Society works best, especially for the poor, when the
powers of government are limited. Big companies and crony capitalism make this
difficult to achieve. Here’s an illustration:
A carpenter named Scott has three employees, several
thousand dollars of tools, a truck, and a mobile phone. His business is
successful, and his wife home-schools the children. He’s in a position to say
to the federal government, "I don't need you. I want you out of my life, with
low tax rates and few regulations." Scott's pension plan includes mutual
funds containing hundreds of domestic and foreign stocks. The mutual fund
managers may vote these shares, but Scott does not.
Alternatively, consider a hypothetical company with over
50,000 employees that builds solar panels and wind farms. It's pretty much
controlled by the CEO, named George. The company pays over a million dollars to
Washington lobbyists. George instructs them, "Tell the administration and
members of Congress that we're willing invest plenty of money in renewable
sources of energy, such as wind farms. Since renewables are less efficient than
energy produced by fossil fuels, we want the government to give us tax
advantages and regulations that will encourage renewable production.”
George continues, “Our business is large enough to
deal with federal regulations. We want the feds to impose plenty of
regulations, to hinder upstart companies from competing with us, even though
they may be more efficient than we are.”
Scott controls his own company, but has no control
over the companies in his pension plan. He wants government to be limited. George’s
company, and many others, want government's help. This is called crony capitalism.
Corporations are not wrong to seek government's help. It’s
their job to maximize earnings for the shareholders. If government officials
are willing to be bribed, via campaign gifts, to help them, the companies
should take advantage. But it is certainly wrong of government officials to accept
such gifts and grant such help.
The reason why America got started as a democracy is
because, for the first time in world history, most citizens owned their own
land and their own businesses. (At the beginning, most businesses were farms.) Like
Scott, they generally didn’t need government and didn’t want its interference.
They developed a constitution which endeavored to limit the power of the
federal government by allocating it to the executive, the legislature, and the
courts. The constitution also provided that all powers not specifically granted
to the federal government was reserved to the states or to the people.
Democracy these days is more difficult to sustain.
Unlike Scott, most people do not own their own businesses. Some are on welfare.
Many others are employees. About twenty percent are employees of gargantuan
federal, state, and local governments. Many work for large companies which are controlled
by relatively few people. These companies often want government’s help, and they
find government officials who are willing to provide it.
Society works best when the means of production are
widely owned and when government is small and unobtrusive. One solution comes
at election time, when voters can throw out of office those legislators who
fail to keep government limited.
Another solution is eventually to do away with all
kinds of federal welfare, including Social Security, Medicare, and all crony-capital
assistance to businesses. Instead, at considerable savings, a guaranteed
monthly income would be paid by the federal government to the bank account of every
American over 21 years old. The payments would be reduced when the person’s
total income reaches a certain high level.
Instead of income being paid at the government’s
discretion as welfare, it would be paid to every adult regardless of
circumstances. Many fewer federal bureaucrats would be needed. And the guaranteed
income would enable many people to start their own businesses. The likely
result would be smaller government, which would benefit everyone, especially
the poor.
A slightly different draft was published
by the Concord Monitor on December 31, 2016
