Urban Onramps

Samuel Gregg @ Acton:

Why then are so many business leaders ambiguous about markets?

Apart from resenting market disciplines, many businessmen have not proved immune to the neo-Keynesianism still dominating much economic policy throughout the world. An example is some private bankers’ refusal in the present credit-crunch to contemplate letting any significant financial institution fail – no matter how insolvent it may be. Hence, they agitate to have governments and central banks provide special-financing for ailing institutions, thereby, in classic Keynesian fashion, putting off the ultimate reckoning instead of actually addressing the problem by letting bankrupt financial houses go, well, bankrupt.

Another source of business market-ambivalence is, surprisingly enough, many business schools. We often assume business schools produce hard-charging, wealth-creating capitalists. Undoubtedly some do. But close inspection of many business schools’ curricula reveals their primary focus is on management – accounting, financial, personnel, and process management – rather than free competition and entrepreneurship. While an important aspect of business, management per se is not about risk-taking. Management is mostly about planning and control. It often struggles with, and is sometimes wary of, economic creativity.

Clearly it’s not enough for business to be “pro-business.” Business leaders need to be pro-free enterprise, pro-free competition, and pro-free trade. Otherwise they risk simply becoming lobbyists, helping to create a world in which political influence counts for more than entrepreneurial ability, consumers pay more for lower-quality/higher-cost goods, and the poor in developing nations are locked out of the global markets that give them more hope of a better life than any amount of foreign aid.

To paraphrase St. Luke’s Gospel: “Businessman, heal thyself!”

I love the way this article begins, with this Adam Smith quote: “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.”