Give the “Occupy Wall Street” crowd has a valid point in its criticism, but it embraces an entirely wrong solution.

As James Sinclair has noted, “The greatest threat to our economy is neither corporations nor the government. The greatest threat to our economy is both of them working together.”

Sinclair proposes that Occupy Wall Street and the Tea Party have some common ground. They both believe that “large corporations lobby government to have more power, and in return the government enacts laws and regulations favorable to large corporations.”

 

 

 

 

 

 

Let’s do a quick trip down memory lane:

  • Government ethanol mandates / tax breaks and Archer Daniels Midland (ADM)? Check.
  • Government takeover of GM and bailout of the UAW, abrogating decades’ worth of bankruptcy law (sticking it to bondholders)? Check.
  • Government bailout of Goldman Sachs and many other firms, with the cost borne by everyone else? Check.
  • Government-imposed renewable energy requirements, which enrich General Electric? Check.
  • A “Big Green” coalition to change energy, environmental and transportation policies–not to mention something as simple as the type of light bulb you can use–in the name of “doing something about climate change?” Check.

What do we have here? A classic combination of two unsavory qualities of our political system: private companies seek favors from government, and governments seek to expand their influence over the economy.

To be fair, not all favored companies in the politically driven economy are of the size of GM or ADM. But they set the tone for smaller deals, such as the one between the State of Minnesota and a Seattle-based company for a solar energy manufacturer in the Iron Range.

Sinclair concludes that higher tax rates and special tax breaks are two sides of the same coin; specifically: anti-market activity:

“Bailouts, subsidies, tax breaks, special rights and privileges, regulations designed to restrict competition—to name a few of the many ways the government protects and stimulates corporate interests, and those things are every bit as anti-free market as, not to mention directly related to, the high taxes and excessive bureaucracy that gets Tea Partiers riled up.”

Attempting to strengthen government as an attempt to rein in business is not only an unconstitutional idea, it’s a fools’ errand based on the assumption that a large government can be wise, disinterested, and fair.*

So the surest way to attack the threat to freedom posed by the “coalition of big” is to keep the size of government–especially but not only the federal government–in line.

For further reading, please see the blog The Knowledge Problem, and associated links.

* Is business a problem? To the extent that it is empowered by government. Consider that while government is by definition perpetual, only two of the original twelve members of the Dow Jones Industrial Average exist today as independent companies.