Why Big Business Hates Free Markets...And Loves Big Government
There is a huge misconception, where Americans are led to believe that Government and Big Business are antagonists. We see it in Hollywood movies, and in the media all the time. Americans need government "regulations" to protect them from business. In reality, Big Business could not be happier with this slight-of-hand. They love government "regulations," and hate the free market.
There is a huge misconception, where Americans are led to believe that Government and Big Business are antagonists. We see it in Hollywood movies, and in the media all the time. Americans need government "regulations" to protect them from business. In reality, Big Business could not be happier with this slight-of-hand. They love government "regulations," and hate the free market.
There is a huge misconception, where Americans are led to believe that Government and Big Business are antagonists. We see it in Hollywood movies, and in the media all the time. Americans need government "regulations" to protect them from business. In reality, Big Business could not be happier with this slight-of-hand. They love government "regulations," and hate the free market.
Hello everybody and thank you for tuning in to the Liberty Report.
With me today as co-host is Chris Rossini.
Chris, welcome to the program.
Great to be with you, Dr. Paul.
Very good.
We want to talk a little bit about a subject we allude to and deal with all the time and that happens to be the relationship of big business and big government.
And it's very frustrating to a lot of people and everybody talks about it.
But I'm not sure they always understand exactly the fundamentals and where the line should be drawn because a lot of big business people couch their terms in terms of free markets.
For instance, yeah, they're for free trade, except it has to be fair, which means they want to regulate it and help one person against the other.
So there's always a catch someplace.
They say, yes, I'm for free markets and free enterprise.
Oh, but except.
And all of a sudden we find out that the system we have engenders and energizes all the people in business to do business with the government.
And the truth is, it's pretty hard not to because government is so involved with regulations.
Even if you just really truly wanted a free market, you have to fight the federal government all the time.
You're trying to get rid of regulations.
But those are usually the little guys.
The big guys in big business, big banks and military industrial complex, they're buddies.
They work hand in hand.
And that's where our problem is.
And not only is it an economic problem, but I think it's also a social problem because people start to resenting wealth.
Before we get further into this, because we are going to criticize big business and big government, I want to put a pitch in for rich people that do a good job.
If you're a wealthy businessman and you're competitive, you have no monopoly power because of government regulations, and you get no special benefits from government, but you get voted very wealthy and you get very rich because you provide a service or a product for the consumers and they buy your products and you had none of these special benefits, then you should be rewarded.
It's your money and you should be able to keep it and spend it and invest it.
And a lot of people are every bit as resentful of those individuals as those who make up the large majority of big business who get the benefits from government.
And the one thing that motivates people and the concern is, and I think about this a lot because they don't need to worry about it, it's sort of, he's too rich.
He's a billionaire.
That's way too much.
He doesn't need that much.
And they say, well, we have to take some from him because there's always still some poor people, not understanding that poor people are poor because we don't have a true free market.
But people, what are they going to do?
What if they are providing a fantastic service without the help of government and they're making a lot of money?
Just think of the responsibility they have.
They're serving our needs.
They're giving us a good product.
They're providing jobs.
So whether they make, and it makes no difference, whether they have $500 million or $700 million, they're still very wealthy and they don't need anything.
But their obligations are also maintaining jobs for people, making sure the price is low so that can be maintained.
So that's my pitch for people who are rich the honest way.
Now, Chris, what we want to do today is talk a little bit about the partnership that develops and corrupts and really engenders all the hatred and people despising all people who are in business and they throw them all together.
And I'm sure you've given that a little bit of a thought.
Yes, our current system came into place.
It's built on a lot of propaganda that starts all the way when you start in first grade.
If you go to a government public school, you're told about government and what its role is, and it's there to regulate business.
And the business, there's almost an antagonism that is put in your mind, that government and business are antagonists.
And even in the Hollywood movies, I watched one last night where these evil businessmen were going to take over, but the white knight government came to save the planet.
But government regulations and big business are very much in favor of it because that's how they feather their nests.
And in fact, if you think about what recently happened with Facebook, the big fallout, and the technology industry is still relatively free market.
And then you hear of the Facebook executives say, well, maybe it's time for government regulations.
Well, that's curious.
If they're antagonists, why would they be calling for government regulations?
So there's a lot of sleight of hand that goes to create this crony system that we have.
You know, a lot of words get thrown around carelessly.
You know, talk about socialism.
There are candidates running now on the socialist platform.
And in many ways, they'll say, too, that we have too much socialism, that Obama was a socialist.
I don't see it quite that way.
They're interventionists.
They're radical interventionists.
They're radical, crony capitalists, and they're always divvying up the loot and given special privileges.
Those regulations you talk about, the people who are most powerful write the regulations.
So if they're banking regulations, believe me, they get written by the lobbyists who represent the banking industry who buy off the politicians and support all the system, both through candidates and campaigns as well as lobbying.
So that the regulations is not it.
In a free market and a free society, there's no authority for the federal government under our Constitution to regulate the economy.
Now, where we got off track on this on philosophy is that it was decided a long time ago, and it was shown up in our schools, is that the free market is too radical.
Laissez-faire is evil, and it causes a discrepancy.
And therefore, we don't want anybody to fall through the cracks without even understanding why somebody might be poor.
So they say we have to have a mixture.
We have to have a mixed economy.
And therefore, we don't want this laissez-faire, which is damaging, but we don't want communism either.
So they come up with this idea of interventionism.
And this is well known.
And it generates the kind of thing that you're talking about, Chris.
So that it's the cronyism and buying and the partnership of big government and how the military-industrial complex works.
So this is what happens.
Now, Mises talks about this in Human Action.
He said this is the case.
It's interventionism.
It isn't socialism because there's still some pricing structures out there.
There's a lot of price controls, but overall there's a pricing structure, so you still don't have socialism.
Interventionism's Impact00:10:22
Socialism becomes socialism once the control of all prices are established by the government, and then the whole thing falls apart, like in Venezuela and other places.
But Mises predicted that this does not work, will not work, and he said that socialism wouldn't work and it would collapse, and it did.
But he also was very not very optimistic about interventionism because it would grow and grow and feed on itself.
And that's what we're witnessing now.
And there's some real weak spots in it, like the dwindling middle class.
No matter how great the statistics are, there's a lot of unhappy people out.
The middle class is getting poorer.
A lot of people are starting to worry about their pension funds.
And a lot of people, you know, realize something is going on.
So there is a maldistribution of wealth.
The poor get poorer and they have a harder time surviving and there's a higher demand for welfare.
Same way with government.
There's a contest between who gets the welfare, the big business or the poor people.
Before I went to Congress, I always thought all welfare was for poor people and they were taking away the incentive for go-getting a job.
But I think I've changed my opinion on that because the big bucks really go to big corporations and big banks and they get bailed out.
And it's just not in our country.
This is a global type of system that we deal with.
And that, of course, is why the dollar is so important because it's all propped up on the dollar of printing money and allowing other governments and other banks to be bailed out when necessary.
But everybody eventually wants to protect the dollar.
In order to protect the dollar in this situation, they have to bash gold.
And that, of course, is what goes on constantly.
Ultimately, though, the markets win out, and then we have to sit down and decide that we have a different system.
And Chris, I'm sure you have some suggestions on exactly what those suggestions might do differently than what we have today.
Yes, well, we're trying to reach the people.
And for the people that are listening, please understand that there is no appetite from big business, from politicians, and from the public for free markets.
Nobody is ringing our phones saying, you know what, you guys have the right idea.
Let's skip them out there.
Nobody has any interest.
But there's a lot of people that believe that America is a free market.
So when this crony system crumbles, free market takes the blame, even though it's not in existence.
There's just here and there, there's parts of it.
So that really needs to be understood because immediately the media will say, well, we need regulation, we need more regulation.
And the cycle just continues.
Yeah, I think we can see how it operates because some people said that Obamacare was socialized medicine.
It wasn't.
It was corporate medicine.
The drug companies loved it.
The insurance companies loved it.
And the medical management companies loved it.
And it had not, well, it had something to do with socialism because the goal was to move to, you know, to really ruin the system and then move to a one-party payment.
But I think there's been a step backwards.
I think this administration has helped.
And actually, my son Rand has moved it in the direction of not having the mandate on there to try to move one little step toward a free market.
So yes, this is a contest because if the one-party payers win, that means socialized medicine and total control over fees.
Fees are already controlled a lot, and that's why, you know, there's a lot of money out there.
But most of the money is going to the middleman.
The middleman is out there.
When I started my practice in 1968, I just walked in and opened up my office and had a couple people work in my office and dealt with my patients and billed my patients.
And if they had insurance, they collected it.
And that was it.
Today, you have to have a management company.
The management company is the middleman.
The drug companies are involved.
Just look at what you do with the pharmacies.
Pharmacies really pump up the sale of drugs.
They call you and say, oh, your prescriptions do come by this.
So it's very, very much involved.
But someday there'll be a knock-down drag fight on whether it's going to be totally socialized.
And of course, if you want inefficiency, you work in the direction of Venezuela.
If you want freedom, at least keep it legal.
Keep education legal.
If you want to educate your kids at home or it's homeschooling, keep that legal and keep it legal where you can go to a doctor and have a doctor-patient relationship.
That still does exist in this country.
And hopefully, we can get to convince the people if you want the best price and the best service, you go with the free market, whether it's medicine.
They always say medicine is an exception.
Everybody has to have good medical care.
You can't pick on sick people.
What about poor people?
They claim that they need to be fed and they need to be housed and they need a job and they need transportation.
The thing just goes on and on.
And every time you add something to it, you add on debt.
Debt is the problem.
Debt is the ultimate regulator of what we have today.
And you could send more and more people to Washington, smarter people to write better regulation.
But believe me, it won't work.
Eventually, the market regulates, and the overbearing debt that this system we have, I think will limit how long this lasts.
Yes, very good points.
And for one second, I'm going to put myself into a crony businessman's shoes.
And I personally, if I'm one of those people, I would love those unconstitutional bureaucracies like the FDA, FCC, OSHA, EPA, because they're staffed with former employees of the companies they're supposedly regulating.
You can't take a liberal arts politician and have him regulate some complex business.
So I would make sure some employees are there to make sure everything's okay and then call for subsidies.
Maybe use the word national security to have subsidies come my way.
I would call for licensing to keep competition away from my business.
And if I'm really bold, I would ask for a mandate.
Everybody has to buy my service because, just like Obamacare, just because.
So there's reasons why business loves government regulations and don't want to deal with just the consumer with no props.
You know, and Chris, the one place where we're moving in the wrong direction, I think, is the momentum for having more protectionism, put on tariffs.
Anybody who's having a problem, put on a tariff.
And we've talked about this several times already.
But the tax, you know, tariffs are taxes, and you're not taxing the Chinese, you're taxing the American consumer, and you're taking away his right to buy the product he wants at the best price.
So it's a little bit challenging, and people want more security than to be challenged, but they don't have enough confidence and understanding that markets deliver the goods.
So in spite of all these regulations and the distortion in the monetary system and the distortion in interest rates, it's probably still pretty amazing how much is accomplished.
But I see it being accomplished based on debt and not on good investments and savings.
Capital is supposed to come from saving, not by a printing press.
So that's why this cannot last forever.
Otherwise, why don't we just quit working and just print the money a little bit faster, you know, and hire more people, have more immigrants come in.
We'll just pay salaries for everybody to work for.
And people say, well, that's extreme.
Well, we're working with a program that's pretty extreme that will not last.
So hopefully, Chris, that we can move in that direction of promoting free markets based on a principle of liberty.
And I think it would be very helpful.
Do you care for our closing comments, Chris?
Yes, to our leftist friends out there, because they're notorious for being anti-business.
If you really want to stick it to the man, call for free markets, because they'll shriek at even the thought of it.
But that's very hard for a leftist to do because of their belief in what government is.
But big business would be very much against your call for free markets.
They love government regulations, and they're okay that you love it, too.
Well, you know, it's hard to find, harder now than ever to find a good progressive who's honest with themselves and would have an honest discussion about this issue.
And I've worked with some that I do trust, and we have conversations, and they would take the anti-interventionist position on war and spending all that money on the military.
And they would also be in agreement on civil liberties and privacy here at home.
But then when it comes to free markets, that's different.
All of a sudden they say, this is different.
People aren't smart enough to make these choices and it's not going to work.
So when I approach this, I always try to put that all together.
Freedom means that you have freedom of choice on how you want to run your personal life, how you want to run your religious life, your intellectual life, how to mind our own business about telling other countries how to live.
But this works in that you ought to have the right to keep what you earn and have the incentive to what you earn, and you ought to have the right to make these determinations of what you do with yourself.
The government can't protect you in economic security or in physical security by just having more regulations.
That has to be done.
It's an imperfect system.
But if it's imperfect and you can't have a society where everybody will take perfect care of themselves, why do they think that sending a few people, the boldest and the most anxious to be the personal dictator of everybody else, will do the right thing?
And obviously they don't.
They make things much worse.
So I think the case can be made and should be made, and that's how it has to be made.
It has to be made intellectually.
The ideas have the consequences, and demagoguing and yelling and screaming never works.
So let's hope that we can keep promoting the message of peace and prosperity and move in that direction.
I want to thank everybody for tuning in today to the Liberty Report.