The Center for American Progress, a progressive, DC-based think tank, celebrated July 21 as “Consumers’ Independence Day.” The date marks the official birthday of the Consumer Financial Protection Bureau (CFPB), a new federal government agency developed to “protect and educate buyers of financial products.”
CAP is certainly right that consumers, that vague but vulnerable group, ought to be both protected and independent, that there must be something to check the power of the big banks. What is perhaps less clear is what should be — or indeed is capable of — protecting consumers and how we can grant them true independence from the control of the powerful.
Market anarchists readily agree with mainstream progressives that Wall Street enjoys far too much influence in Washington, a fact that the same progressives seem to forget when something like the CFPB is born. Politicians and “expert” bureaucrats are bought and paid for, and the service Wall Street forks out for is decidedly not protection of the lowly consumer.
The regulatory framework progressives desire is naturally built into the workings of a real free market. It is important to understand, then, that the current economic system, with its disastrous financial meltdown, is very much a product of vigorous government involvement.
To allow one party to impose his costs on, exploit or steal from another, coercive violence of some kind is a necessary condition, for — as Benjamin Tucker often noted — liberty cannot properly mean insulating people from foolish exchanges they might make voluntarily. Since the state is the one institution that can legally aggress against an innocent, it is the ultimate source of economic exploitation.
At least in a context where all are allowed to compete, where the only law is that of equal freedom and authority, fundamentally unfair or abusive agreements are impossible. Today’s disparities of bargaining power and unconscionable mistreatments of the consumer result not from anything like free market competition, but from the utter lack of it.
Were the conditions of a genuine free market to obtain in society, the land and resource monopolization of the present, state-corporate economy would evaporate as a matter of course. Without the privileged ability to forcibly prevent competition, no one could stockpile wealth in the manner we currently see on Wall Street.
As Kevin Carson has explained, the purpose of the privileges that characterize the statist economy “is to erect a toll gate in the way of your ability to transform your energy and skills directly into use-value.” Foreclosing anything close to real independence forces the common man into dependence on the bureaucratic, hierarchical state-corporate structure for his livelihood and for his financial services.
The banksters’ power comes from the fact that we’re not at all independent, that the state can’t make us so and that it busies itself with ensuring that we never will be. When we are independent — from the constrained, bribe-ridden, political capitalism of today — so too will we be protected from predatory financial practices.
Competition gives us as consumers the quality we want and deserve. New government bureaus and rules have only ever served to stifle competition and consolidate market power in the few firms able to afford the cost of manipulating those bureaus and rules.
The state is no friend to the consumer. Wall Street and Washington know that fact, so we’d do well to wake up to it as well.