It's Market Failure, Not Government Failure

I love America. I really do. We're a country that hates paying taxes, hates lawyers and hates minorities. Because why would you want to pay for services, appreciate the people who protect your rights, or appreciate the diversity and struggle of people who have had it harder than you? This is a great country! Nationalism at sporting events, a poverty rate based on the cost of an "economical" meal, and a C average president! But the best thing about this country is the near religious belief in capitalism.

First, let me say I'm glad there's an Invisible Hand. That sounds wonderful! Maybe there can be a Unicorn of Free Trade and a Griffin of Prosperity! Seriously? An Invisible Hand? This is what we're going with? Darwin's bad, but some Invisible Hand? Did I miss something?

Capitalism is not a form of government, it is an economic system. Is it the best economic system? Probably. But it needs to be countered by the government. Unregulated markets lead to all sorts of bad things. Do we need to be Cuba? Of course not. But we do need to be a bit stricter than say Reagan or a 17th Century colonist.

My pal Ronald Reagan famously said that "Government is not the solution to our problems, government is the problem". Such lovingly poetic quotes from America's favorite B-list actor. Anyway, this assumes that the government restrictions are the problem, that government programs are the problem, but let me ask this: Which came first? Did we have free markets or government programs?

The answer, is that we had free markets first. We also had "Faith Based Organizations" first. The Church is very old. Capitalism is very old. Trade is very old. Government welfare is the new kid on the block. Trade unions are young. Worker's rights, indeed individual rights, is a pretty new concept. I'll give you a hint, Coca Cola has been around a lot longer than Social Security and Standard Oil, along with its lovely descendants, was ripping people off long before we came up with food stamps.

So why do we have these programs? Because the markets failed. The religious and charitable organizations failed. The Church couldn't provide for everyone (not that it should be expected to). Nonprofits did not have the resources to fix society's problems. And the markets? The markets were a huge part of society's problems.

Lets think about what the markets have given us. I'll start with the positives. Markets have given us Coke and Pepsi, Ipods and Itunes, fast computers, fast cars, nice TVs and beautiful houses. Markets have generated a lot of wealth and jobs for a fair number of people. Markets have also provided the tax base necessary for government to do its work.

Now lets move onto the slightly more negative things that markets have given us. Things like slavery (sorry, but its true, its all about keeping down labor costs), child labor, sweat shops, prostitution in its various forms, oil spills, factory farms, gated communities, asbestos, cigarettes, a thousand types of alcohol, monopolies, price gouging, and Haliburton.

This isn't to say that markets are bad or good. They're markets. Society cannot let itself be ruled by economic self interest. That leaves way too many people behind. Markets are a tool, not an end. And markets benefit tremendously from the government.

Starbucks doesn't have to build its own roads, or its own school system. Microsoft doesn't have to invent mass transit or a system of laws. The knowledge and experience of hundreds of state universities benefits the markets. And even regulations help. Burger King may not like having to cook its hamburgers, but I'm pretty sure the other companies appreciate their employees not dying of food poisoning. Exxon and Duke Power might hate the Environmental Protection Agency, but I for one appreciate that the government limits the amount of poison in my environment.

Government isn't the problem, but proper Government is the solution.