Government subsidies give government officials a license to order the recipients around:
- Spend on this.
- Merge with that.
- Get rid of this CEO.
You take our money, you take our orders. Strings definitely attached.
But there are other kinds of bullying, often more subtle than formally enacted laws and regulations applied to otherwise independent firms.
Some government goons toss their weight around in the private sector entirely outside any legislative or regulatory process. How? By “conversing” with private firms about how they conduct business.
Recently we witnessed Senator Chuck Schumer chatting with Time Warner Cable about its test of broadband metering in Rochester, New York. The cable company’s notion was to price different levels of service. Customers using huge amounts of bandwidth were charged extra for that extra usage.
In normal markets, buyers constantly communicate happiness or unhappiness with what sellers are selling, both verbally and through buying patterns. No politician had to chat with Coca Cola to convince it to bring back “Coca Cola Classic.”
But politicians like scoring political points. And companies subject to such persuasive efforts know that more than persuasion is involved. There’s also the threat of force if the company doesn’t knuckle under to the politician. So Time Warner dropped its price-tier trial.
And we’re all just a little less free today than we were yesterday.
Read more at www.ThisIsCommonSense.com