The Corporate State

Limited governments always turn into fascist or semi-fascist states. Large corporations and business interests become nearly state-run organizations. The monetary system of a given nation will be run by a central bank, with a fiat currency as the only legal tender. Price controls, subsidies, and arcane legal frameworks become the norm as the mix of public and private control over the economy becomes more normalized. The state will gain more and more power over time as new crises erupt. At first, the new powers of the state are not used as their use would engender a public outcry. Over time, the state will use these powers in small and limited ways, until people are comfortable. They will then use those powers more and more often.

The first powers over society will always be exercised in a way with which most people will sympathize and therefore applaud. The Fascist Manifesto actually had many of these explicitly declared: a minimum wage, universal suffrage, eight hour workday, labor union support, progressive income taxation, invalidity insurance.

There are two major reaons for this course of events. The first has to do with the nature of free markets and governments. The more free the market and the more free the society, the faster and vaster wealth will be created. This can be seen in the USA, where after the abolition of slavery and a terrifyingly bloody war, the creation of wealth was startling and immediate. More people enjoyed freedom, and without slavery machinery was needed. As machinery was needed, the market provided it. The explosion in wealth generates an explosion in tax revenues.

The explosion in tax revenues allows the government to start offering those services that will engender public support while simultaneously growing state power. People will allow this as they can afford the tax rate, and those becoming disenfranchised are bad people anyway, right?

With the government's power on the rise, corporations will lead into the fray. The corporations are set up to absolve the owners/operators of any responsibility for their actions. The corporation is its own legal entity and it can be taken to court. The executives and investors are not normally on trial themselves. As such, the corporations can do things that are often too risky for privately owned business. This allows them to grow in size, power, and market dominance. They will start lobbying the newly empowered government to implement barriers to entry (licensing, patenting, copyrighting, banning, etc...). This makes it harder and harder for anyone to compete against the mega corps.

A natural biproduct of this is monopoly (or near monopoly). The monopolies gain so much power that they are nearly government agencies. Prime examples are businesses like AT&T pre breakup, your local telco, your power company, your water company, your natural gas company. Those industries with too many initial movers will become oligopolies: Oil, Rail, Aviation, PCs, and most recently cloud services (Amazon/Microsoft/Google/Apple).

A feedback loop becomes established. The government gains more power, the corporations back increasingly Byzantine legislation that serves their own interest, which then further enhances power of both government and corporation, and the cycle repeats. In the process small businesses and individuals can lose a great deal, and sometimes their very existence.

Conservatives claim that this is because we no longer follow the Constitution. If we just followed the Constitution everything would be okay. The truth is, the US government never followed the Constitution. The myth of the American founding would have people believe that the founders were philosophers who chose not to become an imperialist power, but this isn't quite accurate. The Alien and Sedition Acts (1798) were used to persecute all those who disagreed with the system (most notably anti-federalists). Further, Washington allowed the creation of a federal bank so long as the new capital was placed near his home in Mount Vernon. He also crushed dissent with use of the military. By the 1850s, this type of proto-facsist behavior was normalized. Lincoln implemented the first income tax, started a war between the states, threw all of his dissenters into prisons without trials, suspended habeus corpus, and even drew up the first legislation that would enable corporations to become legal persons. During Lincoln's War, it was official policy to bring war against civilians as well as military. Sherman's March to the Sea was endorsed by President Lincoln (and actually ordered by him), and during that march, the Northern troops murdered non-combatant men, women, and children. They comitted acts of random violence, rape, and theft. They burned homes, crops, and businesses to the ground. There was never a "freer" time in America. This conservative ideal is a myth. There was a freer time for the states, and that was actually after the Revolution, but before the Union. The USA was an experiment in creating the smallest government possible. The smallest government in one of the newest nations, is now the largest, oldest, and most Byzantine government on Earth. The other "free" nations around the globe are quickly following the path that the USA has laid.

I can admit that even I can tear up on occasion when I think of the countless men and women who perished trying to ensure that the USA and her blessed ideals of invidualism, private ownership, and professional excellence lived on. The truth is that these men and women triumphed and their ideals survived despite the state and not because of it.

Licentiam Absurdum