Privatizing Government

"That way madness lies." -- Shakespeare, "King Lear."

   "That government is best that governs least," said Henry David Thoreau. The logical next step would be to say the best government is one that governs not at all.
   That seems to be the president's strategy -- to leave all stabilizing influence on the economy to free and open market forces. How else to explain his proposal to privatize the national air traffic control system and the Federal Aviation Agency, putting the system out to bid for a single company to operate what he calls a "modernized" system?
   The new company, he claims, would be a self-financing, non-profit entity with access to markets and investors.
   What's next, privatizing the Tennessee Valley Authority, which brought electricity to many thousands of families in Appalachia?
   How about eliminating the Federal Reserve Board, and relying on self-correcting free-market forces to revive a crashed economy? The Fed was formed in 1914, to help regulate financial cycles and to serve as a central bank to rescue troubled banks. Or the Federal Deposit Insurance Corp. (FDIC), which protects the savings of ordinary citizens when a bank fails?
   
   It's ironic that the president would adopt a Thoreau-type attitude, since Thoreau was jailed for civil disobedience when he opposed war and a military draft. Then again, it's unlikely that this president has even read Thoreau or is familiar with his work.
   There is a role for government to play in any national enterprise, because government can and should do things that the private sector either cannot or will not do. Some of these are construction projects and industry regulations that benefit all citizens.
   Example: If not for Republican President Dwight D. Eisenhower, the U.S. would not have its network of interstate highways, which were largely funded by federal money.
   Meanwhile, the  president wants to transfer infrastructure building and maintenance -- roads, highways, bridges, etc. -- to states and cities, so the federal government would have little or no role in this activity.
   
   Economics 101 teaches that government has a major role in any economy, as shown by the formula C+G+I = GDP -- Consumer spending plus Government spending plus Investment equal Gross Domestic Product, the total value of all goods and services produced in a given year. To sharply reduce Government activity, especially when an economy is skirting the edge of a downturn, is to invite a full collapse.
   Conversely, when a nation's economy is in difficulty, government spending, even at the expense of debt, can rescue a country from disaster. This happened in the early 1930s, when the Great Depression brought havoc and poverty worldwide. It has happened periodically since then, as government stepped in to stimulate economic activity, and trimming its spending as the economy recovered.
   But to cut government input too soon can only send the economy tumbling again. This happened in the mid-1930s, when government pulled back, and the economy stumbled just as it was beginning to recover.
   Today, the national economy is clawing its way back from the Great Recession, but to sharply reduce government support may well spell more disaster for American confidence.
   That way madness lies.

   There is no such thing as a totally free market, just as there is no such thing as a totally managed economy. Therefore, neither pure socialism nor pure capitalism can exist in the real world.
   Those who hail the virtues of competition do so on the premise that they will win, at the expense of all others. Therefore, there is little real competition, because the strongest or the dominant player fixes the rules in order to retain and enhance dominance.
   Likewise, pure socialism can only exist in a small commune, wherein everyone contributes for the benefit of all, and everyone shares the benefits of cooperation even with those who are unable to contribute, such as children, the old, the sick and the unskilled.
   Communal societies were attempted in America in the 19th Century, and some survived well into the 20th Century. But they were never large, and eventually faded as more ambitious members abandoned the commune to try for success in the larger, competitive nation.
   This is not to say that competitive systems are always better in every way. It is to say that greed plays a role as some try to accumulate more for themselves at the expense of others.
   A better system combines features of each, so there is room for competitiveness and achievement as well as consideration and sympathy for those less able.
   It may well be true that over time, in the long run, a totally free market finds ways to correct itself and recover from difficulty. But the issue instantly becomes, how long will that take and what will the many millions of people without massive financial reserves do until that happens?
   Human kindness and ethics says we should help others in need.
   Otherwise, as John Maynard Keynes succinctly put it, in the long run we are all dead.