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

A Reminder of the Ineffectiveness of Covid-19 Lockdowns

Since the beginning of this pandemic, the 1889 Institute has argued against lockdowns even as “experts” advocated for them. Now, months after the weeks-long lockdowns were supposed to end, there are still states in various levels of lockdown. State and local governments have devastated their economies with shutdowns in the name of public health. Yet some politicians, including presidential candidate Joe Biden, have stated a willingness to lockdown the economy again on a national scale to eliminate COVID-19, in a "virus first, economy later" approach. Even as some lawmakers in Oklahoma urge governor Stitt to take more extreme action, it is essential to remember that lockdowns are not very effective. A group of epidemiologists have released a declaration denoting the harmful effects of lockdowns. These include; lower childhood vaccination rates, worsening cardiovascular disease outcomes, fewer cancer screenings, and deteriorating mental health. These consequences are more ...
Read more

If Licensing Protects Consumers, Why Are Licensing Laws Blatantly Anti-Consumer?

Once upon a time, there was a small island whose economy revolved around scuba-diving tourism. Unfortunately, the island elected legislators who considered scuba dangerous. Inexperienced divers would surface too quickly and get the bends. The legislature, wanting to make diving feel safer, passed a law that banned sharks in designated scuba diving zones. There were no known cases of sharks attacking divers, nor were divers being frightened into surfacing too quickly by sharks. This is what most occupational licensing schemes look like. Legislators act, giving the public a sense of security, and giving powerful industries protection from competition. The laws do almost nothing to help consumers. Not only are they futile, they are also deceptive.   Some licensing regimes, like the Oklahoma Real Estate Broker ’ s Act, take the deceit one step farther. Instead of just telling the sharks not to eat people (which they weren’t doing anyway) the act does the equivalent of gathering a group...
Read more

Oklahoma Mayors Acted Unlawfully With COVID-19 Orders

In response to COVID-19, the mayors of Oklahoma’s three largest cities subjected their citizens to draconian shelter in place orders, restricting their freedom, damaging them financially, and undermining their constitutional rights. The mayoral decrees were more restrictive than those of the Governor, and in significant ways contradicted his policy. To this day, city-mandated social distancing rules remain in place in Oklahoma City, Tulsa, and Norman that are not required by the state’s reopening plan. The mayors claim that where their rules are more restrictive than the state’s, the city rules apply. Was any of this unilateral mayoral activity legally valid? For the reasons examined in my paper published today, An Argument Oklahoma’s Mayors Acted Unlawfully During COVID-19 , the short answer is no. (A summary of the paper can be found here .) A close examination of relevant city ordinances and state laws governing the mayors’ COVID-19 decrees forces the conclusion tha...
Read more

Destroying Others’ Property Is Violence, No Matter How It’s Done

With characterizations of protests and riots that have occurred over the last several months as “mostly peaceful” and headlines that include “peaceful demonstration intensified,” and “Fiery But Mostly Peaceful Protests,” it’s clear many in the press do not consider property destruction to be violent. Most likely, they mean most of the protesters haven’t physically harmed anyone. Still, during the very same protests, a large proportion of the “peaceful” participants , in obvious acts of aggression and hostility, have vandalized and stolen property. In fact, property destruction and theft are acts of violence, and are therefore legitimately defended against, not because these acts feel threatening, but because they are, in and of themselves, violent.   Nevertheless, it’s common to hear many condemn individuals who use or threaten force in defense of their property. After all, if no one is physically harmed, or even actually threatened, how can damaging inanimate objects possibl...
Read more