Competition and the Constitution: Friends or Foes?
Three of the nation’s leading economic experts converged at the National Constitution Center June 16th for “Competition and the Constitution,” the Ninth Annual John M. Templeton, Jr., Lecture on Economic Liberties and the Constitution.
Held in honor of the late philanthropist and investment pioneer Sir John Templeton, and underwritten by his son Dr. John Templeton, Jr., the lecture offered an opportunity to step back from the headlines and examine some of the nation’s most urgent economic issues. The lecture was delivered by the American Enterprise Institute Senior Fellow Christopher DeMuth, with a response by law and economics Professor Michael Wachter of the University of Pennsylvania. Daniel Gross, economics editor at Yahoo! Finance (formerly of Newsweek and The New York Times), moderated a post-lecture Q&A.
Here are some excerpts from last night’s program. Click the play button to hear each quote in its entirety.
On competition in America:
Dr. John Templeton, Jr.:
“Competition renders ‘improvements of our social and economic development,’ according to Sir John Templeton. Progress thrives on open competition.”
“Competition is nowhere mentioned in the Constitution or in the Declaration of Independence….but competition is, to a much greater degree than is usually understood, a foundation of our political order.”
“Chris has a very friendly view of competition…I must have grown up in a different neighborhood…[In the business marketplace] the winners get the riches and the mansions, and the losers get to visit the bankruptcy court.”
“…This ‘inside the Beltway’ view–that loves to see the clashing of interest groups, that loves the drama… this intense competition over everything in Washington…is what a lot of people get up to do every day.”
Competition in our current government:
“Our constitutional institutions are becoming markedly less competitive…Federal spending and regulatory policies, from Medicaid to highway spending to the No Child Left Behind Act, are producing national uniformity in key functions of state government that are in special need of diversity and innovation.”
“What is true for the economy is not true for the government. Here we do not need to fix a competitive mechanism. We need to fix an organizational problem, and replace competition for power with cooperation to benefit all instead of the winning team.”
On the rise of regulatory agencies:
“Regulatory agencies are executive-legislative hybrids. They write and enforce rules—often with enormous economic consequences—under very broad delegations of authority from Congress. [These agencies] now exercise most of the domestic discretionary authority of the federal government.”
“The President and the legislature are generalists…The agencies are specialized and need to have the expertise that only trained professionals can provide.”
On America after the financial collapse:
“First, both the financial and health-care sectors will become much less competitive.…The other certain thing is that policy in the financial and health-care sectors will be relatively undemocratic and immune to public opinion.”
“Today’s remedy to the financial crisis, Dodd-Frank, is hardly the end of the story….For certain it has not ended the threat of further crises. We need to live with the business cycle to gain the benefits of the free enterprise system. But this also means we need to try to contain or regulate its adverse side-effects.”