Big government solutions will stifle the free market
There’s a bipartisan movement in Congress to fix what isn’t broken. While such a tendency is hardly new to official Washington, the recent impulse sees politicians from both sides of the aisle looking for ways to use government power to fix what they see as a broken capitalist system.
As Russ Greene and Adam Millsap write in City Journal, this is something defenders of free markets should fight. But how deep is the problem? It’s scrambled the usual left-right narratives for starters:
Conservatives have termed the phenomenon of businesses expressing support for progressive politics “woke capital,” but their proposed responses have not always been sound. Some of them, often referred to as “national conservatives,” have conjured an ideal past when American businesses took care of their employees, customers, and communities—a past undone by libertarians and neoliberals, who took control of Washington, controlled economic policy for two generations, and made business serve Wall Street instead. This potted history usually culminates in an appeal for government to require companies to serve, once again, the common good. Progressives from Ralph Nader to Elizabeth Warren have told a similar story in calling for centralized federal control of corporate decision-making.
This populist-progressive axis of anti-market evil, however, still manages to stumble over its demands for a new capitalism:
In a recent Senate Banking Committee hearing, Republican and Democratic senators grilled CEOs of the nation’s six largest banks. Both groups of senators wanted banks to lend more to the right groups and less to the wrong ones, but they had conflicting definitions of right and wrong. Political micromanagement of corporate governance won’t be easy if one side’s friends are the other side’s foes.
An ideal outcome would be for the two sides to struggle against one another and leave the market and companies alone. But that’s not going to happen, because the political class is incapable of leaving anything alone.
The advice to companies, then, is to avoid as much as possible the political traps both sides deploy to score points, and campaign contributions. Yeah…that’s probably not going to happen, either. The larger and more intrusive the state becomes, the harder it is to escape either its grip or its demands for tribute.