The Corruptible "Free Market"

| Wed Jun. 22, 2005 3:47 PM EDT

The Washington Post has a front-page report on the growing number of lobbyists thronging the nation's capital. But here's an important passage that, I think, misleads:

In the 1990s, lobbying was largely reactive. Corporations had to fend off proposals that would have restricted them or cost them money. But with pro-business officials running the executive and legislative branches, companies are also hiring well-placed lobbyists to go on the offensive and find ways to profit from the many tax breaks, loosened regulations and other government goodies that increasingly are available.

"People in industry are willing to invest money because they see opportunities here," said Patrick J. Griffin, who was President Bill Clinton's top lobbyist and is now in private practice. "They see that they can win things, that there's something to be gained. Washington has become a profit center."

Judging from the way the Post tells it, the story goes like this: In the good old noble days—i.e. the 1990s—corporations and other business groups were simply interested in preserving the "free market" and fending off those meddlesome government regulators and pesky bureaucrats. But now, alas, businesses have abandoned their good old conservative ways and have decided that taxpayer dollars are just one big cookie jar to be raided as quickly and as greedily as possible. Whereas once we had free markets, now we have businesses strewn about, pale and withered, hooked on corporate welfare and hiring legions of lobbyists to help them get another fix.

It's a depressing little tragedy, but it's also not entirely true. There was never a hallowed time when business interests were just trying to avoid the burden of government regulation and enjoy the free market. They've always, since the dawn of time, viewed Washington as a "profit center," where they can "win things," where there's "something to be gained."

Take the oil industry. Oil executives, Dick Cheney among them, love to rail nowadays against government regulation and/or funding for alternative energy sources, arguing that if an industry can't earn its way in the marketplace, it doesn't deserve to live. Sadly, that was never true for the oil industry: government, not markets, created oil's success. As Paul Sabin has described in Crude Politics, the oil boom essentially started when the federal government started granting oil rights to whoever can reach it from their lands. Fearing that their neighbors would start slant drilling, owners of oil-lots tried to pump out as much oil as they could reach from their land as quickly as they could, thus flooding the market with cheap crude. Low prices and thin profit margins then spurred oil industry leaders in the 1930s to beg the California government to set statewide production limits, which were granted. They clamored for tax breaks on drilling; granted. Meanwhile, vast government spending on highways ensured that demand for oil would continue to rise. (Not to mention the hundreds of billions we now spend stabilizing oil-producing regions of the world.) Washington has long been a "profit center" for the industry. Corporate handouts have always been with us.

This is why the so-called Gingrich "revolution" in 1994 was always a fraud. That fresh generation of conservative Republicans—who claimed to champion free markets and small, out-of-the-way governments—simply didn't understand how business works. Industries have always thrived off heavy-handed regulations and government intervention, and so long as businesses exist, lobbyists will flood the capital. It's not that the GOP philosophy of government has been "corrupted" by high-spenders and corporate welfare hounds like George Bush and Tom DeLay; that philosophy was corruptible right from the start. What we're seeing now is, sadly, the only logical conclusion to "free market" conservatism.

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