The federal government has a vested interest in preserving the standing social order. While that might be a laudable goal from a political science perspective, it’s a less desirable goal for innovators and consumers who benefit from creative destruction.
Think, for a moment, about some of the routine tasks that are part of your daily life. How many of them are influenced by government action?
For my own part, I awoke this morning to a blaring alarm on my phone, warning me about the potential for flash floods in the town where I live. This was not an alert I’d set myself, but one government mandated be broadcast on my phone. Fairly disgruntled by this inauspicious start to the week, I then got up and made myself a cup of coffee. My coffee pot is UL listed, which lets me know that it complies with applicable government safety regulations. As I sit here typing this column, the Energy Star app on my computer is yelling at me about settings on my computer affecting my battery’s efficiency. Energy Star is, effectively, a propaganda arm of the Environmental Protection Agency, whose goal is “helps businesses and individuals save money and protect our climate through superior energy efficiency,” as if I needed an incentive beyond the skyrocketing cost of electricity (thanks government-sanctioned monopolies!) to be energy efficient.
Everything I’ve done so far today has been touched upon by government regulation.
Now, I’m not attempting to make the case modern America is some kind of sleeper Orwellian state. I’m merely pointing out that the reach of government is virtually unlimited. There is, effectively, no barrier between the public sector and the private sector: regulation everywhere nudges private actors into conformity with the paternalistic judgment of the federal government, in a manner so slight as to be effectively invisible.
One might ask, whether, since most of us are rarely aware of the effects of these actions, and, since many of them are designed to promote individual welfare, why are they something to be wary of?
For a start, there’s the economic cost: regulation not only makes life more expensive for consumers–meaning your dollar doesn’t go as far and limiting the amount you can do as a result–but creates a barrier of entry into markets. Given how enthusiastically the government likes to promote “the little guy” as an underdog in the eternal war between greedy venture capitalists and the toiling everymen of America,
The larger problem, however, is that private and public operators, like matter and anti-matter, have two distinct and directly contradictory principles at their core. Government is like the fused spine of society: it is rigid and unmoving; it provides stability.
Private action, on the other hand is chaotic and amorphous and unpredictable. Its laws are ever in flux, because individual judgment is at the crux of the interactions that shape markets. Producers are constantly in competition with one another to provide a better service to a broader sector of the public, whose loyalties shift as different actors come to better embody those things they value.
In short: government exists to enforce the status quo it has written; private life exists to subvert the status quo.
This is not a problem so long as government has strictly delineated bounds in which it can be operate. However, Congress, having defaulted on all the powers given it by the Constitution, has apparently grown bored and now extends its reach well into the private realm. It is this motivation that catalyzes the ridiculous vaudevillian showmanship of Congressional hearings. These are the government equivalent of exploratory surgery: legislators have an instinct that something is wrong somewhere and feel entitled to poke around until they find something that looks like a problem to be excised by regulation, a move that flies in the face of the Fourth Amendment.
Without actually being accused of any specific crime, private actors are dragged before officious legislative subcommittees and forced to defend their actions against the specter of same vague threat conjured up by even vaguer questions by individuals who represent institutionalization and rule of law, a perspective necessary to their roles as politicians but one that also negates their ability to understand the rationale by which the business man, a denizen of the private realm, lives or dies.
The government’s instinctual desire in such inquisitional proceedings is its most fundamental urge: promote stability through the status quo. Hence, any innovation that upends the standing order is seen as a threat, despite the untold possibility for growth that comes with it. This is a behavior increasingly evinced by the federal government’s response to the changing technological landscape. The government, which is supposed to protect the parity at which individual rights are held, views certain actors, namely big businessmen, as threats. Its actions are biased against them: Net neutrality is needed to squelch Internet service providers. Regulation is needed to break up Facebook’s monopoly on digital speech. Foreign companies like Broadcom might one day prove a threat to American business, so they must be excluded from domestic markets.
Put aside for a moment the issue of monopolies and there is one commonality that binds these actions together: fear that change represents an implicit threat to American citizens. Government looks to coddle citizens–assuming they are incapable of making these assessments for themselves–by batting down any change to the existing social order. Their message is clear: we have a system that works and, though it has flaws, these are fixable because we’re familiar with its procedures.
To justify itself, government raises the bogeyman of monopolies and plays on instinctual fears that concentrated power in the hands of big business makes it impossible for smaller actors to make a living.
Ironically, however, it is only their protectionism that makes this possible. It’s not some altruistic duty to fairness that drives Mark Zuckerberg to resign himself to the inevitable regulation of Facebook or drives Internet providers to lobby for net neutrality regulations: its their own self-interest.
Preservation of the status quo means that those business already established in a market will retain their place of dominance. Regulation creates a barrier of entry into the market for new actors. Established businesses can stop worrying about the constant need to find new ways to improve their product and ensure audience loyalty. That’s the grim paradox of government by stasis: it actually hurts quality of life for those actors whose interests its trying to promote. Protectionism gives cover to businessmen, who, in the anarchic creative environment of an unregulated market, have to constantly cater to the changing needs of their clients just to maintain their presence.
And that’s the real danger of a government with an unlimited reach: it means innovation is pretty much stifled. Its not just the organs of power that are frozen in time; all of society is, because there is, effectively, no private realm where individuals are beyond the wagging finger of government protectionism.
Also published on Medium.