Wednesday, August 24, 2011

Corporate Growth

In the last few decades of the nineteenth century, and the first few decades of the twentieth, corporations grew, wages rose, the number of people working in industry increased, and the population of the United States grew steadily. A steadily growing population is one necessary precondition for a prosperous economy. Cengage's history book describes this era:

This growth in scale was in part a response to the enormous domestic market. By 1900, railroads provided the country with an efficient transportation system that allowed corporations to ship goods virtually anywhere in the United States. A national network of telegraph lines allowed constant communication between buyers and sellers separated by thousands of miles. And the population, which was expanding rapidly, demonstrated an ever-growing appetite for goods and services.

This prosperity, and its benefits to citizens at every income level, is founded upon an understanding of property. Although legal ownership is a central concept in any free society, it is balanced by a moral tradition of stewardship - that one is only temporarily in charge of one's property, and has a duty to use it wisely, fairly, and for the benefit of others. Legal ownership gives the individual power to make decisions; the moral tradition gives the individual guidance about how to make those decisions. Temple University's Mark Levin writes:

The key to understanding the free market is private property. Private property is the material manifestation of the individual's labor—the material value created from the intellectual and/or physical labor of the individual, which may take the form of income, real property, or intellectual property. Just as life is finite, so, too, is the extent of one's labor. Therefore, taxation of private property, or the regulation of such property so as to reduce its value, can become in effect a form of servitude, particularly if the dispossession results from illegitimate and arbitrary state action.

If the legal notion of private property is threatened, both the freedom of society, and its ability to attempt justice are inhibited.

the federal government should raise revenue only to fund those activities that the Constitution authorizes and no others. Otherwise, what are the limits on the Statist's power to tax and regulate the individual's labor and, ultimately, enslave him?

Taxes, although sadly necessary, must be kept to a minimum, or else both the individual and society will suffer a loss of freedom, the inhibition of justice, and a decrease in the ability to benefit either the person or the community.