Big Government and Big Business: Two Wings of the Same Bird

“If government has nothing to sell, bribery is useless.”
Ron Paul

Common sense dictates that whenever two or more parties can reach an agreement that benefits all parties involved, the deal will be made, barring any moral or ethical objections – though those objections affect different people’s decision-making differently. In our daily lives we constantly barter and trade goods and services voluntarily based on their perceived (subjective) value; you show up at work in the morning because your employer pays what you perceive to be a fair price for your labor, some of the income you receive as a result is exchanged for food at the grocery store, another part goes to pay for rent, electricity and other things to sustain you.

Big Govt, Big Business Two Wings of the Same BirdThe above, of course, is not rocket science given that these are all win-win situations where all parties benefit from the transaction. After all, people voluntarily forego the perceived benefits of, say, having a lot of savings for the greater benefit of being well-fed, clothed and having a roof over their heads. As long as this is the case, there is no reason why a transaction should not or would not take place. If circumstances do change consumer behavior will respond accordingly, perhaps opting to drive less to save money on gas or to buy a cheaper tablet instead of an iPad after a price hike – as some in Japan might currently consider doing. In other words, human beings continually seek to reach agreements that they personally expect to benefit from; otherwise there is no reason to give up (part of) his or her material possessions, time or effort.

It can be argued that this applies even to charitable donations, as people select certain charities according to what is important to them. Some might give money to help feed malnourished children in the developing world while others donate to a local homeless shelter. These charities may be church-affiliated, NGOs, supported by businesses or taxpayer-funded. Whatever the case, donations are made based on people’s personal beliefs and values to causes they believe in and therefore want to support. In that sense the donation fulfills the psychological or moral wish to do good, thereby providing a benefit to the giver as well as the receiver: again a win-win situation.

Yet, an exception to this rule seems to exist in the minds of many. The exception is called “government officials”: from politicians to judges to police officers to paper pushers working for a government agency. Even though practically anyone can run for office and work for this institution “of the people, by the people and for the people”, somehow government workers are believed to be special, in that they respond differently, if at all, to the very same incentives us common folk are exposed to. When given the chance to accept money or some other benefit from a corporation, special interest group or other organization in return for a (political) favor – a win-win situation for both parties – government workers are relied upon to kindly reject the offer in furtherance of justice and the common good. Though rarely bluntly stated in these words, this is the underlying, implicit assumption regarding corruption and misconduct in government.

Upon further examination, though, the absurdity of this assumption is hard to miss. As far as I can tell, the people that work in government buildings are regular human beings. Just like in general society they are of both genders and of all colors, races and creeds; they look the same. They have families and friends. Sometimes they feel happy, sometimes they feel sad. They drive cars, play sports, go to the movies, eat out in restaurants, use the bathroom, sleep at night and breathe in and out just like the rest of us.

In fact, chances are you wouldn’t recognize one if you saw one. In short, they are just regular people with their own vices and virtues, not mythical creatures or angels that selflessly sacrifice their knowledge and skills for the betterment of society. They are not uniquely equipped to resist temptation or make the right decisions despite perverse incentives. The only difference is that they are more frequently exposed to such temptations and perverse incentives and are far more likely to be able to successfully evade the consequences of their actions at the expense of others.

Given that chance many find it hard to let morality guide them and rather easy to rationalize an ethically objectionable course of action. Just consider the cases of U.S. government researchers knowingly infecting unwitting Guatemalan subjects with STDs, the Food and Drug Administration’s ties to the pharmaceutical industry, insider trading scandals, the cover-up of a NATO-led clandestine operation in Europe killing hundreds of innocent people including children, government-sponsored coup d’états against elected foreign governments, “regulators” reluctance to prosecute major banks dealing with drug traffickers and terrorists, Japanese authorities covering up the true extent of the radiation spewing from the Fukushima Daiichi nuclear plant, the secret deal Obama made with the pharmaceutical company lobbyists, or the NSA spying program, to name but a few.

Scandal upon scandal shows that Big Government and Big Business are bed fellows. Just piling on more regulations to “solve” the problem has been an utter failure for the simple reason that human beings respond to incentives. This is basic human psychology and should surprise no one.

Realistically, the only solution is to eliminate the government’s ability to dole out benefits to corporations and let the market separate the wheat from the chaff.

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