After reading my post, Tumblr user Squashed defended the little guy with the following point:
A giant media conglomerate owns a bunch of newspapers. One of those competes with an independent newspaper. The media conglomerate decides it wants the independent newspaper to go away. (So far so good. Capitalism encourages competition.) Then the media conglomerate does something illegal. It cuts the ad costs its competing newspaper to below the cost of producing the newspaper. It uses profits from the other papers to keep the paper losing money afloat. As soon as the little paper went under, it would have jacked the ad cost up higher than it had ever been because there was no longer any competition in the market. This is illegal.
I’m not disputing the fact that the big company broke the law; I am disputing the law itself. A moral action can be illegal if the law itself is immoral.
A company — even a big corporation — should be entitled to its property just like anyone else. This will sometimes result in cunning business practices making it difficult for the little guy to compete directly. If you say this requires government intervention, then you are condoning the same principle that funds Halliburton’s Iraq project and that poisons our food supply through federal corn subsidies. You believe that government does not have enough control over its citizens as it currently does.
If the government has the authority to handicap this big corporation, it has the authority to help any other big corporation. Hence, our present day crippled economy, where unethical businesses make back room deals with unethical politicians, funneling uncountable dollars into their bank accounts and stifiling untold innovation.
You can’t have it both ways; either the government can intervene with any private business, or it cannot. The former is always arbitrary and unjust (though it sometimes produces a heartwarming story about a little guy).
Imagine owning your own company, and being at the whim of any judge who sympathizes with an underdog competitor. Look past the details of this particular case, and examine the underlying principles. Would you agree with the judge’s decision? Reblog your answer.
Jakob’s point seems to be that each time the government infringes on a corporation’s ability to do business, the government has—to that extent—trampled on the principles of the free-market, which would have otherwise led to innovation, technological progress, and would have sorted itself out naturally anyways.
I have some sympathy for this position; corporations do lead and more importantly fund research and development that produces technologies and advancements that help and save human lives.
But to argue the government does not have the right to intervene misconstrues the relationship between the government and business. Corporations were designed to accomplish a pubic good while sharing the burden of risk. So if a bridge needed building, and government could incorporate a group of businessmen. They would each invest in the project—if it was successful they would share in the profits, if it failed, no one person would be held accountable, the corporation would simply dissolve. The public benefits from enjoying the bridge, and the businessmen benefit from the profits.
The government ensures that corporations function according to the public good because 1) corporations have a responsibility to the community in which they operate and 2) the market is an instrument of the state (not something that exists outside the state) which is used and ought to be used for the betterment of the people the government represents.
If anything we should be talking about how the government isn’t doing enough to ensure that corporations act on behalf of the public good. In this sense, one could argue that the government stepping in to ensure a competitive marketplace is completely defensible (and this is not because the government ought to defend against monopoly capitalism as iputitonyou and squashed suggest*, but because it is a natural feature of representative democracies to act on behalf of the public good).
*Although this point is equally valid.