Often as not in the broad strokes of the American political
debate, Big Business is presented as Exhibit A in the case against
free-market capitalism. Yet large companies’ lobbying dollars
frequently encourage more government regulation, not less, stifling
pesky competition from non-behemoths, eliminating the all-important
“loss” bit from the “profit and loss” and subverting the “invisible
hand” which ideally creates market equilibrium. Thus, a convenient
free-market bogeyman such as Enron fought for price-controls in the
California electricity market as well as the Kyoto Protocol,
Phillip Morris begs for FDA regulation, Boeing and Wal-Mart drink
mightily at the trough of government largesse and farm subsidies
for agribusiness still aren’t dead.
In his new book The Big Ripoff — out today from Wiley
— Timothy P. Carney explores in a meticulous-yet-highly-readable
fashion how the collusion of big business and big government
depletes the savings accounts of average Americans, fills the
coffers of regulation-adoring politicians and damages the cause of
free-market capitalism in the United States. Carney kindly took
time to answer a few queries below:
Despite the unambiguous evidence you’ve collected in your
book, the idea that “pro-business” is synonymous with “pro-market”
is fairly pervasive in the collective American consciousness. You
call it a myth. After decades of reinforcement, though, how
difficult is it to pierce that fog and shine a light on the
truth?
This is precisely what I hope to accomplish with the book. I
want the reporter who sees Philip Morris endorsing FDA regulation
of cigarettes to stop saying, “in an interesting twist….” Part of
the problem is that journalists are scared of the business world.
They distrust people who make money, and they also are convinced we
would get another Great Depression if the government left us all to
our own economic selves. As long as reporters keep putting both big
businessmen and free-markets into the “scary” drawer in their
brains, then the myth will stay alive.
Do people who believe themselves free-market conservatives
unwittingly aid the forces of regulation with reflexive defense of
big business against liberal attacks?
Yes, and if my book does any good, it will be to make sure big
business stops getting a free ride from the advocates of free
markets. In the book, I tell the story of a young conservative Hill
staffer eager to meet with a Philip Morris lobbyist because of how
much the media and the Left have vilified the company. Then he gets
his heart broken when the company tells his boss to support FDA
regulation of tobacco. Still, the next time Philip Morris comes
calling, the Republicans and conservatives will open their doors
much wider than they would to some consumer group. Companies win
goodwill with the mainstream media, bureaucrats, and the Left by
seeking bigger government. We shouldn’t let business get that
Left-love for free. There is a lot of profit for big business in
seeking government protection. Conservatives and libertarians need
to make sure there is also a cost in terms of goodwill.
Likewise, would liberals and the
anti-capitalism/globalization crowd be horrified to learn how often
big business is their ally? Or, at the very least, how big
government aids Wal-Mart or how Jimmy Carter helped Rupert Murdoch
find his American footing?
It depends. Many on the Left want government control for the
sake of government control. If that helps Goldman Sachs, so be it.
I think Chuck Schumer is the key example of this. On the other
hand, most young liberals hate big business almost as a matter of
principle. If these liberals read my book, they might begin to
question the wisdom of big government.
Do both parties have a vested interest in maintaining the
hardened stereotypes of liberal Democrats as foes of big business
and Republicans as patrons of the unfettered marketplace, however
little relation to reality either holds?
The Big Myth, as I call it, certainly is a useful thing for both
sides. It allows Democrats to slander limited-government advocates
as corporate hacks, and it enables Republicans to fool their
small-government base. On the flipside, the Big Myth allows
Republicans to attack big-government liberals as “anti-business,”
but also enables Democrats to haul in corporate cash while
pretending to fight for the little guy.
From the outset of The Big Ripoff you declare the
book is “about how the regular guy or gal is ripped off” and,
indeed, one of the great strengths of the book is in the micro
level human stories you found to illustrate your macro level point,
especially in the sections on Eminent Domain and tax increases. Did
that research and those interviews bring the negative impact of big
business-big government collusion more to life for you?
If I were to write a second book, it would focus even more on
the victims of the ripoff. Sitting down with Bill Brody in his
hardware store in the Bronx as he described how the government took
away his property — his retirement — really brought forth the
human side of the kind of things we talk about in Washington all
the time: the cost to regular people of central planning and big
government. When landscaper Gary Rissmiller told me that a new
state law on weed-spraying was costing him $20,000 every year that
number loomed much larger than the billions I already knew
regulation drained from the economy.
It goes beyond saving taxpayer money, though, doesn’t it?
You talk about how corporate welfare contributed to nuclear weapons
proliferation, for example.
When a government does something, it implicates its citizens. If
Motorola is aiding the Communist Chinese military, I can sell my
Motorola stock and get a Nokia phone. If the U.S. Export-Import
Bank is subsidizing a known proliferator of nuclear weapons
materials, I don’t have the option to stop paying my taxes. This
means that you and I are aiding the China National Nuclear
Corporation. We are complicit in the CNNC’s activities.
You ably describe the bipartisan coddling of big business in
Washington, D.C. FDR was in bed with big business. Nixon was in bed
with big business. Carter. Reagan. Bush. Clinton. Bush, again. Yet
America is still a fantastically prosperous country. Have we been
kept from meeting our full potential? How would life improve in an
era where big government plays by the rules of the market?
I suspect the main losses are in ingenuity, innovation, and
entrepreneurship. It’s a cliche, but small businesses hold the most
potential for real contributions to this country’s prosperity. Big
businesses play great roles, too, in helping drive down costs and
employing lots of people. But the key point here is that giving
consumers and investors more control over their own money will
result in a more efficient allocation of resources.
I’ve always felt that one of the challenges for true
champions of civil liberties is that only one half of the country
is ever interested in the cause at a given time. Do those who would
like to see the big business-big government marriage annulled have
a similar problem? Are partisans always going to give their team a
pass on these issues as the price of victory? And if so, what is
the prognosis for real change?
I think you exaggerate the problem. If you’re talking about
politicians, you’re 99 percent right about the lack of principle.
If you’re talking about the media, activists, and the public, I
think you’re only 50 percent right. But still, high-stakes politics
does hurt the cause of limiting government. The chance of changing
things for the better? It’s pretty low. I wrote this book and
articulated the problem, but you’ll notice I don’t too much
prescribing solutions. As a conservative, I am wary of
“solutions.”
We can do incremental things to make the situation better. We
can start by no longer giving big business a free pass. I
personally will start by trying to draw media attention to how much
big business profits from regulation. The key is getting this
information out there: regulations help big business and hurt
little guys. Once that idea is more commonly understood,
politicians will be less likely to do big-business’s bidding in
calling for big government.
