Every privilege given to a company or industry is an act of plunder against the rest of society. Franklin Roosevelt’s National Recovery Administration and Mussolini’s fascist guilds both involved the government allying itself closely with industry in order to ‘reduce wasteful competition.’ The only problem is there is nothing wasteful about competition; quite the opposite, competition results in the greatest efficiencies. By contrast, corporatism results in competitors being shut out and those in the industry enjoying the ability to charge whatever they please while being insulated from the need to innovate or even give good service.
Corporatism often spreads via administrative agencies tasked with ‘supervising’ an industry. Instead of protecting society from the ravages of the industry, such agencies are invariably captured by the industry’s dominant special interests, which are motivated and highly rewarded for lobbying to influence the regulators. These agencies then work tirelessly to secure the interests of those already in the industry by erecting legal barriers to shut out competition.
Another way corporatism occurs is through over-regulation. Regulation is the friend of big corporations and the enemy of the small business. Large corporations can absorb the overhead easily, so regulations have the effect of squeezing out competition. Mega-corporations tend to welcome regulation and even suggest new regulations to ‘safeguard’ the consumer. In reality, each new regulation leaves the consumer and the rest of society increasingly defenseless against the mega-corporations’ plunder.