Biological parasites steal resources without the host organism’s consent. The consequences of infection range from minor inconvenience to death. Economic parasites steal resources without the host entity’s consent. The consequences of infection range from a minor decrease in output to almost total long-term collapse.
Economic freedom is to economic parasites as ivermectin is to biological ones.
Sometimes economic parasites are governments. Sometimes they are businesses. Sometimes they are nonprofits. The worst parasites tend to be so-called “complexes,” or public and private entities working in concert to take what was once yours and make it theirs.
Infected organisms often know that something is wrong but they do not know what to do to rid themselves of their parasites without damaging themselves in the process.
Infected economic entities often know that their resources are being expropriated. Americans love “The Rich Men North of Richmond” and similar songs because they know they expose the economic parasitism that diminishes their lives. Too few, though, know what to do to rid themselves of the parasites without damaging themselves in the process.
Ultimately, the only source of resource creation stems from the efforts of individual human beings, sometimes working alone like Robinson Crusoe, but most often working in concert with others. How to share the resulting resources remains a sticky problem because determining contributions to joint output can be difficult to discern and everyone wants to claim more resources than they actually created.
If a production group decides to divide everything evenly, everybody has an incentive to shirk, and in large groups they will be able to shirk quite effectively. Vide communism, where workers pretended to work and the group’s leaders pretended to share resources with them.
If the group decides to divide resources unevenly, some people will be overcompensated for their efforts while others will be undercompensated. All sorts of sophistry will emerge to justify the distribution, like claims that what should matter are inputs (he puts in long hours!) or need (she has four children!) instead of contribution to output.
As a result, even in advanced market economies everyone feels as though they are being expropriated at work, and many people actually are, though perhaps not to the extent they believe. Their only consolation is that those with higher incomes get taxed more heavily in dollar and perhaps even in percentage terms. Most of those taxes, though, fund parasites, economic entities that receive far more resources than they create.
Just as biological parasites try to hide in the recesses of host bodies, economic parasites try to hide in the recesses of the body politic. Some, like leeches, cling tenaciously when exposed to the light. Others, like hookworms, feed deep in the belly of the economic beast. Yet others, like trichinella, infest vital economic institutions.
Although biological parasites can usually be eradicated early in the infection phase with miracle medicines like ivermectin, if left untreated they can severely damage the host and may need to be surgically removed. Economic parasites also dig in deep, so deep that it may seem that removing them could harm the host.
Consider, for example, the military-industrial complex. Cut the DoD’s budget a penny, nay don’t allow it to grow faster than inflation, and the complex’s many minions will warn that America will be immediately overtaken by North Russina, perhaps working in concert with Venubaran.
Similarly, if the scientific-university complex isn’t adequately fed financially, its minions will claim that the nation will lose its technological edge and within a few years will have to capitulate to Eurojapnam, perhaps working in concert with Israwan.
Try to excise the medico-pharma complex and watch as paid pundits pontificate that as a result Americans will all die from Covipox faster than they can say “illegal gain of function research.”
Such claims are obviously self-serving, but are deliberately made to sound so dire that even when discounted they remain worrisome. Best to shut up and pay up, too many Americans thus conclude.
But is it ever good for a host to allow parasites to fester? Maybe occasionally, but certainly not as a rule. We could at least try cutting funding to see what will happen. Sometimes less is more. Most people become healthier when they consume fewer calories, they do not immediately die of starvation.
Would the United States really be susceptible to invasion if it kept only its nukes and re-established civilian militias? It could no longer invade countries that displeased the military-industrial complex, but is that really what the American people want anyway?
Is there not another way to finance scientific research? The current system is clearly broken and expensive. Why not try another model, like the private one that served us so well until World War II? Or how about putting public and private monies together into a pot that researchers can draw upon through a random process, or quadruple blind review (the grantees and grantors remain anonymous as well as the researchers and the status of the test subjects)?
And doesn’t it make sense to put health and life insurers in charge of medical research because, like Americans, they want effective preventative protocols and one time treatments, not lifetime addiction to drugs, vaccines, or anything with untoward “side” effects?
Alas, Americans currently enjoy insufficient economic freedom to pursue any of the alternatives proposed herein. So the parasites wax ever larger, as does an emerging populist counterculture that may opt one day for a more direct way of ridding the body politick of its parasitic complexes even though the best cure is simply more economic freedom – lower taxes, fewer regulations, and sounder money.
Robert E. Wright is a Senior Research Fellow at the American Institute for Economic Research. He is the (co)author or (co)editor of over two dozen major books, book series, and edited collections, including AIER’s The Best of Thomas Paine (2021) and Financial Exclusion (2019). He has also (co)authored numerous articles for important journals, including the American Economic Review, Business History Review, Independent Review, Journal of Private Enterprise, Review of Finance, and Southern Economic Review. Robert has taught business, economics, and policy courses at Augustana University, NYU’s Stern School of Business, Temple University, the University of Virginia, and elsewhere since taking his Ph.D. in History from SUNY Buffalo in 1997.