Last week (March 24), Businessweek’s Paul M. Barrett took on a proposed law that he said “would impede [regulatory] oversight not just of nuclear reactors but also of oil and coal facilities, food processing plants, pharmaceutical factories, and all manner of transportation.” Quoting the unctuous Senator Orrin Hatch as decrying “anti-competitive . . . regulation,” Barrett characterizes the bill as an attempt by Republicans to institute some wild, unsafe free market.
If passed into law, Barrett says, the bill would give “powerful corporate interests a backdoor opportunity to smother regulation,” “[tying] the hands of federal employees charged with protecting consumers.” Oddly enough, Barrett identifies the “human tendency to cut corners” as the reason that free markets must be inhibited from walking all over consumers, that the regulatory state must intercede as benevolent guardian.
Especially exasperating is Barrett’s credulity toward the standard Republican account of “free enterprise,” his willingness to take the pro-competition rhetoric of the political establishment at face value. Like his foil, Senator Hatch, however, Barrett falls into the wonted delusion of conflating “anti-competitive” and “anti-business,” and accordingly anti-regulation and anti-consumer. Further, while noting the perils of regulatory capture and the “revolving door” between corporate and state bureaucracies, Barrett nevertheless regards federal agencies as the last hope for the common man.
Well, if they’re our last hope, then there really isn’t any way out of state capitalism’s shrewd schemes to bleed us dry and sell us poison. Barrett never bothers to consider, though, what it is that enables corporations to “cut corners” against the interests of consumers. If he did, he might notice that the state’s regulations have created a system wherein, as Stanford economist Roger Noll observed, “They [businesses] don’t have to collude, they don’t have to form a cartel.” No, the state has taken care of the preconditions of monopoly for them, erecting a framework of truly anti-competitive rules that are very much pro-business.
Any honest look at the present economic system reveals quickly and plainly that the power and property of the usual Big Business suspects was gained not by anything approximating a free market, but by state-granted privilege. Conscientious libertarians, those concerned with property as a natural right, shouldn’t feel any particular obligation to defend the “private property” interests of the state’s elites, which are just the ill-gotten gains of a fundamentally anti-competitive structure.
The spoils of the giant multinationals, rather than resulting from free and voluntary exchange or through legitimate homesteading, are the product of their ability to use the state — through Barrett’s revered regulations — to monopolize important sectors of industry. Through suffocating “consumer protection” regulations, Big Business precludes challengers from below, potential competitors that don’t enjoy the protection of the state.
There is no myth more useful to the plutocracy at the helm of the state’s economic mechanism than the derisible fiction that the state is primarily there to protect “the little guy” from “cutthroat competition.” The reflection of that fallacy is the equally serviceable narrative that Bank of America and Walmart are simply the winners in a field of genuine free market participants. But real, wide-open competition, exactly the condition that bloated corporations fear and lobby against, would gnaw away at the power of concentrated, organized capital an its game of consumer exploitation.
Without taxpayers and consumers footing the bill for their wastes and inefficiencies, most of the lodestones of the present economy would dwindle and die, leaving frugal, streamlined market actors in their place. Free market anarchists advocate for a market without privilege, one based on value-for-value exchanges between autonomous individuals — nothing like the kind advocated by Senator Hatch.
That latter species is, rather than a zone of economic freedom, a racket originating in the very regulations that Paul Barrett exalts as preventing disasters like the Deepwater Horizon spill (some job all of that regulation has done). The only way to prevent greedy corporations from cutting corners, from scamming consumers and ravaging the environment, is to allow the forces of unobstructed competition to curb their size and power. If Barrett is worried about dangerous policies “cloaked in seductive rhetoric,” then the state’s many regulations are the place to look.