Which Is More Dangerous: Government or Corporations?

Corporations are not saints, especially the bigger ones. They routinely seek subsidies, tax breaks, and other forms of corporate welfare. And contrary to popular belief, corporations usually favor burdensome new regulations. After all, a large, established company can afford the expense. But smaller upstarts can’t. Too often, regulations are simply a way of keeping competitors out of the market.

The common ingredient in all of that perfidy is government. Markets do not respect special interests; Washington exists to cater to them. Many anti-corporate activists have their heart in the right place. But their ire is misplaced.

In that vein, here is a bit of wisdom from Matt Ridley’s excellent new book, The Rational Optimist:

Companies have a far shorter half-life than government agencies. Half of the biggest American companies of 1980 have now disappeared by takeover or bankruptcy; half of today’s biggest companies did not even exist in 1980. The same is not true of government monopolies… Yet most anti-corporate activists have faith in the good will of the leviathans that can force you to do business with them, but are suspicious of the behemoths that have to beg for your business. I find that odd.

(p. 111)