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Fight Club: How bad politics turns good neighbors into rivals

Fight Club: How bad politics turns good neighbors into rivals

10 Mins
June 26, 2010

THERE’S A CIVIL WAR RAGING IN MY TOWN. On the Public School Front, my side (call us the “Alliance for Choice”) was recently crushed by the Egalitarian Axis in the Battle of the Universal Pre-K Lottery. Before the battle, well-meaning educated, liberal urbanites were able to say they were committed to public schools, while escaping from the worst urban school blight through competitive magnet schools and the like.

If a family wanted to be in these schools, they actually had to apply for them. This simple principle of choice ensured, at least, that each magnet school was full of families that valued it and its programs in particular. This created esprit-de-corps, involved communities, and happy magnet schools. If other city schools were going to pot, well, the earnest liberals could just vote for higher taxes each year.

The effective entry point for most of our magnet schools is a pre-kindergarten program. In the happy days, any school that was in demand set up its own lottery or waitlist for admission to that particular school. But now, thanks to a regulatory ruling from the state government, the city school board has been forced to change the enrollment policies. The “fair” solution pushed by the egalitarians: one size fits all! Share the misery! The board threw all the Pre-K registrations in one big pot—all the seats, in every program.

Little freedom exists by right anymore.

Now, one can choose only yes Pre-K or no Pre-K; if you win a Pre-K slot through the city-wide lottery, you get one wherever one is available. Now, parents who want a shot at sending their kid to a magnet school have an enemy in every family interested in a public school Pre-K program. Before, though there was competition for the scarce magnet slots, everyone who sought them cared about education. Now, parents aiming at a magnet school must hope that the Pre-K program fails to reach more of the poorest, least educated, and least supportive families that it is supposed to be helping. That’s the only way that slots can remain open for those who just want their kids to attend a magnet.

These parents wanted to live in a nice neighborhood and raise their children. They chose between city and suburbs. They chose between charter schools, district-managed public schools, parochial schools, private schools, and home schooling. They chose between their neighborhood school and the magnet schools. They wanted what was best for themselves and their kids. But now, every other city parent with a toddler is their enemy. Now, everyone who cares about their own school must fret about the enrollment policies of every other public school. Some of them are angry. Many will be frustrated. People who sympathized with the plight of troubled kids in the inner city are having second thoughts. It’s another day in the war of all against all.


When you think of other people, do you think of competitors or collaborators? When you hear of someone’s misfortune, do you think that this adds to the burdens on you—or do you think it is a waste of potential? When you meet a stranger, do you hold back in fear and prepare to defend yourself—or do you open up a little, seeing the potential there? In fact, in normal circumstances, others should be, at worst, of little consequence to you, and at best, the source of many great benefits.

While the parents in my city are fretting about the possibility that the demand for free Pre-K may surge next year, they aren’t fretting about the demand for canned spaghetti sauce. Why not? The difference illustrates a fundamental difference in how we can deal with others.

Public school slots are paid for with taxes. The amount provided depends not on how much the schools’ customers want their products, but on a political tangle involving the school board, Congress, No Child Left Behind, the state governor, the teachers’ unions, the school administrators, and the voters of our city. Jars of spaghetti sauce, meanwhile, are paid for through voluntary purchasing decisions. The revenue goes to the supermarket, which pays to stock the sauce, and to the producer of the sauce. If people want more at the going price, the supermarket will sell more.

If the producer doesn’t want to make more, rest assured, the retailer will find another producer; there are many, and the retailer probably contracts directly for a house brand, too. Spaghetti customers, if they think about it, want demand to rise. Increased demand for sauce is virtually assured to result in better variety and lower prices in the end. Meanwhile, denizens of the public school district groan when demand rises: it just increases the competition for scarce slots and puts pressure on the budget; it creates a need for a new political solution that will impose costs and benefits on everyone.

Parasitism replaces production in the war of all against all.

The basic issue is trade. When people deal with one another by trade, having rights to their property and formalizing long-term agreements by contract, every interaction is win-win. Each person in a trade relation is responsible for himself in the end. Trade encourages us to attend to the harmonies between our needs and those of others. Money is a wonderful tool in this respect, because it translates your need for, say, pantyhose, into a common store of value I can use for, say, a trip to Tahiti. But trade isn’t really about money. It’s much broader than that. It’s about exchanging value for value, benefit for benefit. It’s about allowing us all to live with each other as individuals, respecting our differences and our needs while making our own choices. It’s the way to live-and-let-flourish together.

It’s not all roses when we deal with others by trade, of course. We can rub up against competitors and bosses, ex-spouses and ex-friends, people we merely tolerate and people we really don’t care for. But these negative relations aren’t of the essence, because we can also have a rising standard of living, insurance against risk, a choice of careers, and relationships founded in love and esteem. Trade makes us friendly neighbors.

The alternative to trade is coercion, that is, force. In a bare sense, it is robbery and assault. But usually, force wears the velvet glove of governmental policy. It takes legitimacy from democratic electioneering and the majesty of the law. It comes in the form of taxes that you didn’t approve and regulations that you didn’t agree to follow. To trade, one person must offer the other a benefit—after all, you wouldn’t buy a car if it wasn’t worth the cost, and you know, however good a deal the salesman offers, he is not cutting his own throat by selling to you. But taxes are another matter: they rise and rise (and sometimes fall), and there’s not much you can do unless you can convince a large number of your neighbors to vote with you. You didn’t have to convince your neighbors to agree with your choice of car, did you?

Tens of millions of people who don’t live in Massachusetts invested earnest hopes in the January 2010 Senatorial contest between Democrat Martha Coakley and Republican Scott Brown, which Brown won—Yippee! Tens of millions invested earnest hopes in the outcome of the February 2010 Super Bowl contest between the Colts and Saints, which the Saints won—Whoopee! The first contest was dull to watch, but every American stood to win or lose from it because the candidates had vowed to cast the deciding vote—yea versus nay—on a health care “reform” that was poised to be forced on everyone. We watched the Super Bowl, by contrast, for itself: to see athleticism. Not even folks in Indianapolis or New Orleans thought the football game would much affect their jobs or their ability to get medical care.

Trade makes our dealings personal, as far as they can be in society. The rights that underpin trade give us the security to know that, whatever others may do, we can make our own plans, save, build, and live by our own lights. Instead of this positive relation, a coercive system of collective decision-making puts each of us at the other’s throat. It makes every person’s choices come at a cost to others, usually strangers. It makes us all insecure. It makes us all have to watch each other, to make sure no one gets out of line and causes trouble. It puts us into a power struggle with everyone else.


Today, in most of the world, governments have complete power over the economy. They regulate most material aspects of life—and many cultural and spiritual aspects as well. Little freedom exists by right anymore. Most businesses, for example, have to get permissions and licenses even to open. This means that their existence hangs on political decisions taken by legislators and regulators miles away. It means that to some extent, skill in business today isn’t measured by one’s ability to organize production and market goods and services. Instead, it is measured by one’s ability to jump through regulatory hoops and play politics.

I’ll bet you want to insure yourself against unforeseen health care expenses. Get ready to fight the war of all against all! In your state capital, some parents are bemoaning the fact that their son or daughter couldn’t afford treatment X for ailment Y. Soon, the governor will climb aboard the bandwagon mandating coverage of X. Now you are obliged to pay for everyone who wants X. In a free market, the cost of your health care would be based on the known risks about you.

But you’ve already lost a lot on the health care front, and so you probably can’t get health insurance that rewards you for being healthy, or charges more for a condition you already knew you had. If you’re young, it treats you like you were old. If you’re old, it charges you like you’re young, which is manifestly unfair. The truth is, you can’t insure yourself against risks; you have to take part in a shared health-care savings program the provisions of which you have little control over. If you want a plan that truly fits your needs, you had better march down to the statehouse and gird yourself for war. If you are young, every elderly person will be your enemy. If you are sick, every well person will resent you. But, hey, if you will just embrace an ethic of self-sacrifice, where your own well-being doesn’t mean a hill of beans, you will be able to accept the situation with equanimity!

In the midst of the recession, one service is winning “clients,” according to news reports. It is food stamps. Once stigmatized, the federal free-food program is now trumpeted as a benefit for working folk. (State and city governments love it, because the federal government pays for it. Federal senators from big farming states such as Indiana and Iowa love it, because it makes people from non-farm states foot most of the bill.)

Of course, one doesn’t want innocents to suffer. It’s not good news when budgets are cramped and decent people find it hard to make ends meet In a recovering economy, we yearn for news of new growth, production, creation. If a new industry was rising in a poor neighborhood—a call center, say—we could hope it would grow and thrive, knowing that its success was to our benefit. But the more people that food stamps reach, the more taxpayers lose. This program must not grow too much: we couldn’t afford it. For every cheerful “client,” for every farmer whose income rises, someone else has less. It’s a vampiric arrangement: parasitism replaces production in the war of all against all.

What is the most powerful lobbying group today? The United Auto Workers are 2009’s poster children: they connived with the Congress and the president to force the rest of America to shovel 50-plus billion dollars their direction. But the real powerhouse is the American Association of Retired People: AARP. Because of them, and because of the senior-citizen voting bloc they represent, “no cuts to Medicare” is the firmest plank in the health care platform of the Republicans—the party that is supposedly pro-capitalist and free-market. Since the founding of Social Security in the 1930s, the elderly have sunk their teeth into the youth, adding more and more “entitlements.” As the U.S. government shambles toward a bankruptcy that can now be seen just a few years ahead, the political consensus swirls around one fixed point: more gravy for seniors!

In a society based on individual responsibility and real liberty, the well-being of the elderly is the concern of those who care for them, usually family members and loved ones. All individuals can take their own life plan in hand, can work and save, and so prepare for retirement and the rising medical and nursing costs that come with age. But the current system is instead one of democratic looting, where the young have to fear that elderly people with no connection to them will set the terms of how much wealth they may keep and what, if any, health care they will be able to afford. Everyone must fend off attacks in the war of all against all. Everyone must organize… find allies… cut deals.


The neighborhood along K-Street in Washington, D.C.—home to The Atlas Society and the Competitive Enterprise Institute, among others—is known as the “Golden Triangle.” Its industry is lobbying and advocacy, that is, pull. Not all, or perhaps even most, of the lawyers, researchers, writers, and talking heads there have bad motives. Many are representing people who just want to get the government off of their backs, or to fend off the depredations of other interest groups. Many just want to make sure their voice is heard when the federal government sets national standards and national economic incentives. Still, this kind of business is at best a cultural inoculation: fending off destructive world-views and bad policies. At worst, the neighborhood’s shining office buildings and buzzing bars are a monument to the democratic civil war that is raging. Now everyone needs an advocate in Washington.

Washington, D.C., has always represented, by its economic status, the American view of government. In America, political and economic power have traditionally been separate and little related. The greatest American cities—New York, Los Angeles, Chicago, the Bay Area—are none of them capital cities. They were built based on commercial prospects, not governmental needs. The capitals meanwhile—Albany, Sacramento, Springfield—were never much more than meeting points for the legislature. Just so was Washington, home to the government and little else. Now that is changing, and Washington is becoming a place to do business. It is the burgeoning government—sticking its finger in every activity from broadcasting to medicine to the arts to farming—that provided the kernel of wealth around which the new businesses have coalesced.

For many, parasitism is looking like a winning hand. Federal wages have been ascending faster than private-sector pay. Throw in the generous health and retirement benefits that federal employees receive (no 401-Ks there), and the difference is downright shocking: according to the Bureau of Economic Analysis, average compensation for federal civilian workers rose more than 55 percent between 2000 and 2008 (and it hasn’t fallen since), while average total compensation in private industry rose only 30 percent during that period, and much of that rise was just inflation.

Today, if your workplace is unionized, you probably work for the government. The unions have come full circle. In the nineteenth century, they advocated workplace safety, improved pay, and gentler working conditions. By the twenty-first century, they had become powerful clubs for shaking down the public and capturing government monopolies such as the public schools and the transit authorities.

Not all government work is destructive or useless; some of it fills real needs—after a fashion—and some—the work of the law courts, the police, and the military—is even a pre-requisite for modern civilization. Still, cut off from the basic quality-check that individual choice stamps on voluntary trade relations, these government jobs are measured by political pull, not practical productivity. The Obama administration is sure its spending is helping the economy—regardless of any real evidence that this is so, besides the increase in government jobs. When private firms show this kind of hubris, bankruptcy and foreclosure rein in those who overreach. But in Washington, all that’s needed is a more durable political coalition, and the fiesta can go on and on. Only the bankrupting of the country could place a non-political limitation on it.

This is the democratization of lordship. It’s no accident that the governing class often promotes the ideology that society must be actively structured by government. “The market has failed,” proclaim endless opinion pieces, “government must step in.” The ideal government policy is the focus of endless academic papers from climatology to economics. This is the modern version of the doctrine of aristocracy. Some must rule, and the rest must serve. These social relations, say the bien pensants, are too vital to be left to the hurly-burly of the marketplace: they must be enshrined in law—in rules of the FDA, the EPA, the IRS, and the SEC, for example. This provides the cultural cover that political coalitions need to take their fighting off the street and into the realm of committees and deliberations. From these hallowed halls, the overlords of society rule. And if what they demand most is a cozy nest, well, it is democratic, after all.


This corporatistic parasitism isn’t really in anyone’s long-term interest. Even the bureaucrats would do better in the long run in a free market, so long as they remained willing to work at all. There is a better way to live: we can have a system that protects our rights and lets us choose for ourselves what products to buy, groups to join, and what cultural causes to support. There is a way to live that lets us take what we want—and pay for it. It’s called laissez-faire capitalism.

The only way to get there from here is to fight and win the war of pull. We need to fight on the cultural front, to educate people and help them see beyond the short-term subsidies that the pull-peddlers blandish before them. Most crucially, without a moral revolution that empowers folks to stand up for their own lives and happiness, the social engineers will always have a handle on the public soul. We need practical political solutions, too, ones that respect the fact that people have made life-plans based on the existence of government programs like Social Security and Medicare, but that move us to a future where individuals take back control over their retirements and medical savings. We can expand the areas where government must act by super-majority, making it harder for special-interest coalitions to capture government policy. In the end, we need grand coalitions, built on principle rather than faction, that take action to de-escalate the war of all against all. We can deepen the zone of social peace by using deregulation and expanded liberty to wall off whole aspects of life from the war.

But we cannot hide from the civil war of pull. The power of government is the power of the sword and the gun. Government is only a benefit when kept within the bounds that rights and the rule of law place on it. When it bursts those bounds, it will affect your ability to live. The only real choice is to work towards something better, or to be the victim—and in the end the slave—of those who can master the system and use it to control you.

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Regulation and Taxation
Elections and Democracy