In defense of small government, I like the saying that, “No power to be bribed is no power to corrupt.” It is a sad fact that the need for regulation comes from unfettered greed and the corruption of regulators comes from the same source. Add the revolving door between industry and government and next thing you know, the foxes are guarding the hen-house. Treasury and the SEC have driven this point home brilliantly over the last 15 years.
In my opinion, the libertarian, free-market, laizzez-faire philosophy is terribly muddled by the various interventions, regulation and bailouts. To add insult to injury, it is then blamed for consequences that are caused by the interventionists.
I still struggle to confidently agree with Friedman’s speculation that U.S. automakers would have made safer, cleaner, more efficient cars, which cost less without regulation that forced the issue evenly on all automakers. Similarly, I am unconvinced that our natural environment would be as good or better without environmental regulation. On the financial front, Glass-Steagall seemed to work well with the banks until it was shredded in the late 1990s when commercial and investment banks came together and became “too big to fail” – their risk greatly enhanced by practically unregulated investment vehicles and derivatives.
I wouldn’t throw out the libertarian concept. However, I doubt the ability of humanity to handle pure libertarianism. I think wealth and power would most likely end up in a few hands and we would revert back to feudalism. I can only hope I am wrong. In the current situation, it looks like we may never find out. Heck, I doubt our ability to handle anything for the long-term. We, as a species, seem to have an exceptional ability to advance magnificently and then self-destruct.
As to “power”, I define it as the ability to execute cause and effect in a sphere of influence. That may be effected through a codified civil government, a feudalistic earl, a tribal chieftain, a corporate board, a warlord, or a gang leader. I suppose one could call any one of those a form of “government”, especially if it is the highest power in a given place and time.
The closest working examples of pure libertarianism resulted from the dissolution of empires – Egyptian, Persian, Greek, Roman, British, French, Spanish, etc. After the Roman Empire disintegrated, the power vacuum led to the descent of European civilization into the Dark Ages. This resulted in reversion to tribalism, feudalism, monarchialism, democracy, and whatever you want to call what we have today. Similar scenarios, though varying in magnitude, duration, and details, resulted after the other empires.
To staunch supporters of pure free markets. How would you propose to enforce the framework of free markets? Do you go for anarchy? That is the only social construct I know of that doesn’t exercise the power of government over society. How does one enforce anarchy? How do you define freedom? Liberty? How much government do you suggest we have to achieve that definition? Can you give me a working example of that in history?
I love the ideal of pure liberty, but the human race proves it unrealistic. I repeat my earlier position, that I doubt our ability to handle anything for the long-term. We, as a species, seem to have an exceptional ability to advance magnificently and then self-destruct.
With regard to the environment, as much as I agree with the libertarian ideal in theory, given a responsible and moral society, it ignores the abuses heaped on our natural environment pre-EPA. The EPA has been effective in creating a nationally even playing field with regard to environmental protection. They have also cleaned up a lot of seriously nasty messes.
Maybe there is a better way, but I remember just a few decades ago… Lake Erie catching on fire, intense smog in major metros, and hepatitis-infected tide water in my own back yard. Currently, look to Beijing for a mega metro with little environmental regulation.
People are far too willing to pursue short-term gain at the cost of long-term destruction, especially if the burden is shifted to someone else. This is the root of our fiscal dysfunction as well. I believe in liberty and democracy, but I believe it requires a wealth of integrity to function without regulation.