Virtue-Preserving Federalism

The Whitest Man on Earth ever so impishly guides my eyes to a Forbes piece of his from a few years back. In his tale, he buys ponchos cheap from dollar stores and sells them dear at sporting events.

Much like our ice truck yahoos or Adam Smith's sea merchant, Dubbers braves the maelstrom of uncertainty. Will it actually rain? Will he be able to move his entire inventory? Will the Crimson Tide roll far enough inland to justify snapping up more than one game's worth of ponchos?

Will university police throw him in an Alabama slammer for unlicensed sales?

There are two broad sorts of risk involved here: risks from nature and risks from man. Within each, we can find the finer taxonomies we're used to of risk, uncertainty, and non-ergodicity. There's not much anyone can do about the weather or the frequency of earthquakes or the likelihood of being swallowed by a sea serpent, but there is something we can do about our tolerance for the caprice of our legislators.

Anti-gouging laws, bans on genetic research, prohibitions against prostitution. These things prevent people from serving each other. Worse yet, the very notion that the scope of legislative power is broad enough to encompass virtually any activity that involves voluntary exchange between consenting adults chills the entrepreneur. From her perspective, it's bad enough that the ordinary risks of the market and the ever-shifting whims of her as-yet unidentified customers shake her confidence, so just imagine how much worse it is having to worry about whether or not the cops are going to upturn your stall, unplug your reefer and toss your tacos in the sewer. The threat of preemptive expropriation compounds upon fickle fortune in times when the simple dignity to try is subjugated in civil society.

But do we even need entrepreneurs? Do we need creative destruction? Innovation? Good question. I suppose we could be happy enough living in mud huts and plowing our subsistence farms by hand, but the fact that we see vanishingly few people actually doing this strikes me as reasonably good evidence that humanity cherishes those few of us who pack our bags for the hike out of Hobbes' jungle. It seems painfully obvious that the lot of humanity is advanced by the freedom to experiment, to search for the little ways we can find to strike mutually beneficial arrangements. Conversely, prosperity is retarded when the median constituent has granted political elites, either through inattention or active demands, the authority to meddle in private affairs.

If you don't want to buy what an entrepreneur is selling, that's great. Don't buy it. But that's no excuse to tolerate elected officials who have made it their business to go round smashing eggs in the nest before they even hatch. That's a great way to ensure the hens stop laying.

Entrepreneurship is far from euvoluntary. It's also the camshaft of economic growth. Its henhouse deserves to be free from the guardianship of elected foxes.