Several conservatives howled this week when the U.S. Patent and Trademark Office decided to stop enforcing the Washington Redskins' trademark because it is a racist disparagement of Native Americans. The Tea Party News Network blasted the decision as an act of government tyranny. Rush Limbaugh opined that the cancellation was nothing more than the domination of "statists and authoritarians" with "sweeping power."
Such reactions are largely clouded by confusion about the nature of the government's involvement in the economy. This is unfortunate.
First, let's clearly describe the Patent Office's actions in this case. The Patent Office did not fine the Redskins. It did not arrest or jail anyone associated with the Redskins. It didn't even tell the team that the name must be changed.
Instead, the Patent Office declared its future intention to literally do nothing. It decided that, because there are racially derogatory slurs involved in this trademark claim, the government is going to sit on its hands and stay out of the matter altogether. In short, the Patent Office has abdicated its role in regulating use of this name, instead opting for a small-government, hands-off, libertarian stance on the question of who can use "Redskins."
Now, anyone may use the word however they'd like, including the Washington Redskins organization. The football team can still do whatever it wants with the word, as always. Nothing changes for them. It's just that now everyone else can do whatever they want with it as well. The team's liberty with respect to the word is unchanged. Everyone else's liberty with respect to the word is expanded.
The problem for the team, of course, is that it makes a lot of money off of the government restricting everyone else from using the word. When the government gives the Redskins organization a monopoly over the use of that word — which is what a trademark is — the team can leverage that monopoly to get other people to pay them money to use it. Vendors who want to use the word to sell shirts and hats know that the government will go after them unless they pay for the team's permission. Vendors are thus forced to strike a deal and pay the Redskins organization to keep the police at bay.
By revoking the trademark, the Patent Office has not intervened in the economy with the heavy hand of big government. Quite the contrary: It has withdrawn itself from the economy in this particular area. Previously, it helped the football team by giving them a monopoly on the word and promising to go after others who violated that monopoly. It won't any longer.
Nonetheless, commentators continue to describe the situation in exactly the opposite way. For instance, Sally Jenkins at The Washington Post cast this development as "the mobilization of the U.S. government in favor of a correct sensibility," when it is in fact the immobilization of the U.S. government with respect to propping up racist slurs. Likewise, The Wall Street Journal views the patent cancellation as the Obama administration dictating sports nicknames. Erick Erickson of Red State made a similar error, chalking up the patent decision to tyrannical liberals who, he claims, "will turn the power of government against you." But this is precisely the opposite of what took place.
Few people actually think hard or clearly about the nature of our government's role in the economic system. We become so habituated to various government-enforced institutions and rights that we cease to even see them as governmental. For instance, when we think about intellectual property like trademarks, we just imagine them as some passive property right that somehow sits with its owner. We don't see them as a perpetual ongoing government battle to keep people from copying certain patterns and words, which is what it really consists of.
Because we don't see the government action, the withdrawal of that action ends up looking like action itself. When government involvement is experienced as non-involvement — as it often is when it comes to the vast array of economic institutions the government enforces daily — then non-involvement gets experienced as its opposite.
The entire economic system rests upon government actions just like those involved in the holding of the Redskins trademark. A contract is nothing but an instrument that binds the state to enforce its provisions. Property is nothing more than the government acting so as to exclude everyone but one person (or corporation, which is itself a legally-constructed entity) from a specific piece of the world. When you drill down, the economic structure is a government program involving constant government action and well-placed threats of force.
Government intervention is the engine that makes the economy what it is. Watching what happens when that intervention is occasionally removed, as in the Redskins trademark case, should make that as clear as day.