Congress can only “create” regulation

Alex Marshall believes that governments create economic markets. He says so here. What is so very wrong with this belief is that it empowers government far beyond anything it was ever intended to have. The word “market” doesn’t appear anywhere in the Constitution, and “commerce” only appears twice—in Article I, Sections 8 and 9. To say that government creates markets, one would expect at least a shout out to the Constitution, but other than a passing reference to the 14th Amendment (naturalized citizenship), none can be found in Marshall’s diatribe promoting government economic intervention.

This omission should be very telling for anyone who wishes to base what the government can and cannot do on the founding document of the country. Of course, liberals will always appeal to history when they cannot make their case constitutionally, and this is precisely what Marshall does. But even here, he cannot prove his assertion that governments create markets, he can only restate it. Hoping that his readers are not sufficiently bright enough to notice that his bold assertions are not actual proofs, Marshall presses forward by comparing modern capitalism to land grant fiefdoms. In other words, Marshall assumes that government “owns everything” and works outward. It has been long established that wrong assumptions lead to wrong conclusions, and in this case, Marshall’s argument is proof-positive that this principle is still true.

To begin with, Marshall makes the assertion that:

Government is responsible for every aspect of the market economy, from writing the laws defining private property, corporations and intellectual property, to building the roads on which commerce depends. When business was simpler, centuries ago, government built simple markets. Today, it creates more complicated ones.

Notice that Marshall never once defines what he means by “market economy.” He cannot define it for the simple reason that a market economy cannot be created by government, because government has nothing to buy nor sell. The reason that economists refer to them as “markets” is because this is essentially what they are: arenas where goods and services are bought and sold by individuals and companies. Government can no more create a market than it can destroy a market; the existence of the “black market” should be evidence enough that government is not required to “create” an economic arena. Supply and demand is what creates a market, not governmental laws, intellectual property, or road building.

Just when it appears that he may be making his way toward a truthful statement, Marshall skids off into the ditch of the nonsensical. He writes:

Just as there can be good and bad forms of government, such as democracies and dictatorships, there can be good and bad markets. There used to be a vast body of law dealing with the buying, selling and ownership of slaves, for example. When Congress finally outlawed slavery through the 14th Amendment in the 19th century, all that was swept away.

Really? Is Marshall actually this naïve? Does he really believe that outlawing slavery was what stopped the practice? Marshall seems to envision former slaves dancing in the streets after the passing of the 14th Amendment. He also seems to be under the delusion that democracy equals “good” and dictatorship equals “bad.” Just as black markets will exist so long as there is a demand for the good or service, regardless of what the law has to say, so can there be good dictators and bad democracies. The form doesn’t define the “goodness” or “badness” of the people in charge.

In his final paragraph, however, Marshall really seals the deal of his own ignorance by stating: “Government doesn’t just change the light bulbs in the arena that private businesses operate in. It designed the whole stadium.” This is a sheer impossibility because government, just like economists, cannot predict how a market will actually react. Government can no more “build an economic stadium,” than it can force people to buy something they do not want (regardless of whether it is a “tax” or a “penalty”). Article I, Section 8 of the Constitution gives Congress the power to “regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” Regulating commerce and creating commerce are two different things: you can only regulate what is already in existence. Regulating commerce doesn’t create the market anymore than regulating the price of milk creates the cow. This simple fact apparently escapes the notice of Alex Marshall.