Hmmmm....

I saw a comment on a youtube video today, to the effect that what we're viewing in the bailouts is not socialism (government ownership/control of large portions of the economy) but rather capitalism gone horribly wrong: large corporations leveraging their significance to the economy in order to faciliatate "the largest transfer of public funds to private organizations in the history of our fair nation."

It's a different train of thought than the one I usually follow, with government involvement in the private sector leading to corruption, stagnation of creativity, etc. This line of logic begins with greedy capitalists paying attention to the motto of the Clinton years--"It's the economy, stupid." Our elected representatives, since the Reagan yeasr and probably before, are being elected on whether or not they can promise prosperity.

I've seen people engage in sick attention-seeking behaviors where they will use the threat of self-injury, or suicidal statements, or claim to have been assaulted or raped in order to get attention and feel significant. They hold themselves and their health hostage against the good will of their friends/the emergency medical system and demand that people drop everything and take care of them. In essence, the theory is, "If you don't give me what I want, I'll hurt me, and that will make you feel guilty and everyone will feel sad and you don't want that! So give me what I want!"

The capitalist at the top of a sinking corporation, however, is a little more clear minded. "Help me," he says to the elected official, "or I'll sink your economy AND your political career. Help me help you, Bob! Give me nice fat loan that no bank in their right mind would sign on..."

I was reminded today of a simple statement: government = the power to coerce obedience. But economic power is coercive too. An increase in governmental powers is a de facto increase in the governors' coercive influence over citizens. But governments do not posess a monopoly on coercion. Any relative concentration of power is inherently a relative potential for coercion.

I like to use this example: everyone has their price. For some, it's high, for some, it's ridiculously low...but it's probably graphable on a bell curve. It would take a lot for me to prostitute myself (and I'm talking like, hostages' lives on the line) but some will do the job for ten bucks or a quick fix or affirmation and attention. There's a market with an average price for corruption.

So let's say Joe Citizen is a salaryman--it isn't worth the (rough guess of the average) couple of thousand dollars it would take to convince the mayor to pass some legislation favoring him in a land dispute with his neighbor. But let's say the same Joe Citizen is a business owner who stands to gain a few thousand dollars per year in business if he gets preferential treatment from the town legislation or the zoning board. Whatever expenses he incurs in obtaining the coercive services of the state, whether through straight cash, services rendered, quid-quo-pro favors or socialization are simply business investments that--if he refuses--will put him at a competitive disadvantage with those who will. So there's the rub--when an unjust businessmen competes with a just businessman, the just one loses. Hence most of the Old Testament.

So that's why we have this fantastic legal system in our country. If you split power between the exectuve, legislative and judicial, you increase the number of people you have to influence, and hence the cost of obtaining legitimate coercive power. This is clever institutional planning--it is exponentially harder to influence fifteen people than it is to influence one, and the chance of one of those people being incorruptible is way higher than if you have just one king. Concentrated power, says Mr Reagan, is the enemy of liberty.

But we don't just have a separation of powers--the rule of many kings. We have made these kings accountable servants. And not servants of the public, or the majority--but servants of the law. Lex rex, the Latins like to say--"The Law is King." We live under the protection of the rule of law (fast forward to 2:05 for a moving tribute to the rule of law...) What a great system of government, that so effectively empowers the meek and lowly and protects them from the sway of the powerful and rich!

Unfortunately, it's not perfect if you have a situation in which the welfare of the community rests in the hands of a few powerful people. If there's just one or two factories in a town, their owners are pretty important people--they control, partially, the hopes and future of the entire town. Everyone, from grocer to librarian to plumber to homebuilder to IT specialist to gas station attendant, relies on the profits of that factory flowing through the hands of its owners and workers. So they have a lot of influence in town politics.

If you run the metaphor further up the food chain, you end up with Michigan--it's a three factory town. If the three automakers do well, the economy prospers, and the elected officials are safe and the populace is happy. And the factory owners know this--they know that the economic welfare of an entire state rests on their shoulders, and they do multi-billion dollar business with a clear incentive to work closely with state and local governments to ensure that they make lots and lots of money. The business is large enough where the costs of corruption are relatively minor. The only check on their power is public will, the integrity and pride of public servants, and the hope that such servants can see far enough ahead to preserve the interests of future generations, rather than making short-term, politically expedient decisions. Of course, if you pit a just politician against an unjust politician, and the public will is not robust and wise--all of the just politicians will be run out of business.

This is what I hear when I hear the words, "too big to fail:" I hear, "I own you. You are dependent on me, and you have to do what I want. You are going to pay for my problems, because you can't stomach the pain of being free and you won't make a difficult decision and make us all suffer for my problems. So you're going to work for me."

I hear a bigger, sicker, and more twisted version of some messed-up girl with a knife to her wrist for the thirtieth time that year, leveraging the kindness of others because she cannot imagine a world in which she is not the most important thing. Human nature at its finest, unrestrained by the rule of law, prudence, or the public will.