Underground Man

Received in response to my craigslist ad:

Hello,

I saw your ad on Craig’s List for the room in Park Slope starting in November and it looks like a good match. I am a guy, but I have lived with girls before.

About me: I am a 24 year old grad student at NYU, pursuing an MFA in fiction. (So probably I will be famous.) I went to undergrad at Vassar, and have lived in the city for two years [...] at a sustainable architecture magazine. I’m originally from Salem, OR, and have been told I have something of a ‘western’ demeanor, but that might just be common to all people who come from terrible places. Now that I am in school again, I maintain a fairly flexible schedule, but spend a good chunk of the week reading/writing/going to class, so nothing too raucous. I have become skilled at being quiet when need be and respecting public areas from living in a railroad for two years. Other than that, I generally go out on the weekends, but would appreciate a genial atmosphere where people’s friends are welcome to stop by at reasonable hours.

Part 1, The Conventional Review:

The Informant! is a comedy depicting horrible people acting horribly. Why should we care about these particular people? That’s a good question. As the film progresses, we learn that Mark Whitacre, the film’s main character, is a liar, as well as an idiot. Are there any insights into his motives? Absolutely not. He is presented to us as a grotesque carnival act, to be gawked at and/or pitied from a distance. Contrast this character with Jerry Lundegaard of Fargo, whom we actually get to know as his situation becomes more and more desperate. In The Informant!, we have to settle for Whitacre’s constant voiceover non-sequitur (which I must admit are occasionally amusing).

Part 2: The Economic/Poitical Review:

Looking past The Informant!’s artistic shortcomings, we now turn to what I consider its far more serious offense: its egregiously ignorant commentary on the evils of free markets. The film presents the age-old myth of the evil capitalists, attempting to rob the public at every chance, and the noble government officials, who, though not perfect, try their darndest to reign in these monsters and protect the little guy. Of course all the executives, including Whitacre, are despicable human beings and criminals, and the only sympathetic characters to be found are, you guessed it, the two FBI officials trying to make things right. In a particularly heart-wrenching scene, we have one of the agents, whose heart bleeds for the poor S.O.B. Whitacre, tearfully asking him, “Why do you keep lying?” God bless this noble public servant!

The company featured in the film is Archer Daniels Midland, agribusiness giant of the Midwest. Now, The Informant! aims to skewer capitalism, and thus makes no mention of the fact that ADM is one of the biggest subsidy whores in existence. To quote at length from a CATO.org study:

The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM’s annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM’s corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30.

Yikes. It’s these sort of details that ought to grant us pause before we make any hasty conclusions about capitalism. ADM is a product of the state, plain and simple. The free market doesn’t put corn syrup in our soda or ethanol in our gasoline; ADM does.

The chief economic lesson of The Informant! is that evil corporations will fix prices and rob consumers. That is, sometimes two or more producers in a particular field meet and talk, and then act in a particular way. The FTC can spot price fixing in a flash by simply observing that prices are higher than they’d be under “perfect competition,” conveniently ignoring the fact that “perfect competition,” much like the elusive “perfect information,” has not and never will exist in any industry at any time, ever. The FTC really can’t do any better than observe that prices are, well, different from the prices the FTC thinks should exist.

A reasonable question one might ask oneself upon observing that the price of X seems high is, “Why doesn’t somebody else start putting out X? They’d make a killing!” 99 times out of 100, the answer turns out to be: It’s not a free market. The government restricts competition. That somebody else would love to get into the X business, except for the whole being imprisoned or shot thing. Finally, even if two companies agree to raise prices in a truly free market, it’s still not a crime. No one is being robbed. Get over it. Buy something else, or don’t buy anything at all. If you think you have the right to demand, at gunpoint, that two would-be colluders must offer you good X at price Y or lower, you’re the criminal, not they.

In sum, The Informant! is a bad film.

Mike

I quote in full Paul’s comment to this Marginal Revolution post:

Oooh. Someone used the word ‘invest’.

Personally, I’d say waste. As in waste money collecting the tax. Waste money in deciding where the money was to go. Waste money on setting up the ‘programs’. Of course a big building will have to be built and staffed somewhere in the Washington/Boston Yuppie Good Idea Zone. Then of course we need to recruit and staff the NGO’s. They’ll all need health care, training schools, each country will need administration buildings, staff. ( Anyone seen any improvement yet?).

Now about five years into this money flushing exercise, but good for lefty yuppie graduates of worthless, but expensive lefty schools and, ahem, ‘disciplines’, we will have our first study on ‘effectiveness’. This will start a few years of back and forth amongst secular lefty do-gooder faithful. ( Still no kids really educated who were first 10 when the boondoggle started and now 17 and out of ’school’.)

By now the NGO is fully versed in buying political support, hiring the useless lefty daughters and sons so they can drink, have sex and get paid and get lefty do-good moralizing awards in some tropical local, driving Toyota Land Rovers, wearing Pantagonia and hitting My Face on their Appple laptops.

…….

I could go on.

I hope Paul doesn’t mind. Talk about a perfect summation of the things that enrage me about young, rich, educated society in this culture.

In response to my suggestion that the alleged checks and balances of the US government should not alleviate our fears, the typical political libertarian will say, “Of course what we have isn’t perfect, but isn’t it better to take a shot at checks and balances than to have none at all?”  Why, then, do they get so squeamish at the actual idea in practice: a society in which no group claims or is granted a monopoly on the right to use force? Of course things will appear a bit “messy” to the statist, but doesn’t the explanation of the US system sound “messy” to the advocate for dictatorship? 

A  common knee-jerk criticsm of a stateless society is “What happens when two private courts disagree?” That’s a tough one, but no tougher than the question, “How does a government resolve internal conflicts?” If you think the latter question is answerable, you should at least reexamine the claim that the former is not.

Mike