Dear Friends,
It seems to me, a progressive might argue, we need regulations and big government to control corporations. Without big government riding roughshod over big corporations, the corporations would buy everything and make everyone their slaves. This argument sounds true enough, until you think about the nature of big corporations and big government. The one needs that other like we need air. Big government thrives on corporate graft, lobbying and regulatory capture while big corporations need government regulations to keep entrepreneurial wolves from snapping at their heels, as well as cronyism to make money without having to provide anything for it. The progressive might say that big corporations have no need of big government, but that claim ignores history.
The progressive might say that they came to become so powerful because of the lack of regulations. That lack allowed the Pareto distribution free reign to create robber barons and bone crushing poverty. I would respond that it was not a lack of regulations, that allowed them to become so powerful, it was the result of many factors coming together. The tacit backing of political forces that enabled them to crush their business foes, laws selectively applied, and yes, there needs to be laws prohibiting monopolies. The fact is, no matter how an economy is set up, there will be super rich and super poor… because of the Pareto distribution. Socialist nations are even more stratified. Instead of an economic elite or royalty, they have a political elite.
The Pareto distribution is a theory based on ideas by Vilfredo Pareto. He surmised that the distribution of anything in a complex system will be a long tailed curve. This applies to income distribution, the distribution of productivity in a company, to the work load of a sewer system. It is an elegant mathematical demonstration of why the world is as it is. It also shows that no matter what, there will always be a vast difference between the rich and the poor. Look at supposedly utilitarian societies such as North Korea, the former Soviet Union, present day China, Pol Pot’s Cambodia, etc… and in every case there is the Pareto distribution, but it is magnified, with a much smaller percent of the population controlling much more of the national product.
If a nation seeks to have a free economy and establish a meritocracy then monopoly cannot exist. I think both progressives and conservatives agree on this point. That monopoly is the antithesis of free markets. Monopolies stagnate and with them the economy stagnates. What is so enlightening about this idea, is that while conservatives and progressives agree that monopolies are bad, the government ignores the will of both progressives and conservatives on this point. Which calls into question the foundational premise of the progressive mantra, that big government is the only entity capable of controlling big corporations. It would appear that big government, far from discouraging monopolies and big corporations, instead nurtures and protects them and their monopolies.
Perhaps rather than tens of thousands of bureaucrats writing regulations to “control” big corporations, we had a small government that had laws against monopolies with clear definitions and solutions? What if instead of flattening the income curve with job killing regulations we allowed everyone to get ahead? What if we grew up and faced the facts some people will be rich and some will be poor, and to try to solve that insolvable problem we simply change the rich from those who merit it, on some level, to those who take it by political force. The Pareto distribution doesn’t change just the names of haves and have nots. We should look at it like adults, big corporations need big government as big government needs big corporations, and monopolies… but do we need either?
Sincerely,
John Pepin
