Pro-business vs. Pro-Market

In his critical op-ed. on Donald Trump, Luigi Zingales presents useful distinctions between a pro-market and a pro-business businessman.

Among self-identified Republicans in a 2010 Booth-Kellogg survey, 43 percent agreed that “big business distorts the functioning of markets to its own advantage,” and only 22 percent disagreed. But the Republican establishment has happily become big business’s mouthpiece. This fracture became evident during the congressional debate on the Troubled Asset Relief Program: Many Republicans in the House voted against it, even though it came from George W. Bush, a Republican……

….. We cannot blame voters for being confused about pro-business versus pro-market politicians. The Republican establishment deserves most of the responsibility. Being pro-market means being in favor of competition and against excessive concentration, as Theodore Roosevelt was. Business executives are pro-market when they want to enter a new sector.

But when they become established in a sector, they favor entry restrictions, excessive licensing, distortive regulation and corporate subsidies. Those policies are pro-business (in the sense that they favor existing businesses), but they are harmful and distort a competitive market economy. [Link]

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