When we discuss politics, my moderate and liberal friends often address me as the defender of business interests. As they see it, liberals represent “the people” and conservatives represent “big business,” while the government weighs both sides and develops policy. But this interpretation is both misleading and harmful. It certainly sounds better to side with the people than with big business. Framed this way, it’s easy for liberals/Democrats to elicit support from the less informed among us.
Unfortunately, some Republicans have not contributed to this misunderstanding in recent years. Rather than seek to reduce the influence of government, many have been content to counter each big government anti-business policy with a big-government pro-business response. When liberals raise taxes, conservatives call for tax breaks. When liberals pass more regulations, conservatives call for exceptions. Instead of arguing for limited government, many conservatives today make the case for balanced government.
Whereas a limited government allows individuals to retain their liberties, a balanced approach empowers Washington to weigh the arguments of the special interests and make decisions for us. Relinquishing that power to the federal government gives CEOs the incentive to focus more on government policy than on their products and competitors. In such a system, profitable companies are the ones that successfully navigate the maze and complexity of government intrusion, not the ones that produce the best products and services at the lowest cost. The extreme case of this arrangement is called fascism. The less extreme but equally odious version is called crony capitalism.
Neo-Marxists like crony capitalism because it allows government to exert great influence over business activity without actually having to accept responsibility for production. Many CEOs like it as well, because only big business gets a seat at the table. Small companies and would-be upstarts are excluded from the negotiations. In exchange for their support of government intrusion—higher taxes, healthcare mandates, regulation, and so on—big business gets favorable treatment from their government partners. The government policy that follows tends to crush small and growing companies the most.
Crony capitalism has been around for a long time, but it’s become much more pronounced since Obama was elected President. Just last week Obama formed a new economic advisory panel, the “Council on Jobs and Competitiveness,” ostensibly to give big business a voice in economic policy. The chair of the panel, GE’s CEO Jeff Immelt, is a long time supporter of the President. But Immelt is more of an opportunist than a capitalist. Indeed, his company is arguably the greatest beneficiary of the government bailout. Recall that TARP was originally designed to assist a specific group of financial institutions, but was expanded for GE’s benefit. To date, GE Capital has issued about one-fourth of the $340 billion in debt backed by the government’s TLGP (Temporary Liquidity Guarantee Program).
I haven’t heard anyone in the administration answer several important questions. Why is this new panel necessary? Is this an admission that Obama did not consider the unintended but easily predictable effects of his past economic policies on U.S. business interests? Why won’t the President just pursue a hands-off pro-market economic policy that alleviates the need for special representation of any kind? In the end, it’s all about centralized authority. It’s time we address this head on. Crony capitalism is not really capitalism at all.
You’re wrong Parnell. Pure capitalism creates the cronies and government is just the vehicle. Capitalism allows corporations to profit from dishonesty. Government is the check on the dishonesty. Without government, all capitalists are cronies. This is why only a mix of capitalism and socialism will work.
you’re missing the point lefty. There are scoundrels everywhere. Capitalism allows companies to profit when they serve the public well. Cronies can’t survive in a pure capitalist system. They need help from government, which you get in a mixed system.
Leftists have it bass-akward. Take lobbyists as a symptom of the problem. Liberals complain about lobbysits all the time. Actually, most of us do. Why? Lobbyists swarm all over Washington because that is where the money is. I’ll bet you lobbyists in Washington have increased substantially since President Obama took office. Health care lobbyists are probably off the charts in numbers. Downsize gov’t and the many lobbyists will be out of work. I know, I am in business and lobbying is a distasteful yet necessary part of the deal because of the influence of government.
One more thing. People are not inherently dishonest. Neither are corporations. Those that are eventually pay the price. We have laws. It is disingenuous for leftists to say that without government corporations would run amok on people. Conservatives are not anarchists. We understand the necessity for laws and courts and justice. These are the backbone of a civil society.
We sometimes forget that both government and corporations are made up of people. They are not entities in themselves, but comprised of the people that make them up. The check on the people that run corporations is the people that run government who are empowered by the people that vote. When the voters are ignorant or misled, or the people in government are influenced by lobbyiests and those with agendas, or the people in corporations use the system as a tool for personal gain, then there is a problem. The whole key here is the vigilance of the voter, and the loyalty of the politician to that voter as his first priority.
The purpose of a business is to make money for the owner. Some succeed, some fail. In our system, they must be allowed to do both. Over the years, reasonable regulation has been expanded to limit growth and prevent failure at the same time. Government cannot be the overseer of everything business, especially when the senior leaders know nothing of business and are influenced by politics more than experience and knowledge. Our system created by the founders of limited government and capitalism got us to where we are and needs to continue. Our standard of living and greatness are not a result of government intervention into business. It is a result of the freedom to create and grow business and innovation through a capitalist system. An infusion of socialism into the system does nothing but weaken it, and us.