Monday, November 8, 2010

"We Do It All"

How often have you seen an advertisement assert, "We do it all!" Usually this is from someone trying to start up a home-based service business, or an established service company trying to improve its image or expand its client base. They certainly get (and deserve) points for initiative, but face it: nobody can "do it all," or anarchy would be a viable alternative to conventional government. Man being political by nature, as Aristotle pointed out (that is, by nature associates with others within a political unit), solutions as well as problems come from organized human behavior.

That is why the virtual tsunami of dependency on the State that seems to be growing exponentially, seemingly by the day, is "bad." It's not just that the State is the wrong tool for doing anything other than it was designed specifically to do. That is, the State's job is to provide a level playing field and police abuses. We could insert the Preamble to the U.S. Constitution if you really want more detail, but just about everything can fit under those two broad categories.

It's not even that our growing dependency on the State is a very bad thing for our individual development as full human beings, that it's contrary to nature, that lack of competition leads to monopolization and concentration of power and the resultant corruption, and so on, etc., etc., etc. The biggest immediate gripe that should be on everyone's lips when yet one more proposal is made for expanding State power or demand is made that "they" (the State) should "do something" is that, frankly, the State is incompetent outside of its proper sphere, and — if not properly designed and maintained — frequently within that sphere as well. If you want something done poorly or not at all, then get the government to do it or (worse) pretend to do it.

That is why the increasing demand for more, more, and more government regulation of the financial services industry in place of systemic internal controls is a very, very, very bad idea. We need hardly look at the reports of increasing incompetence in the policing of abuses, the deficiencies that escaped inspectors' notice, the endless arguments over whether some individual, company, or industry was really at fault, (etc., etc., etc.) to see that something is seriously wrong — not with the way government regulations are enforced, or even the sheer quantity of them, increasing by the hour, it seems, but with the idea of government regulation and how we understand it.

The government cannot do it all, and we are living in a fool's paradise if we think that the State can. The best that the government can do is help people in setting up a system that, in the main, polices itself through internal controls (most especially separation of function, such as not allowing commercial banking and investment banking under the same roof), and then policing the abuses that occur when such systemic controls are violated or circumvented.

Ultimately, we approach the ideal when we achieve a state of affairs similar to that noted by Alexis de Tocqueville in America in the early 19th century:
In some countries a power exists which, though it is in a degree foreign to the social body, directs it, and forces it to pursue a certain track. In others the ruling force is divided, being partly within and partly without the ranks of the people. But nothing of the kind is to be seen in the United States; there society governs itself for itself. All power centers in its bosom; and scarcely an individual is to be meet with who would venture to conceive, or, still less, to express, the idea of seeking it elsewhere. The nation participates in the making of its laws by the choice of its legislators, and in the execution of them by the choice of the agents of the executive government; it may almost be said to govern itself, so feeble and so restricted is the share left to the administration, so little do the authorities forget their popular origin and the power from which they emanate. (Democracy in America, I.iv)

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