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An important point about this, is to ask, who is more immoral, those asking for government favors, or those handing them out. If government took the lassiz faire approach to economic activity and didn’t provide favors, then there would be far less money chasing the favors (as well as less money used to avoid regulations that affect profitability).

In other words, “regulation” occurs because politicians want campaign cash to flow from the economy to their pockets.

Those people do not have any special powers that are not inherent in all human individuals. But because the power created is believed to exist within the institution created to hold them, then the persons holding that power will have it to use.

The moral hazards of the situation are inevitable because the power itself is non-existent as anything except a belief. There is never any basis for it’s existence other than a perceived need for it, usually some fear that is real or imagined, and the belief in the power by those who have it and those who depend upon it for their own peace of mind.

Because the power itself is imagined, it has no connection whatsoever to tangible reality. So any interaction between that power and the reality will be made entirely by the people who occupy the institution with the believed power, and not by the power imagined. The only effects that will be seen are those that are possible, not those that are imagined.

The distortions within society created by the beliefs in special privilege and positive rights will create malinvestments in both capital and trust. Business will comply because it must follow the will of the society as a whole, even if that society is under the spell of its own beliefs.

The problem starts by the creation of a system of government that contains positive rights as a force for the good of the society. From there, it’s all down hill. Those rights are a belief only. Never are they real. What is real is the use people will make of them because the society has an expectation of their use! The belief is not just within the institution that holds the power but also within the society that believes the power exists THERE within the institution.

Business, then, must follow the will of the society and so must dance the dance of institutionalized beliefs in institutionalized power. Is it any wonder that businesses grow to find the power useful when they grow large enough to reach it? Is it any wonder that people find it better to be driving rather be the road? Create a special power and someone will want to use it.