Pro-Business vs. Pro-Market
Econ prof Dr. Mark J. Perry quotes Luigi Zingales, professor of entrepreneurship and finance at the University of Chicago's Booth School of Business, interviewed in The Economist:
Why do you say that America's political system is degenerating into crony capitalism?There is not a well-understood distinction between being pro-business and being pro-market. Businessmen like free markets until they get into a market; once they are in it they want to block entry to others. Pro-marketeers want free markets at all times. The more conservative pro-marketeers are fearful of criticizing business, because they assume they will be seen as criticizing the free market. But we need to stand up and criticize business when business is not helping the cause of free markets.
In what way?
Take lobbying. Lobbying may once have been reactive but now it's proactive--businessmen use it to shape policy and ask for tax advantages. This is corruptive of democracy.
Politicians and bureaucrats have the power to write legislation and regulations that favor their benefactors. As long as they have that power there will always be plenty of rich benefactors knocking on their doors.
Big billionaires, big corporations, big bankers, big unions, lobbyists, special interests pay big money to politicians, both Democrats and Republicans, in exchange for even bigger paybacks and favors from the government, at the expense of American workers. They've been doing it for 200 years.
They're greedy and selfish, but they're not stupid. They wouldn't keep paying if they weren't getting what they’re paying for. And they'll keep getting it as long as the government has the power to sell it.
Concentrating power in the hands of politicians and bureaucrats is the surest way to concentrate even more wealth in the hands of the favored few. We know that from 200 years of experience. The solution is to take away that power from the government, and let the rich stand or fall on their own.
Ken R at August 28, 2012 3:08 AM
If you think this is new, you're sadly mistaken.
Jim P. at August 28, 2012 9:50 PM
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