Power corrupts; absolute power corrupts absolutely -- Lord Acton.
Trying to overwhelm the concentrated power of a corporation by concentrating power in government is wrong. When a large company misuses its power, your action should be to make it smaller by buying from its competition. Even monopolies (e.g. Microsoft) have competition (e.g. Macintosh and Linux). I happen to believe that no government function is necessary, but I recognize that that is not a mainstream view. Most people support the idea of governments. How do you get away from having a monopoly government, though? How can you have competitive governments?
I believe that the United States was set up to be a collection of competitive governments: the states. If you read the Constitution with that in mind, you see that the federal government was strictly limited in what it could do. Everything else was left to the states to decide. Some things are obviously better if the states cooperate, and cooperate they do. There is no Federal Department of Driving, which ensures that driver's licenses have identical requirements, or that laws relating to driving are identical. The competition between states causes the states to end up having nearly identical laws. A state that differed wildly from its neighbors would have fewer people able to enter into it.
Why don't we have that situation anymore? I think that some time shortly after the Civil War, people became convinced of the advantages of bigness; of centralization. This was the period of the first really large companies: railroads. The centralization of a business, however, is not the same as the centralization of a government. A business has to earn money. That is its ultimate test for efficiency. If it cannot do that, it cannot survive. A government, however, does not need to make money. It can be wasteful with taxpayer dollars without suffering. Even if it does suffer, the suffering is used as a justification for spending more taxpayer dollars. "Oh, we're educating our children badly; we need smaller classes and more teachers."
So, companies that have grown too large get cut back in size. AT&T sold off NCR; it was a mistake to ever get that large. How can we cut back the federal government in size? That's what George Bush is trying to do. Whether his method will be successful or not can only be answered by the historians.
posted at: 13:20 | path: /economics | permanent link to this entry