Editor Note: Back in 1992, the founder and president of the Competitive Enterprise Institute (CEI), Fred Smith, reviewed Al Gore’s new book, Earth in the Balance. More than two decades later, Smith’s review is still on target and good reading. (One cannot say the same of Malthusian-school writing of the same period.) The review follows:
Al Gore has written, “When giving us dominion over the earth, did God choose an appropriate technology?” And then: “One is tempted to answer, the jury is still out.” Much the same can be said about Governor Bill Clinton’s wisdom in selecting Sen. Gore to be his running mate.
While Mr. Clinton has spent months (if not years) attempting to fashion himself as a moderate Democrat unwedded to the Big Government programs that have dominated his party for so long, the selection of Al Gore signals a return to yesteryear’s agenda.
“Most people are ethical. If virtuous capitalists and entrepreneurs had higher social standing, there might be more of them, and fewer rent-seekers. In the long run, everyone would benefit.”
Every year, the federal government distributes more than $100 billion in corporate welfare. The handouts include thousands of subsidies, mandates, bailouts, and grants. Cronyism also includes favorable regulations to keep competitors out and many other types of other special treatment.
“Rent-seeking,” the term economists use to describe seeking these unethical government favors, is clearly a huge industry. But a major question remains: why isn’t there even more of it? I recently co-authored a paper with Fred Smith on this very topic.
The Tullock Paradox
Lobbying is a $3.5 billion industry resulting in $100 billion annually to its beneficiaries. That’s a 30-fold return.…
Continue Reading“Good profit can only result from creating value for the consumer. It is the manifestation of the entrepreneur’s respect for what the customer values.”
– Charles Koch, Good Profit (New York: Crown Business, 2015), p. 244.
In his previous book, The Science of Success, Charles Koch, classical-liberal CEO of Koch Industries, Inc., described heroic, moral capitalism as “maximizing long-term profitability for the business by creating real value in society while always acting lawfully and with integrity.”[1] Real value to Koch comes from the economic means of consumer service, not the political means of special government favor (see here).
Part I yesterday shared some Koch quotations on cronyism from years past. Today, quotations from Koch’s just released book are presented that clearly spell out his views of cronyism in the mixed economy (what has been called political capitalism):
“Good profit comes from making a contribution in society–not from corporate welfare or other ways of taking advantage of people.”…
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