Wednesday, July 12, 2006

Why Government Can't 'Price-Gouge': A Reply to Tali Satele's 'We Need Cheaper Government'

Stuart K. Hayashi

Note: This is a revised version of my Comment posted on "We Need Cheaper Government."


Hey, Taliphone call,

You write,

The biggest price gouger in American Samoa is the ASG. The taxes mainland Americans and locals pay is the price the ASG charges the people. . . . We need cheaper government. We can achieve it and should demand it now.

However, most people in the United States say that private companies "overcharging" customers is undeniably worse than the government overcharging taxpayers.

Why is that? Because most Americans judge people according to their stated motives rather than by the actual nature of their conduct.

Note that Mao Tse-tung killed even more people than Hitler did. Yet Mao is seldom regarded with the same level of abhorrence. Some years ago, Manoa's Revolution Books Store (which certain University of Hawaii professors coax their students into shopping at)sold T-shirts with Mao's face on them. Do you think people would be as tolerant of shirts with Hitler's visage?

Why does Mao still have a relatively positive reputation? Because of motives. Hitler murdered people for elitist reasons for his own benefit. Mao murdered people in the name of communism, which is considered a moral ideal because it is unselfish.

In short, people will make many excuses for an atrocity -- including murder or theft -- if its performed for unselfish purposes.

Private for-profit companies are created primarily to benefit their private owners. The government, meanwhile, is created for the purpose of helping "all of us."

That particularly applies to a democracy. In a democracy, who is the government? We are! We, The PeopleTM!

Thus, when the government taxes us, it is simply us taking care of ourselves by paying ourselves for amenities necessary for all our well-being. The collective "we" wins out.

When private entrepreneurs overcharge us, they do so for their own selfish gratification. When the government overtaxes us, it does so for the sake of benefiting everybody to provide public goods like fire protection and roads.

The government collective is supposed to represent everyone; private companies only represent their individual shareholders -- and we, being middle-class schlubs, probably don't own any stock!

When private companies "price-gouge," it only benefits them. When the government, in your words, "price-gouges" us, it is still on behalf of us.

That is the psychological difference. We don't side with "them"; we side with "us."

I believe that people will become more enlightened about this when they first realize:

(1) The government is not "us" and it doesn't "represent us all"; it only represents the will of those in power.

(2) There is no collective "us". As Margaret Thatcher understood, " 'Society' does not exist. There are only individuals" who independently choose if and when they will interact with one another.

(3) People should not be judged primarily by motives, but the manner in which they conduct themselves while seeking their goals. Thus, no unselfish intention can ever justify an immoral act of brutality like extortion.

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