Human Events... Defense of Big Business

From Human Events…

In Defense Of Big Business

by John Hayward

12/22/2010

I’ve been pretty rough on Big Business lately, in the course of discussing profit through regulation, and the Net Neutrality issue.  It seems fair to put in a few words in its favor.  It’s important to have a clear view of the motivations and interests of large corporations, but that’s not logically equivalent to hating them. 

Large corporations are, quite simply, an inevitable extension of economic freedom.  Economies of scale are highly desirable, so smaller entities will eventually combine to create them.  The result can bring terrific advantages to consumers.  Is there any question that mighty corporations have done much to improve the quality of Western life?  More pointedly, I would contend they have done far more to improve the lives of the lower classes than all the obnoxious socialists of the past two centuries. 

Look at the vehicles, appliances, televisions, and computers filling the homes of every American, rich or poor.  None of those things could have been created by independent small businesses, certainly not at the fantastically low prices we pay.  Nothing like them has been produced by totalitarian governments. 

The products of Big Business have done more to level the quality of life between rich and poor than redistributionist social programs, and they did it in a way that made everyone wealthier.  There’s no doubt the rich live much better than the middle class and poor, but the resources and luxuries we all have access to have increased dramatically over the past hundred years. 

Big Business provides consumers with more choices, by driving down price and increasing the availability of goods.  Contrary to a lot of hand-wringing during the early days of Wal-Mart’s ascension, no one is left with fewer choices when the big retailers come to town.  They vigorously do battle with each other.  Stores like Target offer a better shopping environment than Wal-Mart, at a small premium in price, while discount operations like Costco are cheaper for those willing to buy in bulk.  (To paraphrase Fight Club, on a long enough timeline, anyone can eat sixty pickle spears.)  None of these business models would work as small local concerns.

Big corporations also provide a sense of confidence to the highly mobile consumers of modern America.  It’s a comfort to drive into a strange town and see hotels, restaurants, and service stations from companies you trust.  It can be a delight to discover local goods too… but we increasingly do that with data services like Orbitz or Priceline, made available to us by huge companies. 

The Internet is the greatest environment ever created for energetic small businesses with big ideas – that’s one of the reasons the odious “Net Neutrality” regulations must be overturned, and quickly – but it has also brought us services that could only be provided by big businesses like Amazon, Google, and Blizzard Entertainment.  I’m second to none in my admiration for the resourcefulness and creativity of independent programmers, but no “mom and pop” operation could have created World of Warcraft.

Production efficiency, volume purchasing, vast research and design capital, and the power of national advertising make the formation of Big Business inevitable.  Consumers are unquestionably hungry for the products and services they provide.  Wal-Mart became huge because a vast number of price-conscious customers made it that way, not because some government bureau ordained its creation. 

The great pitfall of Big Business is that, in a statist economy, government power becomes a fabulously valuable resource, which only large corporations can afford to purchase.  In fact, it becomes patently foolish for such operations not to buy political influence, for it will surely be used against them… or a carnivorous government hungry to feast upon scapegoats will come after them on its own.  Big Government provides armor against competition, and weapons to smash up-and-coming small businesses in search of market share.  It is in the nature of Big Business to want these things, and Big Government to offer them.  Our challenge is to be vigilant and prevent the necessary marketplace from forming.  It’s the one market where the creative power of capitalism is nowhere to be found.