What Are We "Investing" In? (David S. D'Amato)
Friday July 1st, 2011
President Obama, CNN reports, is on the road touting his administration's "critical investments in the country's long-term development," trumpeting a desire to see the products of the future "bear the proud stamp that says 'Made in America.'" Meanwhile, the President's agenda for the week also includes meetings with congressional leaders to discuss the possibility of raising the debt ceiling.
While the connection between ballooning government debt and attempts at invigorating American Big Business may not be immediately obvious, the two are very intimately joined. Quite contrary to a free market untouched and unaltered by state intervention, the American economy has been appreciably permuted by government involvement in every area.
Given how heavily the state is invested in business (with our stolen dollars), it would be misleading to say that the government is not itself actively engaged in commercial activities. In 2010 alone, for example, the federal government spent more than $150 billion on research and development, only to turn around and grant monopoly patent privileges to the rich companies whose new inventions we taxpayers footed the bill for.
So when the President starts talking about "investing in development," that's thinly veiled code for privatizing the profits of the common man's funding of some of the biggest companies in the world. The political class can call that whatever they'd like, but it's not the sort of free market that market anarchists advocate for.
The unmistakable truth about the state is that it can't stop spending money it doesn't have. In order to survive in spite of the structural instability of its economic system it must continue to spend. Taken as a whole, the state capitalist model operates in a constant state of loss. Because it is incapable, in the aggregate, of producing things that consumers want, it must seize and deplete ever more resources in order to carry on the illusion of balance.
As Kevin Carson notes, the state's economic system, with its subsidies to elephantine corporations and its pattern of waste, "equates consumption of inputs to creation of value." Absent state intervention to make many of those "inputs" -- which account for the present day corporation's major costs -- available at a discount, it would be impossible to remain "in the black."
The state is primarily a class instrument designed to interfere with the process of voluntary exchange in order to allow elite commercial interests profits that a free market would not. This means, however, that state expenditures must go on bankrolling, through a medley of corporate welfare categories, the expenses of Big Business.
Could we remove both government sponsorship (direct and indirect) and government barriers that empower corporate cartels, the towering structures of the global economy would collapse under their own weight. They are therefore very similar in their functioning and in their economics to the state-owned and -operated pure monopolies that libertarians so steadfastly denounce.
Just as state agencies have no incentive to stay under budget and indeed have every incentive to exceed it, so too do state-protected firms have every reason to dissipate resources. The free market actually does engender all of the discipline and productive efficiency that libertarians say it does, but the statist, corporatist American system is not a free market.
A free market is a system of voluntary exchange where everyone carries her own costs. With the state interrupting that process and stealing from the poor to give to the rich, we get what we have today. If that's what investing in the American economy looks like, count me out.
C4SS News Analyst David S. D'Amato is a market anarchist and a lawyer with an LL.M. in International Law and Business. His aversion to superstition and all permutations of political authority manifests itself at www.firsttruths.com.