At Cafe Hayek, economist Don Boudreaux makes a distinction between two ways of being “pro-business.” His comments were prompted by a New York Times article about the economic element of President Obama’s his current trip to Asia, and how the visit may be a way for the White House to mend fences with Corporate America. But I highly recommend it to Republicans as well, both nationally and here in Georgia:
There are two ways for a government to be ‘pro-business.’ The first way is to avoid interfering in capitalist acts among consenting adults – that is, to keep taxes low, regulations few, and subsidies non-existent. This ‘pro-business’ stance promotes widespread prosperity because in reality it isn’t so much pro-business as it is pro-consumer. When this way is pursued, businesses are rewarded for pleasing consumers, and only for pleasing consumers.
The second, and very different, way for government to be pro-business is to bestow favors and privileges on politically connected firms. These favors and privileges, such as tariffs and export subsidies, invariably oblige consumers to pay more – either directly in the form of higher prices, or indirectly in the form of higher taxes – for goods and services. This way of being pro-business reduces the nation’s prosperity by relieving businesses of the need to satisfy consumers. When this second way is pursued, businesses are rewarded for pleasing politicians. Competition for consumers’ dollars is replaced by competition for political favors.
I’d say the first option is more pro-market, which is what politicians ought to — but don’t always — mean when they say “pro-business.” That’s the standard to which we should hold them.