Earlier this week Hillary Clinton was touting her ability to create jobs and revitalize the economy through “partnerships” between government and business. Everyone “working together” to solve problems might sound like a good idea. Sometimes entities from the private and public sectors must work as partners, but the less this happens the better.
There are two problems with government-business partnerships. First, government is not an equal partner with any other institution. Government has a monopoly on force and will always be the senior partner in any arrangement. Put another way, when government and business “work together,” it’s usually government telling business what to do. This bleeds into fascism.
Second, government and business have distinct goals and responsibilities. Just as business shouldn’t be strapped with determining what is in society’s best interest, government shouldn’t be picking winners and losers in commerce. The differences between the two are obvious. Government obtains revenue by force from individuals who may not benefit—at least not fully—from the confiscation. If you don’t like your government, you can’t easily switch to another one unless you are willing to leave your state or nation. On the other hand, business obtains revenue voluntarily from individuals who benefit from the transaction. If you don’t like a business, you don’t have to make the transaction. Government is ill-equipped to compete, and business is ill-equipped to address social policy.
Herein lies both the problem and the irony. Government and business serve different functions, but in a corrupt way, each has something to trade the other. Businesses prefer not to deal with pesky competitors, and government can stifle new entry to a market through various forms of regulation. Government prefers to circumvent an irate public when attempting to control an economy, and business can help by lending its support through markets. Partnerships usually morph into such trade-offs and ultimately cronyism. Promoting partnerships while decrying cronyism is like suggesting that zoos eliminate cages and complaining when the lions attack the patrons.
Some do not see the connection between partnerships and cronyism, but others do. Many in government and business see these alliances as security blankets that allow them to evade their responsibilities. I believe most business and government leaders fully understand the ensuing cronyism when they tout government-business partnerships. Indeed, most of the problems they purport to solve with partnerships would be solved more effectively if business would stick to honest competition and government to protecting individual liberty.