There is many occasions that I have to defend the free enterprise system or what the Marxists call capitalism to those on the ideological left. The argument always leads back to the liberal explaining how big businesses is taking advantage of the people down below. When the left begins to allow logic to slip from their hands while their religion of liberalism is exposed for the ignorance that it is, their faith-like offense becomes the defense by class warfare. At this point the conversation breaks down and often the end is an agreement to disagree.
It is always the intention of each side to explain the way they see things in order to influence the other side to stand on their site. What is frustrating about debating a devout liberal is the breakdown in their logic while discussing empirical data, the laws of economics, or even natural law that proves them incorrect. Trying to convince them that the public sector taking wealth from the private sector and giving it back to the private sector doesn’t create wealth is a perfect example of this. It makes no logical sense at all but somehow stealing or what the socialists call wealth distribution does not advance society and create wealth.
So I often try to step on their side of the fence in order to explain how their dialectical logic is void of reality. Of course when you jump to their side of the fence there is that pesky little deposit that the puppy left that you step in that forces you to use leftist analogies that you wouldn’t often make with your successful logical friends at the business brunch. So with this in mind, let’s ignore the puppy poop for a minute and logically weed through the liberal garden.
We often hear that big oppressive capitalistic businesses like Exxon, Walmart, Haliburton, and Bank of America destroy the middle class with their greed. We often hear that they give huge campaign contributions in order to gain market share so they can conquer the world with their poisonous polluting self interests. We often hear that they muscle out the mom and pop shops with their cheep prices and fancy store fronts. We often hear that the virtues of television are being destroyed by advertisements and that commercials should be outlawed. It is always the big business that is ruining life in America. When this “2 of spades” is played at the poker table of political debate, I always reach for the question labeled the “ace of spades” – logic. What creates big business?
Now remember what side of the fence that we are on. I always go back to regulation. Those on the left always see that regulation is the answer to fixing the ills of society as if regulating something creates more of it. It is the old Marxist argument of quality vs quantity and that regulation creates quality. In fact without the environment of pure communist utopia, quality is destroyed by regulation. The environment of massive industry regulation works for liberals until the river that they diverted breaks from its levees and returns to its natural intended route which destroys all that the levees intended to protect. When the levees break like their regulations that failed when the housing market collapsed, they reach out to ridicule and blame the river as if it did something wrong rather then the stupid faulty regulations that they installed. After all what is different between the wants and desires of the millions of citizens in the country and the millions of gallons of Mississippi water that flow into the Gulf of Mexico every minute. There is no difference. The laws of economics are natural as the flow of a mighty river.
So back to the question; what creates big business? Let’s use the cable industry as an example. Imagine that you have a cable company that offered a buffet of options. Instead of buying a package 50 stations, you could buy stations individually based on what you wanted to watch. As I remember what side of the fence and what I am standing in I say, “If you didn’t want Fox News you would not have to purchase it. Think about how great that would be as well as how cheap it would be. The quality of the television experience would be ideal for you as an individual. Instead you could simply buy MSNBC like the other four people that bought it.” Well why is it that this can’t be done? Well it goes back to regulation. The FCC regulates cable rates because they try subsidize the lack of demand for local affiliates. So while trying to ignore the smell of menacing regulation, it is apparent through the odor that the regulation of this industry has simply made it more expensive to have cable. I just can’t buy MSNBC, now I have to pay more for the channels that I don’t watch like high school croquet matches.
So if I was an entrepreneur and had an idea that would revolutionize and innovate television and I wanted to get into the cable business, I would have to abide by the expensive regulations. So the regulations do what they are intended to do. They limit me from doing business without subsidizing the unsuccessful. It is a major hurdle that keeps companies like Cox Cable and Comcast at the top of their game. Is there any wonder why big business donates money to the same people that create massive regulations for their own industry? What better way to defeat your competition then eliminating them with regulation.
The regulations are the bouncer at the door, making sure that you are the person that the ruling class wishes to allow onto the playing field of success. So now that the cat is out of the bag, we must ask the next question. What creates lobbyists? Uh oh… We always hear the left screaming about the rich capitalists who send their evil lobbyist to pad the pockets of politicians so they can get preferential treatment in the market place. It is kind of like slipping the bouncer a hundred bucks to let you in the door. If the market was truly free, why would anyone have to pay a politician have to succeed in the market place? If we eliminated the need for lobbyists, wouldn’t the market place be a more equal playing field? At this point wouldn’t the authentic quality products rise to the top in the free market system? Think about it.
The left is always talking about favoritism and crony capitalism as if it is the true nature of free enterprise. So who are the cronies? It is the government that makes the regulations. Regardless of party affiliation, the rules of the playing field are influenced by self interests of the politician. Whether it is political self interest or the interests of monetary gain, what is the difference? We can all lie to ourselves and think that all elected officials perform their duties as if they are angels. The fact is, the more rules and regulations that we allow them to make the more power they wield. You can bet they will use this power when an attractable self interest appears before them. And after they are long and gone, the repercussions of their regulation will still be there. It was best said by Reagan that “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!”
So now that we have flipped the liberal’s argument of free enterprise creating huge monopolies, lets look at the most regulated businesses. There are a dozen or so huge oil companies and a dozen or so electric utility companies that we can choose from right? How many electric companies do you have to choose from in your neighborhood? If you got upset with your energy company, what other choices would you have? How many BP and Exxon stations did you have to pass up to get to a station that supplied gas by a company that hasn’t had a major oils spill? Why haven’t these companies converted their primary methods of energy development to more efficient renewable forms of energy? How many regulations does an energy company need to go through in order to produce energy? How many permits do they have to have in order to create energy? How much money would an entrepreneur need to have or raise in order to start up an electrical company? Think about it. Is it the lack of regulations that has kept innovation from coming up with a renewable solution or has regulation not allowed the innovator through the door? I think we have illustrated that pretty clearly.
It is apparent through our discussion here that regulations reduces the options available for the consumer as well as creates a wider divide between the big companies and the small companies. It is obvious that the virtues of companies are not determined by good products and good business but rather buy politicians. It is obvious that the lobbyist is created by the need to pay the powerful regulation defining ruling class politicians in order to get an edge in a extremely difficult playing field. It is apparent that free enterprise has been replaced by crony-capitalism. So when you are confronted by the ill-witted liberal that spouts their creed of regulations of the big business, ask them why big business would pay the same regulators that make business more expensive for them. Ask them why would big businesses need lobbyists if politicians have the power over their production. So now that we clear this up, clean off your shoe and return the sanity of “right” side of the fence.