Bypassing the State

Chapter 11

Bypassing the State

The 20th century has been a failed experiment in big government. Every day more people see more ways that problems could be better solved by profit-seeking companies, mutual aid associations, or charities than by government. Private capital markets can provide actuarially sound insurance and offer better retirement benefits than Social Security. One of the world's largest engineering projects, the $12 billion tunnel under the English Channel, was designed, financed, built, owned, and operated by a private consortium. A company called Human Capital Resources wants to sell equity investments in the future earning power of college students as an alternative to student loans--better return for investors, less post-graduation burden on students, and no cost to the taxpayers.

Private communities, based on governance by consent, can be better tailored to the needs and preferences of 250 million diverse Americans than local governments can. Private schools provide a better education at lower cost than government schools, and in the next few years information technology and for-profit companies will revolutionize learning. Private charities get people off welfare rather than snaring them in it.

Some day soon we may be able to bypass governments to get all the goods and services we need. But in the meantime our $2.5 trillion federal-state-local governments are not going to give up their power without a fight. The U.S. Postal Service tenaciously clings to its legal monopoly. School boards and teachers unions declare that they won't let children "escape" from their schools, and spend millions to prevent the implementation of school choice plans. The people who benefit from the existing system won't willingly downsize government even if all the customers desert it. As school enrollment in the District of Columbia fell by 33,000--about 25 percent--the system actually added 516 administrators. The 800,000 postal employees are not going to quietly accept layoffs even if we send all our communications electronically.

We cannot simply wait for "social forces" or technology to automatically replace bloated government. To ensure that such changes happen, individuals will have to demand their right to choose schools for their children, to compete with the Postal Service, to invest their money in a secure private retirement fund. And then taxpayers will have to work to ensure that government stops producing services no one uses any more.