A Cure Slightly Better Than the Disease

I have to admit, I’m more than a little confused these days by the apparent complacency among most people towards the failures in government that seem to be coming more fast and furious than ever. It’s not like these are small mistakes or minor rounding errors that are occurring; these are major, ongoing issues, and it’s not just in our own country. If private companies were to make mistakes or (worse) engage in cover-ups of this magnitude, there would be an immediate outcry for investigations and government oversight. But who watches the watchmen? (Well, okay, I did. Great film. But that’s beside the point.)

The counter I usually get from friends and colleagues when I bring these issues up is that “there are other branches of government that are investigating.” Oh, good. That makes me feel ever so much better. Because I certainly would have trusted BP to investigate after the Deepwater Horizon oil spill, and if there were any doubts about private contractors in Iraq I feel quite confident that Halliburton would have gotten to the bottom of it and let us all know the facts right away. They both have internal divisions for checking into that sort of stuff. All major companies do. And they have nothing to gain from gaming the system, right?

The source of my doubt and cynicism is the logical fallacy of it all. Even granting for the sake of argument that each branch of government is independent, that each department is independent, and there’s no amount of favor-trading or back scratching going on, there are still problems. Fact: the cause for the investigation is corruption or ineptitude in a government agency. Fact: the investigators are coming from a government agency. Assertion: we have nothing to be concerned about, because the government will fix it. Does anyone else see the problem here?

The worst violators of this, and I am not pointing at either the left or the right because they both do it, are the ones who demand the most government “oversight” of the free market. Whether it is in manufacturing, finance, or any other field, it seems there is no limit to the amount of regulations, restrictions, and controls they want to impose. And to what purpose? To ensure that nobody does anything wrong. But something always goes wrong, bad things happen, and people always find a way to game the system, for three simple reasons.

The first is that criminals are creative, and where there is money to be made they will find a way to make it. Too hard to import drugs? They’ll start cooking their own. Make it too difficult to get the common stuff they need, they’ll find other ways. Meanwhile, the companies that are being regulated are lobbying Capitol Hill to make sure that the laws are as generous as possible for them and as hard as possible on their current competition as well as any new entrants. The people who end up getting hurt most by these laws are usually the ones inconvenienced by them day in and day out, paying more in money and time for law abiding activities. But hey, anything to prevent 1% of the population from doing something bad, right?

The second reason is that technology marches on. Laws move at the speed of legislation, which (thankfully) is not nearly so fast as the speed of innovation. Every time a new technology hits the market, it has the potential to change the way we live our lives and make existing laws obsolete. This is most often a good thing, but it has its downsides. Fifty years ago nobody ever heard of computer crime, and “identity theft” was when somebody forged your name on a check. But legislators try to make new laws that keep up with the times, rather than understanding that for the most part, the existing laws still work just fine; identity theft is fraud, computer crime usually involves some kind of theft, and we really don’t need new powers to delineate what can or should be done about it.

Finally, sometimes people get hurt because of the law of unintended consequences. Whether it’s because somebody thought they found a new way to make money that everybody bought into with good faith and it turned out the market wasn’t there for it, or maybe there was a government program that was meant to alleviate poverty and instead it perpetuated it for generations (hypothetically). We have imperfect knowledge, and we cannot know the results or far-ranging ramifications of our actions until after they occur; to assume otherwise is the height of hubris. To press on without acknowledging this is simple folly.

So what is the nature of government that sets it apart from other human institutions? In the private sector, if there is corruption, or bad judgment, or even a simple failure to deliver on enough of the promises that have been made to your audience, the price that is paid is that your company loses value, and eventually will go under. In government, the price of these things is… more government. That would make as much sense as rewarding bad management at companies with more money to continue their bad management.

I’m not advocating for a complete absence of government. There needs to be some outside force that does punish the wicked, but there needs to be an understanding as well that government is not always the answer, and not even the first answer. Government should be the answer of last resort, the cure that is only slightly better than the disease. Approached that way, perhaps then we will see a little less of the rampant growth of government, as well as fewer attempts to buy the government we have.