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Why Are Statists So Inconsistent?

From time to time, I think of this question.  Consider free speech -- almost every liberal views that as the one part of the Constitution they’d keep. Indeed, they once defended the rights of Nazis (Nazis!) to march in Skokie, Illinois! Now they find it all too easy to support selective speech restrictions: “harmful” speech, campaign finance laws, campaigns to eliminate the “false balance” of the media (re global warming and other PC-controversies).

Free speech now is restricted to intellectuals --- academics, the media (if they don’t fall into “false balance”), liberal politicians. But economic interests must be treated differently -- they have undue influence and threaten true, democratic “free speech.” Business and business friendly voices have been targeted repeatedly -- and campaign laws are but one example. Research papers funded (even with independence guarantees) must carry the equivalent of  a scarlet dollar sign. Experts from the business world are denied a voice on government advisory committees. Activist shareholder groups file shareholder resolutions seeking to force firms to cancel any support of business-friendly policy group voices. The First Amendment they support is only to allow the Chattering Class to chatter in much quieter rooms.

Another statist argument that illustrates this inconsistency is their view on “cooperation.” They seem to view the market as anti-cooperative -- only the state, they seem to believe, allows cooperation. Free markets are certainly competitive -- indeed the very essence of free market capitalism is Schumpeter’s creative destruction. But, firms certainly do all in their power to cooperate with their customers, their suppliers, their shareholders, their employees, those living in their neighborhood. Such cooperation is essential to sustainable profitability.

Moreover, firms often seek to cooperate even with their fiercest competitors. A firm, after all (a la Coase) is best viewed as that assemblage of tasks that are best performed at roughly the same scale -- within the same entity. Typically there will be some tasks -- cooperative R&D, resolving intellectual property rights disputes, technology advertising -- that is better performed at the supra-firm level (that is via joint ventures). Yet, statists see all such cooperative ventures only through the antitrust regulatory lens. Often they are banned as “anti-competitive!”

Statists fail to understand that the essence of capitalism is cooperation -- voluntary exchange. Firms, of course, compete to persuade customers to come to them rather than others, but they do so by making their offers more attractive, more cooperative. Nicer stores, lower prices, more agreeable clerks -- all to encourage more cooperation. Yet, all that is depicted as nature savage in tooth and claw! How silly. Individuals compete for mates. Do we really think that is “vicious competition?”