Goodman on Firms as a Vehicle for Regulation
By David Henderson
So how many Californians have been arrested for eating the wrong kind of egg? Zero. Not even one? Not one. Actually, the law doesn’t take effect until January, but even then egg eaters will have nothing to fear. The reason: the law doesn’t apply to people who eat eggs. It only applies to people who sell eggs.
When you stop to think about it, that’s not unusual. Almost all government restrictions on our freedom are indirect. They are imposed on us by way of some business. In fact, laws that directly restrict the freedom of the individual are rare and almost always controversial.
For example, some municipalities restrict your ability to possess a gun. Federal law requires you to pay Social Security taxes if you employ a nanny. Federal and state laws restrict your ability to consume recreational drugs. Until recently, some states made gay sex illegal. In each case these restrictions were (or are) hotly debated.
But the vast majority of government encroachments on your freedom of action come about through laws that constrain an employer or a seller – without much controversy. For the most part, government doesn’t regulate people; it regulates businesses. Even the collection of the income tax and the Social Security (FICA) tax is almost all done through employers. (And if employers didn’t act as tax collectors, it is doubtful that federal revenue would be even close to what it now is.)
This is from John C. Goodman, “Reason for Big Government: The Firm.” He’s put his finger on something important. Of course, as I’m sure he would be the first to admit, that doesn’t mean you can get small government by banning firms. To ban firms you would need–a government. And that government would have to be pretty powerful.
Goodman’s point, though, reflects the era we’re in. There was a time in this country when businessmen felt confident enough that they could defy the federal government. If there was such a thing as a turning point–I think it’s more gradual than that–this would be a candidate. (I don’t have permission to post this photo, so go to the link.)