Magazine article Ideas on Liberty

Businessmen on Business Values

Magazine article Ideas on Liberty

Businessmen on Business Values

Article excerpt


APRIL 2002

William H. Peterson

Contributing editor William Peterson ( is an adjunct scholar with the Heritage Foundation.

ACato Institute report issued last October estimates corporate welfare at $87 billion in 2001. That's 30 percent (bigger than Cato's previous 1997 corporate welfare estimate of $65 billion. Welfare for business? Business in bed with the state? What goes on? (See Stephen Slivinski, "The Corporate Welfare Budget: Bigger Than Ever," Cato Policy Analysis No. 415, October 10, 2001.)

True, President Bush stoutly sought corporate welfare cuts of about $12 billion a year ago, notably in such programs as the Overseas Private Investment Corporation, Export-Import Bank, Small Business Administration, and Maritime Administration's guaranteed loan program. Somehow these proposed cuts vanished with September 11 and the Hill politics of budgetary "stimulus" at a recessionary hour. Comments the Cato report on some of the "worst" corporate welfare programs: "They subsidize large, profitable corporations at the expense of taxpayers for projects that already receive, or could receive, adequate funding from the private sector."


The Cato report notes how hard it is for business and members of Congress to overcome their incestuous relationship. Such was the problem congressmen faced in shutting down military bases-and jobs-in their home districts, bases declared surplus by the Defense Department itself. Years passed till cooler heads in the House and Senate hit on the winning military-base-closurecommission idea. Cato urges an analogous corporate-welfare-reform commission: it would propose a list of corporate welfare programs for repeal by Congress, which would hold an up-or-down vote on the entire package.

A personal confession: As a young innocent some 50 years ago setting out in graduate economics at New York University, I saw businessmen as born defenders of the faith, natural trustees of free markets-save for some renegade protectionists milking the system. Then I met visiting NYU Professor Ludwig von Mises, who set me straight by having me look up this passage in the English edition of his Socialism (1951, p. 503; original German edition 1922): "The entrepreneur, the man who seizes the opportunity of the moment, has little interest in the issue of a secular struggle of indefinite duration. ... To fight on principle for the maintenance of an economy based on private property in the means of production is no part of the program of organized entrepreneurs."

Corporate Philanthropy

This Mises point on corporate expediency, on getting along by going along, is seen in work by the Capital Research Center, based, like Cato, in Washington, D.C. Check its annual series, Patterns of Corporate Philanthropy, on the widespread business habit of handing over responsibility for corporate giving to a philanthropic managerial class hardly in sympathy with the workings of a free economy. …

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