Body thieves and regulatory capture
I sometimes find myself thinking about how libertarians agree and disagree with non-libertarians. How much of the disagreement is due to a deep division of values and how much is due to different ideas about how to pursue similar values? Of course, there is no single answer to this question, but major trends can be observed.
I’ve noticed one area where libertarians and leftists (largely) agree on the nature of a problem, but come to very different conclusions about how best to address that problem. I think of how the state tends to favor powerful and entrenched interests over the interests of the less powerful. Leftists typically describe this with phrases like “we live in a corporate state and corporations control the government”, while libertarians are more likely to use phrases like “regulatory capture makes the state serve the interests of regulated industry rather than the public interest,” but both sides are describing the same phenomenon here.
By the way, I think leftists underappreciate how much libertarians share their concerns on this front. Those on the left will suggest that libertarians champion free markets and oppose economic regulation out of loyalty or a fondness for big business, but that is very far from the truth. On the one hand, big business doesn’t want an unregulated free market – they want the market regulated in their favor. Second, the more regulatory power the state has, the greater the incentive for businesses to ensure that the power is used in their favor. And third, the nature of the policy ensures that this is almost certainly how the regulations will be used in practice. Milton Friedman expressed it well in the first episode of his Free to choose TV series:
I don’t think it’s appropriate to frame the situation in terms of industry versus government. On the contrary, one of the reasons why I am in favor of less government is because when you have more government industrialists taking power, and the two together form a coalition against the ordinary worker and the ordinary consumer.
Where libertarians and leftists disagree is on how to deal with the problem of this coalition between state and corporations. Libertarians see this coalition as a strong reason to reduce the regulatory powers of the state – leftists disagree. Obviously, I think the libertarian approach makes more sense – and to illustrate why, let’s indulge in a corny sci-fi thought experiment.
Imagine Earth being slowly invaded by body-stealing aliens, who replaced humans with identical-looking alien agents who worked behind the scenes to further the aliens’ sinister agenda. Let’s say the government has tasked the NSA with countering this extraterrestrial threat. Unsurprisingly, the aliens begin to sneak in to take over the NSA.
What’s the best way to answer that? An approach that we should definitely not take is to say “The body thieves have taken over the NSA, so we need to increase the powers of the NSA so they can better protect us from the body thieves.” It would be a terrible idea – if the body thieves have already taken control of the NSA, then increasing the powers of the NSA will only play into the hand of the body thieves. CQFD.
Leftists who believe we live in a corporate state and who advocate greater state control over the economy as a counterbalance to this concern, make the same mistake. Their position amounts to saying: “Corporations control the government, so we must increase the powers of the government so that they can protect us from the corporations that control the government.
Kevin Corcoran is a Marine Corps veteran and health economics and analytics consultant. He holds a Bachelor of Science in Economics from George Mason University.