What is Government? Part II: The Visa/Mastercard Solution

Just Try It

In response to my article about Government is Force (where I mentioned that government was created mainly to protect our inalienable rights and that to do this it must focus almost entirely on law enforcement and national security and not get distracted on other things), a number of people asked about services and infrastructure like roads, utilities, the post office, water systems, schools, etc.

This is an important discussion. In our day, it’s one of the biggest issues in the world. So, to get a handle on this, let’s consider a few foundational principles of freedom.

1. Government is force, and any use of government is force. Even when the government doesn’t directly use force for a certain program (like building a school or hiring a postal worker), it uses force to fund it. For example, if Tom refuses to pay his taxes, the government will use force—stern letters, threats, fines, and eventually, if Tom still refuses, government agents will show up at his house with guns and he’ll be forced to pay or face incarceration. If you don’t think government is force, just try skipping jury duty. Even this core right is now administered with threats of fines and jail time. Government is force. Nothing the government does is without force of some kind.

2. There are things that are best solved by force, like situations that need police or military reactions. That’s why government was invented.

3. Anything that doesn’t require force, doesn’t need government. It can be better accomplished in some other way. This is true of many things, from schools, hospitals and roads to water systems, postage systems, utilities, etc.

The Difference

Again, if any of these things are done by the government for the purpose of national security, it might be best for government to do them.

The American framers knew firsthand the problems caused to the Continental government and military during the Revolutionary War by the lack of adequate roads, postal systems, weights and measures, good coinage in the monetary system, etc.

As a result, they delegated these very powers to the federal government in the Constitution. But all were given for purposes of national security—where force is needed.

Many of the founders even argued that states should fund and run schools for national security purposes, and this is what happened. In all these things, force (government) programs were designed and funded with law enforcement or national security in mind.

As for water systems and local utilities, and similar things like local roads or garbage services, the founders strictly kept these out of the Constitution and left them to the states or local areas.

In some states, cities and towns during the founding, such systems, roads, and utilities were governmental—and in others they were privately run. It was left to the local voters to make the final decisions on when to use government and when to handle such things privately.

The major difference between then and now is that in the founding era almost all the citizens understand the simple fact that all government is force.

When they chose to use government for something, they made sure they knew exactly what they were getting from the government, exactly how much freedom they were giving up for it, and precisely what the checks and balances were on the specific government program. Today very few voters have this knowledge.

Up and Down

That’s the background. Now let’s dig a little deeper. What about utilities, water systems, schools, transportation, etc? When should government lead out in these things? And when should they be left to the private sector?

Here’s a challenging thought: What if voters limited anything done by the government to law enforcement and national security? This is worth considering. It may sound extreme, but I think it’s worth arguing the extreme in this case. What’s the downside?

First of all, the upside is that government simply wouldn’t be able to become too big. This would be a huge benefit to the economy. Freedom works. Why are many moderns so afraid of it? Why don’t we give freedom a try more often?

The biggest problem in our day is the overreach of government. How to fix it? Keep the federal government limited to the powers listed in the Constitution—precisely limited to the powers outlined in the Constitution. And keep state and local government programs to more of a minimum.

I think this is a fantastic idea. It certainly solves our biggest current problem.

But, secondly, it does even more. It frees up more opportunity for free enterprise. It encourages innovative, entrepreneurial, free enterprise solutions to other challenges. These nearly always do better than force.

The Power of Private

For example, a host of private schools and private universities provide much better education than public schools and public universities. The Ivy League is the best, and it’s private. The same is true in other arenas.

Private firms like UPS and FedEx are just as good as the US Post Office. Most people think they’re much better. For that matter, most people prefer email letters and social media posts sent through private-sector Internet companies over the Post Office or any other government-run means of communication.

A lot more consumers prefer travel by Delta, Southwest, American Airlines, and a host of other privately-run companies to Air Force or Navy planes—to the point that government fleets aren’t even available to most people. And these private airlines do much better than the government airlines run by some nations.

Try putting this to the test in your own life right now. Pull out your wallet and see how many dollars you have available in government currency versus private-service money.

Most people have a lot more capital available in Visa, Mastercard, American Express, Discover and even loyalty points like skymiles or Sam’s Club/Costco cards than in actual government currency.

Who’s In Charge

Thank goodness we have CBS, ABC, NBC, Fox and CNN to give us our news—rather than “The White House Press Briefing.” Imagine if this was our main news source! Terrible. (A lot of nations suffer under such a system.)

Or worse, what if our media was all government: the “National Obama Newscorp,” or “The George Bush Federal News”” Bad idea. Private media, with all its problems, is much better than any government-run media.

In fact, people who read various private-sector views and sources online get much better news than those who just watch one source.

Studies compare how informed watchers of Fox News are versus the MSNBC audience, but the best-informed watch them both—along with several other sources (especially written sources). The competition between private media companies and providers means we all get better news options—if we look for it.

These private services listed above—and others like them—aren’t worse than government programs. In most cases they’re superior.

Just compare Hollywood’s version of movies to Washington D.C.’s. No comparison. Private is often better. Wendy’s or KFC versus the high school lunchroom meal. Chevy or BMW versus government made cars. (Remember the Lada? Probably not.)

What about all the perfumes and colognes at the mall versus whatever Congress and the White House would come up with if they were in charge of how we smell.

Scary.

The Thing That Works

Of course, the critics of private enterprise quickly point out that corporations can become abusive. And they’re right. But that’s exactly what government is for—to step in and use force when other entities get out of line. That’s why government is necessary and good, if it keeps to its proper limits.

If Visa, FedEx, Yale, ABC, Delta, or Google gain a monopoly and/or use force or lies to attack their competitors or consumers, the government’s correct role is to wisely intervene and ensure that the market remains fair and open. Again, government should do this. That’s what it’s for—the restrained, wise, and proper use of force.

If Mastercard, Apple, Ray-Bans, or McDonald’s raise their prices too high, the government should ensure that an open market allows other companies to compete. That’s all it should do.

It shouldn’t start up its own companies to compete in the private market, or regulate these companies to the point that the government is basically in charge. It just uses force to ensure a free, open maket.

This naturally leads to innovative start-ups that drive prices down. In fact, big corporations are usually a lot more powerful than they should be precisely when government is too big and joins them in keeping down the start-ups.

Under free enterprise, governments keep the market free, fair, and open to all—and small businesses innovate and compete. This keeps big business and big prices in check.

The Wrong Argument

Sadly, governments generally deliver this kind of intervention much less effectively when they are doing more than law enforcement and national security. Government achieves the right kind of intervention much better when it stays in its proper role.

The American founding model was simple: let the government do things that require force, keep it closely monitored and checked as it uses this force, and leave everything else to the private sector. And, simultaneously, use government to wisely check the private sector when needed.

Again, at times the founders and other free generations have used government programs for something beyond law enforcement or national security—but always with careful monitoring, checks, and limits.

The consequence of forgetting how this works is that today we have at least two overarching political problems: (1) the government does much more than it should—way beyond police, military, and perhaps a few wise additional local programs with clear checks and balances—and (2) it is pretty weak at stopping abuses by powerful corporations and other entities when they go too far.

One of the most interesting things about our current system is that those who are most worried about problem 1 are deeply opposed to those who are most concerned about problem 2—and vice versa. The first group is called Republicans, and the second Democrats.

But while the two parties are busy stopping each other from solving much of anything, both of these problems are spreading: Government keeps growing in hurtful ways no matter which party is in power, and corporate and other private forms of abuse are also increasingly hurtful. The victims are the regular, hard-working citizens.

When to Consent

Yes, to reiterate, under the right circumstances, government can help society by doing well-considered projects beyond law enforcement and national security. But even when this is the case, wise and educated citizens will only consent to such government programs when they have first given every consideration to private options and free enterprise alternatives. Let’s get the horse in front of the cart.

Then, after wise analysis of all the options, if government is the best choice for a certain program in a given situation, engaged citizens must ensure that clear, effective checks and balances are written into the structure and implemented for as long as the government program is in place. Without this, freedom always declines.

To sum it up: Of course government can do more than just law enforcement and national security, but we should only turn to government for such programs when the private options have been fully considered and found wanting. Free enterprise almost always comes up with better programs than politics. Not always. But almost always.

Freedom, and the habit of trying free market options first before turning to the state, always rules the day in a truly free nation. We should only turn to force (government) when it is truly the best option. Sometimes it is. Usually it isn’t. Wise citizens must know the difference—and the costs.

Oliver DeMille is the New York Times, Wall Street Journal and USA Today bestselling co-author of LeaderShift: A Call for Americans to Finally Stand Up and Lead, the co-founder of the Center for Social Leadership, and a co-creator of TJEd.

Among many other works, he is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy, and FreedomShift: 3 Choices to Reclaim America’s Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.