But over the years, I found myself forced to refine my views regarding business firms. Three lessons stand out. First, being “pro-business” is not the same as being “free-market.” Second, regulation, which presumably works “against” business, goes hand-in-hand with special privileges and artificial protections “for” business. Third, the phenomenon of active and routine collusion between business and government made the business world seem less than the pure and benevolent social agent I once perceived. In short, I began to recognize that the concept of “the corporate welfare state” goes a long way to describe some of the problems we observe in the complex nexus between the market sector and the government sector. All too often, businesses lobby government for special privileges they would not have in a true, free market...
Examples of Privilege
Bailouts. Clear-cut examples of artificial, government-granted privileges include bailouts, such as when a large firm or industry is losing money. The government gives the failed entity cash or cheap loans, or allows it to write off its creditors without liability, so it can resume business despite its poor performance. Recent examples include banks and auto manufacturers.
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My thoughts: A timeless article written in 1995.
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