Classical Liberals Aren’t Naive About Big Business

Big business has become a point of friction between conservatives and classical liberals, especially social media and other internet companies that fall under the heading of Big Tech. Conservatives are increasingly likely to say that large companies need to be constrained by law, such as antitrust, to prevent them from threatening American values. Classical liberals disagree, which sometimes leads to accusations of naivety from our conservative friends. I respectfully dissent; classical liberals have always been wary of big business.

We can trace that skepticism all the way back to Adam Smith, who famously noted that, “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.” While this is often used to suggest that Smith would have endorsed economic regulation, the opposite is true. The rest of the passage notes that such conspiracies are normal reactions to regulatory restraints. We place burdens on businesses, so they raise prices, hurting consumers. Jen Psaki and Elizabeth Warren, take note.

Conservative business critics often make a similar mistake in reasoning. Businesses offshoring production hurting heartland towns? Clearly a conspiracy against the public inspired by love of Mammon! No, far more likely is the final breaking of the camel’s back after years of regulations and taxes piling on. Technology companies restricting speech? They obviously hate us and want to silence us. No, that’s far more likely a reaction to laws around the world that punish companies for “misinformation” and to threats of stricter regulation in the U.S. Companies going “green” or pandering to racial agitators? Look at the number of laws and regulations around the world pushing them in that direction.

We have seen the results of businesses attempting to stand up to government over the years. It rarely ends well for them. Lobbying is one of the few tools they possess, but their ability to do that is always under attack. And now they have vice presidents of environmental and diversity acting as government agents from within, often using the company’s lobbying power to call for more restrictions.