economics politics

Political entrepreneurs

A really nice piece from Cato

“I was asked by a radio host more than once this week what I thought of the fact that some big business leaders were standing by President Obama in his pursuit of the gargantuan “stimulus” package. There is an unfortunate public perception that supporters of free markets are knee-jerk supporters of anything that could be perceived as benefiting “big business.” As the thinking apparently goes, because free marketers favor business, and members of the business community favor the stimulus, shouldn’t free marketers therefore favor the stimulus?

Hardly. In his book, The Myth of the Robber Barons, historian Burton Folsom differentiates between market entrepreneurs and political entrepreneurs:”

There is a huge difference between those two. Market entrepreneurs innovate and compete on services and quality of the goods they produce. Political entrepreneurs lobby the government to “protect” them. Protect them from what? From competition, the friend of the consumer and the enemy of the business owner.

Any time you see a large company, or an industry group putting their weight behind legislation be on guard, especially if it will cost them money. Inevitably, the legislation will have been worth every penny they invested in it to get it passed…

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