Tom Blumer reminds us of what has long been known, that big businesses often oppose free market economics, preferring to squelch competition and gain advantages through government subsidies:
That business leaders are frequently all too willing to sell out the core principles of the free market system in the name of perceived and often illusory short-term profits is not exactly news. Adam Smith wrote over 200 years ago that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Too many businesses, when they reach a certain size and gain confidence that they are no longer just a few missteps away from serious financial problems, often put more energy into cementing their current market positions through anticompetitive means than into growing or expanding their enterprises. If they become big enough, they often turn into institutions inexplicably perceived as “indispensable,” which then enables them to lobby for unfair breaks from governments. Thus, at the local and state level, supposedly indispensable businesses that are sometimes as small as a few hundred employees receive tax abatements and other incentives.
Not only did Adam Smith warn of this tendency, Karl Marx believed it was one of capitalism’s “internal contradictions” that would bring it crumbling down. Both Democrats and Republicans often blur over this fact, at the expense of the small businesses that are really on the front lines of the free market.