Via Jesse Walker comes a splendid Cato Unbound essay by Auburn philosopher Roderick Long, explaining why free markets and concentrated corporate power aren’t really mutually supportive, even if most defenders of “free markets” really are just a bunch of corporate shills. (Disclosure: I’ve been holding on to the title of this post for months.) Here’s the crux:
Corporations tend to fear competition, because competition exerts downward pressure on prices and upward pressure on salaries; moreover, success on the market comes with no guarantee of permanency, depending as it does on outdoing other firms at correctly figuring out how best to satisfy forever-changing consumer preferences, and that kind of vulnerability to loss is no picnic. It is no surprise, then, that throughout U.S. history corporations have been overwhelmingly hostile to the free market. Indeed, most of the existing regulatory apparatus—including those regulations widely misperceived as restraints on corporate power—were vigorously supported, lobbied for, and in some cases even drafted by the corporate elite.
As any regular reader of this blog is no doubt well aware, I love this shit – and it’s exactly this sort of idea that undergirds my take on raw milk and was an essential element for my argument for “culinary conservatism”. (My friend Tim Carney has written a nice book on the subject, too.) Long runs through a bunch of examples of this kind of phenomenon – corporate welfare, tariffs, monopoly privilege, eminent domain abuse, cartel enforcement, heavy regulatory burdens, tax breaks, intellectual property laws, environmental laws, inflationary monetary policies, and so on and so on – but then, after taking some well-deserved shots at the left and the right, urges libertarians to face up to their (our) own role in this charade:
If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that’s just what they’re doing (though here, as above, there are plenty of honorable exceptions to this tendency). Consider libertarian icon Ayn Rand’s description of big business as a “persecuted minority,” or the way libertarians defend “our free-market health-care system” against the alternative of socialized medicine, as though the health care system that prevails in the United States were the product of free competition rather than of systematic government intervention on behalf of insurance companies and the medical establishment at the expense of ordinary people. Or again, note the alacrity with which so many libertarians rush to defend Wal-Mart and the like as heroic exemplars of the free market. Among such libertarians, criticisms of corporate power are routinely dismissed as anti-market ideology. (Of course such dismissiveness gets reinforced by the fact that many critics of corporate power are in the grip of anti-market ideology.) Thus when left-wing analysts complain about “corporate libertarians” they are not merely confused; they’re responding to a genuine tendency even if they’ve to some extent misunderstood it.
This is all really good stuff, and while it should be chewed on with care – the interaction between government, genuine market forces, and the rest clearly creates one of those knots that are hard to untangle – it is absolutely brimming with important truths. Truths which I have a lot more to say about but can’t find the time (or words) right now. And truths which, one hopes, will be at the core of the F5GG agenda for the next few weeks (hint, hint). So read the whole thing; check back in for the scheduled follow-ups from Matt Yglesias, Steve Horowitz, and Dean Baker; and help fight Wal-Mart through capitalism!
P.S. In related news, see Mike Riggs on how the American Dental Association uses licensing laws to keep people in Appalachia from getting new teeth. More on medical cartels here, and also here and here (that last link is to a post of Prof. Long’s).