Is there a difference between government and society? Rachel Maddow seems to think not.
Pay close attention to these words from the MSNBC host's promo as she attempts to defend "America" against those who (in her view) believe its best days are in the past:
"No, no, no. We're not going to build it. No, No, No. America doesn't have any greatness in its future. America has small things in its future. Other countries have great things in their future. China can afford it. We can't"—you're wrong! And it doesn't feel right and it doesn't sound right to us because that's not what America is."
The first question that arises is: Who is it that says "America [unlike China] doesn't have any greatness in its future"? Who is Maddow arguing against? The last time I heard something like that, it came from the "limits to growth" crowd, which is probably part of Maddow's fan base.
This question continues to be a puzzle until you realize that when Maddow says "America," she means not individual Americans or society but government. And now her fallacy is clear. Frédéric Bastiat identified it in 1850. In his classic, The Law, Bastiat wrote that the "socialist" confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education... We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.
I can see Maddow saying that. One need not be a state socialist, however, to commit this fallacy. It's done all the time all along the political spectrum. But Maddow offers us a particularly good example.
Note Maddow's unspoken premise: An achievement isn't great if the government has nothing to do with it. Government does big things. We mere private individuals do only small things. The bias toward government—a curious thing when you consider that its essence is the legal power to use physical force against peaceful individuals—couldn't be more stark. Yet what grounds are there for believing this? When people are left free to innovate and produce, they routinely take risks to achieve things that are great in the sense that they make our lives better, healthier, and longer. Moreover, much of what makes life better is the cumulative effect of many "small" achievements, marginal improvements in products and services. Any one of them may be small, but the total effect on our lives is great. We'd be worse off without them.
Echoing President Obama and Senator-elect Elizabeth Warren, Maddow apparently believes that no private accomplishment is possible without government support through spending on infrastructure, education, and research. But that is wrong. All of those things can be and have been provided in the private market. Government has a way of crowding out private efforts and then asserting its own importance because of the lack of private alternatives. It's a self-fulfilling prophecy!
Government doesn't just crowd out private-sector activities; it also substitutes inferior ones in their place. No one is pleased with education—which has been under government control for close to 200 years. If the infrastructure is in disrepair, who's to blame for that? Politicians don't think about fixing things until they need a rationalization for "stimulus" spending. Why does it take a recession to make them think about the roads and bridges? American history is rife with examples of private roads and bridges, whose owners didn't wait for an economic crisis to fix them. Their incomes—their businesses—depended on satisfying customers. That goes for education and research too.
What sort of great things does Maddow have in mind? When historians rate American presidents, they tend to favor the ones who took America into war. A president who avoided war and just let people go about their business in freedom would have no chance of being ranked among the greats because he didn't "do anything." This attitude colors the views of pundits like Maddow. They also rank congressional sessions by how many bills were passed. A far better measure would be how many were repealed.
But let's assume Maddow isn't looking for a war to make America great. To her credit, she's written a book—Drift—complaining that America gets into war too easily these days. So what kind of greatness does she have in mind. Since she has shot promos at Hoover Dam and a wind farm, we may assume that these are the sorts of things she wants. She apparently likes industrial policy, government-guided economic activity in which politicians decide which industries and firms should be encouraged and which not.
Maddow needs to be reminded that we live in a world of scarcity. That doesn't mean great things can't be accomplished, but it does mean that if politicians and bureaucrats decide what is to be built, the scarce labor and resources used in those projects will be unavailable for other projects—particularly those that private entrepreneurs are willing to take risks on. It's Bastiat's broken-window fallacy again. We readily see a government project being built. (Don't worry, the politicians will make sure of that.) What we don't see are all the things not being built because government preempted free enterprise.
But we must ask: Who is better qualified to determine how scarce labor and resources should be invested, politicians or private individuals? Politicians operate under a perverse set of incentives and lack critical information. They aim to please electoral constituencies and special-interest donors, while having no market feedback to guide them in choosing among the many alternative projects; they risk no capital of their own and acquire resources by force—taxation. Why would we expect them to make good decisions? They may call what they do "investment," but in economic terms, it is consumption not investment.
On the other hand, entrepreneurs—at least when government provides no safety net of bailouts, guarantees, subsidies, cheap credit, and the like—do risk their own capital or must raise it from investors who are free to say no. (Try saying that as a taxpayer.) It's not an infallible process, but if consumers are ultimately unhappy with what is produced, they are free to withhold their dollars and send the misguided entrepreneur into bankruptcy, a process that will transfer resources to more able hands. That's a kind of clout which political subjects can only wish they had.
In other words, government may do flashy things, but they are things that are never subjected to the market test of actually serving consumers. Do political decision-makers pay the price for their failures? Usually not. Occasionally an incumbent may lose an election, but he never had any capital at risk.
Maybe that's why Maddow prefers government "greatness" to private "smallness." She doesn't want plain people calling the shots, which ultimately they would do in a freed market. She seems more at home with the governing elite and their court intellectuals, who promise to take care of the rest of us rather than let us look after ourselves through the vast mutual-aid society known as the free market.
The above originally published at The Project to Restore America and is reprinted with permission.
Sheldon Richman is the vice president of The Future of Freedom Foundation (FFF) and editor of its monthly, Future of Freedom. He is the author of three books published by FFF:Separating School & State: How to Liberate America's Families (1994); Your Money or Your Life: Why We Must Abolish the Income Tax (1999); and Tethered Citizens: Time to Repeal the Welfare State (2001). Previously, Richman was the editor of The Freeman (Foundation for Economic Education), 1997-2012