Wednesday, April 15, 2015

Frederic Bastiat, Foreign Affairs, and the Future of Success

“Across the entire innovation chain, from basic research to commercialization, governments have stepped up with needed investment that the private sector has been too scared to provide. This spending has proved transformative, creating entirely new markets and sectors, including the Internet, nanotechnology, biotechnology, and clean energy.”[1]

In this Foreign Affairs article, Mariana Mazzucato argues that government has the capital and power to take the risks the private sector won’t. The results, as quoted above, are advances and discoveries that we frankly would not want to live without today. The investment and involvement of the government has created whole new markets, thousands of jobs, and significant progress.
Sounds pretty good, right?

Mazzucato doesn’t stop there though. She lists many examples of great success due to government loans when no one else would fund certain research and development such as all the components in an iPhone, or the all-electric car produced by Tesla Motors, as well as the innovating behemoth Google.

She also gives a few examples where it was a financial sink hole for the government. She calls for reform, to make it better and easier for the government to obtain more gain from the success and not just be stuck with the failures. She explained, “it requires fundamentally reconsidering the traditional role of the state in the economy.”

This got me thinking.

To fundamentally change the traditional role of the state, what is the “fundamental role” in the first place?

The Black Belt in Freedom mentoring program with Oliver DeMille covers Frederic Bastiat’s power-packed little essay, The Law, where Oliver and Bastiat take this question head on. 

They break it down like this:

In a free society, the proper role of government is to protect life, liberty, property, and the pursuit of happiness. Period. Anything else leads to less freedom.

And that’s the catch.

I’m not saying that Mazzucato is wrong, neither am I arguing that she’s right. But if the fathers and mothers of today, if the business men and women, if the leaders of each sector[2] don’t know how the proposed solutions to the problems we face right now compare to natural law, then freedom will decrease and the generations to come will be less free until they can’t be free—and not being free is unnatural.

When government has to fill in the gaps where other leaders aren’t magnifying their roles in society, it comes at a cost. That cost is almost always a decrease in freedom. If private individuals won’t heed the call to be leaders in society, if we won’t innovate, if we won’t support those who need the help, if we won’t provide opportunity, if we won’t be actively engaged in a good cause—in short, if we won’t fund freedom—government agencies and institutions are more than willing to step in and take that role from us.

But government is force, and it doesn’t relinquish power very easily.  

Besides, how many businesses failed or innovations stalled because governments regulated and taxed at the high rates that gave them access to the money they loaned? How many innovators would have flourished more, earlier or simply done better without such government intervention? There is a reason many private institutions are more afraid to risk nowadays—and that reason is government.

The need for regular people to stand up, to become their own unique type of leader, to immerse themselves into the great conversation is as great as ever in today’s world of rapidly expanding government programs and benefits.

It’s time for people like you and me to dig into the great ideas, to become fluent in our inalienable rights and our inalienable duties, and to understand, live by, and protect natural law in all spheres of society.

Ian Cox





[1] “The Innovative State” by Mariana Mazzucato Foreign Affairs January/February 2015
[2] Freedom Matters by Oliver DeMille