Corporate Welfare

The Corporation and the State

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The latest debate at Cato Unbound is devoted to the topic "When Corporations Hate Markets." The lead essay, by the libertarian philosopher Roderick Long, argues that

Corporate power depends crucially on government intervention in the marketplace. This is obvious enough in the case of the more overt forms of government favoritism such as subsidies, bailouts, and other forms of corporate welfare; protectionist tariffs; explicit grants of monopoly privilege; and the seizing of private property for corporate use via eminent domain (as in Kelo v. New London). But these direct forms of pro-business intervention are supplemented by a swarm of indirect forms whose impact is arguably greater still….

In a free market, firms would be smaller and less hierarchical, more local and more numerous (and many would probably be employee-owned); prices would be lower and wages higher; and corporate power would be in shambles. Small wonder that big business, despite often paying lip service to free market ideals, tends to systematically oppose them in practice.

Not content to criticize lefties and conservatives who conflate the corporate state with laissez faire, Long argues that many libertarians have only added to the confusion:

If libertarians are accused of carrying water for corporate interests, that may be at least in part because, well, they so often sound like that's just what they're doing (though here, as above, there are plenty of honorable exceptions to this tendency). Consider libertarian icon Ayn Rand's description of big business as a "persecuted minority," or the way libertarians defend "our free-market health-care system" against the alternative of socialized medicine, as though the health care system that prevails in the United States were the product of free competition rather than of systematic government intervention on behalf of insurance companies and the medical establishment at the expense of ordinary people.

The whole article is here. Watch the Cato Unbound site for response essays by the liberal writer Matthew Yglesias, the leftist writer Dean Baker, and the libertarian writer Steven Horwitz.