Big business is not our friend

Don’t get TAFKAS wrong.  Business is a wonderful thing.  But big business, well, that’s another matter.  And much like its brothers, big government and big labour, which together form the horsemen of the economic apocalypse, big business needs to be watched carefully.

The horsemen of the economic apocalypse are all a threat to freedom and economic prosperity.  But when they act together, well then, it is for sure that citizens and consumers will be the biggest losers.

Don’t believe TAFKAS?  Take the words of Adam Smith:

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.

How about the words of James Randall (Former president of Archer Daniels Midland):

We have a saying here in this company that penetrates the whole company. It’s a saying that our competitors are our friends. Our customers are the enemy.

Replace the word “customers” in Randall’s quote above with taxpayers or citizens and the statement still works.

Consider also the oft quoted line that business wants a carbon trading scheme.  Here is Tony Burke:

Burke noted Labor had championed a market model for more than a decade in part because that’s what stakeholders, including major business groups, said they wanted

Major business wants a market model.  Why?  Because whilst a carbon trading scheme is a cost and pain for big business, it is an even bigger cost and pain for small and medium business.  A cost and pain that on the margin will destroy small and medium business and further empower big business.

Big business’ interest is not about climate.  Big business’ interest is about getting bigger by damaging and destroying smaller businesses.

Here is a guide.  You know the jig is up when big business wants to work with big government to increase laws and regulations.  When this happens, the only thing that is certain is that big business will get bigger, big government will get bigger and small business will get smaller.

According to TAFKAS’ first law of regulatory dynamics, 95% of the time and resources of regulators will be spent on “beating up” those already compliant and seeking to add additional imposts on them.  Why?  Because chasing rule breakers and cheats is hard and time consuming.  It is much, much easier to show you are busy by beating up those people who comply.

According to TAFKAS’ second law of regulatory dynamics, the ideal regulatory environment is to have a small number of large, slow and predictable businesses to regulate.  Ideally monopolies.  And hey presto … what do you get but the big 4 banks (where are BankWest, St George, Advance Bank and the rest?).

According to TAFKAS’ third law of regulatory dynamics, regulation should drive businesses to have a common strategy and operating model such that the cost and risk of consolidation is reduced.

Regulators, much like the rest of us, are essentially lazy. Looking for and  pursing crooks, cheats and miscreants can seriously interfere with work/life balance.  It is also stressful and we all know that stress is a very real workplace health issue in government agencies.  Just ask ComCare.

But for the results of the Australian regulatory environment which keeps getting bigger, more expensive and more complicated see the report of the Hayne Royal Commission and see also APRA and Basel bank regulation rules and consider why all banks look the same and have combined over the past 20 years.

Let’s remember.  Big business is good for bigger business because there is less competition.  Big business is good for big labor because getting enterprise agreements is easier.  Big business is good for big government because it is easier to regulate.  Not to mention they behave when threatened and they also make lotsa political donations.

So the next time you hear big business supports this or that, be very very careful.

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28 Responses to Big business is not our friend

  1. Not a leftie

    Yep.

    All businesses want to be big, all big businesses want to be bigger, and the way they achieve that is collusion with other businesses and corruption of politics.

    Surely this is obvious to everybody by now. It’s probably axiomatic.

    The only question is: what solution does centre-right/libertarian politics propose, beyond deregulation?

  2. stackja

    Hawke Kelty Accord – BER – NBN – NDIS etc etc

  3. Roger

    So the next time you hear big business supports this or that, be very very careful.

    Big business invariably supports “diversity” and “inclusion”, i.e. social engineering and group think.

    The board rooms and CEOs of big business have taken on a very sinister, soft totalitarian cast which is at odds with our freedoms.

  4. We await Lord Sinclair to refute that hypothesis. In his words, or to that effect. ‘You can go elsewhere’.

  5. John Constantine

    The most powerful German economic corporate emporium in the first half of this century was the Interessengemeinschaft Farben or IG Farben, for short. Interessengemeinschaft stands for “Association of Common Interests” and was nothing more than a powerful cartel of BASF, Bayer, Hoechst, and other German chemical and pharmaceutical companies. IG Farben was the single largest donor to the election campaign of Adolph Hitler. One year before Hitler seized power, IG Farben donated 400,000 marks to Hitler and his Nazi party. Accordingly, after Hitler’s seizure of power, IG Farben was the single largest profiteer of the German conquest of the world, the Second World War.

    The U.S. government’s investigation of all the factors leading to the Second World War in 1946 came to the conclusion that without IG Farben the Second World War would simply not have been possible. We have to come to grips with the fact that it was not the psychopath, Adolph Hitler, or bad genes of the German people that brought about the Second World War. Economic greed by companies like Bayer, BASF and Hoechst was the key factor in bringing about the Holocaust.

    https://www.dr-rath-foundation.org/2003/06/ig-farben-and-the-history-of-the-business-with-disease/

  6. John Constantine

    Anti-Trust legislation in Australia would have prevented the:

    “Too big to not be occupied by fascists”

    crony colluding cartels controlling the voiceless proles of Australia.

  7. RobK

    crony colluding cartels 
    Now also armed with nefarious IT capabilities.

  8. Robbo

    Quite right in pointing out that big business is no friend of the consumer. Want an example? Try fuel retailing which is now dominated by a small cartel of Coles and Woolworths. Prices going up at pretty much the same time is hardly coincidental but those bastards deny collusion and the body charged with protecting consumers wrings its hands and does bugger all. So that completes the circle with big business being monitored by a body set up by big government. No wonder very few have any sort of respect for our governments, State and Federal, and even less have respect for the greedy businesses that rip us off every day.

  9. Cynic of Ayr

    The recent Royal Commission into Banks and Superannuation.
    The big corporations were found guilty of having dead people as clients, overcharging, “forgetting” to give refunds etc. etc.
    The small businesses in the financial advisors trade were not mentioned. Why? Because they didn’t break the rules. Only big business did.
    Just got back from my yearly review with my small business financial advisor. Almost 80% of my fees go to regulatory requirements.
    I asked if someone could walk in the door and just seek some advice on their Super. No, he said, because first up is an 85 page document that has to be completed, to comply with regulations on advice. He would need to charge $2,000 to do this, while his fee for the advice would be $300.
    TAFKAS is correct. Despite all the bullshit to the contrary, Governments do not want small business.
    (Nor do they want small Government!)

  10. Chris M

    Yes crony capitalism!

    In aviation for example the biggest carries are very cosy with the government regulators and regularly swap staff etc. So it’s easy to quash smaller rival like a bug if they in anyway begin to threaten even a little. Compass, Tiger etc.

    If (and I have my doubts) robot driven interstate trucking succeeds it could be quite difficult for small start-ups to enter the market, you would potentially need to outlay many multi-millions just to begin operations in a field with tight margins.

    The more a regulatory an environment the more conductive to cronyism and corruption.

  11. Driftforge

    Working definition for ‘Big’ in this context: An organisation is big when the expected returns from changing marketplace rules to your own advantage exceeds that of competing in that marketplace.

  12. Entropy

    Yes, big business has a close relationship, both professionally and personally, with both big union and big government.

  13. Entropy

    In the public service here are regulators and service delivery people.
    While both categories have the time servers, the service delivery people are often quite committed to helping the little guys until they get to the rarified SES, at which point they spend time with the big guys. In fact, maybe working with the big guys is the entre to the SES.
    Regulator types can work long hours if they are a zealot, but it is not common.
    The key difference between the two categories is the service types look for ways to do something; regulators look for ways to not do something.

  14. Macspee

    It’s the interelationship of government, unions and big business that is the essence of fascism.

  15. Bruce of Newcastle

    Major business wants a market model. Why?

    Because they know in their hearts that the clearing market price for CO2 emissions is $0 per tonne.

    They know that because UN emissions certificates futures are now trading at 21 euro cents per tonne. It’s not the first time either. When Chicago went into carbon emissions trading they lasted a decade and then expired with the CO2 emissions price at 5 US cents per tonne.

    Obviously 5 US cents per tonne of CO2 was too high.

    If you sell something worthless the price will soon reflect its true value, like Zimbabwe dollars.

  16. Percy Popinjay

    Looking for and pursing crooks, cheats and miscreants can seriously interfere with work/life balance, It is also stressful

    This applies equally to our beloved “police services”. It’s far, far easier to harass and financially penalise otherwise law abiding citizens*.

    *Although given the myriad of “laws” in existence, there is essentially no such creature.

  17. Bad Samaritan

    Robbo (11.57am). I don’t accept your claim re Woolies + Coles and petrol. In my neck of the woods there are six stations, all on the same main road. One is a Coles and another a Woolies. another is a Shell and the other three Independents. C+W are both 143.9c; the others all cheaper, with the Liberty at 133.9c (all this Unleaded). They are all within about 2 ks of one another, with the cheap one right in the middle.

    If motorists choose to pay 10 cents per litre more (say $5 a tank), so be it. If C+W won’t go down in price, so what? These prices are lower than Brisbane or Sydney, so why the whinge?

  18. classical_hero

    BON, the only way a carbon pricing will work is by government force. It has to happen because it’s artificial and that’s what the government does.

  19. John A

    How about the words of James Randall (Former president of Archer Daniels Midland):

    We have a saying here in this company that penetrates the whole company. It’s a saying that our competitors are our friends. Our customers are the enemy

    .

    I hope that not only is Mr Randall the former president but that the company is also former – such an attitude towards customers should be anathema to a business wanting to survive and prosper.

  20. @johna. You may recall a movie about adm and collusion. With Matt Damon. You may also recall the kerfuffal when hockey blocked the takeover of grain Corp by adm.

    Adm is well alive and kicking.

    It makes most of its money from the us government via grants gifts and subsidies.

  21. Bruce of Newcastle

    BON, the only way a carbon pricing will work is by government force.

    Hero – That would be a “tax” then, wouldn’t it? A “carbon tax”. Under the government that an ALP PM leads. I do believe that the Australian voters may once’ve had something to say about a carbon tax. Ancient history I know.

  22. Iampeter

    Big business is not our friend

    Who is this “our” you’re talking about? Whoever you are, you are no friend of capitalism.

    Business is a wonderful thing. But big business, well, that’s another matter.

    Freedom is a wonderful thing. But TOO MUCH freedom, well, that’s another matter. Right?
    Have you really lived a lifetime and not picked up the abstract thinking skills to see what you’re actually saying?

    And much like its brothers, big government and big labour, which together form the horsemen of the economic apocalypse, big business needs to be watched carefully.

    No, it doesn’t. Big business is not big government. There is no analogy to be had.
    Whatever a business does or doesn’t do, will never tell you what a government should or shouldn’t do.
    Your lack of political theory cannot be back-filled with appeal to cringe, leftist, anti-business rhetoric.

    Between Spartacus and Kates, Catallaxy is fast becoming the one stop shop for all your boilerplate, left wing, politically illiterate, anti-capitalist drivel.

  23. Nato

    This is your best post yet.
    Well reasoned and thoughtful. Reminds me of Howard crushing the unions nnot by force, but making it a better option to hang out a shingle than keep the big business pay cheque. Didn’t he call the Liberals the party of small business a couple of times?
    And Shorten looking to bail out the big business car makers, not Abbott.
    And that line that you cannot govern good people, but must make a state where everyone is a lawbreaker but you choose what gets enforced, when.
    And a lot more.
    This was a smart article.

  24. max

    Smith’s point is that the only way businessmen can succeed in a ‘conspiracy against the public’ is if they are given protection by government regulation. If not, the pressures of competition will ensure that conspiring businesses are quickly undermined by their competitors.

    As Adam Smith clearly saw, the real danger is not collusion between business men and business men, but collusion between business men and government.  Government is so much more dangerous because it is always done “for our own good.”

  25. John A

    Iampeter #3029203, posted on May 29, 2019, at 4:29 pm

    Big business is not our friend

    Who is this “our” you’re talking about? Whoever you are, you are no friend of capitalism.

    Business is a wonderful thing. But big business, well, that’s another matter.

    Freedom is a wonderful thing. But TOO MUCH freedom, well, that’s another matter. Right?
    Have you really lived a lifetime and not picked up the abstract thinking skills to see what you’re actually saying?

    And much like its brothers, big government and big labour, which together form the horsemen of the economic apocalypse, big business needs to be watched carefully.

    No, it doesn’t. Big business is not big government. There is no analogy to be had.
    Whatever a business does or doesn’t do, will never tell you what a government should or shouldn’t do.
    Your lack of political theory cannot be back-filled with appeal to cringe, leftist, anti-business rhetoric.

    Between Spartacus and Kates, Catallaxy is fast becoming the one stop shop for all your boilerplate, left wing, politically illiterate, anti-capitalist drivel.

    You, self-aggrandising misnomer, are actually part of the drivel.

    Too much freedom is called anarchy, and yes, it is another thing. The enemy of responsible freedom under limited authorities is centralised power aka totalitarianism, and big government conspiring with big business and big unions has led to what we see – unwarranted politicisation of many areas of public life like local government, sport and the professional bodies.

    Your posts present more and more your philosophy of total anarchy and downright inanity. It is utterly detached from real life but don’t stop, because I need to lift my low blood pressure to more normal levels and occasionally I enjoy a good belly laugh.

  26. Iampeter

    You, self-aggrandising misnomer, are actually part of the drivel.

    He says as he posts self aggrandizing drivel.

    Too much freedom is called anarchy, and yes, it is another thing.

    Anarchy isn’t any kind of freedom, let alone too much.
    Deep thinker that you are, you don’t even know what “freedom” means, do you?
    Freedom is what you have to the extent that you’ve implemented a rights protecting government.
    THAT is the alternative to collectivism and leftism, of either conservative or progressive variety.
    Politics is about rights protecting government vs rights violating government.
    It is NOT about maintaining a balance between anarchy and authoritarianism because those aren’t alternatives.
    As usual, you’ve demonstrated a child-like, total ignorance of the subject and launched into insults, while maintaining a hilariously pretentious tone. This is typical fair at the unintentional comedy website that is the cat.

    The belly laugh we are having is at YOUR expense.

  27. John A

    Iampeter #3030432, posted on May 31, 2019, at 7:49 am

    Freedom is what you have to the extent that you’ve implemented a rights protecting government.
    THAT is the alternative to collectivism and leftism, of either conservative or progressive variety.
    Politics is about rights protecting government vs rights violating government.
    It is NOT about maintaining a balance between anarchy and authoritarianism because those aren’t alternatives.

    If “government” is about protecting rights, then who (else) is violating them? And why?

    And what about personal responsibility?

    And from where does “government”s authority derive?

    And where do “rights” come from?

    Do you understand anything about human nature?

  28. Iampeter

    If “government” is about protecting rights, then who (else) is violating them? And why?

    Murderers, thieves, fraudsters, etc.

    And what about personal responsibility?

    What about it? You have the right to be irresponsible and that’s the extent that “responsibilities” has anything to do with politics.

    And from where does “government”s authority derive?

    What does this question mean?

    And where do “rights” come from?

    Remember you had to ask this entry-level question next time you throw ad hominems at me.

    “Rights” are an ethical concept, that forms the bridge between ethics, what you should do qua you, and politics, what you should do living among other people.
    Rights, like all concepts, is conceived by using reason.
    You observe that humans are rational beings that have to think and act in order to live.
    You observe that the only thing that can prevent them from doing so is another human using force against them.
    You conclude that if humans are going to live among each other, then their rights to think and act must be protected and to that end government is established.
    So that’s where rights “come from.”

    Do you understand anything about human nature?

    Obviously.
    The same cannot be said of you though, so I’m not sure why you’re throwing this question at me.
    Remember, like most pretentious posters here, you think you can discuss politics but haven’t even figured out what rights are.

    You have nothing but entry-level confusion and questions that I would expect from a teenager, so take it down a couple of notches.

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