Column on Business versus Business

Business Versus Business

Tibor R. Machan

One can think of business as a profession, like medicine or engineering, and ask whether it is worthwhile or valuable. Should people in their communities welcome business or not? Or one can think of business as the collection of commercial institutions, such as the banks, corporations, shops, and so forth that are active in one’s community.

It is one thing to oppose the former, quite another to be critical of the latter. One may well find business valuable as an institution in a human community, something to be embraced and supported, even as one considers the great majority of existing businesses guilty of innumerable types of malpractice. The same can be so with any other endeavor, such as medicine or entertainment or farming. While as properly understood all of those could be assets in a human community, their actual manifestation at any period of time could also be highly lamentable.

In America, just as elsewhere in the world, it is arguable that too many businesses are engaged in malpractice even while the institution of business, sans the malpractice, is something very much to be prized and in considerable need. The malpractice I am referring to involves mainly getting into bed with politicians and bureaucrats whereby too many businesses are actually attempting to subvert the very nature of their profession. These outfits run to Washington and other centers of political power to gain favor against their domestic and foreign competitors and thus flagrantly betray the institution of business. Of course this is not too difficult to understand, even to excuse, given that government has become thoroughly corrupt by involving itself by picking winners and losers, in favoring various businesses and disfavoring others, with special legislation, regulation and other policies that undermine free and open competition in the market place.

Consider as an analogy professional sports. If the organizations that administers the rules of a given sport were to have established as a routine practice favoring certain teams over others, if referees and umpires took bribes as a matter of course, it would be no surprise that the various teams would try to outdo each other with their offer of bribes to these officials. Or if a judge in some criminal jurisdiction established a record of corruptibility, it would be no surprise if litigants tried to approach their case not with good arguments, not with facility with the law but by way of coming up with the most attractive bribe for the judge. Those making use of bribes would, of course, be complicit in the corruption of the system but the main fault would lie with those in the administration who make a practice of selling out, of in effect betraying their oath of office.

When Bill Gates’s Microsoft Corporation was being hounded by the Department of Justice for allegedly violating antitrust laws–supposedly by means, for example, of bundling its products, something that should never be deemed objectionable let alone illegal–he was reportedly advised that his practice of staying away from Washington, of refusing to fund politicians running for election, was the source of how he was being treated. In time Gates learned his lesson and began to game the system. Instead of remaining independent of politics and relying mainly on technological and market savvy, he followed the practices of his competitors by supporting politicians of both major parties running for office. By now, of course, Microsoft Corporation is there with all the others who take part in what some call crony capitalism or what is simply the corruption of capitalism. (If the sport of tennis were administrated similarly, would we call it crony tennis or simply corrupt tennis?)

One can be an enthusiastic supporter of business as an upstanding institution in a human community but at the same time be vehemently critical of how actual firms are being managed vis-a-vis their ties with politics. But the main source of the problem is how the system of government in a society makes it not just possible but nearly imperative for people in business to become corrupt so as to be able to survive and prosper.

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10 Responses to Column on Business versus Business

  1. Unknown says:

    What are your thoughts on how the recent citizens united court case affects the ability of business to be corrupt? I think it will have a fairly muted effect because of the rise in 527s and other channels to spend money that already exist. Squashing the flowof money is very difficult, something the justices understand (although why they think they can still try and control it baffles me). Furthermore, because shareholders are a bit more mobile, the argument goes that they can leave a corporation they don\’t like. While that makes some sense, if somehow a corporation could end up spending its money on politics to improve its profitability, I as an investor would welcome the improved return. But I really don\’t think that a massive corporation could effectively change the outcome of an election (buying votes is expensive), nor do I think it would want to, and even if it was possible, who would they choose to buy? A president? Would McCain or Obama really make much difference to them? Or would they buy a congressman? One vote in the house isn\’t worth much. Anyway, those are my thoughts on the issue. Apparently the free speech part of the case matters a bit too, and I know you have thoughts on the rights of corporations to speak and I would be curious to hear these. (Bye the way, I met you at Cato Univ. over the summer, discussing rights at lunch one day…)

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