Thoughts on the unsavory and oppressive relationship between big government and big business:
…one needs to remember that the New Deal was not the assault on big business that its fans claim. FDR may have talked a good game about going after “economic royalists,” and he did love confiscatory personal income taxes. But he and his Brain Trust also loved cartels, big businesses, and other “big units” of society. The notion that big business and big government are at war with one another is one of the great enduring myths of the 20th century. The truth is that ever since Teddy Roosevelt abandoned his love of trust-busting, progressives have liked big businesses big, really big. The bigger the business, the more reliable the partner for big government.
Contra popular myth/lies, It’s not libertarians who favor big business and corporations.
[Update late morning]
Not Japan — Argentina:
In visits to Asian capitals during the region’s financial crisis in the late 1990s, I often heard Asian reformers such as Singapore’s Lee Kuan Yew or Japan’s Eisuke Sakakibara complain about how the incestuous relationship between governments and large Asian corporate conglomerates stymied real economic change. How fortunate, I thought then, that the United States was not similarly plagued by crony capitalism! However, watching Goldman Sachs’s seeming lock on high-level U.S. Treasury jobs as well as the way that Republicans and Democrats alike tiptoed around reforming Freddie Mac and Fannie Mae — among the largest campaign contributors to Congress — made me wonder if the differences between the United States and the Asian economies were only a matter of degree.
On Wall Street there is an old joke that the longest river in the emerging-market economies is “de Nile.” Yet how often do U.S. leaders respond to growing signs of economic dysfunctionality by spouting nationalistic rhetoric that echoes the speeches of Latin American demagogues like Peru’s Alan Garcia in the 1980s and Argentina’s Carlos Menem in the 1990s? (Even Garcia, currently in his second go-around as Peru’s president, seems to have grown up somewhat.) But instead of facing our problems we extol the resilience of the U.S. economy, praise the most productive workers in the world, and go on and on about America’s inherent ability to extricate itself from any crisis. And we ignore our proclivity as a nation to spend, year in year out, more than we produce, to put off dealing with long-term problems, and to engage in grandiose long-term programs that as a nation we can ill afford.
Read the whole depressing thing.
The idea that libertarians favor big business and that an truly free market leads to oligopolies is an example of what Hitler called the big lie theory. You tell a lie enough times and people come to believe it is true.
FDR did enact legislation that made running a business more challenging. If what the author said is true, that FDR like big busness buddies, then it could be posited that he gave big business buddies breaks, thus showing that the two-faced liberal elitism machine was chugging along even then.
Yup. That sort of regulatory burden is why big businesses succeed when little ones can’t – the regulatory compliance costs are spread out over a larger scale. J.P. Morgan and Citigroup love regulations that make it really expensive to start a new bank. Less competition, especially of the disruptive innovation kind.
Mancur Olson wrote about this decades ago. The UK and the US are probably the most efficiently “captured” governments, since their governments have been around the longest for special interests to work their claws into. Starting over with a clean regulatory slate would do wonders for our productivity and economic growth.
In my opinion the only good involvement of government with business is antitrust. Anti competitive behavior hurts the public. Competition is the only thing that keeps prices from going through the roof.
“Competition is the only thing that keeps prices from going through the roof.”
Man, you said it! I remember when I went shopping a couple months ago for a new buggy whip, was I ever glad there were so many makes and models on display!
Maybe competition isn’t the only thing that drives price. Maybe demand has a part to play against supply when determining prices, as people aren’t quite the herd animals most politicoes and admen make them (read, us) out to be. And maybe – just maybe – technological innovation opens new markets that entirely supplant old and obsolete ones, thanks to the demand for the newer, better thing. Which is something that weaker-minded businessmen think of as a threat, instead of a new opportunity. As opposed to the smarter ones: There’s a reason Fischer Body (I’m sure Mr S. will correct the spelling) still has a carriage as its logo, despite having made carbodies for GM for most of its existence.
It’s a good point, Rand. But actually even small business only dislikes government to the extent it’s already in bed with big business. Small business would, as a rule, love to get government on its side, too.
I mean, business is quite correctly labeled by the Left as amoral (they only go wrong it continuing on to “antisocial” or “immoral”). But it is that way by its very nature, and any attempt to make it otherwise is as crazy and futile as trying to make hurricanes act morally, or in the public interest, et cetera.
The only keeper of the public morality is, duh, the public. It’s only consumers who really value — or should value, if they had their heads screwed on straight — the free market, because, as Adam Smith so forcefully pointed out, they are the only real beneficiaries of it. Business, no. Government, no. Both are forced to work harder for less return by the existence of competition and free markets. People in power, no. They have to convince people out of power to support them, not command.
Funny, is it not, that the most populist tool in actual practise, and that most favorable to the “common man” — the free market — is routinely condemned by those who pretend to speak on his behalf? Tells you a lot about those speakers, I think.
Tells you a lot about those speakers, I think.
You said it!
R Anderson, you are right. However, demand takes care of itself. Competition is the thing that gets bullied out of existence.
Don’t you silly libertarians understand that we need strong government to restrain the corporations that control the government?