Friday, April 17, 2015

Why Big Government Loves Big Business

Big Government, and the politicians who support and use it, often attack "Big Business" (Large, publicly-held corporations and businesses that operate internationally with billions of dollars at hand) as corrupt, evil, and just all-around bad. Democratic politicians often rail against large corporations and generally paint Big Government fighting for the average guy as the counter-weight to Big Business.

And it's a great con. Big Government, and any kind of Fascist or Socialist state, loves Big Business for a variety of reasons:

1) Big Business is predictable. Large organizations move and adapt slowly and predictably. The government knows how big, established corporations will react to things, and can plan for it.

2) Big Business co-operates. The government can call the CEO of a major company and ask for his help on an issue. That's one of the major ways the NSA managed to get a backdoor into all the major internet providers - they asked.

3) Big Business collaborates. The government can count on the active support of many large corporations for most if not all of it's policies.

And Big Business likes Big Government just as much. Why?

1) Big Government means complex rules and regulations to follow to be in business. A large corporation is already setup to absorb the legal costs of the rules, and may just have to hire more corporate attorneys to comply. Plus, once a large organization established practices that follow the rules, compliance costs go down. Potential competitors, on the other hand, have to pay those costs up-front.

2) Big Government often asks for help crafting regulations. That allows large, existing firms to help draft the laws around their own practices, making the way they do business the only legal way to do business. As an example, "micro" financing is illegal in the US, that's why places like Kickstarter and GoFundMe operate on a 'donation' basis. That protects Wall Street and the NYSE from potential competition in the form of brand-new financing models.

3) Big Government grants favors. With enough employees and market share, larger corporations can be far less careful with their money with a Big Government, because the government will bail them out or grant them a special subsidy.

4) Big Government kills competitors. Whether through grants of monopoly privilege or just rigging the game, Big Government's greatest asset to Big Business is killing or preventing small start-ups. Because the Internet was largely unregulated, thousands of small start-ups went into business and tried to do something worthwhile, and hundreds were successful. The biggest threat to Big Business is not another Big Business with a similar model. It's some upstart country bumpkin driving an old Ford pick-up or a couple college kids spitballing ideas.

So while those who support Big Government often pretend to be fighting big corporations, in reality that's a con. They work together to serve each other's ends and protect the other against their shared enemy: disruptive upstart nobodies with a new idea.

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