Big Government Supports Big Business


One thing that consistently irks me is when small government advocates are labeled as “corporatist” or being “pro big-business.” This label usually comes from the political left and serves as a criticism to those who favor less government regulation. The belief that favoring less regulations means you are in support of corporations and big-business is a myth that stems from not understanding free-market capitalism and how it works as an economic system. In truth, those who favor smaller government and less regulation are the opposite of friends to big-business while an increased size in government tends to help big businesses and give them a competitive advantage. The great irony is the same group that supports bigger government and more regulations is often the same group that claims corporations essentially control politicians by donating money to campaigns and buying political favors. The left acknowledges big-business is in bed with government, yet they still advocate for more government. Many regulations imposed by the state are lobbied for by big-business and put in place to prevent competition.

Despite this faulty logic, the left still believes that increased regulation is necessary to save us from corporations controlling everything. The emergence of Uber is a great example of how government regulation is enacted to help big-business. The reason taxi rates are very high in some cities is because government regulation makes it expensive and hard to become a taxi cab driver. Currently it costs upwards of $800,000 to purchase a medallion in New York City to legally drive a taxi cab.[1] Why does it cost so much to do a simple profession? The answer is because government regulations only allow a very limited amount of medallions to exist because taxi companies lobby the government in order to restrict competition and essentially have a monopoly on the service. Surprise, government regulations help businesses create monopolies. Now taxi companies are lobbying to have services such as Uber outlawed. This is because Uber poses a threat to the big-business monopoly that government created. The supporters of small-government want less regulation to see competition thrive while supporters of more regulation help to create big-business monopolies.

There are many examples of big government regulation, so let’s look at another one. The minimum wage is seen by some as necessary to make corporations and big-businesses pay their employees a living wage. However, the minimum wage is yet another regulation supported by big-business to harm competition. As said by Wal-Mart President Bill Simon, “We are not opposed to minimum wage increase, unless it’s directed exclusively at us.” A higher minimum wage would actually work to help Wal-Mart and other big corporations because they are able to afford to pay their workers a higher wage than a locally owned family store. Smaller businesses could not afford the increase labor costs, causing them to go out of business, resulting in corporations gaining an even larger market share– all thanks to government regulation.

I could go on endlessly about how regulation is aimed to harm competition, not control corporations; if you don’t believe me try opening a business and see how many licenses you need to obtain just to sell a simple good or service. Indeed, monopolies have never existed in a free-market and are only created when competition is harmed via government regulation. Advocates of smaller government are pro market competition while advocates of more government regulations are inevitably in support of policies leading to big businesses gaining more power in the market.

[1] http://nycitycab.com/Business/TaxiMedallionList.aspx

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