To Fight Corruption, Limit Government
In today’s New York Times, in an article titled “A False Balance,� Paul Krugman seems to claim that corruption on the part of Republicans and “conservatives� is something special, apparently attributable to their being Republicans or “conservatives.� And since Jack Abramoff happens to be a Republican and a “conservative,� that’s a good enough excuse, according to Krugman, for throwing out any efforts at balanced reporting that may have been made in response to the embarrassment that Fox News network’s stress on “fair and balanced� has caused to the notoriously left-wing media in this country.
Krugman wants the media to harp on the fact that the current lobbying scandal is a Republican scandal and argues that those journalists who don’t “are acting as enablers for the rampant corruption that has emerged in Washington over the last decade.�
The truth is, as Mises showed, that corruption is an inevitable by-product of an interventionist economy. Every act of government intervention constitutes harm to someone or benefit to someone at the expense of someone else, who is thereby harmed. Naturally enough, people want to avoid being harmed and are eager to obtain benefits. To the extent that politicians and government officials gain discretionary power to inflict harm or bestow benefits, they are in a position to extort money from the citizens, who will pay to avoid being harmed and pay to obtain seeming benefits.
If one is serious about fighting corruption, the first and most important thing that must be fought is all discretionary power on the part of the government and its officials. The powers of Congress, state legislatures, and city councils must be strictly limited to protecting the citizens against the initiation of physical force (including fraud), and nothing else. The more the government is pressed back within these limits, the less will be the problem of corruption, because the less discretionary power will the government and its officials have to inflict harm or bestow benefits, and thus the less will be the need and the opportunity for citizens to bribe them. As part of the same process, elections will cease to be bidding wars between pressure groups. The pressure groups will dissolve once the government loses the power to harm or benefit them.
Comments (6)
An excellent commentary from a Misesian, Classical Liberal perspective that strikes at the heart of the matter by Professor Reisman.
Mr Krugman, when he writes in this capacity, is nothing but a partisan political hack. I live in New Jersey and the Democratic Party has done a wonderful job over the past several years regarding scandalous behavior, and given the strongly intervetionist nature of our federal and state governments, this type of conduct is completely expected from either major party.
I wonder if the NY Times has the integrity to prominently print Professor Reisman's analysis along with a few references to Mises's writings on this topic?
Published: January 30, 2006 8:07 PM
I am at a loss to understand how Krugman is considered an economist.
Published: January 31, 2006 7:14 AM
Eloquently stated.
Published: January 31, 2006 9:04 AM
Krugman will be touted as anything they think will attract attention, because Krugman says what they like to hear. If they thought labeling him an "historian" or "commentator" would garner more readers, they would do so.
Published: January 31, 2006 9:25 AM
This "lobbying Scandal" proposes that corporations have too much influence on policy. Remember that corporations only attempt to influence policy which affects them and could care less about 95% of congressional business.
To the extent policies do pertain to particular corporations, these corporations should have significant input into the policy. If congress is debating a reform to the corporate tax code who should they consult? Tax paying corporations or some non profit organization that is exempt from taxes?
Regarding the idea that reducing regulation would reduce corruption, the more important truth is that reducing regulation would benefit consumers and tax payers. The primary result of regulating industries is to give the incumbent corporations protected monopolies. That is why companies such as AT&T, airlines, etc, went bust after deregulation, while prices for their services plummeted
Published: January 31, 2006 3:11 PM
Quibble time.
Reisman writes, "The powers of Congress, state legislatures, and city councils must be strictly limited to protecting the citizens against the initiation of physical force (including fraud), and nothing else."
Hmm, I'm disinclined to agree with that. The part equating fraud with violence. I think he's saying we need contract law.
I don't see why. People need to be free to resolve their contract issues and enforce such resolutions among themselves, without nationalizing or socializing such things.
First, it's unfair to demand that taxpayers be forced to underwrite the resolution of disputes and the enforcement of such resolutions among those who choose to undertake contracts. Parties wishing to protect themselves from fraud need to obtain contracts with binding arbitration written into their contracts, with contracting parties paying whatever fees they can negotiate with the arbitrators. (Sometimes this may mean pre-depositing funds, or assigning legal ownership of deposited items, with the arbitrator or some other assigned third party.)
Second, for reasons that should be obvious to readers here, the State is ill-qualified in myriad ways to ajudicate contract disputes and enforce resolutions thereof.
What, you may ask, if a contracting party refuses to respect binding arbitration? Or what if arbitrators fail to perform their functions properly?
To continue to operate with a large customer base, parties need good reputations. (Eliminate all libel and slander laws, by the way: Let word-of-mouth reputations receive full airing in society at large.) Persons and companies that spurn the arbitration they contracted for will be known as the crooked frauds they are. Arbitrators who fail in their functioning will be out of demand and go out of business.
And fly-by-night operators without reputation won't be able to make a go of it, at least until they align themselves with long-established trustworthies.
In a properly free, propertarian society, people must voluntarily organize themselves against fraud, and not look to the corrupt State to keep themselves safe while engaged in voluntary transactions.
Published: February 8, 2006 6:57 PM