Last night, I was able to see Ralph Nader give a speech at my alma mater. He talked about a great deal of issues, including how corporate America has gained such a hold of our political system and our daily lives that we really don’t have freedom anymore. In terms of his list of grievances, they were largely spot on. Where I have to part ways with Nader is his overall critique of capitalism.
The issue with American politics and economy is not with capitalism per se, but with a certain kind of capitalism, mainly crony capitalism (or corporatism). Think of capitalism as a nice car, such as a Rolls Royce. Now, put a belligerently drunken idiot (i.e. cronyism) behind the wheel of that car. How long do you think the car will stay in one piece? This is where Nader and I would disagree. He'd say the problem is with the car, whereas I'd accurately say it's the driver.
I don’t subscribe to Nader alluding that Obama is a puppet of Wall Street. However, I will give him credence in that corporations do have a disproportionately large amount of representation in American politics, although that's a far cry from pulling politicians' strings. Nevertheless, a considerable amount of campaign donations come from Big Business. It would explain why Congress was more willing to give Wall Street the biggest bailout in American history. [Disclaimer: I'm not saying that Nader is ultimately right. I'm just showing that Nader doesn't base himself solely on crackpot theories about how wonderful government regulation is. There is actually some truth in what he has to say about corporate influence.]
Does this mean I advocate for Nader’s approach of further regulations? Goodness, no! As a general rule of thumb, government regulation is a terrible idea. A great majority of business owners are small business owners. An organization such as the Occupational Safety and Health Administration, which was actually conceived "thanks" to Nader's activism, is a regulation nightmare. Half of their violations come from the "horrors" of not filling out proper paperwork. One study shows that these regulations actually increase occupational death rate. Regulations are a cost-increasing nightmare. It's funny to read this article from the Mises Institute from 2000 because they predict that we can have up to a $3T defecit in 2010. I guess if they knew Obama was going to be in office, they might have increased their projected prediction a bit. I can go on about regulatory egregiousness, but I'm sure that books have been written about this, probably by such geniuses as Hayek and Friedman.
Rather than usher in an era of even bigger government than FDR or LBJ had envisioned, I would like the economy to arrive at free-market economics, where Big Business can’t sway Big Government to insulate them from competition. I would like to see a government that serves the people rather than pander to special interests. Just to give you the condensed version what I had said about the Tea Party: I want my country back!
Notwithstanding Keynesian economics or Nader’s ranting about the corporations controlling American politics, we need to focus on bringing free-market capitalism back to the minds of the American people. And that begins with an individual’s consumer awareness. Know what you’re buying. Know how much you need, and don’t give into frivolous spending. Even more important, know the basics of economics. Open up an Economics 101 textbook or watch something like Milton Friedman’s Freedom to Choose television series. Having better informed consumers means more effective participation in the civics, which ultimately means politicians can stop pulling the wool over our eyes.