Government Intervention on Private IndustryAug 09


Prepared by Stephen McMullin

GCG seeks to examine the philosophical as well as the moral ramification of the government’s direct intervention into private industry and, perhaps more specifically, the ideal of capitalism.

US economic strength has a deep and rich history founded, at its most basic level, in property rights. America encourages its citizens to be entrepreneurs and to measure for themselves the tradeoffs between risk and reward. She does this through providing her citizenship with the necessary tools through which an individual can protect his claim.  Such protection provides the necessary foundation for capitalism

Capitalism- noun- an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state owned means of wealth.

The recent economic turmoil, however, has forced America to intervene in this ideal in unprecedented ways. In order to preserve capitalism, she must undermine one of its most basic premises. She has acquired and, in some cases claimed, multi-asset class positions in private companies. As a result, she has altered the risk-reward tradeoff, tread on the property rights of equity shareholders, and effectively nationalized pieces of private industry.

Is this intervention just?

Is it just for any person or any institution to undermine any ideal for the preservation of itself or the promotion of another, seemingly higher concept?

Consider the following scenarios:

  • 1) A freedom based government that acquires and detains citizens for the protection of the greater population (Japanese detainment camps after Pearl Harbor)
  • 2) A liberty based government that wire-taps its citizens for the protection of the greater population
  • 3) A politician who lies to get elected, only to serve his community with unrelenting commitment (fill in your example of choice)


  • - Are there other illustrations? If so, what?
  • - Is this a question of degree? Is intervention acceptable to a point?
  • - Is this binary? Can an “ideal” not be compromised?
  • - Does such intervention devalue the “ideal”?
  • - What does the need for such intervention prove, if anything?

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