Sunday, July 15, 2007


Jerry Kirkpatrick links to the chapter on competition in Human Action by Ludwig von Mises. As always with Mises, the chapter has profound identifications that at first seem simple and obvious, but after some thought one sees the brilliance of Mises -- especially when you consider that economists of other schools completely miss the "simple truth" that Mises writes.

Take these thoughts on competition:

In a totalitarian system, social competition manifests itself in the endeavors of people to court the favor of those in power. In the market economy, competition manifests itself in the fact that the sellers must outdo one another by offering better or cheaper goods and services, and that the buyers must outdo one another by offering higher prices....

In a free market businesses compete against one another for the consumer's money. But when the state intervenes in the economy, businesses must also compete in currying favor with those in power; if they do not, then the state might pass laws that harm or even destroy a business.

Why do corporations give large donations to both major political parties? Those donations are protection money. When a party gets a large sum of money from a company, it knows that if it regulates that company out of business, the party will also suffer. These considerations are part of the politician's thinking.

Although we hear leftists denounce "dog eat dog capitalism," we rarely hear anyone in power denounce the competition to buy their favor. That is what power is all about -- having people grovel before you for your mercy.

What would you rather have, corporations working overtime to make you happy so that you'll direct your money their way? Or corporate lobbyists in Washington, D.C. kissing the asses of John McCain and Hillary Clinton?

1 comment:

EdMcGon said...

Yet another reason why campaign finance reform is a bigger problem than most people realize.