Posted by
Andrews on Wednesday, August 13, 2008 3:54:40 PM
I have recently noticed a disturbing trend among so called conservatives, the tendency to accept the liberal fear of the "big". Whether "big" oil or "big" business and the "evil monopolies", many conservatives seem to have bought into the crude populism of the left. They have joined their libneral counterparts in maudlin laments over the "death of small business" and in formulating schemes to revive trust busting, while fearing every form of "bigness", except int he government, of course.
Now, it is sad that I should have to explain this to conservatives, but there is nothing inherently bad about big in economics, nor is there anything inherently noble or good about the small. A "mom and pop" shop is logically neither inherently better nor worse than a warehouse store. In many cases, the large store provides goods more cheaply, while in general the smaller store provides more service, with less selection and higher prices. But even those descriptions aren't always true. However, the choice of where to shop is up to the consumer. Just because you prefer browsing tiny shops and are willing to pay more for it does not make it "better' or give you the right to force that decision on others.
But I think I am getting ahead of myself. Since conservatives seem to have forgotten their basic tenets, let me start at the beginning. There is a huge difference between economic power and government power. Economic "power" shouldn't even be called that. The term is misused and so vaguely defined as to be meaningless. Sometimes it means simply the possess ion of more money, in other contexts, it means market share.
Let us assume in this case "economic power" means the amount of market share one controls. And how does a business get such market share? By providing a service and price combination which consumers prefer to all other options. Sometimes it is by providing better product, sometimes by providing something cheaper, sometimes a combination of the two, sometimes by providing better service. Ther eis no hard and fast rule. Even in the same general field. For example, while Wal Mart won out by providing the cheapest prices, Nordstroms did very well by providing customer service, even if the prices were slightly higher. Both have done well using very different models.
But the point is that there is a world of difference between "economic power' and "government power". Economic power is gained by providing for consumer desires better than anyone else. Government power is gained by forcing citizens to give up rights.
And that is not the only difference. Once government power is gained, it can be used to prevent its loss. In other words, government power is very difficult or impossible to reduce.
On the other hand, economic power only remains as long as the company continues to provide the best service. Should they fail to do so, they will lose their economic power and a competitor will take their place.
Now, I know many will argue about predatory practices, but they cannot continue to keep a monopoly in place. Any scheme to exclude competitors requires accepting losses. If they take these losses and then try to recoup when the competitors are gone,t hey will immediately face new competitors. In other words, trying to use market tactics to maintain a monopoly will quickly bankrupt any company.
There is one way (besides providing exceptional product at a good price) to keep a monopoly, and that is government power. But in the free market, there can exist monopoly, but they cannot charge monopoly prices, if they try they will be destroyed by competition.
And at one time conservatives knew all this. Unfortunately it appears that the combination of rising oil prices and sill populists disguised as "paleo-cons" have caused many conservatives to forget their dedication to freedom must include economic freedoms, and they now sound more like liberals than conservatives.