Corporatism and the Left

Why is it that big business is always considered right wing? If you carefully examine the political scene you will notice that big banks and big business usually are the ones that fund progressive charities and activist groups. In fact many of them brag about their support in commercials and print advertising, yet according to the left, big business is RIGHT WING!

The truth is that both the left and the right are in bed with big business, however the problem that many fail to see is that small business is usually left out of this melee and in turn suffers the most. Doesn't sound like free market capitalism to me. In many cases when a business becomes "too big," the liberals in Washington rush to regulate it in order to create "a more fair market," but when you look closely at what they are doing you will find out that competition is not a part of the liberal agenda. In fact, the truth is quite revealing.

Take the following scenario: Lets suppose that a bipartisan piece of legislation is proposed in congress, this legislation will require all soda manufacturers to adjust the shape of their aluminum cans to become more energy efficient. (I know this sounds crazy, but bare with me) The initial response of corporate giants Pepsi and Coca Cola as well as other smaller manufacturers will be ....how much is this going to cost me? After all updating the machinery and changing formats of manufacturing will be an expensive move for all involved. Many manufacturers will start to object to the unnecessary government regulations.

What many fail to realize however, is that the larger more established corporations such as Pepsi and Coca Cola, would not make that argument. Instead this particular piece of legislation could prove to benefit them by hurting their competition. How you might ask? The two corporate giants will begin lobbying members of congress to pass this regulatory piece of legislation, knowing that it will cost them millions, but all the while realizing that it will cost their competition millions. The competition, not being as financially stable as the BIG TWO, will then be forced out of business or their competitive value will be greatly diminished due to financial constraints placed on them by the legislation. Suddenly, the very corporations that you expected to fight against the legislation, Pepsi and Coca Cola, are now embracing the legislation and are actually fighting to get it passed. In the long run, the competition dwindles and the only ones that are able to meet government standards are the larger corporations, thus killing small business, limiting competition and eliminating the free market system.

This is how corporatism works, corporations have regulations imposed on them that are supposed to be in the best interest of the country. The corporations that can afford to comply with these regulations are rewarded by having their competition eliminated. A perfect real life example of this was the governments attack on Big Tobacco during the 1990's. During the 90's the Clinton/Gore administration demonized big tobacco companies for selling the "only product, that if used properly, it will kill you."

Interestingly enough, Big Tobacco agreed to pay out over 240 billion dollars to state governments. The Big Tobacco companies were forced to implement advertising that discouraged youth not to use their products, create education programs about the dangers of smoking and publicly admit their errors. What sensible businessman would agree to perform such acts against his or her own company? The answer is simple, only those who deem it beneficial to them. The End Game for Big Tobacco, was the elimination of smaller, less stable third and fourth tier manufacturers who were still required to make escrow payments. Here is what happened, Big Tobacco increased the price of cigarettes, the price increases were well beyond the cost of the government settlement. This allowed smaller tobacco companies to immediately move forward as they began to see an increase in sells, after all their products were suddenly cheaper. Unfortunately for them however, state governments began demanding higher payouts from small tobacco, even though many members of small tobacco HAD NOT AGREED TO THE GOVERNMENT SETTLEMENTS.

Many states had the idea that as long as BIG TOBACCO was willing to reach a settlement, then they were going to do what they could to impose the same restrictions on SMALL TOBACCO. This eventually led to the financial collapse of many small tobacco manufacturers and assured the sustainability of BIG TOBACCO. In essence the government, through regulation, eliminated the competition.

This is as far from the Free Market approach as one can get, in fact it is exactly like the corporatism of Fascist Italy and Nazi Germany. This entire thought process can be summed up best by saying "the manufacturers that bend to the will of the government, will be rewarded by the government." This sounds eerily familiar to the old Nazi refrain "The common good before the private good." Where this ideology exists the Free Market cannot!