I’m a conservative and a strong believer in free markets because it stokes competition, which benefits the consumer in the way of lower prices for goods and services, and ultimately creates a greater level of wealth for the majority in a society. I believe corporations should be free to compete and prosper with as little government intervention as possible. I am not for Obama’s economic plan of redistributing wealth like Robinhood, taking from the rich and giving their money to the rest of us (who are in relation to their bags of money, poor). What I’m talking about here economically is not taxes or income redistribution, but checks and balances within an economy to ensure that those on top don’t make decisions that injure the lives of thousands of people. How is that best achieved in light of man’s sinfulness and tendency toward greed?
As we’ve seen in recent weeks and building up over the past decade, unregulated free markets without proper checks and balances can spin out of control and cause entire corporations and even some sectors of the economy to collapse (or face the prospect of it) and hurt thousands or possibly millions of people in its devastating wake.
So what is the proper approach? Totally unfettered, unregulated free markets? Fully regulated markets? Or free markets with minimal but necessary regulation so as to keep corruption from occurring, with the people’s interests in mind?
I’m not proposing I know any one air tight argument. I’m simply throwing these ideas out there as a way to ponder the prospect that free markets, without checks and balances, is a risky deal for an economy and it can actually become a national security issue. Think Enron, WorldCom, and recently Lehman Brothers, Countrywide, and a host of other giant companies that have failed, where thousands of employees lost jobs due to corruption and bad, unethical, immoral choices, and millions of people financially injured as a result. And with a bad economy, you don’t have capital to keep the country safe from those who are bent on harming us.
Just as we need checks and balances in the political sphere (the very way in which our country was established), so also in the corporate sphere, this seems to be something that may need to be required. Free market capitalism, as great as it has been has a down side: sinners run it. Sinners become greedy for money, for power, ruthless, self-centered, envious, etc. With that fundamental principle in mind, based on a proper assessment of the history of what sinners are capable of when in power, our founding fathers framed the Constitution and arranged the government in such a way that it checks itself against error and corruption in order to preserve freedom.
Could it be we need something similar within the economy? Not checks on how rich people get, but more about the business decisions that are made. I’m simply proposing the idea, I’m not set on it. But people are getting hurt out there by fat cats sitting pretty, obtaining a lot of cash through greed and immoral decisions at the expense of a majority of people down on the totem pole. That’s just straight up immoral.
Now too much regulation is a bad thing. That’s where the former USSR comes in. That is where the government owns companies and tells them what they should and shouldn’t be doing in every way. That is one of the most inefficient ways to run goods and services for a society, and ultimately the system crumbles apart altogether, or stays like Cuba.
But no regulation at all? That’s what pure free marketers want. Yet a totally unregulated market can actually allow businesses to become the very oppressive, greedy, reckless entities many of these same people oppose in a government because of human sinfulness. Corporations are now the size of small governments, economically speaking. There is a lot of room for the same excess and error on the same scale as that of a corrupt government in some cases. Granted, less issues arise than other economic systems, but the potential is there for really big problems to affect a large majority of people. And not only is there potential, there has been a real situation where this very thing has actually happened.
Historically, what framers of economic theory in the past would have seen corporations growing to the size of many governments? There are factors we must take into account that those in the past couldn’t even have foreseen. Am I talking about the government running companies? No. Again, checks and balances. How does that work? I don’t really know to be honest, I’m just brainstorming more than anything. But if we are to believe that man is dreadfully sinful, to be consistent, it seems we should apply that same understanding to capitalism, should we not? Should we keep our government in check while not keeping our economy in check? I don’t know, just an idea.
So where’s the line drawn between unregulated and fully regulated markets? Honestly, I’m thinking it’s kind of a gray area more and more, though I have been pretty adamant about pure, 100% free markets until recently. And I also believe that it may depend on the sector of the economy and not just an all or nothing kind of thing. I’m still formulating my thoughts on this and nothing is very cohesive yet as to my opinion only because these are recent thoughts I’ve had in light of this economic crisis. But events over the past decade, particularly recently, have really made me question pure capitalism without any government regulation or oversight.
There has been another issue that has come to light in my mind that further shows where the government may be needed to step in: network neutrality.
As a worker in the IT world, as with people in other lines of work, I know things that workers outside of my field do not know. I have an inside look I guess you could say. I see and understand things that others find an enigma, just as I find Greek and Hebrew to be an enigma and rely on scholars and theologians to help me understand what Scripture, in the original text, is saying. (Not saying I’m the equivalent of a scholar in the IT field). I would never presume that I know or fully comprehend the Greek language unless I had studied it to some degree or another. I’m not boasting, or saying I’m great because I know IT and others don’t, so don’t take me the wrong way. Nor am I saying I know everything pertaining to my field, for I only know an inkling. I’m making a point to say that sometimes others talk as if they are in the same line of work as someone else when in reality they have no idea what they are talking about.
And that brings me to net neutrality. The fundamental way to explain this is to say that ISP’s (or internet services providers, e.g. Charter, AT&T, Time Warner, Comcast, etc.) are increasingly working to limit what you can and cannot view and what services you can and cannot use for their own profit (i.e. you would pay more to get more services, versus the current model where internet access is open for all services). Now the free market in me wants to say that companies should be allowed to gain from their business dealings, no matter what.
However, what happens when a company seeks to stop certain services from being utilized by a consumer? Well, fine, switch internet providers then, right? But what happens when you don’t have access but to only one provider? And what happens when all of them are doing the same blocking and stifling the use of a potentially great service or protocol that you can’t use now? And even further, what if those services could be used by developers for further innovation and progress in the realm of internet services?
Net neutrality would be law that forces ISP’s to leave the internet network services open, mandating they not interfere with the accessibility of certain protocols and services developed for the internet (that’s about as simple as I can explain it; I would get technical, but that’s outside the scope of what I’m saying). In my view, this would actually promote competition and keep the ISP’s personal interests at bay for the sake of the consumer. A free and unfettered internet (through legislation) would actually promote innovation and competition with other services. Free marketers cry out that this is just smoke and mirrors for government censorship of certain sites, yet it really is the opposite: it’s keeping the internet open from the likes of the medium you access it through, your ISP, and locking down what you can and can’t do. You see, once again, if net neutrality doesn’t pass, instead of the government having control over what you do (the fear of pure free marketers), the corporations do instead. How about the government checking companies to make sure they are not stifling communication and innovation?
I point that out to say that sometimes, in order to preserve freedom, the government may need to step in to keep the people responsible for your access from blocking the very consumers and citizens they are bringing a service to. Am I wrong? Maybe. I’ve only recently started thinking through all of this and wouldn’t mind some input. But sometimes, like in the financial sector and the tech sector (specifically internet access) government regulation can be a good thing and help the citizens. However, at the same time, it can be a bad thing if it’s too much.
So ultimately I’m coming to the idea we may need checks and balances in our economic system to maintain a prosperous and growing economy that keeps executives from making reckless decisions as well as stifling innovation and technological progress.