Government and Business

A perennial complaint that people make is about the “control” big business has over government.  And, to be honest, there’s a lot of justice in those complaints.  And so, the people making those complaints argue we need to give government more power to regulate business.  More power to regulate business.  More power.

To be exact, that is exactly the exact wrong thing to do.

Here’s the problem.  The more power you give government to regulate business, the more valuable you make influence over the government, and thus over that regulation.  And the more valuable you make it, by definition, the more people or organizations (like big businesses) will be willing to pay for it.

Thus, the more you try to increase government power in order to regulate business, the more the biggest businesses will attempt (usually successfully) to influence that regulation in their favor.  It’s almost invariably the small businesses that end up paying the price–regulatory compliance is usually easier for big players than for small fry, and so the result is reducing competition to the big players.

The process is called “regulatory capture” And I’ve written about some examples of it before.

One might attempt to limit that through laws/regulations that limit what businesses are allowed to do in order to influence government–restricting things like campaign contributions.  There are, however, two groups that will stridently resist any meaningful attempt to do so (while, perhaps, allowing things that give the appearance of dealing with it while still allowing plenty of back doors):

  • Businesses with a vested interest in influencing government
  • Politicians with a vested interest in receiving the contributions that will help them win the next election.

It’s the mice voting to bell the cat while the cat doesn’t want to wear any such bell.

Thus, short of government simply taking control of business, “nationalizing” it, all increasing government regulation does is make the problem worse.  It becomes an incestuous mix of government regulation essentially written by the very businesses being regulated such that it benefits them and reduces the threat of competition.

“But wait!” Some might say. “Government can nationalize the businesses, thereby eliminating the problem. Go, Socialism!”

The problem there is that you run right smack into the issues that Hayek so ably described in “The Road to Serfdom” and I touched on, perhaps less ably, here. Once you take that step, the only way to make it work is through a totalitarian regime where force and threat of government sanctioned violence replaces the operation of prices and the market in determining the allocation of resources such as human labor.

There really is no way increasing government power can resolve the problem of “big business” influence over government without creating the worse problem of totalitarianism and reducing the population to serfs of a central Nomenklatura.

There is, however, one way to helpfully address the problem.  That answer is found in my third paragraph here, specifically: The more power you give government to regulate business, the more valuable you make influence over the government, and thus over that regulation.  And the more valuable you make it, by definition, the more people or organizations (like big businesses) will be willing to pay for it.

You see, the reverse also applies.  The less power you give government to regulate business (or, in general) the less valuable you make influence over that government and the less any businesses or individuals would be willing to pay for that influence.

If you’re truly concerned about the influence business has over government, the answer is not to increase the power of government, but to reduce it.  Strip government of the large majority of its power to regulate businesses and people in general and you eliminate the incentive, the value, of influencing that power.  The worst a business can do you you, after all, is refuse to do business with you.  They cannot (without the aid of a government) prevent you from taking your business elsewhere.  With government, they can send Men With Guns(TM) to ensure you do business exactly as they wish you to.  And even if you can “do business elsewhere” they can make sure that nobody else can offer terms of which they disapprove.

Reduce government involvement in business to legal sanctions against use of force or fraud and most of the problem of “government influence” by business goes away.  Mind you, it won’t be easy.  There are two groups that will object strongly to it:

  • Businesses whose influence over government gives them an advantage over new competitors
  • Politicians who benefit from people attempting to buy their influence.

The only thing that will make it work is creating a climate of opinion where that second category starts seeing that it’s politically profitable to disentangle themselves from the monied interests.  And that will be more people recognizing that the “fix” for the problem lies in smaller, not larger, government.

“Small is Beautiful” was a catchphrase of the counterculture movement of the 1970’s, generally aimed at businesses and in many cases failed because it ignored the value of efficiencies of scale.

But when it comes to government, small really is beautiful.

When is it Science? A Blast from the Past

There’s a lot of talk these days about people being “anti-science.”  The problem is, a lot of people making those claims either are a bit unclear on the idea of what science is or know full well what it is but are hoping youdon’t.  Just because someone calls something science doesn’t mean that it actually is.

First off, science is not a collection of “facts”.  It’s not a set of conclusions.  And it most certainly is not ultimate Truth, forever and ever, amen.

Science is a method.  And the core of that method can be summed up in one simple question:

“How would we know if we were wrong?”

The late Richard Feynman described it this way:

First, we guess what we think our new law will be.  Then we calculate what must happen if that law is right.  Then we compare the result of that calculation with experiment.

And here’s the most important part.  If the calculation from our guess does not match experiment, it’s wrong.  Period.  Yes, there can be experimental error.  Yes, if the data is variable sometimes just from chance you’ll get a result that is atypical.  But once you account for those, once you’ve gotten your measurements nailed down precisely enough  to differentiate from your calculated result, once you’ve got enough measured data for the statistics to say whether it matches calculated results or not, then if they do not match, they’re wrong.  Period.

It doesn’t matter how “common sense” your proposed law of nature/theory/hypothesis (various terms which science uses to label proposed explanations of how the world works) is.  Doesn’t matter how much you want it to be true.  Doesn’t matter how good, or bad, the results will be for you.  Doesn’t matter how many people, how many scientists, say it’s true.  If it doesn’t match experiment, it’s wrong.

The only reason, the only reason to accept or reject some scientific law/theory/hypothesis is whether or not  it agrees with experiment. And any such law/theory/hypothesis is always subject to being amended, or outright rejected, as further data comes along.  Science is never settled.

Let me give you an example.  Back in the early days of optics as a science there were two schools of thought on what the nature of light might be.  One was the “corpuscular” theory, that held that light consisted of really small particles that bright objects emitted.  The other was the wave theory, that light consisted of waves, like sound.  Now, waves and particles behave differently in certain circumstances.  In particular, waves will tend to diffract and interfere and particles will not.

Someone looked at that diffraction and did the math and found that in certain circumstances light, if it were a wave, would behave in ways that was just patently absurd.  In particular it was found that in some very specific circumstances the shadow of a small object illuminated by a point source light of a single wavelength on a screen behind it, certain combinations of size of object, distance to the screen, and the wavelength of light, the shadow would contain a bright spot in its center.  Contrariwise, light shining through an aperture would have a dark spot near the center of the light spot.  This, of course, was completely ridiculous so of course light had to be a particle.

The science was settled.

Then, someone actually found a combination of object and screen distance, paired with monochromatic light (a sodium flame was useful for this, it’s two spectral lines are close enough that it can be treated as a single wavelength for the purposes of many experiments).  And the bright spot in the shadow, the dark spot in the light disk, was there.  Once this was seen, it was utterly clear that light had to be a wave.  Couldn’t be anything else.  Only waves act like that, produce the diffraction and interference that would make that happen.

The science was settled.

And then, once more, experiments started finding oddities.  We learned that the light had to be “transverse” waves rather than “longitudinal waves”:

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Bu that led to some puzzling aspects.  If it was a transverse waves, what was “waving”?  Transverse waves aren’t carried through a liquid or gas, but only through a solid (the ocean waves you see on the shore are a different phenomenon and can only happen when there’s an interface between two materials).  Furthermore, experiments in interferometry had given us the wavelengths of light–very, very short wavelengths–and the speed of light suggested that whatever material was “waving” had to be very stiff indeed.  This led to the conclusion that the Universe was filled with something both extremely tenuous but also extremely stiff to allow light to pass through it.  But this material wasn’t dragging on the planets as they circled the sun so it had to be infinitely elastic.

Then folk started finding out other things.  They discovered that light didn’t quite, or didn’t always, act like a wave.  The photoelectic effect, the “ultraviolet catastrophe” of black body radiation (you heat something and it glows, but for a wave, the higher frequencies should carry most of the energy so that instead of glowing red, or even white, most of the energy should be in ultraviolet, x-rays, and gamma–but it wasn’t).

The science was becoming unsettled.

Then a certain Swiss Patent Clerk (I won’t keep you in suspense; it was Albert Einstein) suggested that light was waves that came in discrete “packets” called quanta.  Under certain circumstances they behaved as waves.  Under others, as particles.  This was the foundation of what is now called Quantum Physics.

And the science is settled.

This Time For Sure.

Or until someone else comes along to unsettle it with some experimental results that just don’t fit.  Somebody will do an experiment.  They’ll look at the results and say “That’s funny.”

And then all that was “settled” will become unsettled again.

The Role of Government

I’m going to wax a bit philosophical here.

Folk who know me (most here, I would presume) know that I lean very heavily “pro-liberty” if not outright libertarian.

OTOH, I part company with many Libertarians (the capitalization is no accident) in that I believe that some government, a “state” if you will, with some modest power is necessary for the preservation of liberty. “That to secure these rights, governments are instituted among men….”

Consider this example: being able to get up on your roof with a rifle to drive off rampaging hordes of barbarians (whether Avars, Huns, Viking raiders, or rioters) is liberty. Having to do so because the barbarian hordes are endemic to your situation, is not.

So the barbarians have to be driven off or kept suppressed, which requires organization with the sanction to use force (since the barbarians, pretty much by definition, aren’t going to respond to sweet reason. If they did, they wouldn’t be barbarians). And once you have an organized body with the sanction to use force, there you have government.

Too little government, and your “freedom” is spent fighting off the barbarians piecemeal. Government itself is a restriction on freedom, also just about by definition.  And the more government, the more that restriction.

So there must, then, exist some level of government, some small level of government, where liberty is maximized, where each individual has the most freedom.  That level may change depending on circumstances.  For instance, a highly dispersed population with little in the way of external threats doesn’t need much in the way of a military and/or police to “keep the barbarians in check.”

The folk who founded the US appear to have been attempting to find that level. And perhaps, at the first, they were pretty close to it–or would have been if they could have gotten rid of chattel slavery (which wasn’t politically achievable at that time and the attempt would almost certainly have destroyed the country before it ever got started).

I submit, however, that the level of government that leads to the greatest freedom (which may vary depending on a number of factors) is always unstable–in fact, I wonder if it’s not the _least_ stable form of government–and will immediately begin to move in the direction of either anarchy or totalitarianism. Various “checks and balances” may slow the motion but they cannot halt it.  Add in that changes to circumstances (increasing population density, rise of external threats, etc.) shifts the amount required for greatest freedom, and maintaining that level becomes even more difficult.

I do wonder if perhaps the checks and balances in the original were not too successful in slowing the move toward totalitarianism. At least some of the Founders did appear to expect a revolution every couple of generations and they got one in the American Civil War, but, although that did lead to an end to chattel slavery I’m not sure that it was a net win for Liberty in the long run with the increase in Federal power that can be traced directly to it. But the increase was slow enough, before and since, that we, as a people, largely got out of the habit of revolution. While the old saw about boiling a frog is not true, not for frogs in pots of water anyway, it remains a useful metaphor and, I think may describe what has happened to the US.

I have said before that at this point, I don’t think a revolution is likely to help–it would just exchange one tyranny for another. Still, If we’re going to turn back from the brink, we’ll have to find other means.

What those means might be, I don’t know. I don’t even know if a new tyranny or even an outright “dark age” is avoidable at all.

And if, somehow, we were to turn back, where would we find that “sweet spot” of maximum liberty and is there anything more than was done in 1787 to give it some semblance of stability?

Good Luck with that, Cupcake

Pick ’em up.
Put ’em down.
Pick ’em up.
Put ’em down.
Pick ’em up.
Put ’em down.
Pick ’em up.
Put ’em down.
Pick ’em up.
Put ’em down.

Anybody remember that?  I do.

Well, we had this Internet tough guy:

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Aren’t they so cute when they yap and think they’re all big and ferocious?

What he fails to realize is that the United States Military has been dealing with people a hell of a lot tougher than he is since Baron von Steuben was haranguing Continental Army recruits.  Even in the Air Force (see earlier posts about why I went AF rather than some other branch of service) any TI (Training Instructor–that’s what they were called in the Air Force) had more attitude, more sheer presence, in his left little finger than this “tough guy” has in his entire body.  I guarantee you he wouldn’t raise a peep.  And if he did?  Well, one of the reasons he wouldn’t is that the Instructor has the entire weight of the United States Armed Forces behind him.  The instructor knows it.  He knows it.  They both know that if the recruit really is stupid enough to try something he’ll feel the full weight of the Uniform Code of Military Justice.

But that’s by way of an aside.  As I said, the military has been handling this since the very earliest days.  The instructors know how to handle “tough guys”, and are more than capable of doing so.

So…lighten up, Francis.

“Wolf and Iron” and Human Wave: A Blast from the Past

I’m going to toss out an idea here. Gordon R. Dickson’s book “Wolf and Iron” (linked below) is a remarkably dark view of a post apocalyptic world. In that world the apocalypse consisted of a widespread economic collapse leading to a breakdown in various “services”. Communities become more “insular” as larger organizations fail, with individual neighborhoods practically becoming independent city-states. Roving bands of bandits complete the breakdown of rule of law, particularly when combined with any traveler or travelers not strong enough to protect themselves is seen as prey by those in more settled circumstances.

The main character, Jeebee an academic type, is struggling through this apocalyptic scenario trying to survive and reach his brother’s ranch.  His first interaction with other people almost ends in him being murdered for his meager belongings and does lose him some key equipment.  Along the way he meets a tame wolf (raised by a now deceased cattle rancher) that accompanies him and becomes his main companion.

The story is very grim and very bleak, at least in the story’s short term. But it’s also got an upbeat component. Jeebee is the sole surviving (so far as he knows) repository of a brand new field of “computational” social science, one which actually predicted the collapse although in true clueless intellectual fashion he never personalized the results of his work until it was almost too late. And, so, he works to preserve that knowledge so that when the world recovers from the current collapse it can be extended and, it is to be hoped, used to prevent such collapses in the future. There’s a strong undercurrent of “no matter how bad things seem now, we’ll get through this and we’ll make things better down the road”.

That undercurrent I believe makes this book “Human Wave” and so Wolf and Iron illustrates that “Human Wave” does not have to be all sweetness and light. It can be quite dark and still be Human Wave.

Wolf And Iron

So How has it Worked Out?

A really short one today.  Back in early 2017 one of the things that pleasantly surprised me about Trump was his executive order requiring two regulations to be removed before any one new one could be enacted.  The EO was signed and presented.  And so, I wonder just how that has worked out.  What regulations have been vacated since that EO was signed?

Let’s be more specific:  what two regulations were removed in order to allow the implementation of the Bump Stock ban?

Inquiring minds want to know.

Folded Like a Cheap Cot

So, after all the brouhaha about the latest “government shutdown” we get…nothing.  Trump agrees to reopen the government without getting his key point, funding for his border wall.

I am of mixed feelings on the wall itself.  First, the “walls don’t work” argument opponents make is nonsense.  That argument is basically saying that every fortification ever built in history, every wall around every gated community, every dike and levee, all of them have all been worthless.  Sure, none of them have been 100% impenetrable, but that’s a far cry from being “worthless.”  What such walls are is force multipliers.  The people you have behind the wall, defending it, are able to more effectively guard against intrusions making them as effective as a far larger force would be without the wall.

On the other hand, one might argue that the resources spent on building a physical barrier, a wall, could be more effectively spent in other ways (that old “allocation of scarce resources that have alternative uses” that economists talk so much about).  Perhaps, but the folk arguing against the wall generally aren’t arguing for the alternate methods.  Oh, a few might pay lip service to it, but where are the actual proposals?  I can think of a few.  I can’t say whether they would be better use of the resources than a barrier at the border but one might consider the possibility–if anyone were actually proposing such alternatives.

But that’s neither here nor there.  The wall was the star to which Trump hitched his wagon.  It was not just a plank but a major supporting structural member in Trump’s “platform” during his campaign.  And he just gave it up.  Oh, they’re supposed to “discuss it” later, once government has reopened, but, well, we’ve heard that before.  “I’ll give you this concession later for that concession today.” Has that ever worked out?  Have they ever actually come through on the “this concession later”? Help me out here.  Has that ever worked out?

And these shutdowns?  Really?  Seems the Republicans get the worst of all worlds.  They want something the Democrats won’t give, or the Democrats want something the Republicans don’t want to give.  This leads to an impasse.  The Republican’s “stand on principle” leading to a shutdown.  Then, eventually, to end the shutdown they give in and either take out what the Democrats don’t want or give them what they do want.  If they were going to do that in the end, why bother with the shutdown?  Give up in the beginning and save everyone the trouble.

Of, course, we know why they do it.  They do it to create the illusion that they are fighting when the truth is that they simply do not have the courage to carry through.  But they can go to their voters and say “we tried” and their voters will eat it up.

“But Trump is different” we were told. “He’s not part of the establishment.” Well, he just proved he’s not different.  He folded, and not even for a promise of concessions later but for promises of talk. “Discussion.”

The Democrats have no reason to negotiate in any meaningful way.  They have no reason to give concessions.  They know that if they stick to their guns the Republicans will fold.

After all, they always have.