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Volume 24, Number 10
Race to the Bottom
Llewellyn H. Rockwell, Jr.
Just about everyone you talk to these days admits serious dissatisfaction with the election choices this year. And yet most people will eventually decide for the "lesser of two evils"—whatever that is, and there is probably no way to know in advance—realizing that no real viable option is going to emerge.
People are right to feel excluded, ignored, and otherwise ill-served by the political system. And yet what do the two parties do about this? They come up with ever more creative ways to do bad things like take from some to give to others. They manufacture distractions and amusements. They do their best to cobble together interest groups to pay off. What they do not do is meet the demands of those of us who merely want to be left alone.
There is a lesson here: in private enterprise, unmet needs are profit opportunities. In public elections, they are opportunities for graft. The whole process is enough to make one cynical toward campaigns and elections. That’s the wrong response. There is nothing wrong with campaigns and elections—they are a normal part of corporate life and institutional management of all sorts, even in religion. The real issue is the fundamental problem of public property.
Economists speak of competition as if it always and everywhere leads to better service and performance. It is true in sports, where there are winners and losers, and in economics, where an ongoing process of rivalry encourages excellence and efficiency. Politics is a different matter, however. Here the result of competition seems to be the opposite result. The two approved parties appeal ever more to the lowest common denominator and seem to replicate each other’s worst traits. Instead of excellence, we get mediocrity and downward drift.
Consider the disgraceful spectacle of Bush versus Kerry on just about any issue. Given the disaster of the Iraq war, one might think that Kerry would have an issue. But instead, he is a picture of studied avoidance. As regards government, Bush has been worse than any president since LBJ. On trade policy, he has been worse than anyone since Hoover. Kerry’s position is that Bush has spent too little and erected too few trade barriers. This is competition of a very strange sort: a contest to see how one can outdo the other in bad ideas and bad behavior.
Competition in the marketplace is of a different sort. It leads to relentless improvements in quality. The enterprise that performs its job with excellence relative to others promising similar goods and services succeeds. The marketplace is always open to new entrants who can show the existing producers how to do the same thing better or do something else entirely. The price of services and goods is always falling (apart from government inflation). Obsolete production lines are folded. Consumers reward shrewd producers and punish the dull ones, so that the best get on top. There is accountability for error and it is punished.
The market is not perfect and it doesn’t always lift up the projects and services we individually prefer. But over time, it always finds the most economical solution to the core economic problem of providing ever more and better material provisions in a world of scarcity. Market competition is so effective that its magic is present with only one producer: the threat of entry keeps prices low and product quality higher than it would otherwise be.
In politics, competitive pressures yield exactly the opposite. The quality is constantly declining. The only improvements take place in the process of doing bad things: lying, cheating, manipulating, stealing, and killing. The price of political services is constantly increasing, whether in tax dollars paid or in the bribes owed for protection (also known as campaign contributions). There is no obsolescence, planned or otherwise.
And as Hayek famously argued, in politics, the worst get on top. And there is no accountability: the higher the office, the more criminal wrongdoing a person can get away with.
The competitive impulse cannot be abolished by any social system. Under communism, it is a source of destruction as resources were stolen, overused, and depleted. People compete for power instead of service. Competition under socialism leads to constant declines in quality, morality, and performance. Ultimately this tendency destroys civilization itself.
Under capitalism, competition leads to improvements in quality, morality, and performance. It is the very basis of modern civilization.
Public elections replicate all the worst aspects of socialism. Two candidates are unleashed to lie to the public for purposes of acquiring power over an institution that they do not own but will manage for four years, during which time this winning gang will sign off on the spending of some $8 trillion and have the power to destroy just about any other government in the world. They risk virtually nothing in this game. The worst consequence they face is being voted out of office four years from now, and being made rich by the special interests they funded with your money.
In private enterprise, every decision of management is tested by the marketplace, every minute of every business day. Owners are constantly on watch and the consumers determine the course of all production. The people at the top only have power in the most superficial sense: it can be taken away immediately by the consumers who gave them power in the first place.
What’s more, the decisions of private entrepreneurs do affect our world only to the extent we allow them to. The right to secede from free enterprise is always guaranteed. You can always stop using a computer, a cell phone, or a mall. You can move from one spot to another. You can subscribe to a magazine or unsubscribe. You can join a club or quit. This right of exit is a crucial part of competition.
But politics provides no such right. You may not unsubscribe. You cannot return the president or your senator to get your money back. You cannot switch from a failed court system to one that serves you better. We are all roped into a single system from which there is no escape, and we are told to be pleased that every four years, we are permitted some modicum of influence in changing the face of despotism. This is not the true meaning of competition but its perversion.
What the world needs is not another "advanced auction of stolen goods" (Mencken) but more opportunities to serve ourselves and all of humanity through ever more impressive uses of private property.
Llewellyn H. Rockwell, Jr., is the author of Speaking of Liberty and president of the Mises Institute (Rockwell@mises.org).