Separating Money & Power

A reader asked me an excellent question last week: What is the proper separation between private businesses and government?

It is true that businesses often influence government by lobbying for legislation in their favor. Why is government influenced at all by businesses? The answer is simple - because government has the power to grant them favors that will amount to millions of dollars.

Complaints of the intermingling of government and private companies come from both the right and left. Democrats complain of Republican administrations awarding contracts to private companies without requiring companies to bid on them (Halliburton & the George W. Bush administration), and Republicans complain of Democratic administrations allowing dishonest executives to spend the night in the White House and giving them huge subsidies (Enron's Kenneth Lay & the Clinton administration).

Both complaints miss the point. The problem is not with one administration or another (although one does not have to look far to find them). Instead, the problem is that government has gained the unconstitutional ability to pass laws that benefit some at the expense of others.

I may have directed readers to Bastiat's work previously, but it is worth rereading. 'The Law' describes what Bastiat terms "legal plunder" and suggests, "the proper purpose of law is to use the power of its collective force to stop this fatal tendency to plunder instead of to work. All the measures of the law should protect property and punish plunder. But, generally, the law is made by one man or one class of men. And since law cannot operate without the sanction and support of a dominating force, this force must be entrusted to those who make the laws. This fact, combined with the fatal tendency that exists in the heart of man to satisfy his wants with the least possible effort, explains the almost universal perversion of the law. Thus it is easy to understand how law, instead of checking injustice, becomes the invincible weapon of injustice. It is easy to understand why the law is used by the legislator to destroy in varying degrees among the rest of the people, their personal independence by slavery, their liberty by oppression, and their property by plunder. This is done for the benefit of the person who makes the law, and in proportion to the power that he holds ... God has given to men all that is necessary for them to accomplish their destinies. He has provided a social form as well as a human form. And these social organs of persons are so constituted that they will develop themselves harmoniously in the clean air of liberty. Away, then, with quacks and organizers! Away with their rings, chains, hooks, and pincers! Away with their artificial systems! Away with the whims of governmental administrators, their socialized projects, their centralization, their tariffs, their government schools, their state religions, their free credit, their bank monopolies, their regulations, their restrictions, their equalization by taxation, and their pious moralizations! And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works."