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

What if Legislators Were Licensed? Well, Just to Make a Point...

1889 Institute, as a general matter, objects to occupational licensing. We have written about it more than any other subject. The scant benefits simply do not outweigh the enormous costs to consumers and entrepreneurs, and  the  burdens that disproportionately impact the poor.   It must be noted that the remainder of this post is a work of satire. This should be obvious to anyone who has read even one of our papers, but each of the proposals below has an analogous provision in Oklahoma licensing laws. To those supportive of government-created cartels, these proposals might sound almost reasonable.  A material threat to the public safety and welfare has for too long gone entirely unregulated, unrestrained and unchecked. This menace has the power to corrode not only mere industries, but to corrupt the entire state economy. It’s no overstatement to say that the practitioners of this perilous profession hold the power to destroy democracy as we know it. After a...
Read more

Kids in Tow: Contrasting Educational Choice in Arizona and Oklahoma, a Parent’s Perspective

The 1889 Institute has repeatedly expounded on the merits of educational choice. School choice lies at the heart of providing individual children with a high-quality education, and Oklahoma could use more of it. With the myriad of programs that have proven successful throughout the country, Oklahoma needs to take an all-of-the-above approach to education to empower parents. The necessity of educational choice is particularly evident when you see students as unique individuals with unique talents and needs.   Every child learns at least a little differently from every other child. Thus, it is far more likely that every child will succeed when families can avail themselves of different educational environments. Two children, coming from the same family, living in the same house, with the same economic means and opportunities, still demonstrate different propensities, proficiencies, and instructional preferences. The close parent-child relationship gives parents a unique understandi...
Read more

Introducing a New Plan for Public Education: Put Educational Practitioners (Teachers) in Charge

The author, Kent Grusendorf, served as a member of the Texas House of Representatives for 20 years (1987-2007), all but two as a member of Public Education Committee, which he chaired for four years (2003-2007). His prior elected experience was as a member of the Texas State Board of Education for three years (1982-1984). In addition to this blog, Grusendorf is author of an 1889 Institute report also based on his forthcoming book. Saving Public Education: Setting Teachers Free to Teach is the title of my forthcoming book, which explores a potentially new professional opportunity for teachers. Most teachers are in the profession because they love to teach. However, far too many leave the profession due to lack of respect, excessive external pressures, and general frustration. Many teachers stay in the profession, but yearn for greater freedom to just do what they love: Teach. Much of that frustration comes from mandates, and a lack of professional freedom. Well Intentioned,...
Read more

Do-Something Syndrome Won’t Produce Groceries in Oklahoma’s Cities

We have to do something ! We hear it all the time. Any time there is a tragedy, or now even a perceived problem, policy makers, news anchors, and everyday citizens demand government take some action that might have prevented it. But all too often the proposed responses do little to actually improve our lives. We become victims of the Do-Something Syndrome. Either the policy doesn’t achieve what it is intended to, there are unintended consequences, or it is actually counterproductive. This shouldn’t come as a huge surprise.   Government works best when it makes generally applicable rules intended to prevent large, foreseeable harms. Government generally performs far worse in responding to highly specific, immediate circumstances. Inherently, everyone gets a voice in a democracy. This is normally a good thing. But when there is a crisis - real or perceived - the emphasis is often on “doing something.” Too often there is disagreement about the problem, much less the best sol...
Read more