White House Announces Debt Deal and Nuclear Investment Plan with Delayed Returns
When the State Turns Investor, The People Become the Collateral
Government ownership of private ventures, struck on dubious legal footing and justified as a ‘creative’ fix for public debts, looks less like prudent stewardship and more like usurpation in slow motion.
I begin where your own reports begin: with a jest. The head of your executive, answering a wave of democratic socialist victories, boasts that he would be “the greatest communist in history,” and soon after, his administration contrives deals by which the government takes a cut of chip sales, a share of mining ventures, and a claim on the dividends of nuclear reactors. A press secretary calls these arrangements “creative solutions” to a crippling debt. Jokes are cheap, but institutions are not. When the same hand that wields the sword begins to reach for an equity stake, wise men ask whether what is called creativity is in truth an enlargement of power under another name.
The facts, as they are publicly reported, are not yet full; that is themselves a material circumstance. We are told of a five percent stake in a mining firm and its project, of a promised twenty percent of certain nuclear dividends, of a fifteen percent cut of chip sales to a foreign power. Yet we are also told that, in at least one such bargain, the government has received nothing, because the administration “has yet to issue the necessary regulations” to codify the profit-sharing, and because there are questions about its legality. When the magistrate’s purse depends on regulations he himself must still write, he becomes dangerously close to a judge in his own case.
When I wrote the Second Treatise of Government, I defined political power as a right of making laws with penalties, only for the public good, and not a general dominion over all property. Property, I there argued, begins in the person: each man has a property in his own person and the labour of his body; by mixing that labour with what nature has provided, he makes it his, provided he leaves “enough, and as good” for others. Now when a government underwrites reactors, or grants export permissions, or extends credit in return for a share of profits, it may be said to contribute something of value; but that is not yet to show that it has laboured in the manner of an owner, or that its claim leaves others as free.
The question, then, is not whether a commonwealth may ever invest or underwrite; that would be to mistake the point. A people may, by consent, entrust their governors with treasure to lay out in ways thought advantageous to their common defence and welfare. The question is rather by what known standing rules such engagements are made, how they are bounded, and by what authority the gains and risks are distributed. If the supposed profit-sharing requires new regulations whose legality is doubtful, then the very existence of the profit becomes an inducement to stretch or obscure the law. That is precisely how prerogative, which I once allowed as a power to act for the public good without a rule, grows swollen and ceases to be tolerable.
Those who defend such measures will say that the public debt is heavy, that the sums at stake—tens of millions now, perhaps more later—are small prices for creative relief, and that so long as the state gains revenue, the people gain with it. This sounds plausible until one remembers that the same hand which gains the revenue is entrusted to tax, to license, to regulate, and even to close the very enterprises in which it now seeks gain. When the umpire buys a share in one of the teams, will the rules of the game retain their impartial character? Or will the temptation to favour the investment prove too strong for frail human virtue, which has never borne the weight of absolute or arbitrary power without failing?
In my time I observed that whenever legislators endeavour to take away or destroy the property of the people, or reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who may then appeal to heaven. I do not say that these particular arrangements rise already to that extremity. The evidence is too scant, and resistance is a grave remedy. But I do say that when ownership claims are built on joking bravado, on ambiguous statutes, and on regulations not yet law, the people have not given clear consent. Power, in such cases, must justify itself, and until it does, it stands under a presumption of usurpation.
If the public, upon full and plain disclosure, freely assents that their government become a merchant and shareholder in this manner, under rules that secure an impartial judge and prevent a long train of abuses, then such consent can regularize what now looks irregular. But where legality is questioned, where the rules are unwritten, and where the jesting tone betrays the spirit of party rather than sober trust, every friend of liberty is bound to be skeptical. The wealth of a nation is not rescued by turning its rulers into partners at every profitable table; it is preserved when those rulers remember that they are stewards, and that the people’s lives, liberties, and estates are not chips to be played but trusts to be kept.
From the works cited
- Second Treatise of Government — Political power defined narrowly as the right to make laws, with penalties, only for the public good — anything beyond that definition must justify itself or stand condemned.
- Second Treatise of Government — The labour theory of property, with its spoilage and 'enough, and as good' provisos — ownership is earned by improvement and bounded by what leaves others no worse.
- Second Treatise of Government — Prerogative as revocable emergency discretion — legitimate exactly as long as the public visibly benefits and no longer.