I got this email from Ed Yardeni who leans pretty hard to the right, but he is not an extremist. He is essentially saying the same thing that I said:
Smith famously wrote: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.”
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The problems start when the butchers, brewers, and bakers form trade associations to stifle competition, or join existing ones that do so. The associations support politicians and hire lobbyists who promise to regulate their industry—for example, by requiring government inspection and licensing. In this way, they raise anticompetitive barriers to entry into their businesses. In other words, capitalism starts to morph into corrupt crony capitalism when “special interest groups” try to rig the market through political influence. These groups are totally selfish in promoting the interests of their members rather than their members’ customers. At least Smith got that concept right when he also famously wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
Although Yardeni is formulating this as trade groups, the concept is true for all lobbyists, be it the chamber of commerce or the foreign national lobbies. If you listen to any retired senator (the sitting ones will want to keep their job, so they won't be forthright), the will tell you that money is the milk and blood of politics. And that while every industry group has a lobby in the Washington DC, the common people do not have one. The flow of money to the politicians is entirely one-sided. |
