Skip to main content

Why I Am Not Pro-Business

Most who consider themselves conservative, even many with libertarian leanings, are comfortable with describing themselves as pro-business.

Not me.

Don’t get me wrong. Just because I’m not pro-business doesn’t mean I’m anti-business. I’m pro-free enterprise, but that’s different from being pro-business.

Chambers of Commerce across the nation are pro-business. They are established to represent their various business members, with large corporations usually the most influential amongst their numbers. Chambers of Commerce almost always favor measures that subsidize businesses, give special tax breaks to businesses, or exempt businesses from regulation, even when these measures favor only specific industries.

Here is one example. Pro-business interests favor special discretionary funds at the state and local levels that are used to pay businesses to locate within the government’s jurisdiction. Often called “closing funds,” they allow the ruling class to take credit for creating jobs. Businesses that benefit from these payoffs rarely change their plans as a result of the payoffs. But, because different jurisdictions simultaneously bid for the same business projects, big corporations that are the objects of officials’ affections can pit communities and states against each other to maximize the payoff in the jurisdiction where the corporations intended to locate all along. That means closing funds, at best, make no economic difference at all.

The pro-business crowd also loves to shower taxpayer money on Hollywood, professional sports, tourism venues, renewable energy, and high-tech, among others. These are all popular because, somewhere, one of these industries has grown fast and driven a community’s high-paying jobs and economic development. The pro-business crowd likes to sell the idea that with the right government incentive every community can get in on the same economic boom. It’s usually an easy sell since the jobs they supposedly create are easy to see. The damage, though, goes unseen. Unfortunately, subsidizing an attempt to develop an existing, already-booming industry in a place where it has never been before is like buying stocks when prices are high; the opportunity is actually already gone.

But it’s worse than that. The value people place on goods and services is subjective. Much (probably most, but not all) of the cost of producing goods and services is objective, determined by technology and physical laws. A complex interplay occurs in a free-enterprise market system that transmits information through prices to balance the allocation of resources (always limited, compared to human wants) so that the most highly-valued goods and services are provided (voluntarily, and without central direction), taking cost into consideration. When politicians step in and artificially lower costs for favored industries or businesses, the balance free enterprise produces is upset. Resources are misallocated. Income and wealth is reduced compared to what it could have been. And although the U.S. is a long way from becoming a Venezuela, that country illustrates what happens when politics interrupts market mechanisms.

Being pro-business grants license to policymakers at all levels of government to act like they are in favor of free markets when they are actually baby socialists, thinking they can centrally plan an economy into prosperity. They enact laws and policies that actually make a mess of things. A mayor in Goodyear, Arizona once told me that if they took care of the big businesses (granted them special privileges), small business would take care of itself. This was likely a common refrain at whatever mayors’ conferences she’d attended. The idea is that when big businesses hire lots of people, there are plenty of scraps for small businesses, like local restaurants and car repair, to get along. Of course, the Goodyear mayor likely would not hesitate to favor big corporations behind various restaurant and car repair franchises that compete with truly local small businesses. The Goodyear mayor’s thinking discourages the organic innovation and economic development that made big corporations grow from once-small enterprises to the behemoths they’ve become.

Pro-business policies are inevitably crony policies. They cement in place a privileged few, create inequality before the law, and contribute to social unrest when people gain a sense that some count for more than others in our government. So no, I’m not pro-business; I’m proudly pro-free enterprise, where the economic playing field is level, and government favors no one.

Byron Schlomach is Director of the 1889 Institute and can be reached at bschlomach@1889institute.org.

The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.


Popular posts from this blog

Is Effective Education Reform Even Possible? The Answer is “Yes.”

Education Reform. Every time a legislature meets in this country, education reform is a topic of discussion. It’s easy to see why. Our schools, especially when you consider the amount of money we spend, don’t do a very good job. It’s really not that hard to casually look around the internet and find that the U.S. ranks in the top five of all nations, year after year, in average per-student spending in public education. Unfortunately, that does not translate into results . Many nations that spend a fraction of what we do outperform us in international academic comparisons . China’s students outperform ours by four grade levels. Oklahoma’s performance is below the national average. Anybody who knows one or more active public school teachers also knows that most of them work hard. Yes, they get longer holidays than most, and there are those relatively few who do the minimum, but there are the many who are conscientious. The problem is, they are swimming upstream in an institut...
Read more

OKC Public Schools Elevating a Privileged Elite over Oklahoma Taxpayers

The hypocrisy of the Soviet Union’s pretense of egalitarianism was well known enough to be the subject of mockery and parody. Ronald Reagan never tired of the jokes . Soviet communism espoused equality, but the reality is that party apparatchiks and government officials enjoyed special perks that no one else had access to. This special class wasn’t officially paid much more than the average skilled worker, but enjoyed privileges like dachas on the coast or countryside, special stores with imported goods and without the endless lines that were commonplace everywhere else, and more advanced medical treatment. For all their talk about eliminating class distinctions, the Soviet nomenklatura —those “doing the people’s work”—could feather their nest with the best of ‘em. Apparently, a similar attitude reigns in our government schools. Our friends at OCPA report that Oklahoma City Public Schools (OKCPS) will not offer in-person instruction to students for the first nine weeks of school this ...
Read more

The Truth About COVID-19: Better Than You Think

As the media turns its attention back to COVID-19, there is a renewed push to shut down the economy. Some states have even begun to scale back reopening plans for their economies; others continue to delay opening. It is essential to look past their catastrophizing and focus on the facts of COVID-19. One fact to consider: while testing has risen 23%, the rate of positive results has only risen 1.3 percentage points to 6.2%. Even as alarmists point to the rise in cases, they still admit that the boost in testing has played a role in the rise in the total number of known cases. Therefore, the total number of positive cases is not of much use in this case, as it only paints a partial picture. The rate of increase in total positive cases is a more meaningful measure, and it has barely increased. Even more important is who is getting infected. The data show that recent cases are primarily younger people. But that’s a good thing; these are precisely the people that are key to building herd ...
Read more

OG&E and the Corporation Commission Aren’t Doing Their Jobs

At the time of this writing, it’s been a full week since there was power at my home. I live within OG&E’s electrical grid, so when it comes to being without power this past week, I’m nothing special. Many of OG&E’s customers had no power for days, and some will have no power for well over a week. By the time power is restored to everyone in their service area, OG&E’s own estimate is that it will have taken ten full days to repair all the damage from Oklahoma’s latest ice storm. Ice storms are bears, no doubt about it. They are very hard on trees, and if the roads ice over, they are very hard on cars. But roads, for the most part, were not an issue during Oklahoma’s “Icemageddon” of 2020. The problem was the extra weight of the ice on trees, wires and poles. And what we discovered was that Oklahoma’s electric power grid, once again, was not up to the challenge. Fact is, Oklahoma’s power grid isn’t up to much of Oklahoma’s weather. Every time the electricity goes out, which ...
Read more