End Corporate Welfare? Yes, But …

Senator Rand Paul has preached the political peril of being too close to financiers as he gears up for a likely 2016 presidential bid.

“We cannot be the party of fat cats, rich people, and Wall Street,” the Kentucky Republican told the audience at the Freedom Summit in New Hampshire in April. “Corporate welfare should once and for all be ended.” [Source: Bloomberg News, 7/1/14]

It’s an interesting and refreshing stand for a Republican (or Democratic) presidential candidate — if it’s explained and understood in the right context.

Rand Paul is correct. Government has no business providing subsidies to anyone, including corporations. However, the federal government also has no business taxing and regulating corporations as we presently do.

Keep in mind that most regulations are not against fraud or things that obviously should be against the law; most regulations simply reflect the personal opinions of a regulator, or a particular political pressure group, on how a particular product or service should be delivered.

Outside of fraud, these matters should be left entirely to the marketplace. All the “marketplace” means are people selling the products or services, and the people buying them.

If polled and asked, “Should government regulate the private sector?” the vast majority will reply, “Yes, of course.” But if the same people are asked, “Should government decide what customers get and how they get it?” you’d probably get a majority saying, “No.” Yet they’re one and the same thing.

So yes, Senator Paul is correct. We should get rid of all corporate subsidies. At one and the same time, we should get rid of all taxes and regulations impairing those corporations in the first place. The government taketh away and the government giveth back … selectively. That’s the truly nasty nature of our corporate entitlement state as we know it, and it’s why the established politicians in both parties cannot ever be trusted.

If we engage in a kind of right-wing or “libertarian” anti-business mentality, my fear is that we’ll get rid of (or at least reduce) the corporate subsidies and corporate welfare, without providing the liberty and freedom to which these companies — all companies, big and small — are morally, economically and legally (in a just system) entitled.

It’s easy to bash business. Yet most of the people who cheer a politician for bashing business work for a company, or in some way depend on that company’s profitability to sustain his or her life. Even a government employee depends on a vast, profit-making and profit-seeking private sector in order to have the taxes required to support that government agency. (Monetary manipulation and national debt will only carry us so far.)

However, you also have to keep in mind: No business makes a single dollar without the voluntary consent of willing customers. Aside from fraud (which the government is entirely right to prosecute), there’s no such thing as a “consumer victim.” Nobody forced that consumer to spend a single dollar without his or her consent.

In the 1990s, I attempted to discuss this issue with someone regarding Bill Gates, the head of Microsoft, who was under anti-trust violation investigation at the time. My discussion partner was in favor of anti-trust laws, and I was against them. I made my point that in the absence of force or fraud, government has no business being involved in such matters.

“But what Microsoft is doing [with its Windows technology] is force,” this man insisted.

“How?” I asked.

“If you don’t buy Microsoft’s product, where else are you going to go?” he demanded.

“But if it hadn’t been for Microsoft, there would be no Windows product,” I replied. “It’s their product.”

“Well, I don’t care what you say,” he insisted. “It’s force.”

A lot of people do not grasp the actual definition of force. In their minds, if somebody creates something wonderful that didn’t before exist, they’re now entitled to have that wonderful thing, under whatever terms they wish. What if the person who created that wonderful thing knew this ahead of time, knew that he’d be fined and even jailed for not selling it on whatever terms the future customer desires? He probably would never have made it.

This is the sort of mentality to which we subject businesses, particularly large ones, on a daily basis. The more innovative and successful the business, the more we subject them to it.

Yes, it’s wrong and ultimately uneconomical to provide taxpayer-funded pull or subsidies to business. Corporate welfare starts to reward business not for product or service quality — the only things that matter in a free market; instead, it starts to reward business for their relationships with Senator McConnell, Senator McCain, or President Obama.

I don’t know about you, but I don’t want a company I depend upon for quality products or services to feel beholden in any small way to the likes of Senator McConnell, Senator McCain or President Obama. These people are among the least morally or intellectually qualified in society to know anything about properly running a business, or much of anything else outside of a power-based government establishment in the politicized nation’s capital.

If we weren’t still a semi-capitalist nation where there’s still lots of profit to be made, these professional politicians would have nothing to redistribute, tax, or arbitrarily and selectively regulate. They’d most likely be out of a job, which is one of the best things possible that could ever happen to civilization.

Does Senator Rand Paul mean what he says about corporate welfare? We’ll never know, unless he manages to become President someday. Our entitlement state — corporate, personal, you name it — has grown to such vast proportions that it seems too late to turn back now, and there’s really no principled opposition to it, outside of a small fraction of the Republican Party. But to me, it’s more important that Senator Paul understands why we need to get government out of the private sector altogether, as quickly and as completely as possible. It may take time, but there’s no time like the present for beginning our massive course reversals; and we’re long overdue.

Yes, corporate welfare has to go. But so must all interaction between government and business. If Senator Paul makes this clear, then — win or lose — he’ll become one of the most effective and meaningful presidential candidates in a long time.

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