Kevin Carson wrote: > > I think you're underestimating the massive effects of state capitalist > intervention not only individuallly, but the synergy between them.
Don't forget the synergies on the other side. > Regarding transportation subsidies alone, Tibor Machan wrote a good article > for The Freeman (August 99, I think) against not only transportation > subsidies, but against the use of immanent domain for highways and airports, > as well. He admitted that this would almost certainly involve a massive > decentralization of the economy, but responded by questioning whether that > was necessarily a bad thing. First, the roads and airports are already here, so there would not be much of a decentralizing effect of cutting off subsidies and eminent domain now. Second, at least part of the subsidies have been to sustain small communities that can't carry their own weight. That was one of the main pro-airline regulation arguments - cross-subsidizing small unviable airports with monopoly pricing in big cities. > As for patents, can we seriously doubt that > the pattern of control over productive technology would be a lot different > without them? Most IO economists think the effect of patents is over-estimated. In exceptional industries like pharmaceuticals where patents are important, the main effect would probably just be to end most R&D. > By no means are these the only forms of state intervention--I just stuck to > them for reasons of length in my original post. Tucker's big four--besides > patents, the money, landlord and tariff monopolies--are at the foundation of > the legal structure corporate power depends on. Tucker is a great writer, but his economic understanding was spotty at best. Rothbard has a good critique in *Egalitarianism as a Revolt Against Nature*. A few simple points: 1. What Tucker calls the "money monopoly" in fact leads to a much higher rate of monetary growth than free banking would. 2. You can argue about exactly what effect government land grants had on the land market. But land ownership has never been concentrated enough in the U.S. for collusion to work. Even if you handed all land over to 1000 corporations, there is little reason to think land prices would be any higher. 3. Tariffs, as I said, are globally deconcentrating. Without them, inefficient national industries would be driven out of business by the world's best. > Then there's the subsidy of primitive accumulation--enclosures, > expropriation of copyholders, slavery, colonial conquest, etc.--without > which the concentration of ownership and economic power would almost > certainly be much less. Transnational agribusiness certainly wouldn't exist > on anything like its present pattern, without something like an enclosure > movement occuring in the Third World this century. You've also got plenty of political efforts to prevent agribusiness and protect local farmers. Hardly clear that the net effect is pro- concentration. > The military-industrial complex has a lot to do with what the high tech > industry looks like now. It is also probably responsible for the very > existence of the jumbo jet industry--without government demand for heavy > bombers, the demand for jumbo jets alone wouldn't have paid for the > specialized machine tools. And while we're at it, the value of plant and > equipment in the U.S. almost doubled during World War II, mostly at taxpayer > expense. During the 1990's, we were able to see the California military high-tech sector switch significantly into civilian production. The latter may have been less concentrated in some ways, but it is not a clear call either, even in the areas where copyright doesn't matter. > In the specific case of antitrust laws, which you mentioned, the main cases > that come to mind are Standard Oil, AT&T and Microsoft--in all three cases, > centrally important resources or infrastructures on which the whole > corporate economy depended, where price-gouging could hurt corporate > interests in general. It reminds me of Engels' prediction of the "mixed > economy" in Anti-Duhring. When corporate capitalism reaches a certain level > of complexity, capitalists will act through their state to plan and > stabilize the corporate economy--which will entail, among other things, > nationalizing infrastructures of central importance to the entire economy. > In this country, it was done through antitrust instead. Most of the > "progressive" and New Deal regulatory state were part of the same > phenomenon--what Kolko called political capitalism, Weinstein called > corporate liberalism, and the Frankfurt school people called planned > capitalism. > > Gabriel Kolko argued that oligopoly markets wouldn't even exist without > federal regulation. Most of the trusts at the turn of the century were > over-leveraged and losing market share to smaller, more efficient > competitors. The Clayton Act's "unfair competition" provisions, however, > made price war much less likely and in effect created a state-sponsored > trade association for each industry. From this time on, market share > largely stabilized, and the world was finally safe for oligopoly. I've heard this whole story many times. It has some kernels of truth, but it is very one-sided. Are you seriously claiming that market shares have been "stable" ever since the Clayton Act? *Because* of it? > The liberal goo-goos in the "public" school system sell all these statist > measures as populist-motivated "countervailing power" against big business. > But bleeding hearts like Upton Sinclair were just useful idiots to help sell > the measures to the public--they were really rent-seeking measures on behalf > of corporate power. I'd say you're missing the main point of the rent-seeking literature: It doesn't actually on net benefit "business." Firms invest in lobbying until lobbying earns a normal rate of return. It doesn't increase profits on net. It just wastes resources. In any case, what about the other anti-bigness policies I mentioned? Double taxation of corporate income? Regulatory exemptions for small business? Extra liability exposure of big business? It is hard to see how these are "rent-seeking measures on behalf of corporate power." > >From: Bryan Caplan <[EMAIL PROTECTED]> > > >Frankly, this strikes me as quite unlikely. There are lots of big > >government policies that encourage firms to be smaller than they would > >be in a free market. Double taxation of corporate income is the most > >obvious. Antitrust laws tend to be used against large market leaders. > >A lot of regulations only kick in if you have more than 50 or 100 > >employees. > > > >And once you are talking multinational corporations, there are other > >government policies discouraging cross-national integration. > >Protectionism, most obviously, tends to preserve the firms in each > >nation that aren't efficient enough to compete with the world's market > >leaders. > > > >You're right that there are some government policies pushing in the > >other way (any time regulations impose a fixed cost, firms' minimum > >efficient scale mathematically shifts to the right), but on balance I > >think you're wrong. Under laissez-faire, big corporations would be > >bigger than they are now. But to quote Seinfeld, "Not that there's > >anything wrong with that." > >-- > > Prof. Bryan Caplan > > Department of Economics George Mason University > > http://www.bcaplan.com [EMAIL PROTECTED] > > > > "He wrote a letter, but did not post it because he felt that no one > > would have understood what he wanted to say, and besides it was not > > necessary that anyone but himself should understand it." > > Leo Tolstoy, *The Cossacks* > > _________________________________________________________________ > Chat with friends online, try MSN Messenger: http://messenger.msn.com -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] "He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it." Leo Tolstoy, *The Cossacks*
