Beware the rush toward minimal government

March 20, 2011|By ALLAN POWELL

The present popularity of the so-called Tea Party and other right-wing enthusiasts for a minimal government should be taken with a large portion of salt. They have the typical burst of power that erupts from new converts to a cause: brashness and certainty of rightness.

One major article of faith is their belief that all government is to be feared. Certainly, there is ample evidence from history to warrant a studied control of government. But the advent of the mammoth aggregates of wealth and power inherent in the modern corporation makes it absolutely necessary to have the countervailing power of government to contain their potential for abuse.

To appreciate the legitimate alarm about the bigness and reach of present-day international corporations, we need to take a backward look to the era when big business dominated the economy and the doctrines of laissez-faire and primacy of property rights over human rights were supreme. The free market ideas of Adam Smith dominated the opinions of most — if not all — members of all three branches of government.

This situation made it possible for the managers of the production of our material goods to control the marketplace. Consumer protection was in its infancy as well as environmental protection. Attempts at organizing labor were thwarted at every turn — including the use of Pinkerton detectives to club laborers on strike. Indeed, it was not until the New Deal that agreements reached by collective bargaining were legally enforceable.

Then, in 1952, a theory was put forward by a competent economist, John Kenneth Galbraith, to show the need for a more stable distribution of power in the working of the marketplace. In "American Capitalism: The Concept of Countervailing Power," Galbraith proposed what amounts to the principle of checks and balances in our political system. There, we divided the overall power package into three segments — legislative, executive and judicial — then again controlled their power by checks and balances.

Galbraith's theory of countervailing power does the same thing in the realm of economics applied to the several contenders for dominance in the marketplace. Management has interests to countervail the ambitions of labor; producers have interests that are countervailed by consumers. Then, government might need to intervene to countervail on behalf of all segments of market power. Power is countervailed with power, and market equilibrium is maintained.

Over the years, Congress has passed legislation to remedy some of the conflicts and issues brought about by the shifts in market power and market practices about which Galbraith was concerned. The regulatory attempts by government to manage abuses in the marketplace by the use of countervailing power were not always effective or simply were unenforced. At present, the anti-government movement might even deny the legitimacy of government as an agent of countervailing power.

What has happened to their sense of historic memory that includes the repeated attempts of the loudest voices for a free market (laissez-faire) to systematically destroy the free market in a mad rush to monopoly? The only realistic countervailing power was the government, and it slowly passed anti-trust laws to restore competition to the marketplace. We are naive if we suppose they would never revert to that era again.

The latter-day free marketers are wealthy enough to have their own health care, so they have no interest in those who can't afford it. They are retired and, therefore, have no interest in the plight of the unemployed. They want to privatize Social Security or even bring it to an end. They need no cushion in old age — why should others have one? In a word, their only interest is self-interest.

A powerful corporation is just as untrustworthy as a powerful government. As Lord Acton stated, "Power corrupts and absolute power corrupts absolutely." Watching the Tea Party in action is just as scary as any other new movement that displays so much self-assurance and certainty. Galbraith was right; we need countervailing power from an enlightened government to referee the countervailing powers in the marketplace.  

Allan Powell is a professor emeritus of philosophy at Hagerstown Community College.

The Herald-Mail Articles