When government intervenes in the market to bail out companies, it becomes a hindrance to economic growth. Not only that, it collectivizes and nationalizes the wins and losses of corporate entities. Instead of letting corporations fall as the system requires the government prevents systemic re-adjustments by picking and choosing winners and losers. Politics replace economic thinking.

Government cannot “save” corporations by funneling taxpayer money into their coffers. It cannot restructure them to make them competitive either. These auto dealers may see an initial and apparent success that inevitably ends in greater need for more funds. Let them fail!

But it is bad policy to then insist on greater government involvement in other areas of life. To want a reduction of the influence of those who receive gifts but more influence for those who lend the gift is absurd. If the concentration of power in mega-corporations is a threat, the greatest threat comes from a concentration of power in the hands of government. After all, government has what the corporations lack, the power to confiscate and the power to kill.

The problem is not to whom power and benefit is re-distributed but the concept of re-distribution itself! It is not going to work well if what you ask for is for the Great Valhalla to give the money to you instead of to “them.”  It is not going to help to insist in greater regulation for those who are in the private sector creating jobs enacted by the very machine that is the major partner in the crony capitalism system.

If the protesters were really for reform and not for a revolution intended in inaugurating a different system, they would be for a less-present government that simply helps the one in need and insists in doing so by channeling power to non-governmental entities.  Instead of means-tests for social programs, insist on work-tests. If economic lack is the door to greater benefits, we will get more needy people. This incentivizes reporting less income, lying about assets, and engaging in black-market activity.

As it is the great power of government the one that lures economic losers into an unholy alliance, how can adding power to government reduce the temptation?  Men are not angels, if they have greater power, they will use it to their benefit. Power gives birth to power. It is only by reducing government and its influence that we can create the conditions for a healthier system where those who lose, lose and are replaced by others; the system bottoms up, re-adjusts and grows. Government then can concentrate on securing that freedom and punishing those who violate the rules, instead of spending time in being the major player in the economic exercise.

As long as we think the government is not simply the protector of freedom through rule of law but instead the great equalizer, we will have the problem of corrupt bureaucratization and economic failure. When the government decides who wins and who loses, we do not have freedom but statist despotism. When the government learns its place and stops bailing out corporations,  favoring farmers with subsidies, enacting protective barriers, and deciding what kind of technologies producers must produce we will begin to see an unprecedented economic boom.

Instead of talking about a continuation of deficit spending schemes, we must favor frugality by all. It is a shameful pyramid scheme the one we are playing with future generations. We are now at the bottom of the pyramid and we want our benefit now. We force our children to get into the bottom after us and find a way to add resources we already consumed. We place them in debt so that I can have someone to pay my student loan now.

Calls for re-distribution of wealth simply misunderstand economics and replace it with an anger-based sense of justice. Wealth is seen as something belonging to “the nation” or to “the people” instead as something individuals create and own. What is needed under such premises is to cut the pie thinner for some and offer “us” the difference. Where is the call for an increase in the size of the pie? Where is the thinking about incentivizing greater economic activity and increasing the tax base? Nowhere.  Just raise their taxes, take the money and give me a job (with benefits).

Unsound economic thinking is nurtured in a culture of excess. Bored in affluence, many are easy prey to collectivist ideologies filtered down from the intelligentsia that now controls academia. Aspiration dies at the hands of passive contentment that finally degenerates in the rage of the victim. If I do not get my ipod touch and my job is because “they” have all the money. In such quest, the fake victim has no qualms in victimizing future generations. As Theodore Dalrymple tells us, “The aim of untold millions is to be free to do exactly as they choose and for someone else to pay when things go wrong.”[1]

Equality of outcome sounds great for one who thinks he might lose if he competes. They desire wealth for themselves but envy it in the hands of another. Equality sounds better than freedom when one understand that inequality of outcome is both the precondition and necessary consequence of freedom. Freedom is reduced then to unrestrained appetite for comfort acquired even without effort. What is the consequence of such perversion? Vice and poverty.

[1] Theodore Dalrymple, Life at the Bottom: The Worldview that Makes the Underclass (Chicago: Ivan R. Dee, 2001) p. 5.