The recent corporate scandals have given some people the impression that the big corporation, not big government, is the main threat facing the American people. Indeed liberal Democrats assert, with renewed confidence, “Big government is necessary to counter the influence of big business.”
Yes, the corporate crooks should be punished, and it may take agents of the government, namely cops, to lead them off to jail. But the broader lesson that some people are drawing from these scandals is entirely wrong. Big business in general poses little danger to the freedom or welfare of Americans. The problem is still one of big government.
However big the business, its power over the average American is quite limited. Consider the computer tycoon Michael Dell. What power does he have over me? He must buy expensive ads on TV and in magazines. He must convince me to call up and order a Dell computer and give the Dell people my credit card number. Now I would never do this unless I was convinced Dell’s computer was worth that money. In short, Mr. Dell must win my consent before he can get a single dollar out of me.
But this is not true of big government. Let me illustrate with an example, which I have drawn from economist Walter Williams. The federal government has a program called Social Security that is intended to help me save for my retirement. What if I were to say: “I appreciate the gesture, folks, but no thanks. I don’t want to be part of this program. I am not going to pay any Social Security taxes, and I forgo any future claim on benefits. When I am old and cannot support myself, I will draw on my private savings, or rely on relatives and friends, or appeal to private charities. And if all of these measures fail, I will endure my fate.” How would the government respond to this?
The government would, of course, respond by killing me. This may seem like paranoid speculation on my part, so let’s explore the hypothesis further. I refuse to pay Social Security taxes. The government sends me notices and imposes fines. I ignore the notices and refuse to pay the fines. Federal agents then come to seize my property. I, taking my gun out of my desk drawer, make whatever attempts I can to protect what is mine. Since I am a poor shot and there are many more of them, the outcome can be told in advance. They will win, and I will be dead.
The purpose of this anecdote is to show that what distinguishes the government from the private sector is the power of coercion. In some ways the most insignificant government bureaucrat—the parking meter attendant, the IRS examiner, the guy at the Department of Motor Vehicles, the immigration official—has more power over me than the CEO of Dell Computer or General Electric. And this power of coercion, which is inherent in the nature of government, fundamentally undermines the claim that the government is doing a moral thing by helping people.
Let me show why this is so. I am walking down the street, eating a sandwich, when I am approached by a hungry man. He wants to share my sandwich. Now if I give him the sandwich, I have done a good deed, and I feel good about it. The hungry man feels grateful to me, and even if he cannot repay me for my kindness, possibly he will try to help someone else when he has the chance. So this is a transaction that benefits both the giver and the receiver.
But see what happens if the government gets involved. The government takes my sandwich from me by force. Consequently, I am a reluctant giver. The government then bestows my sandwich on the hungry man. Instead of being thankful to me, however, the man feels entitled to this benefit. In other words, the involvement of the state has utterly stripped the transaction of its moral value, even though the result is exactly the same.
Now let’s keep the same scenario but change the outcome. I am approached by the hungry man, as before, but this time, instead of agreeing to share my sandwich, I refuse to do so. Along comes a third man, who pulls out a gun, points it at my head, and forces me to hand over my sandwich to him, upon which he gives it to the hungry guy. What is the moral quality of the gunman’s action? I think most people would consider him an unscrupulous thug who should be apprehended and punished. Yet when the government does precisely the same thing—forcibly seizing from some in order to give to others—the liberal insists the government is acting in a just and moral manner. This is clearly not true.
“The era of Big Government is over,” Bill Clinton assured us. Although the welfare state has lost some of its legitimacy, the federal government is still too large and overbearing. Unlike big corporations, the federal government has the coercive power to confiscate our earnings and control our lives. Over the past few decades, the expansion of government has led to a diminished sense of freedom and personal responsibility. We must continue to work to limit the size of government. Ronald Reagan’s dictum remains pertinent: Big government is not the solution; big government is the problem.