The road to hell, they say, is paved with good intentions.

In this book I offer a new perspective on the problem of well-intentioned paternalism, a view I developed in the course of a 14-year effort to launch a market-stabilizing stock auction that came to be called AZX, the Arizona Stock Exchange. Although I didn’t start out with an anti-regulatory bent, the experience forced me bit by bit to question the most accepted tenets of regulatory doctrine, first in the stock market, but eventually in virtually every important industry. In the end I became highly skeptical of all Government intervention in private markets.

Perhaps my most surprising finding is that my discovery that America has gone socialist was not my most surprising finding. Topping even that one is that our version of socialism, which in the end may prove both more durable and more damaging than that which destroyed Russia, is being pursued primarily by conservatives. Like Russia’s communism, which now seems so obviously idiotic, our country is making philosophical and practical mistakes that will one day be laughed at. Can’t happen here, you say? Well, did you think the Soviets said to themselves: Hey, let’s adopt a system that will impoverish our people, ruin our respect among nations, turn our great art to mush and make us the laughing stock of the world’s philosophers? No. They thought they were following the latest, greatest, most efficient, most fair, economic and political principles. And so do we. We’ve now got Government experts, supported by the latest, greatest academic theories, designing every major industry and element of our infrastructure. It’s difficult, of course, to argue with experts, and virtually impossible to do so industry by industry, detail by detail. So the intervention juggernaut rolls on.

But if you connect the dots in this book, you will spot a pattern others have missed. Competition policy – monopolies, antitrust, patents, etc. – is the hidden driver of all these interventions. It is also both usurping individual freedom and having a profoundly disorganizing effect on our economy. As a result, our most important industries are falling apart. Telecom, electric power, oil, natural gas, air travel, computer software, health care, education and many other critical components of our infrastructure are fragmenting furiously, and most are constantly in crisis and getting worse by the day. Even the stock market, the most important industry in the infrastructure of capitalism, and the one that first clued me in to these problems, is rapidly becoming dysfunctional. You won’t need to be an expert in any of the industries discussed to see this pattern. Indeed, it will become clear to you why all the expert attention is the cause of the functional disintegration observed.

The situation is far worse than commonly supposed, even by those who think they understand the problems of over-regulation, namely, conservatives. In fact, it is precisely those conservatives who are causing the confusion. Although we Americans consider ourselves immune to socialism by virtue of our freedom-based traditions, we are not. We may have avoided some strains of that virus, like Euro-socialism or the USSR’s communism, but the fact is that the plague has mutated around our defenses. It is now carried into our body politic by the very words that once made us immune. Words like "competition," "free markets," "property" and "capitalism" are now used regularly to justify intervention and expropriation in the name of fairness. Antitrust is the Trojan horse that makes such deceptions possible. By providing a credentialed excuse for intervention, one with an apparent basis in such laissez faire values as efficiency, freedom and property, antitrust is rapidly leading us to the point where we are agreeing as a nation on our version of having "the people own the means of production." On the strength of its false claims, antitrust then lends legitimacy to a virtually unlimited list of other rationales for intervention, almost all of which would – without antitrust – have philosophical difficulty justifying themselves in a capitalist society.

The largely subconscious "logic" by which antitrust provides legitimacy and credibility to the whole interventionist enterprise runs roughly as follows. Since antitrust intrusions are necessary in any case to make sure our capitalist society runs properly (or so they say), it is easy enough to imagine other interventions that Government could undertake to make sure our capitalist society runs even more properly. With the big foot of antitrust holding the intervention door wide open, it is exceedingly difficult to deny any other excuse for intervention, although only antitrust can claim to improve capitalism directly. Other programs generally must acknowledge a cost in terms of efficiency lost to red tape or an expense in dollars that must be borne in order to achieve any benefits. Of course the supporters of these programs always argue that the benefits are worth any efficiency cost or dollar expense, and thus attempt to justify them in spite of their costs. But that is very different from being able to claim that there are actually efficiency gains to be had from applying the program itself, as antitrust advocates do. Because few dispute this claim, antitrust gets a pass on the standard complaints about big Government.

This is not to say that antitrust is not criticized for its big bureaucracy. But how could we deny its advocates their next expansion – no matter how big the bureaucracy gets – when they can credibly claim that our economy would falter if antitrust were not around to keep prices in check and the paths to innovation and competition open? In other words (if you believe the logic), here is one program that is not open to the normal cost-benefit calculation that conservatives tell liberals to subject their programs to. It is difficult to overstate the confidence Big Brother must get from knowing that here is at least one rationale for intervention that everyone agrees with. While there is plenty of debate over interpretation and application, there is virtually no visible dissent from the proposition that antitrust is beneficial if properly applied. Since, therefore, virtually everyone agrees that having an antitrust bureaucracy is inevitable, the next logical question is: What else can it do? After all, if Government is needed to prevent businessmen from taking unfair advantage of each other or the public, it is hardly a stretch to imagine Government playing a constructive role re-allocating other economic or social outcomes more fairly, too.

Antitrust’s power to justify and inspire intervention beyond its purview is also bolstered by the "national asset" argument – a.k.a.: "its-too-important-to-be-left-to-the-private-market." This argument is most often invoked to attack monopolies providing infrastructure, such as oil, transportation, telecom or the stock market, but is an easily transferable excuse to any program with vocal advocates. Although the argument is connected to antitrust without even the pretense of intellectual rigor, its frequent association with trust-busting, which is presumed to be theoretically sound, makes it easier to swallow confiscations of property for other public purposes, too. If, for example, it is OK to seize "anticompetitive" monopolies without compensating their owners, it becomes easier to imagine taking ranches, too, if doing so would protect a wetland, an endangered species, or some other "public interest." That such uncompensated takings are accomplished by rule rather than forced physical separation does not change the fact that the original owner no longer has use of his property. So what if the rancher was blindsided when the politics changed and the rules changed with them? That is no different than the 180 degree shifts that often cause monopolists’ property to be given up to competitors and then, perhaps with a change of administrations or judges, given back or to others. These people are motivated by private greed, not public interest, aren’t they? Why should we compensate them for taking their property when their motives for keeping it are so impure?

The net effect of all this is that the bureaucratic enterprise, led and legitimized by antitrust, regularly rides roughshod over freedom. That so few of its invasions are commonly recognized for what they are explains both why there is so little concern about them, and why we are so unable to launch an effective counterattack. In large measure this failure to recognize socialism and defend our society against it is due to the fact that conservatives are asleep at the switch as they fiddle endlessly with efforts to perfect antitrust. This is a fool’s errand, because, make no mistake, antitrust’s apparent intellectual rigor is phony. There is no valid justification whatever for its claims to efficiency or any other alleged benefit. And it is incorrect to claim, as many do – liberal and conservative – that antitrust is the least regulatory way to run an economy. Of course, those who make that claim are comparing antitrust either to the presumably more intrusive rate-of-return regulation of utilities, or to full nationalization. And of course those who make such claims are usually doing so in an attempt to burnish their conservative credentials by pontificating on the evils of State planning. But not only are the socialist straw men they deprecate actually less interventionist than antitrust, but they are actually more efficient. They are less interventionist strictly measured in pounds of bureaucrats needed to administer them, and they are more efficient because they can maintain the network integrity of the industries they administer. In contrast, it is antitrust’s mission to bust up and fragment those networks.

Thus conservatives often end up unwittingly pushing socialist approaches that don’t work, demonstrating their incompetence on two counts: 1) they are ignorant of the true philosophical content of their own positions, and 2) they are unable to effectively analyze the practical consequences of the remedies they champion. These philosophical and analytical failures are leading to the wholesale adoption of disastrous economic policies, such as "deregulation," and the consequent rapid unwinding of Western economic potential. Worst of all, because of the incompetence of conservatives, the collapsing infrastructure caused by these policies is being blamed on an excess of freedom, when it is actually unrecognized socialism that is doing the damage. Why are conservatives making these mistakes? Because, although the falseness of antitrust seems obvious upon inspection, few are doing the inspecting. Perhaps this is due to the fact that those who could do so are, almost without exception, wittingly or unwittingly involved in occupations that depend on Government. Whatever; the philosophical reality today is that, not only are liberals winning politically, but so confused are conservatives that they are doing far more harm to their own cause than the liberals are.

My experience with regulation constituted an accidental and, therefore, a halting and tentative discovery of these problems, which are, in reality, just one problem. Mine is an admittedly outlier view, and deeply pessimistic. The reader may be tempted, therefore, and perhaps justified, to dismiss my claims out of hand. After all, I am not an academic expert even in my own field of stock market structure, much less in the other fields I have come across in an attempt to understand a structurally disintegrating market. My observations do provide, however, consistent explanations for some of the most perplexing developments of our time. From stock market bubbles and crashes to air rage and California blackouts, I think I can explain why so many seemingly unrelated things are going wrong at the same time. Perhaps perversely, I take some comfort in the fact that expert opinion is so consistently at odds with mine. In one field after another, they seem to believe that just a little more patience with the admittedly slow-moving bureaucratic process of identifying and solving problems will yet produce good results. But slowness isn’t the problem. Reliance on experts is the problem, because it inevitably blocks private initiative and natural evolution. Having seen close up with stock market regulation how this very process is the reason that progress is never made and that disintegration is inevitable, I feel confident that no amount of experts – however brilliant and well-meaning – can solve such problems in any industry. Ironically, if you ask them why communism failed, they will tell you how stupid 5-year plans were, without ever recognizing that they themselves are involved in the same process.

If I am right, implicit in the uniqueness of my view is that none of the remedies espoused by any of the mainstream pundits or politicians – liberals or conservatives, Democrats or Republicans – will do any good. In the absence of a return to the principles of freedom on which this country was founded, the problem of an overweening Government and our consequent decline as a nation will only accelerate. Air travel delays, indifferent service and the risk of crashes will continue getting worse. Blackouts, bankruptcies and rationing will continue to characterize energy delivery. The stock market will continue to get more volatile and less able to raise capital. Health care will continue to frustrate consumers and rise in price. Public education will continue its decline, computer software platforms will further balkanize, phone service will continue to fragment and confuse. And all these and many similar problems will get worse together, feed off each other, and accelerate the decline of our confidence in Liberty. All of these problems will worsen because the only remedies proposed by any of the experts are political. That is to say, they seek only to determine which groups will be affected and by how much under the various policy options, with an eye to lining up support for their proposals. What’s wrong with that? Many people will tell you that this is how democracy is supposed to work. I, for one, don’t think so. Consider the minimum wage debate.

Adam Smith viewed the right to sell one’s own labor (or to buy someone else’s) as the most fundamental form of property he had.²  But you can listen to a hundred arguments on whether or not to increase the minimum wage, and every one of them will focus only on which groups will be affected and how much by the various proposals. The "conservatives" try to argue that increasing the minimum wage will harm those at the bottom (thus demonstrating their compassion), while the liberals say not so, and attempt to make a connection between family values and a "living wage" (thus demonstrating their concern for moral issues). Not a single expert will argue that none of that matters. Not a single politician of any stripe will argue that it is fundamentally at odds with Liberty to have Government slicing and dicing every man’s property based only on who can muster the votes. Not a single bureaucrat in the Department of Labor will suggest that, perhaps, Government should not be involved at all in setting wages for anyone – regardless of how the groups described in the expert’s studies will be affected. And so it is 100% certain that Government will remain in the wage-setting business.

In similar fashion, all of the experts involved in working out solutions to the problems in the industries mentioned above are concerned only with applying the principles of "fairness" – whose ox will be gored if this or that interpretation of the antitrust laws is adopted. Not a single expert or politician of any stripe will suggest that it is none of the Government’s business. All will content themselves with trying to wangle an interpretation that favors their own constituents or clients. And everyone will argue that it is only fair – or correct, or efficient, or whatever – to adopt his interpretation. So fluid and vague are the antitrust laws today after a century of conflicting application that the arguments put forward are nothing so much as demonstrations of raw political power. It is ridiculous to think that an efficient outcome will result, much less one based on Liberty. If, as a result largely of the example set by antitrust, the administration of our democracy has now become merely a mechanism for determining which groups have the political clout to take property from others, then the American experiment is indeed over.

I would like to say I have an answer, but that would be unrealistic. The good news is that so many things are going wrong for the same reason, call it the Government Fairness Enterprise, that the solution seems easy: just get rid of it. The bad news is that crafting a politically realistic means of accomplishing that is almost certainly beyond our reach. More likely is the continued extinguishing of freedom’s flame, as our aging experiment proves unable to resist the temptation to divide the great big pie that freedom has baked. It may be that we are beyond the stage where, as a nation, we can rejuvenate the experiment by renewing our vows of freedom. It has occurred to me that the phenomena I describe may be nothing more than the natural aging of a successful civilization, the setting in of a certain social sclerosis.

I do, however, offer a suggestion in the final chapter of this book that – while difficult and risky – could allow us to reboot our system. While I suspect my suggestion is as politically unrealistic as the next guy’s, I would encourage the reader to consider it seriously, if only to engender thoughts of alternatives. My approach is to ban, in a fairly direct way through a constitutional amendment, the operation of the Government Fairness Enterprise. As such, it would be offensive to almost everyone who benefits from Government – which is to say, all of us. On the other hand, because it would eliminate most of what Government now does, it might be just what the doctor ordered for those who believe we suffer from a Government illegitimacy problem. The question is: Are we willing to give up all of what Government can do for us, in return for the opportunity – and burden – of trying to fend for ourselves?

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