My good friend Miguel Lloyd this morning posed this question to me during the politics segment of Life Full Circle Radio. Suppose we were to start the country over from day zero. I was immediately excited by the proposition especially since I have been pondering the same question for the past few days. Albeit an academic exercise mostly because I expect nothing to happen overnight, it sets a stage for exploring how to best construct an administrative state given the values of entrepreneurial and social freedom. My thesis would be that an administrative state solely responsible for growing and maintaining the commonweal best optimizes economic output, entrepreneurship, individual liberty, and national security.
How do we define commonweal? Webster’s New World Dictionary defines the commonweal as the public good or the general welfare. Whenever I hear “public good” or “general welfare” I cringe because the concepts are too overly broad. The ” I’ll know the public interest when I see it.” approach leaves too much wiggle room for far out interpretation.
A better definition should specifically take into account what it is we are not sharing. Far too long Americans have promoted the common sharing in the ability to consume; that our general well being should be defined by our ability as end-users to acquire “stuff.” As Annie Lowery noted in a recent The New York Times article, “Changed Life of the Poor: Better Off but Far Behind”:
“Is a family with a car in the driveway, a flat-screen television and a computer with an Internet connection poor?
Americans — even many of the poorest — enjoy a level of material abundance unthinkable just a generation or two ago. That indisputable economic fact has become a subject of bitter political debate this year, half a century after President Lyndon B. Johnson declared a war on poverty.”
We seem to have democratized our consumption, based on Ms. Lowery’s observation in her article. Data from the U.S. Bureau of Economic Analysis confirms this where approximately 68.4% of our gross domestic product goes to personal consumption.
And recent government policy proposals still focus on encouraging consumption. For example, the Obama administration would like to continue providing direct housing purchase loans to underserved communities; continue the refinancing of homeowners; and invest in blighted neighborhoods severely impacted by foreclosure. The Obama administration also appears more interested in highlighting the blame for the stresses of the 2007 recession on entities responsible for capital formation versus encouraging capital formation among individual consumers. The Dodd Frank Act is held up as a tool for punishing Wall Street investment banks while extending consumer protections in the mortgage and other credit markets. The Administration’s policy preferences don’t place a high priority on sustainable capital, only sustainable consumption.
This failure to place sustainable capital (natural capital, human capital, financial capital, social capital, and manufactured capital) on the highest priority probably stems from a failure of our political conversation to acknowledge that capital is what we should be investing in, growing, and sharing.
Progressives may argue that sharing or redistribution is what their agenda is all about, but over the past fifty years, their sharing agenda has focused on the redistribution of wealth carried out by increased taxes on the wealthy in order to fund “fake capital” i.e., food stamps, Medicaid, Medicare, and social security.
Conservatives, on the other hand, want to see greater access to natural capital i.e., offshore drilling, drilling in environmentally protected areas, spectrum, etc.; would like to see individuals develop social capital on their own without government intrusion; leave the development of manufactured capital to the markets; and see the cost of accessing financial capital increase.
Neither side of the ideological spectrum places government in the center of growing and administering a common pool of sustainable capital for Americans to access and accumulate.
If I were to start over, this is where I would start; defining government’s definitive role in capital accumulation and distribution. I’m still fleshing this out. More thoughts to come.