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.