TomNaegeleBlogs

It seems to be the favorite pastime of many people these days to harp on the evils of big business. Evil corporations buy off the government through lobbying, and then stuff their pockets with the proceeds while cutting their workers’ wages. That’s the story we’re often told, and while it may be true in many cases, the proposed solutions would often succeed only in making matters worse.

For some reason, those who rail against big business for their immoral practices are all too willing to hand over more power to the government in an attempt to prevent such crony capitalism. But wait just a minute here.

Crony capitalism is a two way street. If big business is guilty of immoral practices, big government is guilty of even worse crimes.

In no way can big business force government to participate in crony capitalism. Big business may present the temptation to government officials, but we must lay the blame on government for giving in to the temptation. Perhaps a hypothetical example will make this clear.

If Steve owns a grocery store which sells paper towels for $5 and Jim owns a grocery store which sells paper towels for $10, Steve obviously has the advantage in a capitalist system. Jim quickly finds himself going out of business, so he decides to lobby the government in an attempt to win a contract. Jim promises government officials that he will donate handsomely to their reelection campaigns, so those government officials eventually decide to spend all of their two million dollar paper towel fund at Jim’s store. That is crony capitalism.

While Jim is clearly at fault for engaging in immoral business practices, does not the government shoulder more blame for acquiescing to such a rotten deal? By awarding the paper towel contract to Jim, government officials have essentially stolen tax payers’ money. But instead of blaming the big wasteful government, many decide to blame the big business.

Their proposed solution that follows, then, is to give more power to the government, and impose more restrictions on businesses. When one realizes that immoral and unethical government is the real problem causing crony capitalism, it becomes quite clear that the only solution is to take power away from the government.

If government was more transparent in their expenditures, the people would never let such unethical decisions take place. That would mean that Jim is stuck to compete with Steve in a pure capitalist system. Realizing there is no other way out, Jim decides to cut prices and compete with Steve. Everyone wins, morality prevails, and the economy prospers.