American public opinion tends to shades of black and white. As a nation, we are uncomfortable with ambiguity. We want to see international conflicts as contests between “good guys” and “bad guys.” We want to pin domestic problems on specific villains.
American public opinion tends to shades of black and white. As a nation, we are uncomfortable with ambiguity. We want to see international conflicts as contests between “good guys” and “bad guys.” We want to pin domestic problems on specific villains.
Unfortunately, the world is seldom such an either-or place, and acting as though it were can lead to significant problems, as we are seeing with the current crop of corporate scandals.
Benjamin Barber summed the situation up with his usual eloquence in a recent New York Times. “[B] usiness malfeasance is the consequence neither of systemic capitalist contradictions nor private sin, which are endemic to capitalism and, indeed, to humanity. It arises from a failure of the instruments of democracy, which have been weakened by three decades of market fundamentalism, privatization ideology and resentment of government.”
Thomas Friedman has made a related point. What distinguishes America from countries where business corruption is endemic, he notes, is “our system’s ability to consistently expose, punish, regulate and ultimately reform” our excesses. Other countries may have the “hardware” of capitalism, but not the “software”—which Friedman describes as “an uncorrupted bureaucracy to manage the regulatory agencies, licensing offices, property laws and commercial courts.”
Today’s corporate scandals are the product of a decades-long policy debate that has cast government as an either-or proposition. On one side are those who argue that government is at best a necessary evil and at worst, an unmitigated one. On the other side are those who would insert government into virtually every moral or practical problem faced by humankind. Both sides assume a false—and very dangerous—dichotomy. The issue is not order or chaos, government or no government. It isn’t even the size of government, although size is an appropriate concern. The appropriate question is: what kind of government?
To be for or against regulation is similarly beside the point. Governments must regulate, or the market cannot function. Investors must be able to rely on financial information, or they won’t invest. Consumers who have no redress for fraud will buy fewer goods. Small business must have confidence that large enterprises cannot buy special favors from those in power. Rules that insure a level playing field are essential to a healthy capitalism, and bureaucrats who enforce those rules fairly and consistently are friends of the market, not its foe. The question is not whether, but how. The task is to keep regulatory activity within appropriate limits, not to eradicate it, and certainly not to apply it selectively. As Friedman says, regulation does not denote a lack of faith in ordinary Americans, as President Bush has insisted, but rather a lack of trust that “ordinary” Big Oil, “ordinary” Enron or “ordinary” Harken Energy will do the right thing without proper oversight.
Americans have adopted a sports mentality consisting of winners and losers. We are “for” the Israelis and “against” the Palestinians (or vice versa). We are for charity and against welfare. We are for business and against bureaucrats. Either-Or.
It is never that simple.