Charles Koch wrote: “The Closing of the American Mind,” an
article that also came under the subtitle: “There are dangerous signs that the U.S. is turning
its back on the principles of a free and open society that fostered the
nation's rise.” It was published on July 22, 2016 in the Wall Street Journal.
In making his points, Koch quotes Matt Ridley who described
the fusion of ideas that engender innovations as “ideas having sex.” He did so
without adding the caveat that the species having fun must be the same or be
close enough for fertilization to occur. Otherwise, the different species can
be seminal all they want, and still end up producing neither fish nor fowl.
And yet, this is exactly the kind of insemination that
Charles Koch has tried to perform. Here is the passage that tells where he went
wrong: “Despite our enormous potential for further progress, a clear majority
of Americans see a darker future. Some 56% believe their children's lives will
be worse off than their own … I empathize with this fear. The U.S. is already
far down the path to becoming a less open and free society”.
This says that the view of the American people is of one
species, and the view of Charles Koch is of another species … and the twain is
not conjugating well. It is that the people believe they are losing their
industries and the future of their children to foreign societies which are less
open and less free than America
because of reasons which are different from what Charles Koch is implying.
On one hand, the public believes that the captains of America 's
industries – such as Koch and others – have determined they can make more
profit relocating their businesses to those countries. And so, they used the
openness and freedom of America 's
system to do just that … and they are getting away with it. On the other hand,
pointing to the false intercourse he effectuated, Koch has tried to convince
the readers that the American people accept his hypothesis so well, “promoting
a free and open society ought to be the great moral cause of these times.” But
these are two different species and the intercourse produced not even a
stillborn.
Still, having made those arguments, Koch goes on to describe
the kind of system he wants to see implemented in America . He makes a number of
recommendations, among which is this one: “Government, which often has strong
incentives to stifle the revolutionary advances that could transform lives, may
be the most dangerous.” And this is how he displays his true colors. They boil
down to showing that in the tug of war between big business and big government,
he sides squarely with big business.
But he has a problem. It is that he says something at the
very beginning of the article, and something at the very end of it which, when
put together, demolish the point of his core idea. Here is what he says at the
beginning: “I was born in the midst of the Great Depression.” And here is what
he says at the end: “The transformations in my days have been astonishing, with
marked improvement in well-being for all Americans.” Those transformations
included the introduction of Social Security into the system.
The reality is that several opposing, even contradictory
ideas have been generated in the debates that tackled the Great Depression, but
two ideas were accepted by all sides. One pertains to the fact that the
Depression was caused by the extreme laissez-faire climate that existed at the
time. The other is that another depression was never repeated thanks to the
Social Security and the general welfare systems that were instituted in
response to it. That is, the Depression was caused by unregulated business.
Calamity was averted by the intervention of government.
This tells us something we must always keep in mind when
discussing the system of governance in relation to economics. When during a
debate a participant takes the extreme position that business ought to be
completely unregulated, or the extreme position that government ought to be in
complete control of the economy – that debate should fold at once, and
everybody go home. This is because the suggestions are too far removed from
reality to be of any use.
The fact is that an economy is made of two parts: the
production part and the consumption part. The economy functions at optimum
capacity when the two are in equilibrium. Because many factors work at all time
to upset that equilibrium, measures must be taken to restore it. This means, there
are times when you'll have to favor business, and other times when you'll have
to favor government.
It follows that to be useful, a debate on the subject must
restrict itself to identifying the problem and prescribing a remedy that will
favor which side; favor it by how much and do so for how long.
To have a permanent remedy that will address a problem inherent
to international trade; I have argued that competition between nations ought to
function like sport and not like war. The difference is that in sport, the
loser does not die the way he does in war.
Consequently, there must be an international agreement
allowing the nations to protect the industries they deem important to them – up
to a certain percentage of consumption ... say, 30 percent or thereabout. The
balance can be subjected to cut-throat competition, which is good for efficiency.