Weak article. A few quotes and comments:
Libertarianism is based upon solid intellectual and theoretical foundations of how a free-market society should operate, but when these free-market arguments are applied to defend the corrupt, cronyist, corporate state rigged market capitalism we have at present, the effect is not to support a free market, it is merely to excuse rent-seeking corporations that are beholden to state power.Amazon (for example) has been accused, here in the UK, of (legal) tax avoidance to a chorus of libertarian approval; “Hurrah! Starve the beast!” we jubilantly cry. Yet the costs that Amazon places upon the tax-payer are scarcely mentioned – in addition to taxpayer subsidised warehouses, Amazon deliveries are sent on roads paid for by taxation, its staff attended government schools and the NHS will treat their workers when they are sick.
“scarcely mentioned”? What nonsense. We have for decades explicitly and loudly made it clear that we completely oppose state schools, state medical care, state roads. And, we have routinely observed the ways in which big business is in bed with and uses the state to harm the consumer and its competitors — I have mentioned it several times myself in various areas, like IP and minimum wage, and others have too, of course — see footnote 2 of this post: http://archive.mises.org/14623/state-antitrust-anti-monopoly-law-versus-state-ip-pro-monopoly-law/ (I’ll quote from it below); and http://www.stephankinsella.com/2011/08/eliminate-the-minimum-wage-subsidy-to-big-business/
From this post of mine, “State Antitrust (anti-monopoly) law versus state IP (pro-monopoly) law”:
True, large corporations often lobby for and benefit from (relatively speaking) antitrust and other regulations, but still, remove their state-granted monopolies and remove state anti-monopoly restrictions, and let the free market work.
2. See note 10 and accompanying text of my article Reducing the Cost of IP Law (“Once again, as in the case of minimum-wage, social-security, and prounion laws, federal legislation works in favor of big business, … For a recent example, UPS is currently lobbying Congress to enact legislation that would redefine its rival, FedEx, as a trucking company rather than the airline it started out as in an attempt to make it easier for the Teamsters union to unionize FedEx drivers and raise their wage rates—and of course FedEx’s cost structure. See Del Quentin Wilber & Jeffrey H. Birnbaum, Taking the Hill By Air and Ground: Shift in Congress Favors Labor, UPS Over FedEx, Washington Post (September 14, 2007).
See also Murray N. Rothbard, Origins of the Welfare State in America, Mises.org (1996) (“Big businesses, who were already voluntarily providing costly old-age pensions to their employees, could use the federal government to force their small-business competitors into paying for similar, costly, programs…. [T]he legislation deliberately penalizes the lower cost, ‘unprogressive,’ employer, and cripples him by artificially raising his costs compared to the larger employer.… It is no wonder, then, that the bigger businesses almost all backed the Social Security scheme to the hilt, while it was attacked by such associations of small business as the National Metal Trades Association, the Illinois Manufacturing Association, and the National Association of Manufacturers. By 1939, only 17 percent of American businesses favored repeal of the Social Security Act, while not one big business firm supported repeal.… Big business, indeed, collaborated enthusiastically with social security.”); Llewellyn H. Rockwell, Jr., “The Economics Of Discrimination,” in Speaking of Liberty(2003), at 99 (“One way the ADA [Americans with Disabilities Act] is enforced is through the use of government and private ‘testers.’ These actors, who will want to find all the “discrimination” they can, terrify small businesses. The smaller the business, the more ADA hurts. That’s partly why big business supported it. How nice to have the government clobber your up-and-coming competition.”); Rothbard, For A New Liberty (2002), pp. 316 et seq.; Rothbard, The Betrayal of the American Right, 185-86 (2007) (“This is the general view on the Right; in the remarkable phrase of Ayn Rand, Big Business is ‘America’s most persecuted minority.’ Persecuted minority, indeed! To be sure, there were charges aplenty against Big Business and its intimate connections with Big Government in the old McCormick Chicago Tribune and especially in the writings of Albert Jay Nock; but it took the Williams-Kolko analysis, and particularly the detailed investigation by Kolko, to portray the true anatomy and physiology of the America scene. As Kolko pointed out, all the various measures of federal regulation and welfare statism, beginning in the Progressive period, that Left and Right alike have always believed to be a mass movement against Big Business, are not only backed to the hilt by Big Business at the present time, but were originated by it for the very purpose of shifting from a free market to a cartelized economy. Under the guise of regulations “against monopoly” and “for the public welfare,” Big Business has succeeded in granting itself cartels and privileges through the use of government.”); Albert Jay Nock, quoted in Rothbard, The Betrayal of the American Right, 22 (2007) (“The simple truth is that our businessmen do not want a government that will let business alone. They want a government they can use. Offer them one made on Spencer’s model, and they would see the country blow up before they would accept it.”).
See also Timothy P. Carney, The Big Ripoff: How Big Business and Big Government Steal Your Money (2006), and also Rothbard, Confessions of a Right-Wing Liberal (“This is the general view on the right; in the remarkable phrase of Ayn Rand, Big Business is “America’s most persecuted minority.” Persecuted minority, indeed! Sure, there were thrusts against Big Business in the old McCormick Chicago Tribune and in the writings of Albert Jay Nock; but it took the Williams-Kolko analysis to portray the true anatomy and physiology of the American scene. … As Kolko pointed out, all the various measures of federal regulation and welfare statism that left and right alike have always believed to be mass movements against Big Business are not only now backed to the hilt by Big Business, but were originated by it for the very purpose of shifting from a free market to a cartelized economy that would benefit it. Imperialistic foreign policy and the permanent garrison state originated in the Big Business drive for foreign investments and for war contracts at home.”)
See also the Wikipedia article on Rothbard: “Rothbard was equally condemning of relationships he perceived between big business and big government. He cited many instances where business elites co-opted government’s monopoly power so as to influence laws and regulatory policy in a manner benefiting them at the expense of their competitive rivals. He wrote in criticism of Ayn Rand’s “misty devotion to the Big Businessman” that she: “is too committed emotionally to worship of the Big Businessman-as-Hero to concede that it is precisely Big Business that is largely responsible for the twentieth-century march into aggressive statism…” According to Rothbard, one example of such cronyism included grants of monopolistic privilege the railroads derived from sponsoring so-called conservation laws.”
Patents are state-granted monopolies, which are in “tension” with antitrust law; you can have and use this monopoly, even though it technically seems to violate the antitrust laws, so long as you don’t abuse it. This means that the larger companies who amass the large patent arsenals (and cross-license with each other) sort of have immunity from antitrust law while smaller competitors are not only subject to the anticompetitive effect of the patent monopolies possessed by the big players but also subject to antitrust law still. Absent antitrust law perhaps smaller companies could cartelize somehow to combat the patent monopolies of the big companies–for example perhaps they could form defensive patent pooling arrangements–pools that might under current law violate antitrust (I am not sure, have not looked into it in detail). I.e., the antitrust law (maybe) gives enough of an exemption to big companies to acquire large patent monopoly arsenals and to cross-license with each other forming anticompetitive barriers to entry but does not give enough of an exemption for smaller companies to collude and cartelize and form defensive patent pools. I sense that this is basically one thing that is going on.
Another example would perhaps be Big Sports. If I recall correctly federal antitrust law had to grant a special exemption to certain college or large sports leagues, so that they would not be hampered by antitrust law. I can imagine that the combined effect of antitrust law and the special exemption might give some favoritism to the NFL etc. This may be on point but not sure it’s the only one:http://en.wikipedia.org/wiki/Sports_Broadcasting_Act_of_1961.
Update: See Jeffrey A. Tucker, Does Favoring Free Enterprise Mean Favoring “Business”?:
The first great error here is the mental habit that many have of thinking that big government and big business are somehow at odds. The whole of American history from the beginning to the present suggests precisely the opposite. From Alexander Hamilton to Goldman Sachs, a careful look at the history shows that there has been no major expansion of government that some sector of big business hasn’t backed with pressure and funding.
Who won from the mercantilism of the 19th century? Who came out ahead in the war socialism of Woodrow Wilson? Who was the major power behind the economic regimentation of the New Deal? What sectors of American life made out like bandits during World War II and the Cold War and the regulation of medical care and the American workplace in the 1960s and 1970s? Without exception, the corporate elite were behind every push for expanding the leviathan state.
The 19th-century history here has been carefully documented by Thomas DiLorenzo. Murray Rothbard has revealed the role of business in World War I. The postwar period through the New Deal is documented by Butler Shaffer in his great book In Restraint of Trade. The New Deal racket received a thorough exposé with John T. Flynn. The Cold War and after are shown to be radically probusiness in For a New Liberty, as well as Robert Higgs’s excellent works. And this is just the US case: it’s been true in every country where free competition was overtaken by state interventions.
Update: Antitrust vs. Trademark Law
And, from my post “Eliminate the Minimum Wage Subsidy to Big Business”:
Often people will decry tax breaks to certain businesses or industries on the grounds that this amounts to a “subsidy.” Of course it is false that letting people keep more of their money is a subsidy, but it is true that unequal tax rates (or breaks) can distort the market and benefit the more lightly-taxed business relative to more heavily-taxed ones. In any case, because of the distorting effect of tax breaks, various progressives and light-socialists label them subsidies and on this ground urge their abolition–i.e., to raise taxes on those taxed more lightly to equalize the tax burden (when the appropriate solution is to lower taxes on those more heavily taxed).
But if you go by the logic of the raise-taxes-by-closing-loopholes socialistic crowd, what about regulations that help big business by disproportionately harming smaller companies? For example FDA regulations, patent law, pro-union legislation, environmental regulations, and the minimum wage. The costs of these socialistic regulations are more easily borne by larger companies than by smaller ones. Case in point, Walmart has pushed for a higher minimum wage. But Walmart already pays above minimum wage, so raising it would barely affect them. But it would impose costs on various Walmart competitors. So Walmart gets to advocate for what looks like social justice, while hobbling its competition. Clearly the minimum wage (and other regulations) is a subsidy to big business, following the logic of those who oppose tax loophole “subsidies,” and thus ought to be eradicated.