Why pro-business doesn't always mean pro-economic liberty

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Brandon Dutcher has hit the nail on the head:

Conservatives favor low taxes, fiscal restraint, minimal regulation, and serious respect for private property rights.

Business leaders and chambers of commerce, on the other hand, often want higher taxes, lavish government spending (to pay for pet corporate-welfare projects), extensive regulation (to thwart competitors), and the ability to take other people's property (for purposes of development).

And that's why Chambers of Commerce, like the one in Tulsa and the one in Oklahoma City, often oppose tax cuts.

But, you say, the overwhelming number of Chamber of Commerce members are small businesses who wouldn't benefit from that lavish government spending, extensive regulation, or eminent domain abuse. These small businesses would benefit as the rest of us do from lower taxes, property rights, and reasonable regulation. So why do Chambers of Commerce wind up working against policies that would benefit all of their members, as well as the public at large?

It's public choice theory in action -- concentrated benefits and diffuse costs. While each small business pays for government overreach, the incremental cost of each piece of pork or new regulation isn't overwhelming enough for a small business owner to distract him from his focus -- getting his own business off the ground.

The bigger businesses in industries that would benefit from a larger, wealthier, and more powerful government have a financial incentive to use their resources to work for those ends. They use those resources to contribute to election campaigns and hire lobbyists. They can also afford to try to dominate Chamber internal politics. They can justify allowing staffers to use paid time to volunteer for Chamber activities or to run for Chamber office.

Gaining influence over the Chamber would have a couple of benefits -- access to millions in city hotel-motel tax funds and the ability to have a neutral-sounding, pro-business-sounding organization advocating (as an uninterested third party) for the program or policy that would make one's own business very prosperous.

Meanwhile, Mr. Small Business Owner writes his Chamber membership check each year, but otherwise doesn't pay much attention to what the organization is saying or doing in his name.

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Dan Paden said:

Amen! Rod Dreher dwells on this sort of thing, specifically as regards elements of the agriculture business, in Crunchy Cons.

It does often put conservatives in a maddening position, though, since many people, including many conservatives, often think that conservatism is all about doing the will of established businesses. Trying to explain to a liberal that many conservatives, too, are wary of big business (or big government functioning at its behest) can be an exercise in frustration.

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This page contains a single entry by Michael Bates published on November 3, 2007 11:22 PM.

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