Thomas Sowell: The verbal packaging of consumer choice as business “control” has become so widespread that few people seem to feel a need to do anything so basic as thinking about the meaning of the words they are using, which transform an ex post statistic into an ex ante condition.
By saying that businesses have “power” because they have “control” of their markets, this verbal virtuosity opens the way to saying that government needs to exercise its “countervailing power” (John Kenneth Galbraith’s phrase) in order to protect the public.
(Galbraith being a Keynesian economist and prominent Liberal ‘thinker’ and a model for liberals like President Obama)
Despite the verbal parallels, government power is in fact power, since individuals do not have a free choice as to whether to obey government laws and regulations, while consumers are free to ignore the products marketed by even the biggest and supposedly most “powerful” corporations in the world. There are people who have never set foot in a Wal-Mart store and there is nothing that Wal-Mart can do about it, despite being the world’s largest retailer.
And I know such people.
Henry Ford pioneered in mass production methods and had some of the highest paid workers of his day — decades before the industry was unionized — and the lowest priced cars, notably the legendary Model T, which made the car no longer a luxury confined to the wealthy.
But none of these plain facts prevailed against the vision of the Progressive era intelligentsia, who in this case included President Theodore Roosevelt. His administration launched antitrust prosecutions against some of the biggest price cutters, including Standard Oil and the Great Northern Railroad.
Roosevelt sought the power, in his words, to “control and regulate all big combinations.” He declared that “of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.”
No doubt it was true, as TR said, that Standard Oil created “enormous fortunes” for its owners “at the expense of business rivals,” but it is questionable whether consumers who paid lower prices for oil felt that they were victims of a tyranny.
One of the popular muckraking books of the Progressive era was “The History of the Standard Oil Company” by Ida Tarbell. The book said among other things that Rockefeller “should have been satisfied” with what he had achieved financially by 1870, implying greed in his continued efforts to increase the size and profitability of Standard Oil.
A study done a century later, however, pointed out: “One might never know from reading ‘The History of Standard Oil’ that oil prices were actually falling.”
That fact had been filtered out of the story. The question whether Rockefeller’s pursuit of a larger fortune made the consuming public worse off was seldom even addressed.
How consumers would have been better off if a man who introduced extraordinary efficiencies into the production and distribution of oil had ended his career earlier, leaving both the cost of producing oil and the resulting prices higher, is a question not raised, much less answered.
Businesses that charge lower prices often lead to losses by competing businesses that charge higher prices. But, obvious as this might seem, it has not stopped outcries over the years from the intelligentsia, legislation from politicians and adverse court decisions from judges, aimed not only at Standard Oil in the early 20th century, but also later at other businesses that reduced prices in other industries, ranging from the A&P grocery chain in the past to Microsoft today.
In short, the verbal transformation of lower prices and larger sales into an exercise of “power” by business that has to be counteracted by more government power has more than purely intellectual implications. It has led to many laws, policies and court decisions that punish lower prices in the name of protecting consumers.
As a result of the spread of globalization, even if a particular company is the only producer of a given product in a given country, that monopoly means little if foreign producers of the same product compete in supplying that product to the consumers.
Eastman Kodak has long been the only major American producer of film, but camera stores across America also sell film produced in Japan (Fuji) and sometimes in England (Ilford) and in other countries, quite aside from the competition from digital cameras, produced primarily overseas.
In short, Kodak’s ability to jack up film prices without suffering lost sales is hemmed in by substitutes. The fact that Eastman Kodak is a huge enterprise does not change any of that, except in the visions and rhetoric of the intelligentsia.
The straining of words to depict businesses as exercising “power” in situations where consumers simply buy more of their products has been used to justify depriving people who run businesses of the rights exercised by other people. This attitude can even extend to putting the burden of proof on businesses to rebut accusations in certain antitrust cases and civil rights cases.
A somewhat similar mind-set was expressed in a question asked in the Economist magazine: “Why should companies be allowed to dodge taxes and sack workers by shifting operations overseas?”
In free countries, no one else’s right to relocate for their own benefit is treated as something requiring some special justification. Indeed, workers who relocate to other countries in violation of immigration laws are often defended by those who consider it wrong for businesses to relocate legally.
So are “Big Oil” and “Big Tobacco” and “Big Pharma” business successes that have to be punished for being successful.
That the people, the consumers, must be protected from their “power” by the government’s “power”?
So the Liberal Intelligensia want to destroy them, and replace them with their own.
And use the cudgel of Government “control” and “power” to save the people from something they actually don’t need saving from.
That gets THEM more “power”.
Because then the people will look to them to save them.
When in fact, they are being enslaved all over again.
Doesn’t that kind of sound like the “War on Poverty” started over 40 years ago?
And explain why the Liberals hate Bank CEOs because they dare to give bonuses to their employees. But if Congress porks certain groups or gives them special deals (Cornhusker Kickback, Union “Cadillac” Deal” etc) that’s ok.
CEO’s salaries must be “controlled” except for the government ones, Like GM, Chrysler, Fannie and Freddie. (Fannie Mae Chief Executive Officer Michael Williams and Freddie Mac CEO Charles Haldeman Jr. are each eligible for compensation of as much as $6 million this year, the companies said Thursday in regulatory filings.
In addition to the CEO pay, 10 additional executives at the two companies are eligible collectively for $30.1 million in compensation for 2009.–NY Post 12/24/09)
Have you seen them vilified in the Ministry of Truth Mainstream Media??
No.
Will you?
No.
Overall, pay for top executives of the mortgage-finance companies is down 40% from before they were seized, the regulator said in a statement. 
So this “control” is considered “good” in fact.
Because they are defending the “middle class” person and “small business” against the “power” of “big business”.
After all, the whole of the last year of Health Care “reform” was about lower costs. But in the end it’s come down to “control” not costs.
Hence, the Democrats meet in secret to work out how to pass the “control”, and not actually address the “costs” because the “Control” is the “cost” to them.
Now that’s verbal dexterity at it’s finest.
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