Saturday, November 07, 2009

Corporation Phobia

Tibor R. Machan

It is not altogether new that business corporations are besmirched. This isn't some particular attack on a bad company but a general dissing of corporate commerce, by the likes of movie maker Michael Moore and, earlier (and still), by consumer meddler Ralph Nader.

Moore explained to Sean Hannity of Fox TV News that he is not so much against capitalism as against corporatism, crony capitalism, and so far so good--so am I and so are many who champion free market capitalism. This is because business corporations often gain favors from governments, in return for their support of political candidates. Corporate contributions to campaigns are quite staggering, yes, and they may well tip the balance in favor of their interests as legislators write laws and regulations.

But why stop with business corporations? Universities are no less eager to influence legislators and regulators and often are more successful since they tend to be more circumspect about seeking support. Science departments are perhaps the most unabashed about soliciting funds, always, of course, because of how important their work is to the public. But farmers aren't far behind, nor indeed is nearly every segment of society--e.g., museums, theater groups, etc.

In our day and age it is routine for groups seeking resources to go to the government for them, as well as to private donors. Few in the public sphere who enjoy widespread respect and clout make the point that these efforts amount to blatant rip-offs. To demand that ordinary citizens be taxed for the benefit of these institutions is crass extortion--the politicians can ask because they have clout and could hurt them all with various public policies.

Such rent-seeking, as economists refer to it, really is dirty pool--not much different from players or teams in various sports insisting that the referees rule in their favor and against their opponents even without any infractions, in return for some payoffs. Or those in court battles approaching the judge and jury to insist that they tilt in their favor for a bribe.

Those yielding to the pleas, however, are far worse, much more guilty of malpractice, than those extending them. It is, after all, officials of the game and of those who govern society who took an oath to stay loyal to their calling. And what is that? To uphold the rules fairly and, the case of the latter, to protect the rights of the citizenry without favor or bias toward any of them. But the very nature of our welfare state undermines that oath since it involves robbing Peter to support Paul, while those who are administering this corruption skim off a good share of the loot.

Yes, indeed, it is wrong for business corporations to receive funds and other kinds of favors from government officials but what is far worse is for those officials to hand these out to a select number or group of them. It is, after all, they who are going directly against what they swore to do, namely, uphold the U. S. Constitution (which demands that everyone be treated as equal under the law, equal as the government administers its rules and regulations).

But, of course, that goal cannot be served in a welfare state, especially not when resources are scarce. So corruption is built into the system from the start. But it isn't mainly due to the rent seeking of business corporations but due to the willingness--no, out and out eagerness--of politicians to be bought by segments of the citizenry.

What would be cool, actually, is if both Michael Moore and Ralph Nader, as well as their admirers, recognized that the bad guys are mainly those in power, the politicians and bureaucrats, not the citizens who, various grouped, are trying to get in on the game of wealth redistribution. Sure, the citizenry mostly supports this but politicians and bureaucrats not only are free to but have the responsibility to refuse their pleas for such support. Let them find it among other citizens who would be parting with their own resources, not that of the public.

Yes, yes, I am sort of dreaming but not a completely unfamiliar dream. It is really what the American Founders were trying to bring about. I am simply insisting that they were right.

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