Freeman

ARTICLE

Creative Apathy

Washington Is the Headquarters for Wealth-Destroyers

AUGUST 01, 1998 by SHELDON RICHMAN

Filed Under : Government Spending, Interventionism

One man’s bugaboo is another man’s delight. Consider this quotation:

We don’t even care about Washington. Money is extracted from Silicon Valley and then wasted by Washington. I want to talk about people who create wealth and jobs. I don’t want to talk about unhealthy and unproductive people. If I don’t care enough about the wealth-destroyers in my own country, why would I care about the wealth-destroyers in another country?

Those are the words of a computer-industry executive. I’d like to shake his hand. (Unfortunately, I don’t know who he is.)

But Thomas Friedman, the New York Times columnist, would like to grab this guy by the lapels and give him a good thrashing. Friedman can’t fathom the executive’s lack of interest in what are self-servingly called public affairs. All the vital technological, trade, and financial innovations, he writes, are “happening in a world stabilized by a benign superpower called the United States of America, with its capital in Washington, D.C.” How can a businessman at the cutting edge resist awakening in breathless anticipation of what marvelous things his government will be doing that day?

Lest that executive think he and the other children of Adam Smith make the world go round, Friedman has news for them: “The hidden hand of the global market would never work without the hidden fist. And the hidden fist that keeps the world safe for Silicon Valley’s technologies to flourish is called the United States Army, Air Force, Navy and Marine Corps (with the help, incidentally, of global institutions like the U.N. and the International Monetary Fund). And those fighting forces and institutions are paid for by all the tax dollars that Washington is ‘wasting’ every year.”

Well, now. No doubt about where Thomas Friedman stands—although he seems to press his case with a little too much gusto. Really, the IMF and U.N.? Why did he neglect to mention the Peace Corps and International Labor Organization while he was at it?

But the exec did hit a nerve. When Friedman asked him how often he talked about “Iraq or Russia or foreign wars,” the executive apparently enraged the otherwise unflappable Friedman by answering, “Not more than once a year.”

Now, I am too diplomatic to do more than mention here something my colleague Beth Hoffman reminded me of, namely, that Friedman is the Times‘s foreign policy columnist. Maybe I’m not so diplomatic. Friedman has a direct career interest in people’s continual agitation about foreign affairs—once a year is considerably less frequent than Friedman’s column. That the nobs of high tech don’t care what’s going on in Iraq or Russia or foreign wars is equivalent to them not caring about what Friedman does for a living. That’s discomforting. No one likes to contemplate a fall in demand for his product.

Friedman is merely carrying on a long tradition in which New York Times foreign affairs writers, perhaps frustrated they haven’t been elevated to undersecretary of state or to a comfy ambassadorship, carry water for the diplomatic establishment. You have to sympathize with them. Americans have never been enthusiasts for foreign adventures. They traditionally have required adroit hornswoggling to get them sufficiently stirred about things like unpleasantness between Hutus and Tutsis or between Bosnians and Serbs. News of a strongman in the Caribbean was the occasion for a yawn. To get them to take notice, Washington had to convince Americans that the savages’ next stop was Cleveland. This is one of the American people’s most endearing attributes.

That indifference has always been a threat to those who earn their filet mignon endeavoring to project American power abroad. What if members of Congress contract their constituents’ apathy and begin to trim the budgets for foreign aid and the international lending institutions, not to mention the U.N. and diplomatic corps? No congressman likes being confronted at a meeting in his district by an irate citizen who wants to know “why you are spending all that money on foreigners when the needs of our own people are neglected.” The foreign policy establishment—which includes most of the national media—will pay top dollar for ways to keep congressmen from succumbing to that kind of pressure.

One of the most effective ways is for the national media to associate support for the foreign policy establishment with political sobriety. Whenever a crucial vote pends in Congress, perhaps a treaty ratifying the President’s already-made promise committing the American people to something or other, you can count on the editorial and op-ed pages of the Times and Washington Post to solemnly intone that America’s credibility demands a favorable vote. It’s a good thing the supply of words is unlimited, else we would have run out of credibility years ago.

How interesting that Friedman sees Silicon Valley as insufficiently patriotic. Computer executives think of their firms, not as American companies, he complains, but as “I.B.M. U.S., I.B.M. Canada, I.B.M. Australia, I.B.M. China.”

“Oh yeah?” he inveighs. “Well, the next time you get in trouble in China, then call Li Peng for help. And the next time Congress closes another military base in Asia—and you don’t care because you don’t care about Washington—call Microsoft’s navy to secure the sea lanes of Asia. And the next time the freshman Republicans want to close more U.S. embassies, call America Online when you lose your passport.”

Is it necessary to remind Friedman that Silicon Valley’s exports don’t require sea-lanes? They can use something called cyberspace. Capital can travel through that medium as well. If anything is holding up cyberspace as the preferred method of travel for capital and other values, it’s the very Washington in whose defense Friedman perspires. It is Washington that is stifling the export and hence development of electronic encryption software, which is needed to keep prying eyes out of e-mail. Global communications, therefore, are not secure. That might explain Silicon Valley’s sense that Washington is something less than the guardian Friedman sees.

As for his idea that Washington’s “hidden fist” is responsible for global commercial order, Friedman shows some historical deficiency. The world trading system we have inherited was built originally without the help of any superpower or transnational political authority. The collapse of the Roman Empire brought with it a collapse of world commerce. In the eleventh and twelfth centuries, trade revived hand in hand with the development of a highly sophisticated body of mercantile law that was the product of the traders themselves, a dramatic example of unplanned order. Merchants from disparate cultures had a common interest in greasing the gears of commerce. As a result, they themselves generated good law whose benefits we still reap. Governments were not responsible for it. (The story of the Law Merchant is found in Harold Berman’s magisterial Law and Revolution, available from FEE.)

Theory and history support Silicon Valley’s attitude that Washington is the headquarters for wealth-destroyers.

ASSOCIATED ISSUE

August 1998

ABOUT

SHELDON RICHMAN

Sheldon Richman is the former editor of The Freeman and TheFreemanOnline.org, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families.

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