Wednesday, September 8, 2010

I, Economy vs. I, Government

We are having, this fall, a national conversation. It is one that liberals would rather we didn't. That's because, as Attorney General Eric Holder might say, we are cowards.

The conversation is about the limits of government. What should government do, and what shouldn't it do?

Conservatives say that government should be limited. It should do defense and policing and law, and very little else. When it gets beyond the area of force, the defense against enemies foreign and domestic, it makes a mess. That's because government turns everything it touches into a contest of power. It always gets to be a fight to see who gets to wield the power of the state.

Jonah Goldberg has a column today, "I, Market Economy," that tells why government makes such a mess with everything it does. Why? Because everything that we make in the world is unbelievably complex. Take the pencil.

“I am a lead pencil — the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.” It is one of the most simple objects in human civilization. And yet, “not a single person on the face of this earth knows how to make me.”

Even a product as simple as a lead pencil is a product of a vast collaboration of producers and experts and middlemen and consumers and prices advertised and prices paid.

The lessons one can draw from this fact are humbling. For starters, any healthy civilization, never mind any healthy economy, involves unfathomably vast amounts of harmonious cooperation.

But government isn't harmonious cooperation. Government is force.

Government says: this is the way we are going to do education, so fall into line. But Mr. President! Over here! We've got an idea we would like to try out! Forget it, pal. Come back in ten years when you've got a political movement, and you can move the needle on my next election.

With I, Government, there is only one way, and that way is the way of the most political powerful coalition. With I, Economy, there are a million ways. Mostly, of course, the market economy follows the big bucks. Millions of people want Wal-Mart's Always Low Prices. But some people want quirky old-fashioned bow ties. And they get them--off the internet. Millions of people want fast food good and cheap. They get it, at McDonalds. But some people want fresh food grown locally. They get it--in some liberal enclave at an organic food cooperative.

In I, Government, the ruling coalition gets its way, and that's it until the revolution. In I, Economy, the majority gets its way. But so does the minority. And there is always room for a nobody to find a niche that nobody ever thought of. It always looks like the big boys run the show. But below the radar the next Bill Gates or Steve Jobs is working away to change the world.

I, Government likes to wield power. But its power is always the power of the gun and the billy club. All it can do is bruise and intimidate. That's why government always mucks up the economy. All taxes and all credit manipulations hurt the economy. But if you keep tax rates down, and money sound, the damage that government's billy club does is minimized.

President Obama wants to raise income taxes on the rich, from about 35 percent on marginal income to about 40 percent. And he wants to raise the FICA tax too.

You can talk all you like, Mr. President, about sharing the wealth, and that at some point you don't need any more money. But when you are taxing at 25, 30, 35, 40 percent of marginal income you are laying about you with a billy club and you are bruising the harmonious cooperation of the market economy.

Progressives, Goldberg concludes, like to say that "we're all in it together." Another progressive line is the idea of shared sacrifice. These communitarian notions are best applied in a crisis when people willing stop what they are doing to devote themselves completely to helping their neighbors in distress.

But what progressives fail to see is that the market economy is a day-to-day realization of "we're all in it together." We are all out there trying to make a living and learning every day that earning a living means giving other people what they want. We must each of us sacrifice our druthers--our dreams and fantasies--in order to serve other people and thereby earn a living.

Some day, humans will discover a method of social cooperation far better than the market economy. But here's a nickel that says that it won't be a government scheme to "share the wealth."

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