The Benefits of Deregulation
Or: How many venti Starbucks does it take to buy a Tesla Roadster?
Let me be up front about something: I majored in Political Science in college because I wanted sound arguments against all the government and corporate fuckery going down in this country in the late 80s, because well-intentioned people will listen to sound arguments and eventually the world becomes a better place. What I’ve learned in the intervening 30ish years is that “government and corporate fuckery” is the norm. Chalk it up to youthful idealism. Nevertheless, a Bachelor of Arts in Political Science and 30+ years of cynicism have had two lasting impacts on my life: 1) I’m an absolute blast at cocktail parties, and 2) I like to cuddle up with a good treatise on governance from time to time.
So I recently had the joy of reading Herbert Spencer's The Man Versus the State. If you think the Trump/Musk administration is all about deregulation and limiting the state’s role, Spencer was way ahead of them. The whole "get the government out of the way" rhetoric that Trump and Musk spout like it’s some new-age gospel? Well, it’s basically Spencer’s blueprint for the state in his book, though I’m willing to bet neither of those two have ever cracked open a Spencer text, given their commitment to education (See: Trump University. See also: Elon flunks everything)
For context, Spencer was a Victorian-era English philosopher and social theorist, best known for applying evolutionary theory to human society. He was the self-proclaimed architect of “social Darwinism,” an idea that human societies evolve according to the same principles that Darwin applied to nature—survival of the fittest and all that jazz. In The Man Versus the State, he argues for a minimal state, one whose only job is to protect private property, and anything beyond that is not the state’s concern. Nice, right? If you’re a billionaire. Not so great if you’re trying to scrape by on a working-class paycheck.
The book’s central thesis is pretty simple: A limited state, focused exclusively on the protection of property, is the ideal form of government. Spencer believed that the state should intervene only to protect the wealthy from each other—anything else would just be, in his eyes, meddling. Here’s a prime example from Spencer himself: "The state is the trustee of the people's property, and the duty of the state is to maintain the rights of individuals to their property." Not to provide health care, or a safety net, or, God forbid, regulate the excesses of the rich. Just property protection. All the rest? Not the state’s business.
The American working class, fed on the myth of the small business owner being crushed by regulations, has been sold a bill of goods. We're told that government regulations are the enemy of entrepreneurship, that the bureaucrats are lurking behind every corner with their rulebooks, ready to ruin someone's dreams of opening a corner store. While that narrative is appealing, it doesn’t fit the facts.
Here's the thing: A tiny fraction of the U.S. economic output comes from "small businesses." According to the U.S. Small Business Administration, small businesses (defined as businesses with fewer than 500 employees) contribute about 44% of total economic activity. Meanwhile, large corporations, many of which operate on a global scale, rake in the bulk of the profits. In fact, a 2023 study by the Institute for Policy Studies found that just the top 1% of U.S. corporations account for more than 50% of all business income in the country.
So, no, it’s not your local bakery that’s getting stomped on by the man—it’s the multinational tech and finance giants, and they’re doing just fine.
And the idea that deregulation helps the “little guy”? That’s a joke. Regulations overwhelmingly target big corporations, especially in sectors like finance, tech, and healthcare. Meanwhile, many of the labor protections—things like the 40-hour workweek, minimum wage laws, FMLA, and Social Security—actually benefit the working class at the expense of corporate owners. So when we hear about deregulation, it’s clear that what’s really meant is: Make the rich richer.
I don’t know about you, but I have a hard time grasping the enormity of Musk’s $432.3 billion dollar net worth. So I did some fun math. TRIGGER WARNING: massive anachronisms ahead.
Let’s say a Neanderthal born 40,000 years ago likes to stop by Starbucks on Broadway in NYC every day to buy a venti Pike’s Place for $4.30. If he instead put that money into a savings account with compound interest at the current Fed interest rate of 4.5%, he’d have about $1.5 trillion today.
These numbers still too big to be real? Try this: the difference between $1.5 trillion (the 40,000 year old Neanderthal) and $432.3 billion (the 53 year old Musk) is the same as the difference between a single venti Pike’s Place in NYC ($4.30) and two - not one, but two - Tesla Roadsters ($200,000 base price).
If the above comparison between the savings of 500 lifetimes and one man’s wealth doesn’t demonstrate how deregulation and the limiting of state power in the name of protecting private property creates a playground where the rich can get even richer, leaving the rest of us to fend for ourselves, I don’t know what does.
Also, I really want a coffee right now.
All that being said, Spencer was a tiny bit more nuanced than the average deregulation cheerleader. He did recognize a responsibility for the state to intervene in cases where harm is caused, particularly in preventing crime. "The state is the natural agent to prevent harm," he said. But harm from individuals committing crimes, not harm from corporations exploiting workers. A whole lot of people getting crushed under the weight of corporate greed? That doesn’t count as "harm" in Spencer’s world. That’s just the natural order.
So executing corporate CEOs on the street is out - but sweatshops and poison in the public water supply are on the table, baby!
But Spencer was a well-intentioned person. He truly wanted the best for everyone, and he believed in man’s better nature. He reassures us, "In the course of time, as men become more intelligent, they will come to see that their interest in social well-being is identical with the interest in individual well-being." And also, that "The natural progress of things is for liberty to lead to inequality, and that inequality to lead to more liberty." Isn’t that comforting? Don’t worry about the 99% because man’s altruistic impulses will eventually smooth everything out.
How’s the whole altruism thing panned out, you ask? In 2023, U.S. nonprofits raised about $550 billion. In contrast, if the top 5 global companies in terms of revenue - Walmart, Amazon, Berkshire Hathaway, Apple, and CVS Health - had been taxed at the US corporate rate from 1942-1945 (around 38% back then), they would’ve paid a combined total of around $980 billion in taxes.
Just think about that for a second. If we were taxing these behemoths at the same rate we did when taxes on corporations - not people - were actually high, we could fund a whole lot of social programs.
But hey, don’t worry. Just like Spencer, Trump and Musk assure us that the rich will ensure prosperity for all, just as soon as we get rid of those pesky regulations.
Creative Process Transparency: This article was collaboratively written using generative AI. The article’s argument and framing were developed by me, while drafting and refinement were completed with ChatGPT. Final edits and narrative choices remain my own. Based on our established attribution model, this article reflects an approximately 85/15 division of contributions.
The core issue IMO is that Spencer's design wasn't created in the era of trillion dollar companies being a possibility. Just like the founding fathers didn't mean for citizens to bear arms using automatic assault rifles. Since you know, they didn't exist. Now that these anomalies exist, it only makes sense to regulate them, not claim 200 year old philosophies are future-proof.