The Separation of Business and State
We've all heard of the Separation of Church and State, but what about the Separation of Business and State?
The entanglement of state and church was recognized as unhealthy to both sides of the relationship. Religion would flourish best when free of government entanglements. So too would business.
That was something the Founders were well aware of. It is something that we need to recognize today as government and business have become entangled in a deeply unhealthy relationship that is corrupting to both government and business.
Government entanglements have encouraged Rent Seeking behavior by businesses. Many businesses now find it cheaper to lobby, than to compete. The entire culture of corporate lobbying saves businesses the "trouble" of producing a better product, damages the rights of consumers, and corrupts government through bribery.
Meanwhile government feels increasingly entitled to regulate business, which makes American businesses less competitive. There is no better way to destroy an industry than to lower its efficiency level to that of a government enterprise overseen by bureaucrats with lifetime jobs who can't be fired by any means short of an Act of God.
The more the entanglement between business and state deepens, the more the corruption spreads. Consumers and small businesses are shortchanged, tax dollars are spent on pork and kickbacks to corporate donors, and elections and legislative sessions become soccer matches between competing corporations, each looking for loopholes that will let their "man" score a goal.
Government was never meant to play such a role in the free market, and like a State Church, the merger of Business and Government is having disastrous effects. The mass of bailouts is ushering in a new wave of government oversight, even as complaints mount about the corporate perks executives are using their bailout money for. And that is the problem.
The free market is the most efficient way to punish corporate stupidity. The government is not. Artificial schemes for having the government regulate corporations ignores the fact that the United States federal government has repeatedly proven incapable of regulating even itself.
Yet the merger of Business and State creates its own form of centralized religion in the form of Socialism, faith in the power of government to resolve all problems through centralized control. Time and time again this path has led down into the swamp and muck of incompetence, poverty and tyranny.
The free market provides its own form of checks and balances through success and failure. Government by contrast creates checks and balances through democratic elections. Both are good systems for their own side of the street. The free market needs cold and hard reality checks. Government needs citizen representation to avoid becoming a tyranny. But when you overlap the two, you get the worst of both worlds.
Government lacks any cold and hard reality checks. They rise and fall based more on popularity than results. This makes government a spectacularly poor tool for controlling business. You don't have to be right to be President. You don't need to show results, and you don't need to have a clue about what you're doing. You just need to stay on the right side of the polls.
Government is by its very nature inefficient, only representative. Business by turn does not need to be representative, it only needs to be efficient, innovative and show results. It can be utterly ruthless, because its goals are results oriented. When you try to combine the two, you get the inefficiency of government plus the ruthlessness of economic enterprise mingled into one. Ruthless incompetence, sound familiar? We call that socialism.
And that is why the Separation of Business and State needs to be back on the agenda.