All Government Is Force. Even Regulation.

Back to the Occupy movement…

I have some sympathy for Occupy Wall Street and its offspring around the country. There is enough broken in the way our economy works that only a fool would advise inaction. Where I quickly part ways is with the obvious implication that our government can fix crony capitalism (i.e. corporatism). Our government is complicit in this problem. It serves the needs of politicians. Where power exists to grab, it will be grabbed. If this involves buying access to or the use of that power, it will happen. The solution is to limit power, not to pretend that human nature can be changed.

This interesting post from writer Lauren McLaughlin addresses an approach for going forward. She’s right that the movement needs to stop protesting and Do Something. I don’t think she’s right on what should be done.

For example, she suggests:

Early complaints about the movement’s lack of specific demands is also falling away as an increasingly focused platform centering on economic justice comes into focus. Poll the former residents of Zuccotti Park or any of the other occupation sites and you’ll hear a variety of ideas, but the most common seem to be the following:

– Regulate banks in a way that disincentivizes the reckless gambling that puts all of us at risk.

– Tax investment returns at the same rate as income.

– Reform campaign finance laws so that we’re no longer being governed by Goldman Sachs.

On the first item, banks were regulated before the financial crisis hit. That we still had a financial crisis may indicate that crimes took place, although I’m doubtful the evidence is strong. But it also demonstrates how difficult it is to get the correct regulation. Unintended consequences will occur. If we radically alter and/or increase regulation, what happens?

It’s also worth noting that capitalists, rather than corporatists, advocate letting banks fail. The fear of failing, including bankruptcy, is a motivator. It’s unlikely to be the exclusive answer, but we haven’t tried it in conjunction with anything yet.

I’d flip the second to suggest taxing income at the same rate as investment returns. Power is the problem, not inadequate revenue. The point of reducing the government is not mere animosity to government (or worse insinuations). As long as power exists, it will be abused.

On the third, I’m not clear enough on the implication of the item to comment extensively. If it’s a response to Citizens United, then I disagree. Corporations are not people in the literal sense, but in the legal sense they are, and for good reason. Corporations (and other forms of organization) are made up of people. Those people do not lose rights because they’ve chosen to work together. If they do, it’s not a large leap to discredit democracy. But, again, reduce the scope and amount of power available within government and the incentive to buy it will reduce.

Ms. McLaughlin’s next paragraph is revealing from my perspective:

Of course, there are other ideas, like making banks finance their own future bailouts through a financial transaction tax, but I think it’s fairly easy to see the big idea at the heart of the movement: American capitalism and democracy are broken. The big difference between Occupy Wall Street and The Tea Party is that the latter sees the government as the big evil, whereas the former fingers a reckless and under-regulated banking industry that has captured our government and bent it to its will.

I’m not a Tea Party guy, so I’m not so concerned about the difference. But the two have similarities and should recognize that the root causes are very similar. Why does the Tea Party see the government as evil? I think there’s some truth to the assertion, but I don’t know the answer. I also know many Tea Party members have taken the initial, singular focus on government spending and turned to other causes in which they want more government, not less. I’m not sure the analysis that it thinks government is evil is accurate.

Either way, if that’s true, the only way “a reckless and under-regulated” – both subjective terms, with the latter being much less defensible – banking industry could capture our government and bend it to its will is with the full participation of our government. Corporatism is a sinister cooperative effort, not a sinister takeover. Trusting the same government that’s been captured so readily and thoroughly to provide a solution is bizarre. As long as there is power to abuse, this will continue, even if it takes a different form. Any action that is to be a solution rather than a perpetuation of chasing new problems must account for this. I haven’t seen evidence that the Occupy movement understands this. It may yet win, but I fear the outcome if it does.

In related news, the government that will somehow help is the same government that sees no problem with pepper-spraying peaceful, if disruptive, protesters with a callous disregard for the necessity or safety of the force. This is the state in action. This is what Occupy requests when it calls for more government regulation. All government is force. Why is it wrong to use against you, but okay to use against me?