When What’s Costly is Cheap — and Vice Versa

Now we can add border militarization to America’s list of “moral equivalents of war” — all of which involve tightening state control over the public and funneling billions in loot from taxpayers to corporate interests. As part of the US Senate’s “Immigration Reform” package, the border control budget will increase by $38 billion over ten years — including the cost of funding a whole slough of choppers from Northrop-Grumman and Sikorsky.

One of the most important functions of government is buying up industrial output at taxpayer expense, and putting otherwise idle production capacity to use, rendering naturally scarce and costly inputs artificially cheap to big business at taxpayer expense.

Consider all the “industries” whose primary “customer” is the state, whose products are bought involuntarily by taxpayers, and whose “users” are a captive clientele of inmates, students, soldiers, etc., with no say in anything. We already had the Military-Industrial Complex, the War on Drugs and associated Prison-Industrial Complex, not to mention the post-9/11 National Security State. The Border War adds billions more to the bottom lines of military contractors and private prison corporations.

It’s Economics 101 that when you subsidize something, people consume more of it. When you subsidize certain inputs, the dominant business model shifts to adding more and more of these artificially cheap inputs. The result is a model of industrial growth based on adding more and more energy and natural resource inputs. The state bankrupts itself because demand for these subsidized inputs outstrips government’s ability to provide them.

Consider the share of industry’s total inputs that are artificially cheap thanks to the state. The state preempts ownership of vacant land and gives privileged access to oil and coal companies, preempts civil liability for oil spills and pollution with its “environmental” regulations, fights wars to guarantee American access to foreign oil reserves on American terms, and spends many tens of billions on a Navy whose main function is to keep the sea lanes open for oil tankers — all to keep energy artificially cheap. It subsidizes long-distance transportation, artificially increasing market areas and firm size. It spends tens of billions on an educational system whose main purpose is to supply corporate HR departments with a trained, docile work force at public expense.

At the same time, though, the state makes things that are naturally free or cheap artificially expensive. As human capital and technique replace physical assets as the primary source of productivity, the natural tendency is for things to become radically cheaper. If improved ways of doing things reduce the material cost of producing a good tenfold, and the knowledge of the improved techniques is allowed to be freely shared and imitated (which is the natural course of things for information), the result will be something like a tenfold reduction in the cost of the good. By prohibiting the free movement of information and giving corporations a right of ownership in controlling permission to utilize improved techniques, the state enables corporate interests to profit by setting up toll gates and charging rent on access to naturally free information.

So we live in a Looking Glass World where the state makes the material inputs of big business artificially cheap at taxpayer expense — but enforces monopolies that enable big business to profit by charging us for information that should be as free as the air. The state is, in essence, the enforcer for a parasitic ruling class.

Fortunately, its days are numbered. As we saw above, the state is being driven to bankruptcy because of the mushrooming cost of providing subsidized inputs to keep business profitable. And as the music and industry can tell you, controlling the free flow of information is well on the way to being impossible.

The corporate state is headed for a fall — and it can’t come soon enough.

Citations to this article:

Anarchy and Democracy
Fighting Fascism
Markets Not Capitalism
The Anatomy of Escape
Organization Theory