I often write about the erosion of liberal principles in the American political system. Equally, the liberal foundations of our economic system are washing away under the ongoing mantras of free trade and globalization. Most recently, it can be seen in a front page article of the Investor’s Business Daily (IBD). IBD is oriented around investing, investor information, and working the stock market to the benefit of the small investor. I’ve actually found it to be a useful tool. But editorially, the paper is an apologist for the Bush administration economic policies which, we are soon to discover, are disastrous and catastrophic, and profoundly contrary to the free enterprise principles that made America a great economic power.
Here’s the front page headline from Friday, Dec. 1: "Tough Rules, Global Competition Imperil U.S. Market Dominance." The article is a diatribe against regulation.
After decades out front, a report says the U.S. hobbled itself with overly strict regulation while the spread of globalization and technology helped the rest of the field play a stellar game of catch-up.
But who is actually being "hobbled?" It is the capital markets, huge corporations, and those who are able not just to trade in the global market, but to dominate capital markets. Those folks are losing, apparently, because other markets are more "open."
The 22-member, private sector Committee on Capital Markets Regulation,... argued for a system that offers a "proper balance" between costs and benefits of the rules, including more protection for companies from class-action suits, greater shareholder rights and more slack for smaller firms.
The report, echoing a growing chorus, also called for changes in how to implement the Sarbanes-Oxley law, passed in 2002.
There’s enough double-speak and confusing language here to make one think it is politics, not economics. That alone can be a hint as to who is really being served.
For a society to grant the rights and privileges of incorporation, it must reserve for itself the right to regulate those same corporations. Corporate structures, by law and inherent structure, must use all available means to improve shareholder returns. And so, they will. That is why regulation must be employed—to make sure they do not undertake illegal or profoundly immoral acts in pursuit of the profit that is their lifeblood and exclusive focus. But corporations have changed from quietly going about their business under the rule of national laws. Instead, they are now the creators and primary advocators for making those laws compliant with the lowest common denominator in a supposedly global market.
Take this trend to its logical conclusion, and the real loser is American liberal principles. Economic freedom is not enhanced, it is diminished by corporate domination. It is diminished by sheepish adherence to the low standards of international markets. Fewer people will start businesses, not more. Fewer people can be free, not more. Fewer people can exercise the power of labor, not more. We already know what this looks like historically: Remember the robber-barons? IBD and publications like it are absolutely clear: A global order of the robber-barons era is exactly what they, the Bush family, and global corporate leadership all too often seek. They’ll call it free trade, global markets, free enterprise. It is nothing of the sort.
Check out my forthcoming book Call to Liberty: Bridging the Divide Between Liberals and Conservatives. I regularly blog at http://www.calltoliberty.net. This post was cross-posted there.