Saying It Again

The following letter appeared in today’s Opelika-Auburn News. Regular readers of this blog will find no surprises here:

To the Editor:

D. W. St. John (“Regulations often needed in today’s world,” Thursday) blames both the BP oil spill and the financial crisis on a lack of government regulation.

On the contrary, both disasters were caused by pro-big-business regulations.

BP took unnecessary risks because they’d been given a liability cap of $75 million. Small wonder that they engaged in riskier behavior when they could count on regulations limiting their victims’ right to sue.

Alan Greenspan

As for the financial crisis, Fed chairman Alan Greenspan’s manipulation of interest rates distorted price signals and encouraged unsustainable investments, thereby making a collapse inevitable. Calling this longtime regulator a messiah of unregulated markets is ludicrous.

Most government regulations are pro-plutocracy in their effects, regardless of how they’re marketed. Both liberal and conservative politicians are reliable supporters of the big-government/big-business partnership that dominates our economy, though of course they’re careful to wrap that support in anti-big-business rhetoric and anti-big-government rhetoric, respectively.

It’s no coincidence that most of the supposedly anti-big-business legislation of the Progressive Era was lobbied for, often even drafted by, the corporate elite, who understood that big businesses thrive when small businesses are choked by regulations.

The grain of truth in the idea that crises are caused by deregulation is that when government grants special privileges to banks and corporations, and then removes restrictions on how these privileges are exercised, perverse incentives take over and catastrophic results predictably ensue.

But the problem is the initial regulations that create the privileges in the first place.

Unchaining a state-privileged entity is not a decrease in state intervention; rather the contrary.

To learn more about why government regulation systematically serves the interests of the wealthy at the expense of everybody else, check out the websites of the Alliance of the Libertarian Left and the Center for a Stateless Society.

Roderick T. Long

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4 Responses to Saying It Again

  1. D. W. St. John August 11, 2011 at 2:00 am #

    Hello, Roderick Long,
    I’ve read your letters to the editor of the O-A News with pleasure and admiration for some years now. This is true even though I was the target of your most recent letter. I’d like to reply to some of the points you made.
    I should first concede the good sense of much that you say. Indeed government regulations can go awry for many reasons, even if they are written not by corporations but by dedicated public servants.
    In my letter, of the innumerable possible examples of regulatory shortcomings, I chose three, two of which you commented on. The third example—that of Massey Energy and the 29 dead coal miners—you did not mention, perhaps due to limitations of space. But let’s spend a moment on that case and issues arising from it.
    Let’s assume that there were no government regulations of coal mines and mining. And let’s imagine a blindly profit-driven management, quite willing to neglect worker safety—willing to accept, as the Ford Motor Co. did in the infamous Pinto gas tank cases—a certain number of deaths as the price for doing business. (If you have read the details of the Massey mine disaster, you will know that I am, if anything, being too kind and restrained to its owners.)
    You might say that, after all, those miners need not work for such a Simon Legree; they are free agents–they should have just quit and sought a more humane boss! But this reply is ivory-tower in the worst sense. I lived among these miners when I was in graduate school in southeastern Ohio. They would grumble, but they had precious little bargaining power against their powerful bosses.
    Even their labor union could not protect the Massey 29. Indeed membership in labor unions is today but a small fraction of what it was in the 1950’s; and unions are under assault by Republicans everywhere. Teachers, firefighters, police, now join the embattled.
    Or you might say that, after all, sigh, the widows of the 29 dead miners would have a pretty good case if they sue Massey! Libertarians seem to be enamored of lawsuits. Of course the widows’ husbands are still dead.
    It is a constant battle, but much of the time, only the government can protect the weak from the depredations of the strong. And in the 20th century, as you know, much of the growth of the federal government has come in the executive agencies, many of whose officials seek to protect the weak from the strong. Little boys, by law kept out of the mines, now mostly escape cancer of the scrotum—the occupational hazard of chimney sweeps and breaker boys, whose faces haunt the poetry of William Blake and the photos of Lewis Hine.
    I don’t want to sue Pfizer after my child dies—there being no FDA after government is gone. I want my child alive. In this global age when my asparagus for god’s sake comes from Peru…what, in my botulism recovery period I must track down some Lima-based ag conglomerate? I suppose I could just sue Kroger’s, who in turn would sue, etc. Instead, I prefer some effective government inspections and health regulations.
    Roderick, I took your advice and visited the two websites you recommended, reading some of the many articles whose links are provided. The sites seem to be populated by writers such as I imagine you to be: successful American men, tolerant and reasonable, the beneficiaries of countless government-supplied blessings; but who in their secret hearts suppose that while the weak may think they need government, people like us are refreshingly self-reliant.
    W. H. Auden once memorably wrote that we owe our greatest representation of Hell to literature, and our best sense of Heaven to music.
    In the Center for a Stateless Society FAQ section, to the question “What will a stateless society look like?” the answer resembles some sort of attempt at music; but it is cacophonous, as well as being nebulous and opaque. A stateless society must be like Marx’s vision of pure communism, or Mahler’s evocation of heaven in the last movement of his 4th Symphony. It is wholly utopian. It shares the beauty, and the unreality, of the others.

    • Roderick August 11, 2011 at 4:03 am #

      It’s 3 in the morning, so just a few quick remarks for now:

      I don’t have your original letter to hand, but I don’t recall anything about the Massey Energy mine in it. Are you sure they printed the entire letter?

      But if you take a closer look at the sites I linked to, you’ll see explained in some detail that the very fact that our economy is dominated by capitalistic firms rather than worker-owned firms, and that labour unions are so weak, is the direct result of the regulators that you say “seek to protect the weak from the strong.” See, e.g., Kevin Carson, here and here. Without government help, firms like Massey Energy couldn’t even exist.

      Another point: When we appeal to lawsuits rather than regulation, we aren’t talking about lawsuits in our present corporatist economy. That system is currently rigged on behalf of big business, just as the regulatory system is. (And lawsuits are no more “after the fact” than regulation is, in practice.)

      A note in passing: The FDA, which you praise, kills far more people than it saves, for familiar incentival reasons: it’s penalised for type 1 errors but not for type 2 errors.

      Your speculations about the personal lives of our writers are not terribly accurate, but in any case irrelevant as a criticism of their arguments.

      Finally: what would you have said 200 years ago if asked “what would a society without slavery look like?”

      More later when less sleepy.

  2. D. W. St. John August 12, 2011 at 2:01 am #

    Hello again, Roderick,

    Sorry to rob you of some golden sleep! I, too, tend to write late at night, as now.

    I’ll append to this reply a copy of my original letter, which treated the Massey Energy case.

    When I commented in that ad hominem way about your writers, I got a little carried away, I’ll admit. But it’s something to think about: those who see themselves as strong and self-sufficient, especially if a bit limited in the ability to imagine walking in others’ Nike Airs, might be drawn to texts like Atlas Shrugged. This is psychopolitical speculation, I realize, but not necessarily worthless.

    Not everything in your reply is clear to me, probably a result of my ignorance of e.g. “type 1 errors” vs. “type 2 errors.”

    Your slavery parallel is interesting, though not persuasive. Abolitionists could point to many countries and societies without slavery; freedom was easily imaginable. But the closest thing today to a “stateless society” would seem to be Somalia. In fact most people use the phrase “failed state”–a society without a functioning government–to describe the nadir of human conditions. Hobbes argued, powerfully, that people will demand order, even tyrannical order–but the kind of order only government can provide. To cite a minor but recent example: in the wake of 9/11 Bush had no trouble framing a “Patriot Act” that allowed his agents to burrow into anything they wanted. If you pit the need for order against the desire for liberty–order will usually win.

    For me, anarchism’s fundamental weakness is its sanguine view of human nature. All of the great political philosophers, from the Greeks through Hume at least, had a more realistic, more visceral, sense of human wickedness. “Out, vile jelly! Where is thy luster now?” as King Lear’s eyes are gouged out.

    I can imagine a strong anarchist argument being mounted against Left and Right, as we see them manifested in politics today. But anarchism awaits its poet–someone who can make Heaven seem real and reachable and attractive.

    Here’s my earlier letter:

    July 30, 2011
    Letter to the Editor:
    Today’s e-mail brought a mass mailing from Congressman Mike Rogers. He is especially exercised by government regulations and welcomes the House of Representatives effort to cut by 1.5 billion the EPA budget. Extreme conservatives like Rogers have always hated the EPA, though it was a Republican, Richard Nixon, who fathered the agency in 1970. Most Americans then believed that when the Cuyahoga River caught fire, maybe something should be done.
    No one likes government regulations in the abstract, but when they are lacking, or are not enforced, or are administered in a corrupt manner, many people die. The BP oil spill was not “an act of God” but a case of unregulated negligence by powerful corporations. In the 2010 Massey Energy coal mine disaster, which killed 29 miners, the company repeatedly ignored safety regulations and intimidated its own workers.
    But the mother of all regulatory failures must be the financial crisis that brought on the devastating recession we are struggling to recover from. The story is complex, and culprits can be found all across the political spectrum, but at the heart of the mess is a simple fallacy: that markets can police themselves; that we do not need government regulations of financial institutions. The messiah of this gospel was Alan Greenspan, who admitted far too late how wrong he had been.
    So when Mike Rogers wants to scare us by saying that “this spring alone, the Obama administration proposed 4,257 new rules and regulations,” the only sensible reply is, “have you examined these proposals? Exactly which ones are unnecessary and why?”
    Instead of fostering public understanding of current events, Rogers as usual seeks merely to reinforce bumper-sticker slogans like, “Let’s get guvamint off our backs.”
    D. W. St. John

  3. martin August 12, 2011 at 4:28 am #

    For me, anarchism’s fundamental weakness is its sanguine view of human nature.

    That’s where you’re wrong. There is no such sanguine view. The difference between (market) anarchists and others is that anarchists realize that human nature applies to people in government just as well as to other people.

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