A Response to a Libertarian Group

There was this:


While I can agree with the basic idea, the presentation in that graphic is horribly misleading

In the first item a lot of things get lumped into vague terms like “corporate welfare.” When it comes to things like actual subsidies and bailouts, I fully agree. There should be no such thing as “too big to fail”. If a company can’t survive in the market it should fail, releasing those resources to more productive uses. Many people, however, include deductions for expenses and the like. An argument might possibly be made to base taxes on gross revenue rather than “profit” (revenue-expenses) but that would…be bad I think.

The second issue, however is a horrible misrepresentation of what “limited liability” actually means and is largely what prompted this response. Limited liability is for the investors. It basically means that if the company goes bankrupt, the creditors can’t come after your Aunt Sally (who owned a share or two of stock) for her house to help pay them. It does not mean that the actual decision makers are immune from the legal consequences of their decisions. There are problems with the legal justice system which often shield the rich and powerful from the consequences of their actions but corporation “limited liability” is not one of them.

The next, “economic privilege”, when it comes to government influence is a result of the size, scope, and intrusiveness of government, pure and simple. Once government starts meddling in the economy it becomes a matter of self-interest to the point of survival for businesses to attempt to influence that meddling. More regulation simply makes matters worse by making influence still more valuable (and thus folk who can being willing to pay more for it). “More regulation” to attempt to stop that influence is actually counterproductive. First off, the people who would be creating those regulations already benefit from said influence. Likewise, the folk who already have the influence are going to use that influence to neuter any such regulation, at least when it comes to their influence. Those two turn it into a “bell the cat” situation. And even if you could somehow solve that, the simple truth is that any laws/regulations which have fallible humans involved anywhere in the process is going to have flaws and weaknesses. And the folk with the fund to do so, will now be even more willing to spend those funds to find those weaknesses and flaws because you’ve just made that influence even more valuable. The solution there, paradoxically, is to reduce the power of government, reduce its influence over business and the economy. This makes influence over government less valuable and, therefore, people will simply be unwilling to spend resources on that influence. That, unfortunately, is one approach that’s almost never advocated by those who decry the “economic privilege” of big business and the wealthy “buying” influence over government.

Finally, we have that last one. That’s actually correct as written (IMO). The problem is that many people define “enforce contracts” not to mean just according to what the contract in question actually says, but by what they think it should say. Anybody making a “living Constitution” argument is doing just that. And if anybody talks about “enforcing contracts” and an unwritten “social contract”, run. Likewise, they want to restrict what contracts one is allowed to enter into and what contracts one is not (see “health insurance).

So again, while the concepts I, in general, agree with, the specifics noted leave much to be desired.

2 thoughts on “A Response to a Libertarian Group”

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