Big Government, Big Business - Island of Sanity

Island of Sanity

Liberals & Conservatives

Big Government, Big Business

You often hear it said that "the little guy" gets squeezed by "big government and big business". Liberals often talk about the need for big government to balance out the power of big business, apparently with no concerns about the dangers of the power of big government. Moderates will concede that there is danger in big government, but, they insist, it's a danger we have to accept, because we need someone to protect the little guy from the power of big business.

But there's a big logic problem in saying "big government" and "big business" in one breath: The two have nothing to do with each other. I don't just mean that they don't necessarily have the same goals or interests. I mean that using the word "big" to describe government and using the word "big" to describe business are two totally different uses of the word. It's like saying "she filed her nails and she filed her papers". That might make a catchy first line for a story, but it's catchy because we're making a play on two totally different meanings of the word "filed". If someone tried to lead us to believe that filing papers and filing nails are really the same thing because both involve "filing", well, that would just be silly.

What do we mean by "big government"? Surely we mean, an organization that has the power to force many people to do many things. The key element in any definition of government is "force". We do not ask violent maniacs if they agree to abide by laws against murder: the whole purpose of law and government is to force people to abide by a certain set of rules whether they agree or not. By definition, there is no such thing as a "voluntary law". In cases like laws against murder, I think just about everyone would agree that forcing the violent maniacs to comply is a good thing.

What do we mean by "big business"? Surely we mean, an organization that has the resources to give many people what they want. The key element in any definition of business is "voluntary exchange". By definition, there is no such thing as a "compulsory agreement". If two people really agree, then no force is necessary. If they don't agree, one person might have the power to force the other to do what he wants, but that's not an "agreement". It's either a defeat or a surrender.

By definition, a business cannot force you to do anything. If someone really has the power to take your money while giving you nothing in return (or while giving you something that you don't want), they're either a government or gangsters. They may call themselves a "business". The U.S. government calls Amtrak and the Postal Service "private corporations". But they are subsidized with tax dollars, protected from competition by law, and their operations are directed by Congress. Mafia kingpins call themselves "businessmen" too, but that doesn't make it so. I could walk around calling myself Napolean, but that wouldn't make me ruler of France.

The definition of business is voluntary exchange. I give my employer my time; in exchange he gives me money. I give the auto dealer money; in exchange they give me a car. If I decide that I don't like the models they're selling at Ford, I can go to GM or Honda ... or ride a bicycle. They cannot put a gun to my head and force me to buy their cars. Similarly, if I decide that my employer makes unreasonable demands of me, I can quit and go somewhere else. Of course it works both ways. If the auto dealer thinks my credit is no good, he doesn't have to sell me a car. If my employer gets tired of me spending all day gawking at female co-workers, he can fire me.

Barring government intervention, big business only remains big as long as they satisfy their customers. If people decide they don't want to buy products from a certain company any more, it goes bankrupt and disappears. Period. The only thing the company can do to save itself is to start pleasing its customers again.

This is certainly not true of government. If a big government no longer satisfies the desires or needs of its citizens, the government does not automatically disappear and get replaced by another government. Oh, it might. Sometimes governments that are becoming unpopular try to reform themselves. But quite often they just start throwing anyone who complains in jail -- or in front of a firing squad. If you think this only applies to a dictatorship and not to a democracy, try calling the tax collector and telling him that you've decided that you don't like what the government's doing so you've decided not to pay your taxes anymore. See what happens.

At this point I'm sure someone will object that big business does indeed has the power to force little people to do things.

Some will point out that businesses often get the co-operation of the government to force people to do one thing or another. This can be relatively indirect force, like a company getting tax dollars in a subsidy of one sort or another. Or it can be more direct force, like police or soldiers coming in to break up a strike.

But this objection quickly fails. At this point we're no longer talking about the actions of a business: we're talking about the actions of a government. The government may choose to use its power to benefit a business. That doesn't make the government a business or the business a government.

The more telling objection goes something like this: There are forms of force other than the barrel of a gun. A person can be forced to do something just as effectively by financial pressures as by threats to his life. It's easy to say, "If you don't like the company's policies, quit". But in real life not having a job is not a realistic alternative for most people.

There is an element of truth to this, but just an element. Yes, it is surely true that a glib statement like "shop somewhere else" is sometimes not easy in real life -- there may be few alternatives. And "quit your job" is not at all an easy thing for the vast majority of people.

But there is still a vast difference between "economic force" and "physical force". If your boss makes unreasonable demands, it may be hard to say "no" when he has the power to fire you and leave you unemployed. But if the government makes unreasonable demands, it's an entirely different level of "hard to say 'no'" when they have the power to seize your property and put you in jail, maybe even execute you.

In a free market, there is always a choice. In my little town there are three grocery stores. If I decide I don't like one of them for any reason, I can go to either of the other two. If I don't like any of them, I can go to any number of neighboring towns. Sure, that might be inconvenient. I may not want to make that long a drive, or spend the money on gas. But if my dissatisfaction with the local stores is big enough, surely a little drive is not an insurmountable obstacle.

Yes, quitting your job isn't easy. I was unemployed once: it was a scary time. And my employer just recently laid some people off: I was not alone in feeling anxious wondering where the axe would fall. But while being out of work is scary, surely it doesn't begin to compare to being thrown in jail, tortured, or killed.

But what if there is no choice? What if the business is a monopoly? Then the customer is forced to do business with that company.

But there are only two ways a monopoly can exist: It could be that the company satisfies its customers so well that anyone who tries to compete is quickly driven out of business, until no one even tries because they know it's hopeless. In practice, such monopolies rarely if ever exist in real life. I'm hard pressed to think of an example. Perhaps Microsoft comes closest today, but there are still plenty of competing companies out there, like Apple and Sun and the various Linux people. I recall that twenty or thirty years ago IBM dominated the computer world and it was common to call them a monopoly. Then Microsoft came along and beat them to a pulp. The far more common way for a monopoly to exist is for the government to create it and protect it. In many towns the cable company is a monopoly because there are laws against any other cable company competing. If another company tried to start connecting up customers, they would promptly be fined and orderd to stop.

But once we say this, it's clear that again this is not a case of something done by business; it's a case of something done by government. A business benefits, and it may well be that the business asked the government to give it this monopoly and probably spread some campaign contributions around to the right people, but it's still the government that did it.

Big government, by its very nature, is an act of coercion. Citizens do not have a choice. If you don't like the way the ruling party governs, you may be able to campaign against them. You may be able to protest or lobby. At worst, the government will send the police to drag you out and shoot you. Most often they simply ignore you. At best, in a democracy with fair elections and competing political parties who offer voters a real choice and politicians who keep their campaign promises, you still have to get a majority of the people to agree with you in order to change anything.

Big business, by its very nature, is an act of freedom. Customers always have a choice. If you don't like the way a company does business, you don't even have to campaign against them or protest. Just go somewhere else. You don't even have to get a majority to agree that the store that you like is indeed better: just go there yourself and who cares what everybody else does?

Big government stays big because it has the most guns and can intimidate, imprison, or kill anyone who tries to start a new, competing government. Big business stays big because it satisfies its customers and offers them a better deal than anyone who tries to start a new, competing business.

This is not to say that government is always bad or business is always good. Quite the contrary. Sometimes force is the only way to accomplish a worthy objective: like I said earlier, we do not want to ask violent maniacs if they wouldn't please refrain from murdering people. But big government is inherently dangerous, while big business is not.

© 2014 by Jay Johansen


Marcelo Jul 23, 2014

My wife and i felt absolutely thlrlied that Raymond managed to deal with his basic research through the ideas he was given in your web pages. It is now and again perplexing to just possibly be offering key points which usually men and women have been making money from. So we realize we need the blog owner to thank for that. The main illustrations you made, the straightforward blog menu, the friendships you can help promote it's got many extraordinary, and it's really helping our son and our family reason why the theme is thrilling, and that's pretty mandatory. Thanks for everything!

Add Comment