There’s a macabre story about a successful young professional American man who goes on vacation in Nepal. Wandering the streets of a crowded, tangled marketplace in Katmandu, he’s approached by an elderly bearded man in flowing robes who whispers, “You are searching for something special to take with you to America?” The vacationer raises an eyebrow. The old man says, “Follow me,” and leads the young man along twisting, noisy alleyways to a dark, incense-choked store filled with exotic items for sale to tourists.
The old man crooks a finger and the American follows him into a back room, where he finds a cage, and inside the cage is a tiny, two-foot-tall, red-colored humanoid — a homunculus — squatting patiently. The old man says, “This little being is a faithful servant and will do anything you ask.” Intrigued, the young American bargains with the old man and they strike a price. “Be certain you keep it busy!” warns the old man. “Otherwise, it will get into mischief.”
The old man arranges for the homunculus to be exported to the young man’s home, where the creature is soon busy with housekeeping, cooking, home repairs, filing, mowing the lawn, and so forth. Then one day the young professional must leave for a week on a job. Remembering the old Nepalese’s warning, he writes out an especially long list of projects for the homunculus to complete. The young man boards a plane for the coast, where he labors successfully on an elaborate project for a client. But his return home is delayed when weather closes down the airport.
Two days late, he rushes into his house, calling for the homunculus, but can’t find him. He looks around: everything on the long list of chores has been finished. He smells cooking and peers into the backyard, where he sees the homunculus at the barbeque, turning something on a spit. The aroma of simmering meat wafts in the air. The young man approaches and is about to say hello when he notices, to his horror, that the object revolving on the spit is the neighbors’ new baby.
… Now, the only reason I would bring up this story — I assure you, its shock value never occurred to me! — is to point out that the homunculus represents roughly how most Americans think about our business leaders. We consider them useful but dangerous, and, if we drop our guard, they’re sure to do something evil.
How, then, do we watch over our homunculi — er, our business leaders? Why, with government oversight, of course. Government is all about protecting us, isn’t it? We assume civil servants are the good guys, and business leaders are the bad guys. So we give business owners lists and lists of things to do and obey, hoping they’ll get so bogged down in regulatory compliance they won’t have time to think up treachery. We’ve been at this for at least a century, adding burdens to companies willy-nilly.
And how has this been working out for us? What? You say there are more fat cats than ever? And they’re more rapacious than ever? But we gave them to-do lists! What went wrong?
Is it possible we picked the wrong approach?
Think of it in terms of natural selection. (You know, the way flu viruses mutate every season to get around our immune systems.) Government regulation tends to kill off businesses that can’t comply. Usually, those are the small, weak ones, while mostly the huge and wealthy corporations are left standing. These big guys can then manipulate the regulatory system — bribing legislators with campaign funding, promising lucrative positions to bureaucrats when they leave Washington — until the laws and standards favor their companies at the expense of any smaller businesses that still survive. By finishing off that competition, they can raise prices and reduce quality. Innovation gets hampered; consumers’ options are reduced. And if those corporations get into financial trouble, their buddies in government will use your money to bail them out.
By trying to eliminate business bad guys, we’ve managed instead to evoke more and more of them. Now only the super-bad can survive and thrive in our regulatory jungle.
Tom Robbins wrote, “Society had a crime problem. It hired cops to attack crime. Now society has a cop problem.”
Maybe we’ve got it backwards. Maybe business isn’t the homunculus; maybe it’s government. Business, originally, is more like the house that needs tending, and government is brought in to do that, but — when we look away — government instead starts roasting infant startups … and feeding them to the rapacious corporations its regulatory scheme has evoked.
Food for thought, eh?
Sorry. That was gross.
(By the way, there is another approach to business regulation.)