Short discussion: origin of power

[Sanjeev Sabhlok <sabhlok@almaak.usc.edu>]

On Tue, 14 Jul 1998, Charudatt wrote:

> Sanjeev has so far framed this in terms of power exercised on behalf of
> government: any yielding of power to a representative/official of
> government must be carefully examined and thoroughly justified. I
> suggest that this definition is too narrow- that a society must examine
> yielding of power of _any_  person over others, including the situation
> of corporate hierarchies.

The fundamental difference why corporate hierarchies can never be
contrasted with governmental hierarchies is called: False Analogy (see the
paper on Logical fallacies I had put up at:

	http://www.indiaconsult.com/indiapolicy/Notes/logic.html

a) Govt is a monopoly, corpns are not:

A government hierarchy is a monopoly vested with the sole right to protect
me (the citizen) from aggression by other citizens and by other nations. 
There is no possibility of another government entering my village and
providing me with another set of Police and Army for my security. I never
have the need for two sets of Police and Armies. 

b) I have empowered the government to create competition: Corporations are
and will always remain subordinate to this power.

The power I give to government is a two-sided power: to prevent bad people
from doing harm to me and my children, and to enable good people to do
good for me and my children. Therefore I pay the government not only to
provide me security but to regulate business such that me and my villagers
can operate any 'good' business without any interference from bad people. 
In other words, "plotting and scheming capitalists" are prevented by my
delegation of power to government, from colluding and in any other way
preventing the fair and easy entry into the market of my competition. 

To be specific, I do not give power to government to prevent tiny players
like Singapore Airlines from competing with my own enterprises - whether
public or private. That action of government is anti-competitive and
promotes monopolies in my village. That - government sheltering
monopolies, by the way, was the reason for the existence of the 'robber
barons' in USA, and not that capitalism in any way should lead to the
creation of robber barons (I raise this because you had once earlier
mentioned this case, reinforcing the commonly held image about rapacious
capitalists. Remember - it was the bribe-takers in government who created
the monopolies. There is a huge literature on the anti-competitive role of
the US government at that time. If needed, we can have an off-the-list
debate on robber barons].

In other words, if a government tries to promote monopolies, I withdraw my
power from it and raise my voice. That is all that I can legitimately do. 
That is what I am doing right now. 

Note that in any case, a corporation is completely under the regulation of
the People through the government. If my government does its job well, I
have nothing against even the mightiest corportions functioning from my
village. 

c) I can 'exit' from a corporation's jurisdition. I cannot exit from a
government's jurisdiction.

I can always refuse to use a particular corporation's services, but I can
never quit my nation while I live in it. With the government I have no
choice - so I must carefully yield power to it. With corporations
supplying me coca cola, I can always live without.

So, with this "False Analogy" having been taken care of, I guess we can
proceed by focusing primarily on the power weilded by a government over a
citizen, and its origin.

I would request that if you feel that a modification of the 'origin of
powers' is necessary, then please propose the exact wording and we can
further discuss. The act of proposing the modification will make your
arguments clearer to me. 

SS

[PS: The other stuff -about anarchy, keynesianism, etc., is not of
interest since I am neither advocating anarchy nor any particular brand of
economics (I have serious differences with the Chicago school, for
instance - that you seem to indicate as being the mainstream school: in
particular, the Chicago school is clueless about the role of
entrepreneurship in growth. Their modeling seems to be so mechanistic as
to be deterministic; hence I completely disagree with their approach. If
any, I would lean toward the Austrian school rather than the Chicago.) My
economics is an eclectic combination, actually, and Keynes, in any way,
has been fully misrepresented in the extract you sent in: the
'inherent'instability of capitalism is neither here nor there. So, unless
we have something to gain out of these excursions, I suggest that we leave
them alone and focus on the exact words to be used in the manifesto.]



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