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Why You Can’t Just Mind Your Own Business

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This phenomenon, where more and more members of society are drawn into taking rather than making, is known as “rent-seeking,” an extremely ugly social science term that I try to avoid whenever I can (even though it will slip into this book from time to time).45 It is easier to think of it as “People Using Political Power to Enrich Themselves by plundeRing You” or, if you will forgive the acronym, what I call “PUPPETRY,” in the same spirit as “Fannie Mae” is understood to mean the Federal National Mortgage Association, or “Freddie Mac” the Federal Home Loan Mortgage Corporation. This idea of people winning unearned benefits at others’ expense through successful political activity was first systematically described in modern terms by the American political economist Mancur Olson, most famously in his little classic The Logic of Collective Action. One of his students summarized his thinking:

“The great majority of special interest organisations redistribute income rather than create it, and in ways that reduce social efficiency and output,” said Olson. Groups rarely propose ‘social benefits’ that don’t also handsomely benefit themselves.... As society becomes more and more dense with networks of interest groups, as the benefits secured by groups accumulate, the economy rigidifies, Olson argued. By locking out competition and locking in subsidies, interest groups capture resources that could be put to better use elsewhere. Entrenched interests tend to slow down the adoption of new technology and ideas by clinging to the status quo.... At last society itself begins to change. “The incentive to produce is diminished; the incentive to seek a larger share of what is produced increases.” The very direction of society’s evolution may be deflected from productive activity and toward distributional struggle. [Emphasis added]46

Another way of thinking of this shift is that the character of individuals and the society that comprises them begins to change, from one of making to one of taking. This insight that the state becomes a temptation to immorality and a character-corrupting institution when it is permitted to engage in excessive redistribution was best expressed by the nineteenth-century French political economist Frédéric Bastiat.

Since, Bastiat notes, we are all asking the state to take from others and give to us, and since the state cannot give to us without taking from everyone, the state may properly be defined as “the great fiction through which everybody endeavours to live at the expense of everybody else” [emphasis added].47

In other words, when we allow the state to become an instrument of redistribution on a large scale instead of impartially administering laws that treat everyone the same, it too easily becomes the instrument of some groups imposing their will on others. When you know that political power may be used against you, from a purely defensive point of view it becomes imperative to organize and to seize that power, even if all you want is to be left alone.


The tyrant and his victim are still present, but there is an intermediate person between them, which is the State—that is, the Law itself. What can be better calculated to silence our scruples, and, which is perhaps better appreciated, to overcome all resistance? We all, therefore, put in our claim, under some pretext or other, and apply to the State. We say to it, “I am dissatisfied at the proportion between my labour and my enjoyments. I should like, for the sake of restoring the desired equilibrium, to take a part of the possessions of others. But this would be dangerous. Could not you facilitate the thing for me? Could you not find me a good place? or obstruct the industry of my competitors? or, perhaps, lend me gratuitously some capital which you may take from its possessors? Could you not bring up my children at the public expense? or grant me some prizes? or secure me a competence when I have attained my fiftieth year? By this means I shall reach my end with an easy conscience, for the law will have acted for me, and I shall have all the advantages of plunder, without its risk or its disgrace!”

Frédéric Bastiat, Government


PUPPETRY can take many forms. Using the state to commandeer the income of individuals to redistribute it to others is just one. That use of the state is not just limited to taxation, by the way. If the state establishes marketing boards that can set the price of milk and eggs, that action transfers income from consumers (who pay higher prices) to producers (who don’t have to face competition). If widget makers win tariff protection from foreign competitors, PUPPETRY is allowing them to get extra money from consumers who now have to pay more for their widgets than they need to. If the local municipality forces taxi owners to have medallions to operate legally and issues only a few such medallions, that requirement artificially drives up the cost of cab rides, a straight politically produced transfer of income from passengers to owners. The resulting transfers don’t even have to be monetary. Language laws like Quebec’s Bill 101, for example, confer benefits on the speakers of one language at the expense of others.

Every democracy has some PUPPETRY. Politics being what it is, government is inevitably involved in redistribution; even before the welfare state, it certainly helped to transfer wealth from taxpayers to railway builders during the opening of the west, for example, from taxpayers to munitions manufacturers during time of war, and from taxpayers to civil servants and politicians in every era. There is a point, however, past which it ceases to be the exception, requiring strenuous justification and causing moral anxiety, and becomes the common coin of everyday life. Ultimately everyone asks for such special dispensations, to get what they want by having the state take it from someone else.

Fearful Symmetry - the Fall and Rise of Canada's Founding Values

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