Tuesday, March 1, 2011

Capitalist on Capitalism

Vilified capitalist Charles Koch pens an op-ed in the WSJ today, attacking government overspending... on corporations. He doesn't say anything about public sector unions, but he blasts subsidies for corporations and industries, including his own. Call him a hypocrite if you will, but he's shining a light on Federal welfare for his own sector of society, not pointing a finger at others.
Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay. Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want...

Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs... For example, because of government mandates, our refining business is essentially obligated to be in the ethanol business. We believe that ethanol—and every other product in the marketplace—should be required to compete on its own merits, without mandates, subsidies or protective tariffs.
Government's role in business should be, as outlined by Adam Smith, guaranteeing fair competition, breaking down barriers to entry, and enforcing contracts. Plaintive cries of "ruinous competition" were maudlin in Smith's day, and are all the more so in ours: get rid of ethanol subsidies, get rid of guaranteed government contracts for favored businesses, get rid of all forms of corporate welfare, and the economy will grow.

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