by Michael S. Rozeff
by Michael S. Rozeff
In the movie Flamingo Road, Joan Crawford says to her husband "Why don't you be honest with the people? Why don't you teach them to run their own state?" David Brian replies "Honey, the honest men get eaten up. There're too many other men waiting, watching, probing for the soft spots, the graft. No, it's better to be one of them."
Waiting and watching is a useful strategy. Wait and watch for a flock of ducks to fly over. Wait until the birds are in your line of fire. Wait and watch until stocks reach an appropriate price before buying. A burglar waits and watches until your car or home are unoccupied. The state waits and watches for its chance too.
A burglar hits us once, maybe twice, until we put in alarms, get a dog, leave the radio going, or hire guards. Once the state hits us, it never stops hitting us. The lesson is that we need to guard a great deal more against the state than a random burglary. Our losses add up to much more once the state gets its claws in us.
Our fathers and grandfathers should have been protecting us, and now we should be protecting our children and grandchildren. The income tax passed in 1913, a long time ago, and it's never been repealed. We're still being drained today.
The state lulled our forefathers to sleep, sang them a pretty lullaby. We will just take a small amount from the rich. You'll be better off. All the advanced nations have an income tax. What's wrong with us? Think of all the good that can be done with the money. It's good for the country. Let's make the U.S. government financially sound.
Instead of watching, our forefathers slept. We are paying the price today. This is not a random burglary. This is continual theft, and the cost of it is orders of magnitude greater than any single burglary we might have to endure.
The state watched and waited, but we didn't. We were too busy doing the things we're supposed to do. But we slept through one important chore, which is protecting ourselves against our protectors. In fact, I doubt that it even crossed the minds of any but a few alert souls.
Thieves "case" the place they intend to rob. They probe, as David Brian said, looking for weak spots. In The Brink's Job, Peter Falk and Allen Goorwitz (later Garfield) stumble across the open truck entrance to the Brink's warehouse and observe the lax security. Falk's first probe is to enter the premises as a salesman of auto parts for the trucks. After that he leads the thieves inside the Brink's Boston headquarters many times before the eventual robbery. They wait, watch, and they repeatedly probe the weaknesses of Brink's.
Never mind aliens probing the earth for its weaknesses. We have enough aliens to look out for in Washington, 50 State Capitols, and thousands and thousands of localities. Protecting ourselves against them is a full-time job! It's so daunting a task that it cannot be done, especially when they hold all the cards. The solution is to learn how to live without anointing a special class of protectors.
When we buy groceries, we personally protect ourselves against spoiled food to a certain extent simply by inspecting it. But to a great extent we rely on the integrity and reputation of the merchants we buy from. It's the fact that they compete for our business that motivates them to provide us with food that is not spoiled. If we had competing protectors, we would not have to worry so much about them burgling us.
Our current protectors, our states and governments, continually probe us for our weak spots and most of us do not even know it. We are just as open to invasion from them as Brink's was. They are singing even more lullabies to us than they sang in yesteryear. They have to because they are invading us more and more.
So what are our weak spots? The same as human beings have always had. We want something for nothing. Con men exploit this predilection. We want something that belongs to someone else, and we persuade ourselves we deserve it. We want someone else to pay for what we get. We are excessively fearful at times. We want to do good and save the world or alcoholics or drug addicts, and we're not too fussy how we go about it. We fail to take responsibility for our own lives or our old age. We are ignorant. We fail to think straight. We are impatient. We get angry. We are proud. We want revenge. Take any normal human emotion and it can become a weakness if we do not control it. Take any passing evil thought and it can become a weakness if we don't suppress it. We are all too human.
The problem is this. Set up a protector with unusual force and strength that can pass laws, and give this protector a perpetual monopoly. That's what we have in the state. This protector can simply wait, watch, and probe for our collective weaknesses. When they appear, he can exploit them for his own benefit. This is only to be expected, since protectors are human too and possess all the same weaknesses that we do.
So the state waits. When the public, out of some weakness, is ready to accept a new measure, anything from an income tax to an Iraq War, and when the state thinks it can benefit from instituting this measure, it will. And many of these measures last and last and last. They are as perpetual as the state is. And if the public gets too upset with some measure, the state knows how to roll with the punches, pull back, hibernate for awhile, still waiting, watching, and probing.
We have here a perpetual burglar and a strong and crafty one at that, and he requires us perpetually to watch out for his next predation. This is simply too great a burden. Vigilance against such a foe costs too much. Better to do away with such an enemy.
Perhaps a less radical course is appealing. Perhaps we should chain up our watchdogs and only let them loose under highly controlled circumstances. Perhaps we should have enumerated powers and constitutional checks and balances. Let us limit the monopoly state. It won't work. Our protectors will still retain an incentive to chew and chew until they dissolve their chains. They will bite us when we let them loose. If we have kept them divided to weaken them, they'll little by little become a pack and do away with the checks and balances that have separated them. We will still have to be constantly protecting ourselves against our protectors.
If there were a single grocery store with a perpetual monopoly on groceries, we'd have to check on food quality continually. And there would be little we could do about it when we were given bad food. Where could we turn? Multiple grocery stores solve the problem and get the incentives working for us rather than against us. Multiple providers of security and protection will do the same.
February 23, 2006
Michael S. Rozeff [send him mail] is the Louis M. Jacobs Professor of Finance at University at Buffalo.
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