Business people love to say how much they cherish free markets, while decrying government interventions that limit entrepreneurship and personal freedom. But the truth is, business people when given a chance happily give up free-markets in exchange for cronyism.
Think about it. Competition is good for consumers because it keeps prices low while increasing the quality and choices of products and services. Yet competition is hard work for businesses. They have to fight for customers by innovating and evolving in ways that consumers demand. To avoid the gritty work of fighting it out in a free market, organized private interests lobby the government for special regulations, preferential tax treatment, and laws that keep out competition. They lobby lawmakers to constrain the same free markets in which they originally achieved success. This practice has been around for as long as there have been businesses and governments.
For example, the great economist Milton Friedman cited the Interstate Commerce Commission in his 1980 book Free to Choose. In his new paper, “The Pathology of Privilege,” my colleague Matt Mitchell has documented all the ways that private businesses get stuff from the government, often at the expense of all of us, and certainly at the expense of capitalism. Here is an interactive visual (click on the buttons on the image) of what cronyism looks like: