by Michael Douglas Carlin
SECURITY MUST BE GUARANTEED FOR PEACE TO PREVAIL
If you want peace, then government has the obligation to protect its citizens from all enemies, both foreign and domestic. Domestic enemies mean gangs that stop little boys and girls from getting to school. Domestic enemies also mean corporations that pollute streams and kill shrimp or fish. Domestic enemies also include men who run schemes to steal money under the auspices of legitimate businesses, as we experienced during the financial meltdown of 2008. We have spent so much time fighting our foreign enemies. Now, we need to focus on our enemies right here at home.
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SECURITY MUST BE GUARANTEED FOR PEACE TO PREVAIL
Free Market Misconceptions—Free Hand isn't "Free" by itself—Law of the Jungle
In 1984, I wrote an essay for the Milton Friedman National Essay Contest. I won $1,500 for my essay on "Free Trade." I remember spending two weeks writing a single paragraph that was central to the essay. That paragraph is as follows:
"In the absence of government, free trade exists when individuals decide for themselves to trade. In the absence of trade, government has neither purpose, nor means of subsistence. With trade comes government. When purposeful government becomes essential, free trade is still permissible. When government ceases to be purposeful, it begins to unnecessarily restrict trade and hence erodes the sole purpose for its own existence."
This paragraph sums up what is happening today. In this era of big business, we have restricted trade to the point that our economy is eroding the purpose for the existence of government. The fact is that we are reverting to the law of the jungle. Big corporations are so big and influential that they are asking for and receiving legislation that allows them to be anticompetitive. The solution is to peel away unnecessary legislation to get back to the basics. So, let's start at the beginning.
The law of the jungle or the survival of the fittest: Under this form of government, the person or animal with the biggest muscles and best skills is able to take what he or she wants. There is little incentive for weaker vessels to produce, because the product of their labors will simply be taken from them. This form of government is extremely limiting and eventually breaks down to a very small group with a meager existence.
The first law of government must be to create stability, so that the product of one's labors can benefit the person and/or family of that person.
If you want peace, you must first create personal security. People must be safe in order to produce. Safety comes from laws that protect the rights of the individual from other individuals. These laws must have teeth with punishment for those who break the laws.
An excellent example of this comes from our occupation of Iraq. Each time American troops attempted to get electricity, water, sewage or other services flowing, a bomb would explode and service would be interrupted. The troop surge granted safety and security to get some of those services flowing, and the result was a more stable and safe Iraq. As services bring prosperity, recruiting insurgents becomes more difficult. Stability allows people to decide what services are important and is the basis for Adam Smith's "Invisible Hand."
The assumption of Adam Smith's "Invisible Hand" does not consider that government interferes in the affairs of humans to create this stability so that a free market can exist. The government must exist in order for there to be free trade, or society will break down back to the law of the jungle, as in Iraq. Anytime a government creates a class of people who are "above the law," they are setting society up for a breakdown back to the law of the jungle.
A Prescription for Peace here is a police force that administers the law justly backed by a court system that enforces the laws and by judges who fairly administer justice to all equally.
It is equally wrong to hold one individual over another as it is to not hold corporations accountable for their actions. All players in society must exercise responsibility for their actions and be accountable to the law for those actions.
Some have the opinion that no laws governing trade should ever be made. This is the recipe for disaster. All laws concerning trade should maximize the public benefit and minimize the public risk. In 1929, we saw a financial meltdown caused by greedy speculators driving up stock prices to unrealistic levels. When the markets could no longer sustain themselves, we had the crash. In 2008, we had the leveraging of credit default swaps that fell into a grey area of non-regulation.
These assets were already questionable but were being leveraged up to forty times their listed face value. This was another market that was being overpriced and was unable to sustain itself. When the crash came, it nearly bankrupted America and imploded our financial markets. If man can take from society without fear of retribution, then he will do so, as man works in his or her selfinterest. Government's role is to protect us from white collar thugs. Legislation already exists for stocks, bonds and commodities. It should exist for any and all asset classes. No asset should ever be leveraged more than five times the value of the collateral. Violating this law should lead to stern punishment.
In the United States, we have pockets where trade occurs freely. There are other pockets where thugs rule the streets and dictate to citizens. If we are to have peace in our time, these pockets need to be taken back, and the streets need to be made safe, so that all citizens can enjoy the freedom that is the promise of America. Whatever the cost, we need to provide safety for all of the citizens in America.
The costs of action today are far outweighed by the benefits that will play out over a hundred lifetimes.
Any neighborhood in America that isn't safe is the result of politicians turning a blind eye to the problems of that neighborhood. These politicians must be held accountable to make that neighborhood safe or be removed from office and replaced by someone who will make the neighborhoods safe. Not making any neighborhood safe is discrimination that cannot be tolerated in a renewed and equal America. There is no excuse for any neighborhood in America not joining in the pursuit of happiness.
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