Wednesday, August 03, 2005

An Empirical Not a Doctrinal Question

“Santorium’s Mighty Wind: The Accuweather Protection Act 2005”

Senator Rick Santorium, The Republican Senator for Pennsylvania:

“….the free market system is godly: It "not only produces wealth but also virtuous people whose worldly enterprise complements the work of the Creator." Big government, I need hardly add, is an unholy lumbering giant that's "overly intrusive and burdensome."

Timothy Noah, who writes "Chatterbox" for Slate, comments:

“On the other hand, private companies like AccuWeather, which disseminate information collected by the National Weather Service—a big-government agency--
cannot hope to compete with the NWS if the NWS itself disseminates that information. The combined might of Adam Smith and the Man Upstairs are simply no match for the brain-dead time-wasters on the federal payroll. Or so Santorum must believe, because he has introduced a bill forbidding the NWS from providing "a product or service…that is or could be [italics mine] provided by the private sector" unless the secretary of commerce (who oversees NWS) determines that "the private sector is unwilling or unable" to do so, or unless some international treaty requires the NWS to do so…

How do you resolve this riddle? Perhaps by concluding that the common denominator to contemporary conservative thought isn't ideology at all, but rather the crude imperative for big government to shovel as many special privileges as possible to big corporations. Adam Smith would be appalled.”

My comment:
It’s not a clear cut case and we need more data. Interpreting what Smith would have advised I suggest that government may use tax funds to do what private individuals or corporations cannot do adequately, if it benefits commerce and society generally. If the revenue raised is charged to the beneficiaries and is positive, this pays back some taxation and should reduce the burden of government.

On the other hand – and the answer is empirical – if government uses public funds and cross-subsidises activities that are or can be competently carried out by the private sector and have measured benefits to consumers, then government should keep out of duplicating private commercial activities.

It is wrong to assume that Smith had fixed positions on such matters. He favoured a state-owned Mint for currency and state-owned post offices because both could provide profits for the government. He didn’t favour state-owned bakeries.

That Senator Santorium’s state is the home state of the AccuWeather company suggests he is doing what politicians usually do – seek to shore up his chances of re-election.


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