The Free Market 23, no. 7 (July 2003)
The extent to which we are secure in our homes, property, and the places we shop is due in large part to the commercial marketplace. It is the free market that makes available alarm systems, locks, fences, cameras, security services, and in purchasing these items we are free to make a choice among competitive products. If they don't work, we can try something new. If there is fraud, we can hold the producer liable.
Beyond the need for safety, market mechanisms like insurance and its premiums give us every reason to demand security services. Premiums are lower when we install locks and alarms and protect property from invasion. And insurers themselves, because they have a stake in the outcome, turn out to be more thorough investigators of crime than the police, who face no financial reprisal for leaving crimes unsolved.
Service is the watchword with market security, but not with government. We were never asked whether we wanted to subscribe to government security services. Neither can we unsubscribe. We must accept them and pay for them whether they work or not and whether we want to or not. It is thus a serious matter when the government promises to expand its provision of security service. Before it ever delivers any of the desired security, it must make us less secure in our property rights in order to pay for its plans.
That most economists say that only government can provide security, because it is presumably a public good, makes no difference. Government is just as likely to overcharge and underproduce security as it is to make a mess of everything else it does. That's why the idea of a $40 billion Department of Homeland Security sounds promising only to the most naïve. To seasoned observers of government, it means not more security but rather a more menacing state and billions for those who somehow manage to get their hands on the cash.
Who are these people that get the cash? Those who build the building, the bureaucrats who work there, the politicians who allocate the money, the outside companies who get the contracts, and the lobbyists who make the whole system of patronage (legal graft) work. They get paid whether or not they do what they are supposed to do.
Here is the plot of the latest caper. After 9-11, Bush had the idea that the government ought to make some effort to protect American shores from attack—a notable change of priorities for a government that manages to spend $2 trillion a year not doing the only major thing the US Constitution says it ought to do.
In any case, Bush proposed reorganizing a whole host of agencies into one mega-bureaucracy—and this despite the enormous failure that 9-11 represented for precisely this bureaucratic approach. We were told that what dozens of agencies and billions couldn't do—namely stop angry extremists armed with box cutters—another agency and billions more could do.
We were told that this would finally be Republican good government at work. But there is no such thing as "good government," if we think of that phrase as representing a government that just does what the textbook says it is supposed to do: namely, serve the public essential goods without regard to self interest. All government activities are deeply tainted by the fact that its money is not gained through service but through force via taxation, and it is not doled out based on demonstrated need but arbitrarily based on bureaucratic decision making. There is no escaping this fact, no matter how much people talk about sweeping out corruption or "reinventing" the way government does business.
As Mises said in his book Bureaucracy, government is not a business so there is no profit-and-loss check on its activities. In the end, everything it collects and distributes is economically arbitrary but also and inevitably politically influenced. It is not the proverbial man-on-the-street who decides how the money is spent but those who have connections to the flesh-and-blood bureaucrats and politicians with the power to decide—and they don't work for free, but instead insist on quid for their pro quo. The result is what is called corruption, or what libertarians recognize as the ordinary business of government.
We are now getting the first glimpse of how the bureaucratic sausage is made. When the Department of Homeland Security was merely the Office of Homeland Security, agency head Tom Ridge surrounded himself by people with credentials for this type of work. According to the New York Times, many of them have left Ridge's inner circle to become lobbyists seeking contracts from the new department. They cashed in on their new marketability and are now working for established lobbying groups that represent the interests of lawyers, software makers, security firms, and other corporations.
According to politicalmoneyline.com, lobbyist registrations related to homeland security have exploded. The number of companies and firms that use the words "homeland," "security," or "terror" on their registrations have gone from 157 in 2002 to 569 today, and the number is increasing by the day. The shift in priorities of Washington makes it all possible. Clearly, the businesses that make their living from living off others, not serving others who chose their services, see the main chance here.
When revisionist historians look back at the amazing spectacle of government in the post 9-11 era, they will see a process fraught with the lowest form of grubbing. And so long as we are accounting for the work of special interests, consider the billions and billions doled out to defense-industry contractors to make bombs and planes used in wars supported by large industrial interests.
Once you look past the rhetoric, this is precisely what these projects were designed to do, not fix up society or provide us with security but make some people enormously rich at others' expense. To recognize the fraud behind Washington's clichés about public service is not to be cynical; it is just a matter of taking off the blinders.
Homeland security is a necessary good that everyone desires. In this way, it is like food, housing, and clothing, goods that the market provides with great success. The government's attempt to replicate market service has been pathetic, inefficient, and rife with corruption. So it is with security.
Sadly, there is a dearth of literature out there that explores this topic. But later this year, the Mises Institute will do something about that with a spectacular new volume, The Myth of National Defense, edited by Hans-Hermann Hoppe, featuring 12 comprehensive scholarly articles on the topic.
The events of the last two years have shown us that government not only fails to secure us but makes us vulnerable, and never more than when it is erecting monstrous bureaucracies in the name of security. It is time to reject this approach and build on the proven success of free enterprise.
Llewellyn H. Rockwell, Jr., is president of the Ludwig von Mises Institute (Rockwell@mises.org).
