Wednesday, November 2, 2011

Markets and Prohibitions

There has been much said about the theory that a social safety net inevitably leads to totalitarianism. Though quite enough can be said to the contrary, the complete lack of historical examples says much in itself. It is well to note, as well, that even under an iron fist, markets come about spontaneously in accordance to demand for goods and services. Under totalitarian government, such activity is naturally limited to the criminal underworld, and indeed, the lasting legacy of Soviet Socialism is the Russian mafia.

Two lessons can be taken away from this analysis:

1). That markets are genuinely most just when access to both sides of the market are available to as many as is practicably possible, lest lawlessness be rewarded

2). That outright prohibitions will generally lead to corruption of government and society

In answer to the first, markets should be as open to new competitors as practical. Legal structures that perpetuate meritless accumulations--thereby stifling competition--should be limited in every instance practicable. In those instances where the required capitals must be of such size to carry out a necessary or public spirited function, the owners of the capital ought to protected against the corruption of those officers who are employed to labor on their behalf. This should either be by means of some democratization of the decision-making with regard to compensation of the officers, or other matters that pertain to the long term profitability of the company( As presently, this is generally taxed by the short term gain of unfaithful servants). Or, short of this, the appropriate functions should be enumerated by a charter, for which officers should be legally responsible to abide by.

With answer to the second lesson, those goods and services which cannot be demonstrably tied to the direct harm of innocents ought to be let be and let pass. By "innocents" I should include those who are unaware of ill-effects or who are likely to be harmed by the irresponsible use of others. It is well to require advisements be included upon a label, or to forbid false advertising or false promises. However, the informed consumer ought to be free to decide and take responsibility for their own safety, so long as in does not present a hazard to others. As such, it ought to be understood that prohibitions on those activities which are likely to harm innocents (such as the impaired operation of automobiles or other heavy machinery, manufacturing in such a manner as presents a public hazard, recklessly spreading contagious disease, etc) are a just and proper object of laws. But care should be taken as well, to not encourage black markets any more than absolute necessity demand, so that not only can people freely choose their lifestyle as much as possible, but that enforcement and response is available for those most urgent measures -- this last object being spoken to, in different instances, by BOTH answers!

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"Government is instituted for the common good; for the protection, safety, prosperity, and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men: Therefore the people alone have an incontestible unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity, and happiness require it." -- Constitution of Massachusettes (1780)