.
Chrissie, thank you. I’m glad you enjoyed the article.
Nancy, many good points and just a couple I’d take a bit of issue with. Yes, the big thing is that it’s a value-for-value exchange that people do voluntarily and of their own free will. That is the key. And, they both do it because they feel they’ll be better off for having done so. And, that goes right back to Adam Smith’s riff about the butcher, the baker and the brewer. And, yes, it works. And, what you said about choosing not to buy relates to his teaching about “the Invisible Hand.” And, yes, it works.
I found your thoughts interesting regarding “mom and pop” stores and WalMart. While supporting the mom and pop is a nice sentiment, keep in mind again that people exchange value for value because they believe it is their best alternative. And there is no reason for them to do otherwise. If they “support” the mom and pop store it should be because that aligns with their own value; not because of any outside obligation to do so. And, mom and pops have been known to compete with Walmart and win. Difficult but not impossible. They can use their relative small size to do things that Wallmart cannot. And, while they won’t take away the “price-only” shoppers from Walmart they can add the type of value that Walmart can’t; personalization, which certain shoppers value more than saving some money.
The only problem I have with WalMart is that they have at times used “the guns of government” via very loose interpretations of “eminent domain” laws to acquire land to build upon that the rightful owners did not choose to sell. That would be one example of “Corporatism” (mentioned in the article) even though in this case it is taking place on a local level.
Thank you again for taking the time to share your thoughts.
thanks for your response, Mr. Burg, and I think I may not have been clear, because what you took issue with and stated, was exactly the position I was hoping to convey. I agree that the only reason to patronize a business is because it serves you best for your exchange of effort. We have a number of locally owned shops that have survived with a Walmart in town because they provide excellence in service and goods, and it is on THAT basis that they “deserve” –and receive–my support. And of course WalMart is not the only offender, and may not be the worst offender, but they provide a handy target that is easily recognizable, both in the case of price warfare and in land seizures.
I recently listened to an interviewer ask Ayn Rand about the oil monopolies, and she had a similar view on Corporatism, I don’t think that’s what she called it, but her comments rang true with me on something I’d struggled with for a while and I knew that what we have now is not the right answer, and all the stuff I’d heard proposed and thrown about didn’t offer any solutions either, her comments called for an end to Corporatism (I can’t remember what she called it, but it amounted to the same thing) and categorically stated that without the possibility of Corporate influence in government, monopolies couldn’t exist. As I digested that, I saw that it is exactly true. I’m not sure I could explain why or how it is, but because of what I know about fair exchange of value, when men only want what they have honestly earned and ask only for exchange of effort honestly offered, monopolies cannot come into existence. And when we demand the highest level of integrity of our leaders, and offer the same in exchange, corporate influence cannot penetrate government policy.
Hi Nancy (and please call me Bob), got it and understand. Thank you for clarifying.
Nancy, just to answer your question regarding why monopolies couldn’t exist without corporate influence in government: the reason is that without the protection of government, there will always be someone who comes along who will offer their products a little better and less expensively. It has always happened. The so-called Robber Barron’s of the 1800’s only truly became “Robber Barron’s” when they enlisted the help of government to protect them from new entries into the marketplace. By the way (and this is a bit beyond the scope of this space) much of what we know of as “licensing” for professional organizations is much less about protecting the consumer and much more about protecting those who are already in a particular business or profession. Look at any monopoly today and you’ll see it is either an agent of or protected by the government. One very obvious example is the post office. And, how are they doing? 🙂
Libertarianism in theory, Bob, is Walden Pond. But in reality, Libertarian thought would be just another system of imposing values on others who value authoritarianism and the belief that men are not capable of free choice and wise decision-making.
One individual may say it is her right to breast feed in a museum, while a law and an equal constituency that follow the law may decide that it is a misdemeanor worthy of a fine. Lifting the ban will fuel the fire rather than lead to brotherhood and peace on earth.
But it is ironic that a litigious society such as the United States which creates laws on laws which corner honest, freedom-loving people into being unknowing criminals or peaceful protesters against over-arching regulation, also has the largest criminal population in the so-called “free” world.
In absolute terms, the United States currently has the largest inmate population in the world, with more than 2½ million or more than one in a hundred adults in prison and jails. If ever there was an example that laws create criminals rather than criminals necessitate the creation of laws, this statistic is Exhibit 1!
The Libertarian philosophy certainly is closer to the ultimate truth about how we emancipate and govern the voiceless, shackled citizenry in countries around the world, but the trick is to avoid civil unrest in the transition which will then lead to another wolf (the new elite) in sheep’s clothing to reign in free speech, freedom of movement, and free markets.
Richard, with all respect, while I appreciate your participation, the content of your letter is based on so many false premises I’m having a difficult time trying to form a response with going into lengthy back-stories of explanations. So, if I may, please allow me to do my best to provide answers through a dialogue format of displaying your questions (or parts of them), and then my responding individually:
Richard wrote: “…in reality, Libertarian thought would be just another system of imposing values on others who value authoritarianism and the belief that men are not capable of free choice and wise decision-making.”
Bob responds: I actually don’t know what you are trying to say here. That Libertarian thought would impose values on others in an authoritarian manner, or are you saying they impose their values on those who value authoritarianism? Either way, the answer is, “Libertarianism simply respects the right of all people to live their lives however they see fit *providing they don’t infringe upon the rights of others to to the same with *their* lives.” It certainly doesn’t *lead to* authoritarianism; it is diametrically opposed to such. If you are saying that this imposing on someone’s right *to be* an authoritarian because he/she doesn’t believe that people are capable of wise decision-making, my response would be, “that’s fine, because while one can choose to think and believe however one wants, he or she does not have the right to forcibly impose their beliefs on others.”
Richard writes: “One individual may say it is her right to breast feed in a museum, while a law and an equal constituency that follow the law may decide that it is a misdemeanor worthy of a fine. Lifting the ban will fuel the fire rather than lead to brotherhood and peace on earth.”
Bob responds: Here is the *one key point* that if you understand it, clarifies everything in that question. The person who owns the museum (or person he/she assigns to run it) has the sole right to decide on what is allowed and not allowed to take place in his/her museum. That’s it. It is not something subject to a public vote or legislation. It is up to he or she who owns the museum. Any individual who wishes to enter that museum must abide by the museum owner’s rules. Of course, the person wanting to breast feed her child can decide not to pay her money to visit and go elsewhere. That is her choice. She can also call for a boycott of other women and men who believe the museum owner is wrong and hope to persuade that museum owner to change his or her mind. It may work; it may not. But that is a proven, peaceful way to make one’s point.
Okay, this is getting much too long, so let me just respond to one more point, if I may:
Richard writes: “In absolute terms, the United States currently has the largest inmate population in the world, with more than 2½ million or more than one in a hundred adults in prison and jails. If ever there was an example that laws create criminals rather than criminals necessitate the creation of laws, this statistic is Exhibit 1!”
Bob responds: Any many of these people are in jail as a result of laws that are totally Unconstitutional in the first place. So, I’ll actually use that as my Exhibit 1.
Richard, while I welcome you to write, please first read my articles in this series going back to article number one. Truly no disrespect to you is meant, but I’m simply not willing to continue to respond to questions I’ve either already addressed in my articles or to the many other good people such as you in the Comments Sections of the individual articles. The series begins here https://www.burg.com/2008/12/capitalism-vs-socialism-%E2%80%93-understanding-premises-part-1/
Bob…this post needs to be read by every elected official in DC. During my tenure as the executive director of the Ohio Association of Elementary School Administrators I was often asked my opinion of the Federal Legislation: No Child Left Behind. I always began my reply with “First you must understand that 1500 pages of Federal Legislation has to be flawed.” Your post today is deeply appreciated and I encourage you to enhance it with a video podcast of it. Nice work!
Ron, thank you. I love what you said about the 1500 pages of Federal Legislation. Always reminds me of what one of my political mentors, the late, Harry Browne used to say when asked about the famous “Free Trade Agreement.” (Of course, he was totally for free trade, which is simply the willing exchange of products, goods and services between anyone, anywhere). He say, “It doesn’t take over 1000 pages of legislation to say, “okay, you all can trade freely.” In other words, it wasn’t really “free trade” at all; it was filled with tons of regulations; some simply useless, many others based on who payed off what congressman to have it included. A pity, isn’t it? And people actually call for “more government” to solve the problems that too much government created in the first place.
What an article to write on Valentines Day!! I think it is 100% appropriate because it is apparent that we love our country!
Bob, if we get down to the one statement you made concerning decisions being made & carried out, we will see truth. I heard a wonderful quote this week from Orrin Woodward. “It isn’t how great the plan is, but how great the people are that execute the plan.” That is the level we should focus on. It is up to us to educate, train & certainly lead by example making a difference in the smallest area before the “ship” will turn in any direction. That is the nucleus where change is carried out. Are we, the people, making good decisions on a daily basis? If not, are we accepting the blame or pointing fingers to justify our poor choices?
Our country was at its greatest level of influence & respect when everyday citizens felt good about themselves, their community, their potential, & their cause. We need change & it begins with me.
I salute you,
Thank you, Sweet Geneva. As always, your words are kind, which is exactly…you!!
Bob, thanks for being a voice of reason in the wilderness!