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

Friday Special: The Left’s New Fear of Speech

As we said there in rejecting Virginia's claim that the only way it could enable its citizens to find their self-interest was to deny them information that is neither false nor misleading: "There is… an alternative to this highly paternalistic approach. That alternative is to assume that this information is not in itself harmful, that people will perceive their own best interests if only they are well enough informed, and that the best means to that end is to open the channels of communication rather than to close them. - Thurgood Marshall, Linmark Associates, Inc. v. Township Of Willingboro , 431 U.S. 85 (1977) With 2020 being such a caustic year, many novel innovations will be forgotten. Does anyone remember that the global shutdown was supposed to last three weeks to “flatten the curve?” The phrase probably rings a bell now that you hear it, but I bet you haven’t thought of it lately. We took for granted that something had to be done. We blithely accepted that lockdowns wer

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

Official Statement of 1889 Institute: Open Oklahoma’s Schools

Byron Schlomach, director of the 1889 Institute, issued the following statement today regarding the ongoing school closures throughout Oklahoma as a result of the Oklahoma State Board of Education’s response to the COVID-19 virus: Way back in March, the 1889 Institute first protested school closings based on then-existing evidence that school-age children are not prone to the disease, evidence confirmed in intervening months. This evidence, combined with the failure of school districts to provide a rigorous online education and the hardship on two-earner families created by distance learning, makes it clear that closing the schools has, indeed, been a policy error of epic proportions. To that end, 1889 Institute is calling on the Board of Education to rescind its current guidance that recommends such closures and reopen traditional brick and mortar schools immediately following the upcoming Christmas break. Not doing so is a disservice to both students and parents and will have a last

Think Carefully before Voting on SQ 802

So we vote next week on whether or not to expand Medicaid according to Obamacare’s provisions. A vote “Yes” on State Question 802 would expand Medicaid to able-bodied adults above the poverty line. A vote “No” would keep the status quo, with taxpayers buying health care under Medicaid mainly for poor children and pregnant mothers. But as with just about anything proposed by initiative, State Question 802 is not really that simple. For one thing, it forever entrenches a federal program, which can be changed by Congress at any time, in our state’s constitution, which is not so easily amended. Obviously, the proponents of SQ 802 want to set the terms of the Medicaid expansion permanently, sidestepping our constitutionally instituted legislature, which is supposed to react and adjust to existing circumstances. SQ 802 would take that flexibility away. A consequence of that reduced flexibility will likely be sacrifices in other state-financed programs such as public education, both in the n