"[R]evenues drive expenditures, not the inverse....Tax evasion represents a net benefit to everybody....A statue should be erected to the unknown tax evader." ~ Pierre Lemieux
Skipping Down the Road to Serfdom
Column by Duane Colyar.
Exclusive to STR
As noted by the author in a previous column, over 2,000 years ago the Greek philosopher and historian, Thucydides, wrote in the History of the Peloponnesian War that power, once granted, will always expand to control what it can. Recognizing the wisdom of Thucydides and other political philosophers, and knowing that concentrated power always leads to tyranny, our founders attempted to create a federation of states where the power of the central, federal government would be severely limited to a handful of legislative and executive duties, all specifically enumerated in a constitution. The individual states or the people would retain those powers not specifically granted. Yet, in spite of the brilliant efforts of James Madison and company, the power granted to this entity called the United States almost immediately began to expand, slowly transferring prerogatives that once belonged to the states and people to the federal government, an erosion of power that continues to this very day. The Founders did not succeed in their attempt to circumvent Thucydides’ principle.
While this gathering of centralized power impacts our daily lives in many ways, it is particularly felt in the type of human activity called market exchange where people or groups of people exchange the fruits of their labor for the products of other peoples’ labor. We do this every day, often many times a day, mostly using the common unit of exchange called money. All of this can be labeled economic activity, which has been defined as human action in pursuit of scarce resources to fulfill perceived needs. Indeed, unfettered market exchanges to meet individual needs are the most common expression of liberty for the common citizen. The freedom to dispose of the earnings of your labor in the way you see fit is fundamental to the concept of self-ownership. To the degree that the terms of exchange with the earnings of your labor are dictated by others through rules, regulation or taxation is the degree to which you are owned by others; in effect, the degree to which you are a serf. Yet, we passively allow that degree to grow in size and scope year by year. Consider the Federal Register of government agency rules and regulations that define what we can and cannot do in the marketplace. During 1950 that Register was 9,562 pages long. This year the Register is predicted to be over 80,000 pages long.
Our federal government sanctifies this expansion of power regarding market exchange through an ever-broadening interpretation of the power granted by the Commerce Clause in the Constitution. The founding states gave Congress the power to regulate interstate commerce, i.e., trade between the states. Under the Articles of Confederation, the states had started to erect trade barriers between each other, a practice that the members of the Constitutional Convention thought undesirable. Applying Thucydides’ principle, we would expect this granted power to grow, which it has beyond the Founders’ most dreaded fears. During 1942, the Supreme Court, in Wickard v. Filburn,greatly expanded the federal government’s authority to regulate individual economic activity. Filburn was a farmer who was growing wheat for his own consumption during the time when wheat production was limited by the Roosevelt Administration in order to drive up wheat prices. Filburn was fined and the Supreme Court upheld the fine because the wheat he was growing for his own use might impact interstate commerce.
If much of human action is economic activity, is there then no limit on what the federal government can mandate regarding human behavior? Apparently not, for now we have before us a mandate to purchase a private product, health care insurance, whether we wish to have that product or not. Under the new health care reform act passed by Congress and signed by the President, even economic inactivity is to be labeled an economic decision to be regulated under the Interstate Commerce Clause. If the courts allow this to stand, there is little human action that our federal government could not label as economic and find the authority to control.
The oft-repeated allegations that government intervention in health care and other market exchanges is socialism are off the mark. Socialism, by definition, is a political economy where the government owns and operates the means of production and manages the investment capital needed for economic growth. This definition does not accurately describe the developing economic trend in the United States. A more fitting description is another type of political economy that also relies on a symbiotic relationship between the government and business. This political economy is characterized by a government that pays lip-service to individual market exchange, private business and private property but extensively regulates and controls all economic activity for the “common good.” This is partially accomplished by forming partnerships and/or cartels linking government, business and, often, labor. (Think General Motors and the health care insurance industry.) This type of economy has a different name. It is called fascism.
Put aside for just a moment the visions of goose-stepping soldiers and horrific crimes against humanity, for at its core fascism is a type of political economy which, as was the case in fascist Italy, does not have to feature a landscape dotted with crematoria. As with pure socialism, however, fascism must become more and more authoritarian with harsh penalties for those who don’t comply or who challenge the status quo, for an economy can be controlled only by controlling people.
Be cautioned, without intervention, our government’s ever-expanding definition of economic activity requiring regulation will incrementally direct most human activity until we become mere serfs forced to serve the blossoming cartels springing up like noxious weeds on Uncle Sam’s Estate.