Politicians, too, are private interests. So are bureaucrats, social engineers, public schoolteachers, and policemen. They are all individuals, regardless of their spruce uniforms or tax-funded pension packages. The political class itself benefits anytime the government expands, and yet it is rarely recognized as a vested interest in politics.
The same private interests willing to cheat the consumer and worker in business are also willing to enter politics, to fund campaigns, to run for office, to bribe officials, to exploit every advantage the state offers to the dishonest entrepreneur. Further entrenching the monopoly of violence that is the state into the economy only ups the ante of the game over political influence. The more the state can regulate private interests, the more private interests will take control of the state.
The larger the state is, the more private individuals and groups have an interest in keeping the racket going. As the government expands to the detriment or assistance of specific sectors of the economy, collusion is inevitable. Those with power will use it to help the businesses they favor for whatever reason, and those in business will seek to deflect harmful legislation and encourage desired legislation. The more government intervention in the economy, the more the state and business classes coalesce, the more private interests can socialize their costs and privatize the profits to themselves. Socialism merely guarantees unearned profits and unjust power to whoever controls the state. And the state will be controlled by someone.
And as I've pointed out before, the private interests who control the machinery of the state will always have an advantage in attention span, agenda control, and inside information over those on the outside to whom the state is nominally responsible. It's what Michels called the Iron Law of Oligarchy.
Jim Henley totally demolished the typical "progressive" public good argument for the regulatory state a while back. "Progressives" usually challenge, "how would we provide x without a government? Individuals are too greedy/short-sighted to organize and pay for it themselves without some central coordinating authority." Then they go on to argue that, while big government in practice is quite corrupt, it would work just fine if people had the vigilance and tenacity to monitor it closely and exercise ongoing democratic control. But if a populace is too lazy and short-sighted to organize services for themselves, how can they be expected to exercise reliable supervision over their government?
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