February 26, 2023
by Stephen Stofka
Our political conversation often features a dispute over the role of government in our lives. Role is a shorthand word for recognition, powers, legal authority, and mutual responsibilities of government. In the U.S. this debate occurs on multiple levels: 1) the role of the federal government to the states, 2) the role of state governments to cities, 3) the role of all three levels of government to the individual. Supporting these roles are the customs and beliefs of our society.
To understand the development of society, I break it into three phases of political economy. The first is tribalism, a society built on honor. Members of the tribe are expected to accept their status and recognize the status of others. Any disruption to this network of status within the tribe is perceived as a threat to the tribe itself. A second type of society called feudalism is based on obligation. Each member belongs to a class within the society and each class has an obligation to those of other classes. A third type of society called capitalism is based on individual property claims that are tradeable. In the U.S. this set of economic and financial relationships is paired with a democratic political regime based on non-tradeable rights like life, liberty, and the pursuit of happiness as stated in the Declaration of Independence. Claims are tradeable, rights are non-tradeable.
Using this framework, socialism would be a hybrid of feudalism and capitalism. Socialist principles describe obligations to each other as a way of reaching equality and equity. Laws under a socialist regime establish government as an agent who can trade property claims for individuals as a means of meeting those obligations. Governments can redistribute resources through space, from one region to another, or across time, from one generation to another. The Social Security program is an example of such an intergenerational transfer.
Property claims depend on information to establish the claim and facilitate the trading of those claims. However, trading relies on an asymmetry, or uneven level, of information or expectations between buyer and seller. Asymmetry of information is different than misinformation, the transmission of information which someone knows not to be true in order to persuade someone else to do something without physically forcing them. This is where democratic politics, the system of non-tradeable rights, must be separated from economics, the system of tradeable claims.
Democratic politics relies on some degree of misinformation to persuade people to vote for a candidate. A candidate who holds an unpopular position on an issue will not reveal that true conviction if they think voters will reject them because of that position. Republican representative George Santos can misrepresent himself and his background to get elected but not commit criminal fraud.
On the other hand, economic transactions founded on misinformation and misrepresentation are classified as fraud. Carlos Watson, the founder of Ozy Media, can make several misrepresentations and be arrested for criminal fraud (Palma & Nicolaou, 2023). Our capitalist system emphasizes tradeable property claims and the right of contract. Our democratic system punishes transgressions against the capitalist system of contract. Votes cannot be traded legally and our political system rarely exacts criminal penalties for violations of election law.
Article 1, Section 8 of the Constitution gives Congress powers over tradeable property claims. These involve the powers
1) to tax
2) to borrow money and pay debts on behalf of all the states
3) regulate interstate commerce,
4) establish rules for bankruptcy, when property claims become forfeit,
3) control of the creation of money used to make exchanges,
4) regulation of the weights and measures of tradeable goods
5) the granting of copyrights, patents and trademarks which establish tradeable property claims (see Johnson, 2009 in the footnotes).
After specifying some regulatory control over tradeable property claims, the Constitution then grants power to Congress to regulate non-tradeable rights. These involve what economists call public goods. These include
1) Naturalization, the claim to non-tradeable rights as a citizen, including the right to vote.
2) the lower courts that address violations against both rights and claims,
3) the mechanisms for providing a common defense to protect both claims and rights from outside interference and intrusion,
4) the rules of international relations, conduct of war and treatment of prisoners,
5) establishing and administering a central capitol district.
There are two approaches to constitutional interpretation. Conservatives regard it as an instruction manual and employ two analytical techniques grouped under textualism, a close reading of the law, and originalism, understanding the text in the historical background when a law was written. Free market enthusiasts believe that the federal government should have a minimum role in the economy. The framers gave the federal government broad powers over the legal tools that facilitate economic exchange but not the regulation of outcomes. Therefore, the Congress has only those powers listed in Article 1, Section 8, as above.
On the opposite end of the political spectrum are those who interpret the Constitution as software code that needs to be maintained to meet the needs of those who use it. They rely on one phrase at the beginning of Section 8 – provide for the…general welfare of the United States – as a justification for expansive federal authority and redistributive programs. Which is it – instruction manual or software code?
These two political camps may have different perspectives on the scope of government authority but the farm bill is a big spending tent where both camps meet. Spending under this annual bill benefits both farms and individual households. The bill provides price supports to farmers, many of whom are politically conservative. The large scope of the farm bill also includes food support for low income households, addressing the concerns of those who have a more expansive view of the role of government. Democracy is a big tent of competing values and conflicting interests as messy as a finger-style Texas barbecue.
These political and economic debates evolve rather than resolve, and they evolve through conflict. The superior arms of those who believed in individual property rights conquered tribes founded on the principle of group property rights. As those tribes were confined or exterminated in some cases, the debate has been silenced. Technological improvements in farming made feudalism impractical and unprofitable. We are no longer debating the mutual obligations of peasant workers and the propertied lords granted their lands by the king. Our current system will evolve through conflict as well.
Photo by Eugene Zhyvchik on Unsplash
Johnson, S. (2009). The invention of air: A story of science, faith, revolution, and the birth of America. Riverhead Books. This is an engaging book about Joseph Priestley and his influence on seminal thinkers of the 18th and 19th century, including Benjamin Franklin, John Adams and Thomas Jefferson. Priestley publicized his experiments and methods to advance the state of scientific knowledge. He believed that patent rights interfered with progress and the natural human instinct to share knowledge.
Palma, S., & Nicolaou, A. (2023, February 23). Ozy Media founder Carlos Watson arrested on fraud charges. Financial Times. Retrieved February 24, 2023, from https://www.ft.com/content/0669ff08-05d8-4a99-bdec-30f89d59acd6