Rather than my normal habit of introducing my essays with a clear statement of purpose, allow me to postpone any such explanation for a moment, and, as in "Bad Economics Part 11" and "A Hypothetical Situation" begin with a hypothetical situation followed by a few simple questions. Hopefully once I am finished with that introduction, the reason for doing so should be clear.

Let us imagine a fictional land, call it Ruritania, as so many economists love that name for hypotheticals. And let us suppose in Ruritania there is an ethnic minority, one easily distinguished, let us call them Lemurians. It doe snot matter whether they are racially distinct, as blacks and Asians are in the US, or simply distinguishable by behavior, as Orthodox Jews and the Amish are. Or perhaps it is even just a linguistic difference, as most immigrant communities. Maybe even a combination of several of the above, as is the case for Hispanic communities in the US. The specific difference is not important. All that matters is that the average Ruritanian in the street knows what a Lemurian is, can identify Lemurians, and has a mental image, right or wrong, of the "average Lemurian".

Let us suppose that, for whatever reason, there has been some degree of racial strife between Ruritanians and Lemurians in recent times. Nothing excessive, nothing like full scale riots or pogroms, just some small scale strife, a history of racially motivated crimes, perhaps, maybe a public outcry against government plans to favor Lemurians for some posts, whatever you can imagine. The point is that there is some bad blood between many average Ruritanians and Lemurians. It doesn't particularly matter who is to blame, who caused the situation or whether or not Lermurians or Ruritanians are at fault. All that matters is that there is some public animosity, at least among some of the public, against Lemurians.

Actually, one of those hypothetical reasons is important. Let us suppose, in response to this resentment, the government of Ruritania, as many governments in democratic societies, adopts the usual inconsistent course, sometimes doing nothing, sometimes taking an activist course, and when it is activist, adopting inconsistent mixtures of carrots and sticks. For example, at times is adopts the aforementioned programs favoring Lemurians, thinking greater integration will quell resentment. At other times, it adopts policies aimed at forcing greater assimilation, which causes resentment among some Lemurians, whose hostile reaction then upsets Ruritanians who see Lemurians receiving government "benefits" and reacting with hostility. We can obviously postulate a whole host of such responses, drawing not just on the US history, past and present, with various ethnic and religious minorities, as well as immigrants in general, but also those problems faced by every other multiethnic nation in the world. Ignoring for a moment the question of whether government involvement in such matters is justified, or whether it can succeed¹, let us just agree that in general, most efforts in this direction have not fared well, and so it is likely the Lemurians and Ruritanians are not going to be amicably disposed to one another after ever more government involvement.

Let us supposed a political party arises in Ruritania, call it the Popular Front of Ruritania (PFR). And the PFR adopts as part of its platform the position that Lemurians are a threat to Ruritania. They argue that the Lemurians have no loyalty to Ruritania, they have no feeling for their fellow citizens, they form secret cabals and they plot against the state. Some, obviously, dismiss this position as nonsense, others argue it is unlikely, but possible, and some, the PFR's core of supporters, accept it whoe heartedly.

As with most such movements, the PFR does not have but a single position, and the anti-Lemurian position is but one plank in their platform, and probably one which draws them only part of their support. The majority of Ruritanians do not believe in the anti-Lemurian agenda, but the PFR platform is sufficiently broad in appeal that the party wins. Having won, the party begins to institute a platform of legal disabilities for Lemurians. As it continues to do so, many Lemurians do begin to form small groups, trying to organize to protect themselves against the state, to try to reverse the course and so on. And, when discovered, these groups are put forward as proof that the PFR was right all along, the Lemurians were scheming against the state, against all Ruritanians. These meetings are used to show the lack of Lemurian support for the government, as are many Lemurian protests against the new laws, and, based on these claims, even more laws are put forward to restrict the rights of Lemurians.

Obviously, this is a fictional situation, but it is not too different from a few historical persecutions of racial, ethnic and religious minorities. A few small issues are used to justify action against a group, and once that group reacts, their reaction is used to justify even more radical action. It is a familiar pattern from history, and in general we like to think we well meaning, enlightened people are above falling for such deceptions. We like to believe we would not be taken in by such simplistic appeals. However, I have conclusive proof we are not, neither on the right nor the left. We have been taken in by just such a scheme, and we continue to buy into it, even as we claim to be above such things.

No, I  have not gone over to the fringe movements on the right and started to believe in radical anti-government paranoia².  Nor have my open borders beliefs become so extreme I am joining in the overblown rhetoric that sees immigration restrictions as akin to genocide³. I am not even offering this up as some sort of analogy, using this extreme example to argue about something much less significant as happens in a number of posts which start with such dramatic claims. What I am describing here is precisely what I claim. There is a group which we have persecuted relentlessly for decades, which we have slandered mercilessly, which we have blamed unfairly, and then, when they have adjusted their behavior to match our demands, used that adjustment as proof that they were wrong all along. Worse, it doesn't matter which party is in power, both have been guilty of the same thing. Perhaps at times one is a little better than the other, but I have seen the same groups slandered by supposed conservatives as often as liberals, and seen calls for restrictions, prosecutions and other government actions from conservatives up and down the spectrum from pundits and politicians down to the rank and file.

The group in question is the American businessman, and he has been persecuted since at least the 1890's, if not before. Like most scapegoats, the persecutors in both parties pay lip service to believing in his basic goodness, then turn and highlight all their specific claims about individual malefactors, before asking the entire group be penalized. Worse still, conservatives, while claiming to support him, to be his defender, are as guilty as the left of limiting his freedom, and, worse still, blaming him for simply adjusting to the world these restrictions create.

Perhaps a few simple examples will make this clear.

Let us start with the entire subprime mortgage crisis. Outside of doctrinaire liberals, I doubt anyone believes that somehow Wall Street got rich off of making bad loans. Or at least, that they figured out some way on their own to do so. Had bad loans been a way to get rich, businesses would have been making them all along. No, what happened was that the government decided they wanted people to own homes who couldn't really pay for them, or were likely to default. And so the government forced bad loans into the market. Of course, banks don't want to make bad loans, as they are the way you lose money, rather than making it. So they sensibly asked the government to either guarantee them, or take them off their hands. And so were born plans for Fannie Mae to buy up such loans and try to sell them on the market. And, of course, those holding such loans jumped at the chance to sell them. And a few even figured out how to make money on them. Especially when the Bush administration began inflating wildly, making even such bad loans seem viable investments thanks to inflation.

I am sure there is a lot left out of that thumbnail description, and some may differ with me over some details, but let us let it stand for now, incomplete and contentious as it may be. The reason I mention it at all is that it is a description which is close to many offered by conservative since the subprime bubble burst, and even many on the left admit the government played a role in this whole fiasco, so many would agree with it after a few caveats.

However, what I find most interesting is how both groups read that essay. On the left, they read the part about businesses lobbying for the government to take over such bad loans, and hear that some made money doing it, and draw the conclusion that the entire fiasco is the fault of greedy businessmen.

But the right is not much better. Many hear that description and rightly note the government started the ball rolling, but then, hearing of lobbying, they start talking about the "need for reasonable oversight" and they too start to denounce "greedy bankers" and "Friends of Bill" and otherwise begin to tear apart those who profited during the government's period of excess⁴.

And that is why I used my initial analogy. Because it shows how a group can be made into villains when they do nothing but react to what the government does.

Businessmen are just humans. In fact, they are us. All of us, whether we own a company or just rent our labor to our employers, are in business. And all of us are in it to make money. We all seek, quite rationally, the greatest return for the least effort. No, we do not always look for the highest salary, that is a mistake many make and then think it rebuts this theory⁵. We do not seek the greatest monetary return, we seek the greatest satisfaction, which may be monetary, or may be emotional, or a combination of the two. But we all seek to exchange something less valuable for something more. That is rational.

And thus, we are all businessmen.

And, when situations change, we change. We react to the new situation, and look for ways to make it work for us. And bankers and businessmen are no different. When the government begins to throw away money, it is rational to pursue it. If not, then it will go to someone else. Especially, as in the case of banks, when the rest of the government's actions are aimed at reducing your opportunities to make profits. Nor is lobbying an evil. In general, lobbying exists because the government has arbitrary power⁶, that being the case, we lobby to avoid the harm that power may do, and to take advantage of it when we can. It is not the fault of businessmen we placed them at the mercy of regulators, nor that we gave the government the ability to write blanks checks. We should blame ourselves for that⁷.

And so, before we blame businessmen for the ills we created, or for reacting to the bizarre government environment we created, maybe we should ask why they are to blame? Is it not just possible that the blame belongs a little closer to home? Maybe with those who put them in that situation, such as the voters who made the environment in which they operate?

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1. Obviously, my personal belief is that integration, assimilation and the rest are private matters. The state does have one very small role, but that is not for purposes of integration, it is simply a legal necessity, and that is that each state must have one official language. The state can function in any number of languages, can offer whatever languages it wants in its offices and so on, but laws and court proceedings must operate in a single language, as translation always offers the possibility of confusion. Thus, our laws and courts must be in a single language. Ballots must all be in that language, and any purely legal proceedings must be in that language. Beyond that, there is no restriction on what languages an individual speaks or not, nor what languages the government uses in matters unrelated to legal proceedings. It is a topic I am surprised I have not addressed in detail, but I can find no old posts on the topic, at least none exclusively explaining my reasoning, so I will have to write on it in the near future. But for now, accept that this is my sole thought on the state's role in forcing assimilation, otherwise individuals should be free to assimilate or not as they see fit. (Though see "The Important Lesson of Racism" on some of the costs of resisting all assimilation.)

2. Actually, I remain quite critical of such positions. See "Some Libertarian Analogies", "What Happened?", "Third Party Problems", "Why I am a Republican", "Reconsidering My Earlier Justifications of the Death Penalty", "The Overwhelming Exception","Why Ron Paul Scares Me", "The Problem With Ron Paul", "Why Ron Paul Will Lose", "Paul + Nader = ?", "Deja Vu ", "What Happened?" and "Correlation vs. Causation" . Also see "False Flag Theories and 9/11", "Faulty Logic", "Mumia, the DaVinci Code, Full Body Scans, and Loose Change - How Conspiracy Theories Arise", "Conspiracy Theory Enters the Mainstream", "Can Hawaiians Travel Overseas?", "Maybe Obama Was Born in Gulf Breeze, Florida", "Katrina and BP", "I Have To Laugh", "Conspiracy Theories -- The Exceptions", "Amusing "Truths"" and "All Conspiracies Great and Small".

3. I have not written extensively on immigration, but I think I have made it clear, in an ideal world, immigration would be relatively open. Of course, this is not yet an ideal world, and may never even come close, at least during my lifetime. Still, I am far more in favor of open borders than many conservatives, and sooner or later will have to write to explain both my position and what I think is the ideal and the practical position on immigration. (I tried to find quotes for this footnote, and sadly the best I could do were "Addenda to "In Defense of Standards"", where a little of the history of immigration is discussed in a footnote, "A True Conservative Platform" where the topic merits a fairly short paragraph, and "Prelude to a Full Argument" and "Keeping the Drug Cartels Alive" which deal with specific aspects while promising a general argument "later". I suppose sooner or later "later" has to arrive and I need to write a comprehensive essay on immigration.)

4. See also "Conservatives and the "Big Picture"", "Et Tu, Town Hall?", "When Did We Become Liberals?", "Authoritarian Oil Talk", "A Little More On CEO Salaries", "O Tempora! O Mores!, or, The High Cost of Supposed Freedom" and "Self-Serving Cynicism and Our Cultural Immaturity".

5. See "Bad Economics Part 16".

6. See "Those Greedy Bankers" and "Perverting Self Interest ".

7. See  "How Conservatives Defeat Themselves", "The Single Greatest Weakness",  "What We Deserve", "Who Is To Blame?", "Don't Blame the Politicians", "You Lose When You Think You Win", "Beware Populist Deception", "Tyranny Without Tyrants", "Envy And Analogy" and "Good News and Bad News".

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POSTSCRIPT

I was going to initially use a second example about the formation of our managed currency, as we basically faulted banks for not being perfect, for not granting absolutely perfect monetary stability, and immediately implemented a system giving us the longest, most severe depression in history. But I know many on the right think my monetary positions are extreme, so I left that out, as the point was more important than that single example.

I also admit that there is some difference between lobbying to avoid government harm and lobbying to secure benefit, but less than most think. Given that the next spin of the arbitrary government wheel may bankrupt you, it only makes sense to make what you can while you can. The same way lawyers only take advantage of the torts lottery because we created it ("The Perversion of Liability Law", "Still More on Liability Law") business can only take advantage of lobbying because we create the situation that makes it possible. ("Transparency, Corruption and Reform", "With Good Intentions", "A New Look At Intervention", "Why Freedom Is Essential") If we want to fix things, it is not businessmen we need to regulate, it is government. ("In Praise of Contracts", "Greed Versus Evil", "Greed","Greed Part 2", "Et Tu, Town Hall?", "The Other 99%", "The Problem of Professional Politicians, or, The Impossibility of a True "Ousider" Candidate") We can say we have moral issues with those who try to profit from bad government policies, but let us not blame them for the policies we told the government we wanted, or we at least continue to allow the government to enact. The problem is not the profiteers, but that we created an environment which allows profiteers. If the ability of government to enact arbitrary laws ends, we won't need "sensible regulations" or to watch for "unethical businessmen", because there will be nothing for them to exploit.