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What the Enron scandal means to you
Posted By Harry Browne On 03/07/2002 @ 1:00 am In Commentary | Comments Disabled
Some people think the Enron scandal shows that big business is as dangerous as big government – and that Libertarians shouldn’t support big business.
Libertarians aren’t pro-big business. We’re pro-liberty. We’re pro individuals, small businesses and big businesses – anyone who makes his living by offering his services to others on a voluntary basis.
And we’re opposed to those who make their living by crawling in bed with the government.
Fascism in America
Enron was a perfect example of corporate executives turning to politicians for help. The politicians obliged. They helped subsidize Enron and thereby made Enron less able to carry its own weight in the free market.
But being a politician means never having to say you’re sorry. You don’t have to say, “I never should have voted to subsidize that ridiculous Enron project in India.”
No, if something goes wrong it must be the fault of someone in the private sector. After all, they’re greedy businessmen and you’re a selfless public servant.
But the kind of corporate welfare that came Enron’s way is rampant in our economy. Subsidizing corporations has become the stock in trade of politicians – enabling them to reward their friends and punish their friends’ competitors.
Of course, they don’t refer to it in such crass terms. They call it “enlightened capitalism,” or “public-private partnerships.” And it is all “for your own good.”
But as Charles Biderman said, it is “government and big business working together for the Fatherland” – just as in fascist Italy or Nazi Germany. It has now become as American as military tribunals or snooping in your bank account.
Difference between Big Business and Big Government
Fortunately, no matter how big a company like Enron gets, you don’t have to deal with it – just as you don’t have to deal with Microsoft or Federal Express or General Motors. You can always say “no” to big business – so long as government doesn’t force you to buy.
Unfortunately, you don’t have such a choice with Social Security or anything else the politicians compel you to buy “for your own good.”
That’s the difference between big business and big government – the freedom to say “no” to one and the inability to resist the compulsion of the other. When big business (or anyone) crosses the line and enlists the government to impose its way, it is no longer a business – it becomes an adjunct of the coercive government.
Who was hurt?
The only significant losers in the Enron scandal are the employees. In some cases, losing their jobs was a minor tragedy.
But losing their pension funds was even more than a tragedy, it was a crime – a crime caused by the income tax. If it weren’t for the income tax, the pension money wouldn’t have been controlled by irresponsible managers.
Employers don’t pay employees the full value of their services because whatever they pay is taxed immediately – and any gains from investing the money are taxed each year. So an employer puts some of the employee’s earnings in an employee pension plan – where it isn’t taxed and where it can be invested and grow tax-free.
With the pension money in the employer’s hands, the employee has little control over it. He usually can’t diversify in any meaningful way to assure that no single event could be fatal. And he becomes vulnerable to someone else’s incompetence or dishonesty.
But, of course, the income tax and corporate welfare and the $2 trillion government are all there “for your own good.” So shut up and go back to work.
What you should have
But we shouldn’t shut up. We shouldn’t stand for this.
I want an America where you keep all of the 15 percent you’re paying now to Social Security – and do with it as you think best “for your own good.” If you did nothing more than put 5 percent to 10 percent of your earnings in savings accounts split between two or three banks, it would be far more productive than in Social Security.
I want an America where government is so small that you pay no income tax at all, so that every dollar you make is yours to keep – to spend, to save, to give away as you see fit.
I want you to be able to afford to put your children in the best private schools, to go into business for yourself if you want, to support your favorite church or charity on a scale you’ve never been able to afford before.
But none of that is possible so long as we tolerate the idea that people like Teddy Kennedy, George W. Bush, John McCain, or Tom Daschle know what’s best “for your own good.”
The true meaning of the Enron scandal is that government doesn’t work. And we need to reduce it to the absolute minimum possible.
We need to get government out of your life and set you free to take care of your own good.
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