"Compassionate" capitalists can now showcase their virtue in California by seeking legal standing as a "benefit corporation," which protects against backlash from shareholders cold-hearted enough to actually expect a return on their investments. But such legal theatrics slander all business by implying that capitalism is by nature uncaring and uncompassionate, when the opposite is usually true.
Aren't all companies "benefit corporations" that provide a good or service people want -- a benefit -- through fair and voluntary exchange? Each party benefits through such transactions, the company and the customer. That old bogeyman "exploitation" only applies in cases where such exchanges are forced, which shouldn't occur in a truly free economy (which ours isn't). Both parties recognize and receive some benefit from the transaction or it wouldn't take place.
Compassion and altruism don't animate the actions of either party, company or customer, as Adam Smith famously pointed out. Both are moved by self interest (even though no one ever accuses the customer of greedily "exploiting" the company). The ultimate (and happy) result is mutual satisfaction and growing prosperity for all, which is the magic of the free enterprise system.
Corporations don't exist for long that don't provide a benefit to their customers: serving or pleasing others is what makes them profitable. That qualifies 90 percent of California's companies as "benefit corporations," even if they lack such a grand title. That shareholders also benefit through this arrangement is frosting on the cake. And from where does the money that funds most private charity and philantropy come, if not from the people who do well in business?
No wonder businesses are leaving California in droves. Why continue to serve as a cash cow for state leaders who have such mindless contempt for those who put the gold in the "golden state."
Showing posts with label free markets. Show all posts
Showing posts with label free markets. Show all posts
Thursday, January 5, 2012
Thursday, December 29, 2011
Keeping Presidents in their Place
This conservatarian recoils when he sees self-styled conservatives playing a game of Job Creation Derby with the president, or with any of the other job destroyers on the Left. In a truly free market system, and under the Republican form of government with which Americans were blessed, presidents ought to have minimal influence over the economy. Any president who claims or believes he can "create jobs" like a wizard is a president with too much ego and too much power. We can't be said to be practicing "free enterprise" if any politician holds such sway over the economy. I can't support any candidate for president who doesn't have the humility to recognize the limits of economic interventionism.
Swept-up in the irrational exuberance of the moment, and in trying to compete with a President who has assumed God-like powers, some conservatives seem to have forgotten that we're the non-interventionists. Such presidential posturing isn't just presumptuous. It doesn't just raise impossibly high public expectations, resulting inevitably in disappointment and cynicism. The worst thing about it is that it's incompatible with the economic and political systems we Americans claim to revere. In short, it's unAmerican.
A president's job ought to be enforcing a few simple rules, protecting private property and other civil liberties and otherwise getting government out of the way, allowing the real job-creators and wealth-producers to do their thing. A president, if he or she wants to be helpful to the economy, should focus on preventing government from killing jobs -- and on creating a general economic climate hospitable to free enterprise, rather than trying to plant the seeds himself. The rest will happen naturally.
Any Republican who wants to compete with the President as a "job creator" is a wolf in sheep's clothing.
(To be fair to Newt Gingrich, it's worth conceding that the campaign ad that prompted this post talks a good game about clearing away existing hurdles to economic development, rather than engaging in the kind of Keynesian spending binges Democrats call "stimulus." But Newt's chameleon-like history as a consummate Washington insider and manipulator makes me wary.)
Swept-up in the irrational exuberance of the moment, and in trying to compete with a President who has assumed God-like powers, some conservatives seem to have forgotten that we're the non-interventionists. Such presidential posturing isn't just presumptuous. It doesn't just raise impossibly high public expectations, resulting inevitably in disappointment and cynicism. The worst thing about it is that it's incompatible with the economic and political systems we Americans claim to revere. In short, it's unAmerican.
A president's job ought to be enforcing a few simple rules, protecting private property and other civil liberties and otherwise getting government out of the way, allowing the real job-creators and wealth-producers to do their thing. A president, if he or she wants to be helpful to the economy, should focus on preventing government from killing jobs -- and on creating a general economic climate hospitable to free enterprise, rather than trying to plant the seeds himself. The rest will happen naturally.
Any Republican who wants to compete with the President as a "job creator" is a wolf in sheep's clothing.
(To be fair to Newt Gingrich, it's worth conceding that the campaign ad that prompted this post talks a good game about clearing away existing hurdles to economic development, rather than engaging in the kind of Keynesian spending binges Democrats call "stimulus." But Newt's chameleon-like history as a consummate Washington insider and manipulator makes me wary.)
Tuesday, September 21, 2010
Bucking the Beer Cartel
The Economist has a good, succinct definition of the term "rent-seeking":
"Rent-seeking
Cutting yourself a bigger slice of the cake rather than making the cake bigger. Trying to make more money without producing more for customers. Classic examples of rent-seeking, a phrase coined by an economist, Gordon Tullock, include:
• a protection racket, in which the gang takes a cut from the shopkeeper’s profit.
• a cartel of firms agreeing to raise prices;
• a union demanding higher wages without offering any increase in productivity;
• lobbying the government for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or consumers or some other rivals.
Whether legal or illegal, as they do not create any value, rent-seeking activities can impose large costs on an economy."
But how does rent-seeking work in the real world? This news story, from last week's Idaho Statesman, offers a near-perfect example of renk-seeking in action.
It tells of how big beer wholesalers, backed by an army of lobbyists, are turning to Congress for help in eliminating competition from small wine and beer shops that can sell directly to the public, minus the middle man, thanks to the Internet. Instead of meeting the upstarts head-on, the big boys want Washington to help them squash the little boys, through the passage of a renk-seeking measure.
"The bill is backed largely by the National Beer Wholesalers Association, which wants to see it passed in response to a 2005 Supreme Court decision that found some bans on direct shipments of alcohol unconstitutional. That ruling helped open the door to more direct shipments to consumers, especially from wineries. The law would allow states to block direct sales of wine and beer.
The beer wholesalers say the bill will give states more certainty in deciding who can sell alcohol to their residents.
"The net result is that states are unsure about whether or not they can regulate alcohol effectively," said Mike Johnson, the association's executive vice president and chief advocacy officer.
Many winemakers and retailers believe the beer wholesalers back the bill because they view the direct sale of alcohol as a threat to their business. Online sales - now about 1 percent of the market - are growing."
Big Beer has found a sympathetic ear among those who fear that direct sales, via the Internet, will lead to a loss of revenue, and regulatory control, for states. And the campaign donations don't hurt, either:
"The beer wholesalers have proved to be effective advocates. The Washington Post reported that the National Beer Wholesalers Association this year poured nearly $300,000 into the campaign accounts of about 100 lawmakers who co-sponsored the bill."
This case thus falls into the fourth definition of "rent-seeking" offered by The Economist: "lobbying the government for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or consumers or some other rivals." Keep a lookout and you'll see other examples of it, virtually everywhere, given that we live in an era of increasing coziness between big government and big business.
"Rent-seeking
Cutting yourself a bigger slice of the cake rather than making the cake bigger. Trying to make more money without producing more for customers. Classic examples of rent-seeking, a phrase coined by an economist, Gordon Tullock, include:
• a protection racket, in which the gang takes a cut from the shopkeeper’s profit.
• a cartel of firms agreeing to raise prices;
• a union demanding higher wages without offering any increase in productivity;
• lobbying the government for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or consumers or some other rivals.
Whether legal or illegal, as they do not create any value, rent-seeking activities can impose large costs on an economy."
But how does rent-seeking work in the real world? This news story, from last week's Idaho Statesman, offers a near-perfect example of renk-seeking in action.
It tells of how big beer wholesalers, backed by an army of lobbyists, are turning to Congress for help in eliminating competition from small wine and beer shops that can sell directly to the public, minus the middle man, thanks to the Internet. Instead of meeting the upstarts head-on, the big boys want Washington to help them squash the little boys, through the passage of a renk-seeking measure.
"The bill is backed largely by the National Beer Wholesalers Association, which wants to see it passed in response to a 2005 Supreme Court decision that found some bans on direct shipments of alcohol unconstitutional. That ruling helped open the door to more direct shipments to consumers, especially from wineries. The law would allow states to block direct sales of wine and beer.
The beer wholesalers say the bill will give states more certainty in deciding who can sell alcohol to their residents.
"The net result is that states are unsure about whether or not they can regulate alcohol effectively," said Mike Johnson, the association's executive vice president and chief advocacy officer.
Many winemakers and retailers believe the beer wholesalers back the bill because they view the direct sale of alcohol as a threat to their business. Online sales - now about 1 percent of the market - are growing."
Big Beer has found a sympathetic ear among those who fear that direct sales, via the Internet, will lead to a loss of revenue, and regulatory control, for states. And the campaign donations don't hurt, either:
"The beer wholesalers have proved to be effective advocates. The Washington Post reported that the National Beer Wholesalers Association this year poured nearly $300,000 into the campaign accounts of about 100 lawmakers who co-sponsored the bill."
This case thus falls into the fourth definition of "rent-seeking" offered by The Economist: "lobbying the government for tax, spending or regulatory policies that benefit the lobbyists at the expense of taxpayers or consumers or some other rivals." Keep a lookout and you'll see other examples of it, virtually everywhere, given that we live in an era of increasing coziness between big government and big business.
Tuesday, December 9, 2008
Don't Smoke the Kristol Meth
Whatever else Republicans do in trying to pull themselves up off the floor after a much-deserved drubbing, they ought to avoid like poison the political counsel of Weekly Standard Editor Bill Kristol, who would have the GOP abandon what shreds of principle it has left in a pointless quest to regain power.
I say "pointless" because that's what power is without principle -- as the GOP aptly demonstrated in the last 8 years.
Kristol, in two recent New York Times columns, unmasks himself as a non-con rather than a neo-con -- meaning he has nothing in common with conservatives except an empty label. It's the Kristol Republicans who helped sever the party from its traditional moorings, leading directly to the disaster at hand. Cut adrift, party insiders fell victim to every seduction that power can offer, from pork-barrel pigouts to reckless acts of nation-building, with Kristol cheerleading from the peanut gallery. And the party will be dashed on the reef, never to recover, if it doesn't disregard this new siren song.
Several weeks back, ably filling in for regular New York Times Columnist Paul Krugman (meaning that I couldn't tell their columns apart), Kristol argued that Republicans must abandon their slavish belief in free markets and free enterprise if they want to regain power. Wearing Adam Smith neckties is fine for the dweebs that hang out at Heritage Foundation events, Kristol all but said. But these ideas just aren't trendy at the moment -- and they certainly aren't worth losing congressional races over!
Kristol yesterday delivered another broadside -- and another dose of bad political advice -- arguing this time that Republicans no longer can win on the limited government platform. That, too, is passe in Kristol's view. Just as conservatives and libertarians must acknowledge that free markets and free enterprise need to be managed by the wizards in Washington, we must give up on the archaic idea that government should be modest in mission and power. "I can’t help but admire some of my fellow conservatives’ loyalty to the small-government cause," Kristol sneers. "It reminds me of the nobility of Tennyson’s Light Brigade, as it charges into battle: 'Theirs but to do and die.' Maybe it would be better, though, first to reason why."'
Most who ascribe to freedom philosophy already know the "reason why," Bill. We've thought the matter through and decided that political and economic liberty are practically and morally superior to their antipodes, statism and socialism. Kristol's attachment to these ideas is obviously more tenuous, conditioned on whether they help or hinder his party of convenience. I would rather see the Republican Party lose elections than see it lose its soul.
Remove economic and political liberty from the old-line Republican platform, as Kristol advises, and the platform will collapse. What will be left then, except a malleable mish-mash of "position statements" tailored to win congressional races but detached from any over-arching economic, political or moral philosophy. Knee-jerk support for Israel does not a party platform make, contrary to what Kristol and other neocons (oops, that's non-cons from now on!) seem to think.
Republicans don't need to repudiate these timeless ideas; they need to rediscover them, revive them, re-fashion them in a way that works in a modern context. If that takes years, and means they're out of power for a while, so be it. That will give the statists and collectivists the time they need to make an even bigger mess of things -- setting the stage for a revival of popular interest in the limited government virtues our founders espoused.
I say "pointless" because that's what power is without principle -- as the GOP aptly demonstrated in the last 8 years.
Kristol, in two recent New York Times columns, unmasks himself as a non-con rather than a neo-con -- meaning he has nothing in common with conservatives except an empty label. It's the Kristol Republicans who helped sever the party from its traditional moorings, leading directly to the disaster at hand. Cut adrift, party insiders fell victim to every seduction that power can offer, from pork-barrel pigouts to reckless acts of nation-building, with Kristol cheerleading from the peanut gallery. And the party will be dashed on the reef, never to recover, if it doesn't disregard this new siren song.
Several weeks back, ably filling in for regular New York Times Columnist Paul Krugman (meaning that I couldn't tell their columns apart), Kristol argued that Republicans must abandon their slavish belief in free markets and free enterprise if they want to regain power. Wearing Adam Smith neckties is fine for the dweebs that hang out at Heritage Foundation events, Kristol all but said. But these ideas just aren't trendy at the moment -- and they certainly aren't worth losing congressional races over!
Kristol yesterday delivered another broadside -- and another dose of bad political advice -- arguing this time that Republicans no longer can win on the limited government platform. That, too, is passe in Kristol's view. Just as conservatives and libertarians must acknowledge that free markets and free enterprise need to be managed by the wizards in Washington, we must give up on the archaic idea that government should be modest in mission and power. "I can’t help but admire some of my fellow conservatives’ loyalty to the small-government cause," Kristol sneers. "It reminds me of the nobility of Tennyson’s Light Brigade, as it charges into battle: 'Theirs but to do and die.' Maybe it would be better, though, first to reason why."'
Most who ascribe to freedom philosophy already know the "reason why," Bill. We've thought the matter through and decided that political and economic liberty are practically and morally superior to their antipodes, statism and socialism. Kristol's attachment to these ideas is obviously more tenuous, conditioned on whether they help or hinder his party of convenience. I would rather see the Republican Party lose elections than see it lose its soul.
Remove economic and political liberty from the old-line Republican platform, as Kristol advises, and the platform will collapse. What will be left then, except a malleable mish-mash of "position statements" tailored to win congressional races but detached from any over-arching economic, political or moral philosophy. Knee-jerk support for Israel does not a party platform make, contrary to what Kristol and other neocons (oops, that's non-cons from now on!) seem to think.
Republicans don't need to repudiate these timeless ideas; they need to rediscover them, revive them, re-fashion them in a way that works in a modern context. If that takes years, and means they're out of power for a while, so be it. That will give the statists and collectivists the time they need to make an even bigger mess of things -- setting the stage for a revival of popular interest in the limited government virtues our founders espoused.
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