Wednesday, March 4, 2015

Alan Ferguson, Frédéric Bastiat and James Madison

What if crony capitalism and/or crony socialism is the only way one knows how to do business? What if crony capitalism and/or crony socialism is the only way one perceives business is done? What if one grows up in an environment of crony capitalism and/or crony socialism and thinks this is the only way business is done (the way it‘s always been done)?

Cronyism is an old tale. Cronyism waxes and wanes but has been around for millennia. Emperors, kings and queens, dictators, medieval despots and so on all practiced cronyism to one degree or another. Circa 1700 AD, emergent order of the masses wanting freedom and free pursuit, and as such, wanted an end to cronyism and the special favors bestowed upon the few. Came the rise of democracy and representative republics in their many forms.

Democracy/representative republics, institutions much better than all their predecessors and competitors, have flaws of their own. One flaw is legal plunder as pointed out by Frédéric Bastiat in 1850. Legal plunder is where legislators pass legislation that allows themselves to legally plunder the citizen-taxpayer through coercion, whereas, if the individual citizen-taxpayer were to engage in such behavior, they would be jailed.

“But, unfortunately, law by no means confines itself to its proper functions. And when it has exceeded its proper functions, it has not done so merely in some inconsequential and debatable matters. The law has gone further than this; it has acted in direct opposition to its own purpose. The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense. “ (1)

Even earlier in 1787, James Madison in Federalist #10 point to “factions” (what we call today special interest groups) and their interaction with politicos:


“By a faction, I understand a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.” (2)


In the early 1900’s a new idea circulated among the predator class (political class) by the title “economic incentive” and “economic development“. If the politico could bestow taxpayer dollars for select and grand schemes, and characterize the schemes as “economic development” then the schemes would perpetuate the politico’s political constituency building exercises….. with other people's money.

Fast forwarding to today, one sees legal plunder abound and faction after faction at the government trough. Hence Bastiat and Madison were quite correct in their assessments of future developments of legal plunder and factions.

When Mr. Ferguson attempted to present his case against the mega site and was most rudely dispatched the past evening, Mr. Ferguson ran straight into legal plunder and factions that depend on the bestowing of taxpayer dollars as politico privilege. Questioning legal plunder and associated faction causes associated faction and legal plunder to rudely dispatch the opposition: If crony capitalism and/or crony socialism is the only way one knows how to do business and/or perpetuate political constituency building exercises, then there can be no chance that the spongy conduit of taxpayer money is shut off. The well spring must remain open at all price, cost and rudeness. (3)



(1) The Law, Frédéric Bastiat, 1850

(2) Federalist Paper #10 – The Utility of the Union as a Safeguard Against Domestic Faction and Insurrection, James Madison, 1787

(3) Alan Ferguson On Last Night's Greensboro City Council Meeting