by Mitch Kokai
Senior Political Analyst, John Locke Foundation
During my many battles fighting against cronyism, I have often been accused of being hard on government while letting businesses off the hook. This accusation is weird. Defending the free market is quite different from a blanket defense of businesses. I am pro-business only insofar as I am pro-market — that is, I’m “pro”-allowing consumers to spend their money as they choose, and “anti”-special privileges given by government to any business.
As usual, Nobel Prize-winning economist Milton Friedman said it best: “You must separate out being ‘pro free-enterprise’ from being ‘pro-business.’ … Almost every businessman is in favor of free enterprise for everybody else, but special privilege and special government protection for himself. As a result, they have been a major force in undermining the free enterprise system.”
Indeed, when you advocate for the free market system, you quickly learn that businesses are all in favor of competition, tax cuts and deregulation only until they aren’t — meaning, only until subsidies might benefit them. A good example is their well-known champion, the Chamber of Commerce. On one hand, you can always count on the Chamber to join in fights to reduce the burdens government imposes on its members. However, its leadership also frequently embraces loads of special favors for its members — favors such as export subsidies and targeted subsidies or tax credits.
The Chamber’s messaging says as much by highlighting that it is a group of businesses that supports the interests of its members. Like most business organizations, it doesn’t exist to support the free market, and will sometimes defend all sorts of government-granted privileges.
With rare exceptions, individual companies act similarly. If a subsidy is good for a particular business, it will seek it out. Sometimes a specific firm might even demand more regulation on its industry if it believes that it can better absorb the costs than its smaller or more innovative competitors can.