by Locker Room contributor
In Adam Smith’s monumental book, The Wealth of Nations, Smith used the British East India Company as an example of how monopolies could corrupt the capitalist system, putting justice and freedom in harms way. By dominating the market through corrupt and unfair means, unchecked by government rules, the British East India Company used its power to control government policies. This insured their dominance in the market. And because of this, posed a threat to the prosperity of free market enterprise.
Now, compare the striking similarities between this company and the many companies who are now gaining incentives both at the state and local level. By pitting states against states and then cities against cities (within the same state) for bids on the sweetest deals, companies not only hurt consumers, they hurt the economic system in which we live in.
As the East India Company has done before it, current companies who search and receive incentives are gaining government subsidies. These subsidies allow the company to move freely within the market, destroying competition through their new influence bolstered by the government. Eventually, the East India Company’s greed led to their downfall: too much power gained without enough responsibility taken.
Something to think about down the road, if it is indeed true that history repeats itself.