"Power permits people to do enormous good," Lord Acton once said, "and absolute power enables them to do even more."
This wisdom from the nineteenth-century's champion of state prerogative applies as well today. Politicians are crippled by the lack of the one thing they need to yank our hobbled economy out of the mire of recession: adequate power. It is our duty to grant it to them.
Yes, from time to time this commentary space has been critical of government meddling in economic affairs – surmising, for example, that trying to cure poverty by funneling more money through Washington would do less to assist the poor than to pad the salaries of middle-class bureaucrats. We have emphasized the effectiveness of private and faith-based charity, of its capacity at once to use resources efficiently and to respect the individual's dignity. We have argued that persons – morally formed, acting freely, and operating within the context of a rule of law – will generate a bountiful and equitable economic environment without counterproductive interference by the state. We have posited that our current difficulties derive from a combination of moral turpitude and government bumbling.
We were mistaken.
Personal conviction of right and wrong is unnecessary, so long as really smart and well-meaning people think very hard, deliberate long enough, and erect the right kind of rules (and lots of them). People like our representatives in Washington, who can be counted on to act solely with the public interest in mind and without regard to the 35,000 registered congressional lobbyists whose offices line the streets of the capital.
The Madoff affair could never have happened if all stock trading and investment activity were controlled by a government board composed of the nation's finest financial experts. A Bureau of Investing and Finance (BIF) would take all the risk out of the market, and there would be no danger of unscrupulous crooks taking advantage of others by fraudulent schemes. Valuable investment dollars would be directed only to the most promising and viable private enterprises, just as federal transportation dollars are now targeted only to the most sensible and critical road-building projects.
Or take Fannie and Freddie. The whole mess could have been avoided if we had simply done away with the real estate market long ago. A federal Department of Residence, Architecture, and Building (DRAB) could supply the housing needs for the nation's populace, abolishing private home ownership and all the problems that go with it. No more oily realtors, annoying school levies, or marital discord over living room decor. Painful decisions about relocation would be eliminated, because we would be told where to live. That government can handle this sphere of the economy with dexterity and competence has been repeatedly demonstrated by such signal achievements as the Robert Taylor Homes in Chicago, the Pruitt-Igoe projects in St. Louis, and the beauty queen of Europe, eastern Germany's Halle-Neustadt.
The dust-ups over executive compensation and AIG bonuses are similarly misguided, their attendant debates over boards of directors and confiscatory taxation merely tangential. Salaries should be determined by impartial boards of government officials, Committees to Regulate Occupational Compensation (CROCs). These panels would study each industry and generate guidelines for pay. It would naturally be too cumbersome to evaluate every employee individually, so all workers would be paid according to a nimble and easily comprehensible category system. This would furnish welcome relief for some of the thorniest workplace problems. No more annual reviews; no more stressful striving to meet production, sales, or other performance benchmarks; no more fodder for office gossip about who is making what.
Few objections to these eminently reasonable proposals can be imagined, with one exception: how to pay for the army of new public workers? This problem is easily addressed by reference to the model supplied by one of our government's most hallowed and successful programs, Social Security. Let the next generation worry about it.
If the history of the human race has taught us nothing else, it has proven that people in positions of power are apt to use their clout beneficently for the common good. In light of this lesson, it is imperative to widen the circle of government to include an infinitely expanding number of employees, and to unburden public officeholders by cutting away the moral and legal shackles that limit the scope of their authority. Government can solve our problems – all of them – if only we have the good sense to get out of its way.
This commentary was published on April 1st.