Rebirth of Reason

The Free Radical
War for Men's Minds

Nader's Delusions
by Tibor R. Machan

Most of us have heard of Ralph Nader, the so-called consumer advocate and, by the lights of most Democrats, the spoiler of the 2000 presidential election. In fact, Nader spoiled nothing much, when the numbers are closely explored, but it is always convenient for the psyche to have on hand some scapegoat on whom to blame one's bad fortunes. The fact is, Al Gore just didn't cut it with enough folks to do what by all political estimates he should have done this time, namely walk away with the prize.

Anyway, what Nader did and continues to do so well is something he started doing back in the 1960s, namely bash corporate commerce. He thinks business firms have too much power. As he put it recently, "We are talking about the politicians taking their orders from corporate paymasters."

In "Taming The Giant Corporations," one of his early books, he set out to advance the theory that corporations are really creations of government and therefore should be subject to extensive government regulation. Nader's view rests on an understanding of society ruled by the state or government. This made some sense back before the American Revolution, which essentially discredited the age-old rationales for monarchy in favor of the doctrine of personal sovereignty and individual rights.

In a feudal country the monarch runs everything, with a bit of power in the hands of parliament to offer some restraint. But commerce, religion, education and the rest are mainly dictated from above, from the throne. What the ideas of the American Revolution did is to reverse the order of authority, placing it in the hands of individual citizens, making the government a service agency, not some earthly deity that can call the shots about anything within its realm. So, naturally, in a monarchy the king or queen and those who surround the court create the various institutions of society. They establish a church, hand out privileged commercial licenses and otherwise run things as one might run a personal household.

Among other things, in feudal countries the economics of mercantilism is the standard way to do business: the monarch designates who gets to trade in what, produce what, transport what and so on. So, indeed, it is as Nader would have it: Business is the creature of the state. (Consider how most OPEC countries run their economies!)

What was achieved, among other things, in the American Revolution that upset the older order of things is that religion, commerce and other matters involving social organization was wrested from the government and placed into the hands of the people. Corporate commerce, instead of being established by government was to be established via the voluntary combination of resources by shareholders or other types of owners, with government merely a record-keeping agency. At least this is how it should have gone -- just as religion was to be separated from the state, so should commerce have been, at least if it were to remain consistent with the principles of citizenship sovereignty.

Ralph Nader wants the clock turned back. He does not like the fact that corporations have a lot of clout. He hates it that companies can buy privileges from the government, special favors, subsidies, and other advantages because of their considerable wealth. The trouble with Nader is that he does not understand the implications of his own political philosophy of economic democracy.

Corporations include millions and millions of people who in such a system can exert their power to influence government -- to petition it "for a redress of grievances." Given the bloated scope of government today, this means allowing the most powerful agents to practically run the country, just as Nader fears.

If you are like Nader, an economic democrat who wants numbers to count for most when it comes to decisions about the economy, you cannot pick and choose whether to accept some large numbers but reject others. In today's democratic welfare state the numbers determine who gets to call the shots, even though that is not consistent with the American Revolution. Nader has no way out of this!

The way a country can be saved from the influence of large numbers, including the very large number of business interests, is by fully upholding the separation of society and state principle: government gets no say in picking winners and losers in the marketplace. Government gets no say in redistributing wealth -- that right belongs to the people who have the wealth, under the principle of the right to private property.

Ralph Nader is deluded: He thinks he can have democracy confined to those who lack wealth, but that is a utopian dream, not a realistic plan. The only realistic plan is to restrict the scope of governmental power and thus place the power in the hands of individuals making their own choices concerning the disposition of their economic resources. That leaves Nader and the government on the sidelines, not attempting to regiment the economy of us.

Tibor Machan is a professor at Chapman University in Orange, Calif., and a research fellow at the Hoover Institution at Stanford University. He advises Freedom Communications, parent company of this newspaper.

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