Free Enterprise & Economism – The Difference
Posted by Orrin Woodward on September 27, 2010
Free Enterprise describes a society that allows each man or woman the liberty of economic choices, permitting the companies that best serve the customers to survive by the good will engendered. Government and private coercion are held in check, providing a free environment for the people to thrive based upon their efforts. Government, in the free enterprise system, plays the role of an umpire, ensuring equality of playing conditions, so that the winning team is the one that serves the customer the best, giving no special deals to any team. Although free enterprise is the best system in theory and practice, it has rarely been understood in theory and never applied in practice.
Economism describes a society where big business partners with government to provide positive economic arrangements for the chosen few. Government, instead of playing the role of a neutral umpire, becomes the 12th man on the proverbial football team, helping assist Big Businesses, regardless of the on the field performance. It’s not hard to find evidence of Economism, simply glancing at any city newspaper, you will read about the latest government “bail out” of XYZ company for the sake of “protecting American jobs.” Every bail out, in the end, is funded by tax payer dollars, which means the tax payers get to subsidize the wealthy business owner who isn’t competently running his business. Bail outs cost more to job holders than any protection of jobs the bail out can offer, but that is of secondary importance and not the immediate concern of the politician who is only in office for a limited time anyway. Government involvement brings in a political element into the economic sphere, damaging the ability of the customers to vote for the business which serves them best.
The sad part of Economism, a confused middle way between Fascism and Free Enterprise, is people will assume Free Enterprise has failed. In fact, Free Enterprise hasn’t failed in America, it hasn’t been tried. Any time government involves itself positively in the economy, it begins to play a god-like role, choosing which companies will survive, and which companies will die, even though, it’s less qualified to do so than the millions of customers playing that role in a true Free Enterprise system. Economism isn’t new, dating back to Egypt under the Pharaohs, if not even earlier, but its modern day examples play god on a much bigger scale. Look at China, it isn’t communist any longer, but it isn’t free enterprise either; instead, it’s a blend of big business partnered with government, i.e: Economism. Sadly, China is giving more freedom to business owners in its titular communist system than the United States is giving to business owners in its titular free enterprise system.
What first attracted my attention to this was the astonishing extent to which the rich received special deals from the government. This is simply unacceptable in a Free Enterprise system. Many, but not all, of the great fortunes were made by means which were patently unfair, and were known to be so. Owners of large conglomerates who gained control or at least influence of the State’s machinery, and were using it to their own advantage by way of land-grants, tariff concessions, franchise monopolies and every other known form a law-made privilege, abused the system, all in the name of American Economism. In view of American justice for all, this was shamefully bad. Yet on should not blame business owners for exploiting the existing system to their personal advantage, after all, flowing water always follows the riverbed; therefore, true change needs to correct the riverbed, not just punish the water for following the riverbed. Economism gives the government the unnatural right to intervene in protective tariffs, income taxation, regulation, etc; we should not be shocked that some enterprising, but characterless individuals utilize government intervention for exploitation purposes. True Free Enterprise has no part and parcel with Economism, knowing that favoritism can never be squared with justice. On the contrary, free enterprise views government as a neutral umpire in the game of business, while Economism views government as a partner to exploit the masses for the benefit of the elite politicians and business owners. With Economism reigning as the world-view of nearly all politicians and Big Businesses, what could we expect but a continuous struggle for control of the State machinery, many resorting to pay offs, corruption and the lot to win, all for the right to exploit others with State’s power for one’s personal advantage.
While there are many issues, some listed above on the short sightedness of government intervention in the economy, one of the biggest is the concept called “Destruction of the Commons.” Government when it ceases to be an umpire and starts playing as a participant in the economy, quickly becomes the battleground of competing groups for control of government’s monopoly of power. Since citizens have no appeal to any source that isn’t part of the government, gaining control over the political means of power is a major competitive advantage for any big business over its unconnected competitors. Politicians do not own the government, but only rent their seats for a time, willingly surrendering their influence to the needs of big business in order to ensure their elections. The politician is thinking of his gain by being elected and isn’t worried about the long term effects of his behavior to the people in general, which perfectly describes the “Destruction of the Commons.” When you rent a car, you’re not as worried about taking care of it, it isn’t yours and the owner will have to fix those brakes, shocks etc anyway. If you go faster over bumps in the road, it isn’t the end of the world since it isn’t your car anyway. Sadly, most politicians think that way about our government, caring little about the national debt, crippling taxation, and economic ruin as that will be someone else’s problem, not theirs.
As a leader, father, and an American, I am asking for my fellow American’s to get educated and informed on our American history and ideals. What the Founding Fathers envisioned, implemented, and expected, they certainly weren’t perfect and we could learn much from their successes and failures, would be a great start. There are many books to begin this journey, but I recommend starting with Albert Jay Nock, Our Enemy the State. It clearly explains why government and business do not mix; even though it is written in the 1930’s, it predicts accurately many of America’s current fiscal dilemmas. The best way to change the future is to learn from the past and to act in the present. I think its time we start that process. God Bless, Orrin Woodward