Free Bazaar Blog

I hate it when as a defender of free markets, people simply assume that I am for corporatism. I am not sure how libertarians of all people can be accused of that. Let us look at Wikipedia page on corporatism. Here is a quote:
"Countries that have corporatist systems typically utilize strong state intervention to direct corporatist policies and to prevent conflict between the groups." How it can be assumed that something needing strong state intervention can be supported by libertarians, is a mystery to me.
Corporatism cannot survive without state's help. Other way to look at it is that the very reason the corporates flock to the government is because of the power of granting privileges that they hold. If we reduce or eliminate that power of the state over the economy, the corporates would be stop lobbying and bribing the state and this would automatically get rid or corporatism or the unholy alliance of corporates and the state. In fact I will claim that pretty nearly all if not all big companies successfully use state to create entry barriers that prevent new competitors from entering and dethroning them. These entry barriers take many different forms, like: Patents rights (see this article , study and online book for detail on why patents are counterproductive and create monopolies), excessive regulations that cost so much that only large companies can afford them (For example see this article) etc.

Also, this article summarizes the libertarian viewpoint on corporatism very well. Some quotes:

"corporate power and the free market are actually antithetical; genuine competition is big business’s worst nightmare. But also, in all too many cases, yes —because although liberty and plutocracy cannot coexist, simultaneous advocacy of both is all too possible."

Corporations tend to fear competition, because competition exerts downward pressure on prices and upward pressure on salaries; moreover, success on the market comes with no guarantee of permanency, depending as it does on outdoing other firms at correctly figuring out how best to satisfy forever-changing consumer preferences, and that kind of vulnerability to loss is no picnic. It is no surprise, then, that throughout U.S. history corporations have been overwhelmingly hostile to the free market.

"One especially useful service that the state can render the corporate elite is cartel enforcement. Price-fixing agreements are unstable on a free market, since while all parties to the agreement have a collective interest in seeing the agreement generally hold, each has an individual interest in breaking the agreement by underselling the other parties in order to win away their customers; and even if the cartel manages to maintain discipline over its own membership, the oligopolistic prices tend to attract new competitors into the market. Hence the advantage to business of state-enforced cartelisation. Often this is done directly, but there are indirect ways too, such as imposing uniform quality standards that relieve firms from having to compete in quality. (And when the quality standards are high, lower-quality but cheaper competitors are priced out of the market.)"

What It Feels Like To Be A Libertarian?

This essay captures exactly how I feel.

"Imagine spending two decades warning that government policy is leading to a major economic collapse, and then, when the collapse comes, watching the world conclude that markets do not work.

Imagine continually explaining that markets function because they have a built in corrective mechanism; that periodic contractions are necessary to weed out unproductive ventures; that continually loosening credit to avoid such corrections just puts off the day of reckoning and inevitably leads to a larger recession; that this is precisely what the government did during the 1920's that led to the great depression; and then, when the recession hits, seeing it offered as proof of the failure of laissez-faire capitalism. "