Tuesday, June 1, 2010

Regulation and the State Part 1

This was originally aired by Stefan Molyneux on his Sunday Show podcast FDR1663 this transcript starts at [15:03].  Note, this has been edited for language and content.

[T]his idea that we need control over private capitalist organizations is so completely irrational that...this is why i started looking at family stuff.  [Since] there's just no way that anybody can look at a logical diagram and say the following, "We need control over social institutions and so let's a create one social institution arm it to the...teeth, have it be able to steal at will and imprison the population and the population has zero control economically at least over this entity and so we need to create an entity that is completely involuntary and is all powerful and has complete control over the citizenship and we need to create this entity because there are social agencies that the citizens are afraid of not having control over."  I mean that is that is so completely insane that no rational human being with more than 4 1/2 brain cells to rub together would ever come up with that solution.  It's like saying I’m afraid of dating so i want to get raped, i mean that just makes no sense at all, right?  

So that's the first thing I would say [the] citizens have no control over the all powerful government so the idea that we create a government in order to control dangerous social institutions like free market companies is insane.  [T]he huge difference between me dealing with some local grocery store is that if I don't like that grocery store I don't have to do [a] thing, I don't have to get off the couch, I don't have to take my finger out of my nose or my other hand off the remote let's say.  I don't have to move a muscle or take a breath if I don't like the grocery store down the road because I just won't go there so an action going about my day everything that you do in a free market that is not involved in giving money or time or services to a particular organization is a complete vote against every other corporation in the world, right?  

So if I go out and buy an iPad that is a vote against every other $600 worth of consumption that I could have made so if I am voting for an iPad I’m voting against every other possible use of that money including saving it…. I don't have to do anything if I don't approve of a particular corporation.  On the other hand, with the government, if you don't agree with what the government does your [screwed].   If you don't like what the government does what are you going to do?  Well you have to go marching, you have to try to get into office, you have to spend a lot of money, you have to risk going to jail if you don't want to pay your taxes.  In other words, the government compels you to obey and the cost of disobedience is unbelievably high to the point most people, and I think reasonably so, won't risk it.

On the other hand, if I don't agree with what some corporation is doing I don't have to do anything.  I can just sit there and suck up the Doritos dust from my chest as I continue watching another season of “Lost.”  I don't have to do anything.  [T]his difference between positive and negative action is something that people don't understand.  The idea of creating a monopoly of violence in order to solve a multiplicity of voluntarism is completely mad….

[Also, it has to do with] this bizarre belief that corporations have something to do with the free market.  That corporations exist somehow wildly independent of the government and that corporations are the spawn of the free market, they are the spawn of voluntarism, and they are controlling the government and bribing the government and influencing the government and all this that and the other and that is all complete ahistorical propagandized nonsense.  [C]orporations are state created and state controlled ways of avoiding legal liability for your economic decisions.  

So if you have a corporation and your corporation does well you take all the money if you have a corporation and your corporation does something stupid or illegal or dangerous or harms people then the corporation gets sued and you don't get touched.  So for instance, this terrible gulf oil spill or this oil leak that is going on at the moment.  That is just completely disastrous and is going to have effects on the ecosystem of the gulf for probably years if not decades to come…. 

[W]hy are they… drilling 400 miles below the earth below the surface of the sea?  Because, according to environmental regulations, they are really not allowed to drill on land.  Also, why we are we still so dependent on oil?  It's because the U.S. government spends so much money propping up corrupt dictatorships in return for oil.  [H]ow many tens of thousands of troops stationed in Saudi Arabia propping up that dictatorship to get access to oil.  If none of that was occurring the price of oil would be higher or there would already have been reforms in Saudi Arabia and other countries that they prop up through U.S. militarism.  There would have been reforms that would have lowered the price of oil by introducing more competition.  [By] propping up oil based dictatorships, the U.S. is artificially driving up the price of oil and is reducing the incentives for other people to drill….  Now the government does not require the backup systems that might have contained this spill….

Do you think...that one oil executive is going to lose his house over this I mean if I crash into someone’s car without insurance I’m going to lose my house, assuming they get injured, they're going to take my house I don't think that's unfair but these oil executives hide behind these legal shields called corporations and they don't get any personal exposure to the actions of that corporation you can't go after their houses you can't go after their assets.  So when they are weighing the calculations about whether to spend another 1/2 million dollars because they're drilling at the bottom of the ocean because of all the other government regulations, they're weighing that decision there's no personal stake in that decision.  [T]hat's a bit of an overstatement they may want to keep working, they may want to keep their jobs, they might lose their jobs but their personal assets [won’t be lost].  The people at the top pool making these decisions are already making millions of dollars, have more than enough money to live on for generations.  If they want, and there's no personal stake in any of that, so they make these decisions knowing that if there is a catastrophe it's not going to affect their personal wealth.  

It's completely insane.  It's like I have a fictional friend and if I do anything good I get all the benefits and if I do anything bad it's my fictional friend who goes to jail and I just get to make up another fictional friend if I want to. [I]f you could just invent your own personal alternate corporation hand puppet and if anything went wrong you said, “No, no, talk to the hand puppet.”  [W]e wouldn't have a functioning system at all.  If that's how it worked at a personal [level nothing would work].  But this how it works at a corporate level.  [I]t has nothing to do with the free market.  I guarantee you there would be no such thing as a corporation in the free market.  A corporation is an entirely state generated entity and it's a way the government buys the votes of rich people and gets their donations by giving them legal immunity from the negative consequences of their bad decisions.  [T]hat's what a corporation is.  It's a bribe to the upper classes to excuse them from the liability of doing disastrous things like screwing up the entire ecosystem of the gulf with 12 billion barrels of oil...

...But if it was a free market how would they be regulated?

...In a DRO society if I wanted to go drill at the bottom of the ocean the DRO would have…insurance….  I would have to be able to prove in order to get that insurance…to whatever organization that would be responsible for paying out that insurance…that it is safe as humanly possible.  [T]he gulf wasn't even remotely safe as humanly possible.  BP is going to have to pay 1 1000th of the cost of the clean up.  [N]o executives, I guarantee you, no executives will be personally liable one dime of that catastrophe.  It will all get stuck on the tax payers.  That would never happen in the free market because there are no tax payers in the free market.

...So you’re just changing the checks and balances from the government to the Dispute Resolution Organizations (DROs) ...

There are no checks and balances in the government, there's only excuses and predations....


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