by Murray Soupcoff [publisher of “Soupcoff Report” investment newsletter & ‘Liberty North’ blog]
The entire “Wells Fargo” debacle once again brings up the fractious question of whether sometimes the invisible hand of the markets should be assisted by the very visible back of the hand of responsible government regulation. For many doctrinaire libertarians and free market advocates, the answer would be a big, definitive NO. However, having dealt first hand with the sociopaths and thieves who are attracted to today's modern corporate "free market" economy, yours truly knows that the recent “Wells Fargo” savings-account abuses are yet just another example of why government must sometimes intervene in modern commerce to protect the interests of the individual citizen.
As many pundits have already pointed out, the basic 1980's ethos of Ronald Reagan -- an instinctive distrust of all government-- has dominated the conservative and public sensibility of the U.S. for many years. However, for many, the events of September 11th brought that basic sensibility into question, reminding them of the positive and necessary role that government-funded "public" services, such as the police, firefighters and the armed forces, can play in protecting, rescuing and defending them (and their loved ones) from the many perils of today's Hobbesian modern world.
This really shouldn't come as a surprise though. Even the most libertarian concept of the unspoken consensual social contract, underlying civilized societies, revolves around the notion of freedom-loving individuals coming together to create organized institutions and laws to protect consenting participants from the unprovoked attacks of their fellows and from unjust encroachments on their property.
Such an arrangement is viewed as the minimum consensual socio-political undertaking needed to provide sufficient stability and freedom for each individual to successfully pursue his or her individual personal destiny and pursuit of happiness. Also usually implied by such a socio-political construct, in post-enlightenment Western thought, is a system of laws and quasi-legal precedents that additionally allows for the free, orderly and transparent exchange of goods and property for the ultimate economic betterment of all.
The goal of all this, of course, is to create prosperity, peace and social order -- in place of the anarchy, instability and social misery which is seen as the product of a world of unrestricted individual aggression, conflict and ad-hoc rulemaking. And gaining strength in Western democratic thought has been a further notion of restricting the ability of the powerful in society to arbitrarily or unjustly use that power to impose their will on the less powerful.
Of course, what has made the social-contract, democratic experiment so successful in today's capitalistic nation states is the degree to which the power of the state has been applied to maximize individual and economic freedom, while still maintaining the residual ability of government to protect and serve its citizens when necessary.
The United States has become the most successful economic and military powerhouse in recent history because of the dedication of its leaders and citizenry to this shared vision of maximum individual and economic freedom (and protection of private property) mixed with minimal but responsive and responsible government.
Let's get one thing straight though about the state of democratic capitalism today. No matter how much affluence and freedom the invisible hand of free-market corporate capitalism has brought North Americans or Europeans, today’s rowdy young anti-globalism protestors don't have it all wrong. The very size and bureaucratic and atomistic nature of today's global corporate entities does indeed encourage a banality of corporate evil (to appropriate Hannah Arendt's previously misapplied concept of totalitarian evil). We're referring to the ethical and moral abyss into which company directors, chairpersons, vice-presidents, managers and department heads inevitably slide, in which they're sufficiently divorced from direct contact with the damage and harm done by their corporations, so that their consciences and moral judgment remain shockingly unmoved and unaffected.
Even more important, the most successful of these huge corporate enterprises possess hoards of money. And if oodles of cold cash represent one thing in capitalistic society, it's power: the power to corrupt others, to quietly exercise mammoth fraud, and to cheat shareholders or pension-plan holders unable to protect themselves from the vicissitudes of such accounting slights of hand as cooked books, partial disclosure and executive graft.
In the jungle that is today's corporate capitalism, the individual shareholder, or employee pension-plan holder, doesn't have a chance. The powerful can use every device of power to cheat and exploit the powerless. And only one institution is powerful enough to restrict that abuse of power -- government.
Just as each individual citizen -- in even the most free of societies -- must live with some restrictions on their freedom to enable such public services as the police, firefighters and armed forces to serve and protect them, so must they also give up some freedoms so that government may protect them from the kind of financial fraud and corruption that characterizes the recent “Wells Fargo” debacle.
Naturally, there long have been numerous criticisms from conservative circles, regarding decisions -- by U.S. President George W. Bush -- to support government regulation of the corporate financial community to prevent more “WorldComs” and” Enrons”.
And likely, there would be similar criticisms of President Trump were he to take similar actions against corporate criminals (especially from the notoriously stubborn and “politically-pure” congressional ‘Freedom Caucus’).
However, notwithstanding the justified skepticism of Ronald Reagan about government in general, the wise perspective of another Republican President, Abraham Lincoln, should also be remembered:
Government action can be an honorable and just undertaking, especially in those unique situations in which individual citizens -- by themselves -- are unable to undertake the necessary actions that would protect or enhance their individual well-being under most circumstances.
However, as Ronald Reagan would probably also remind us, any initiatives by government must be as limited and accountable to the citizenry as possible. For unless suitably monitored and restrained by the citizenry and their elected representatives, the ever-extending tentacles of government can become intrusive and limitless.
BIOGRAPHICAL INFORMATION — MURRAY SOUPCOFF:
M.A. & PHIL.M (PH.D equivalent) degrees in SOCIOLOGY (many, many eons ago)
Author of “Canada 1984, The Year In Review”(Lester Orpen)
Co-author (with Rick Salutin & Gary Dunford) of “Goodbye Canada”(James Lorimer & Associates)
Publisher of “Soupcoff Report” investment newsletter & ‘Liberty North’ blog
Senior Associate & founding partner of Ian Sone & Associates Ltd, Canada’s first independent social-research firm, as well as original Canadian initiator of (sociological) “evaluations” of federaland provincial social programs set up to assist Canada’s disadvantaged populations
Computer columnist for “Globe & Mail Report on Business” for 20 years
Co-editor of “We Compute Magazine” for 7 years.
Producer & head writer, “Inside From The Outside”, CBC Radio & TV
Currently retired, but still active investor and (until recently) contributor to the “Globe Mail” online investment blog.
Email address: firstname.lastname@example.org