Independent Institute
by Robert Higgs
09/10/09
Most people learn about the relation between the rise of big business and the growth of government in the form of what amounts to a morality play. In the most widely disseminated version, presented in nearly every American history textbook, the emergence of big business (playing the role of the devil) is said to have given rise to a variety of evils and abuses–monopoly power, pollution, exploitation of workers, and so forth. Matthew Josephson tells this story in rousing (if not scrupulously factual) style in his 1934 classic, The Robber Barons. The masses are said to have cried out for relief and to have pressed their political representatives to enact protective legislation. Thus emerged, most markedly during the Progressive, New Deal, and Great Society periods, a profusion of government programs, regulatory agencies, and direct government participation in economic life (divine intervention, as it were), which served to shield the public from the otherwise crushing weight of brutal laissez-faire capitalism. A competing tale, popular among many libertarians and some left-radicals, presents the rise of big business as leading directly to satanic endeavors. This version maintains that the big businessmen, however virtuous they might have been at the outset, ran into trouble because of rampant competition among the emergent big firms. To suppress this irksome, profit-sapping market phenomenon, they used their wealth diabolically to influence or bribe lawmakers to create government programs, regulatory agencies, and so forth that, in effect, allowed them to wield the government’s coercive power in the service of propping up their cartels, suppressing competition, and maintaining excessive profits...
http://www.independent.org/newsroom/article.asp?id=2600
Informant: Thomas L. Knapp
http://freepage.twoday.net/search?q=Big+Business
http://freepage.twoday.net/search?q=Robert+Higgs
