John Adams once said that our Constitution presupposes a moral and a religious people. It is wholly unfit, he said, for any other. One of the places where this undoubted truth is most obvious is when we enter the realm of economics — the place where many Christians refuse to bring the lordship of Christ to bear, and where some Christians even invert the biblical norms in the name of giving free nice things away. Who among us is so stone-hearted as to be against giving nice things away? Well, me, but only because this perverse charity begins by stealing nice things away from other people.
I have mentioned this difficulty before, but so far I have only been able to irr0tiate numerous progressive oysters, and have very few conservative pearls to show for it.
When companies accept regulations, it is not long before they learn the rules of the new game — they come to welcome those regulations, and more like them. The cost of them can be passed on to those poor saps who voted for affordable everything, and they will never figure out the grand mystery of how all these price increases happened. And the more burdensome the regulations, the more the old-timers in the game know their way through all the loopholes, and the more upstart competitors find it difficult to even get in the game.
Regulated industries develop the Stockholm syndrome, falling in love with those who took them hostage. A friend mentioned that in heavily regulated industries — like hospitals, insurance companies, and auto companies — the key to success is to “pull the ladder into the boat once you are inside.” Lobbyists become much more valuable and necessary to a company’s success, and schmoozing and dining the decision-makers becomes standard operating procedure. I wonder if such a wine, cheese and caviar event is deductible? Well, son of a gun . . .
Incidentally, while we are here, let me mention another perverse incentive that the government creates. How do we account for the lush, oriental lifestyles of many businessmen in the private sector? Surely I am not going to blame that on the government? Well, just most of it. But think about it for a minute. Suppose you are in a business that turns a tidy profit — if you hang on to that profit in order to be responsible, the gummint will take a chunk of it away. But if you roll it into “business expenses,” even if those expenses involve gold-plated door knobs, then they don’t. What is going to happen now? Let me think about it for a minute . . .
This is not a problem that began with Obama. Let’s go back to the era of the robber barons. The real robber barons were the ones who got the government to provide them with a bunch of 19th century freebies. But they are generally not the ones vilified down to the present day. The ones who are vilified are those who didn’t do any actual robbing. You would think that robber barons ought to do some robbing, right? James J. Hill built the Great Northern Railroad without stealing anything from anybody, and by supplying a superior infrastructure and service. Meantime, Jay Cooke of Northern Pacific was paid by the government to lay track by the mile, creating (you guessed it!) perverse incentives. Hey, look at this meandering scenic route, wandering all over tarnation. Hill was a market entrepreneur. Cooke was a political entrepreneur.
Now, here is the deal. It is not possible for the government to intervene in the market without creating perverse incentives. The nature of these perverse incentives will be immediately obvious to honest men and honest women. But they are not obvious when hearts have been turned over to dishonesty of larcenous intent. The end result of all these interventions is that the government will wind up paying people to do things they ought not to be doing in the first place, and fining and penalizing people for doing the right thing. This is precisely the reverse of what the apostle Paul said the magistrate should be doing — he is supposed to reward the righteous and punish the wrong-doer.
If you do the right thing these days, they will track you down and fine your sorry little business butt. But if you run your flashy little company car into the red ink pond, and then complain to the officials in charge that it was because your competitor was out there engaged in “predatory pricing,” meaning that he is more efficient than you are and serves the customer more effectively, you might be able to get some regulations in place to slow that arrogant greedhead down. In golf, it is handicapping and we all understand. In basketball, this is called flopping. But in life, it is called cheating.
John Adams said that our Constitution presupposes a moral and a religious people. It is wholly unfit, he said, for any other.