Wednesday, July 29, 2020

1889 Institute op-ed: Why I am not Pro-Business

Why I Am Not Pro-Business
By Byron Schlomach

Most who consider themselves conservative, even many with libertarian leanings, are comfortable with describing themselves as pro-business.

Not me.

Just because I’m not pro-business doesn’t mean I’m anti-business, though. I’m pro-free enterprise.

Chambers of Commerce across the nation are pro-business, especially pro-BIG business. They are established to represent their business members, with large corporations usually the most influential amongst their numbers. Chambers of Commerce almost always favor business subsidies, special tax breaks for certain businesses that small businesses don’t get, or exempt only certain businesses from regulation. They specialize in persuading gullible politicians anxious to get their faces in the news at ribbon-cutting ceremonies to favor these policies.

Here is one example. Pro-business interests favor special discretionary funds at the state and local levels used to pay businesses to locate within the government’s jurisdiction. Often called “closing funds,” these allow the ruling class to take credit for creating jobs. Businesses that benefit from these payoffs rarely change their plans for the payoffs. Since different jurisdictions bid for the same business projects, big corporations can pit communities and states against each other to maximize the payoff in the jurisdiction the corporations intended to locate in all along. Closing funds, at best, make no economic difference at all. In all likelihood, they have negative impacts. Crony policies the world over have been shown to subtract from people’s prosperity.

The pro-business crowd loves to shower taxpayer money on Hollywood, professional sports, tourism venues, renewable energy, trolley projects, and high-tech, among others. These are all popular because, somewhere, one of these industries has grown fast and driven a community’s high-paying jobs and economic development or a few vocal and influential people benefit. The pro-business crowd likes to sell the idea that with the right government incentive every community can get in on the same economic boom. It’s usually an easy sell since the jobs they supposedly create are easy to see.

The damage, though, goes unseen. When a restaurant chain is subsidized, who knows how many budding restaurant entrepreneurs are discouraged from even trying? Unfortunately, subsidizing an attempt to develop an existing, already-booming industry in a place where it has never been before is like buying stocks when prices are high; the opportunity is actually already gone.

Being pro-business grants license to policymakers at all levels of government to act like they are in favor of free markets when they are actually baby socialists, thinking they can centrally plan an economy into prosperity.

Pro-business policies are crony policies. They cement in place a privileged few, create inequality before the law, and contribute to social unrest when people gain a sense that some count for more than others in our government. So no, I’m not pro-business; I’m proudly pro-free enterprise, where the economic playing field is level, and government favors no one in particular.


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