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Friday, April 21, 2006

Corporate State or Laissez Faire?

This picks up on a running theme of Kevin Carson's: Vulgar Libertarianism. We free-market folks can sometimes be confusing to the rest of the world. One moment we complain (properly) about all the deep-seated government intervention, but the next moment we act like we live under laissez faire. Almost in knee-jerk fashion we scoff at reports that income is not growing at all levels, or that income mobility is not what it ought to be, or that CEO pay, severance deals, or retirement packages are ominously high. But if we really live in such an interventionist economy , then shouldn't we expect some undesirable consequences to show up in the data? E.g., if the market for corporate management -- i.e., the hostile takeover -- is stifled by protectionist intervention, as Henry Manne shows, then can't we conclude that CEO compensation might be higher than it would be in a free market? There might be some measure of freedom inside the corral, but let's not forget that there's a corral! In this connection, I refer readers to my latest column in The Freeman: "Full Context" (pdf).

Cross-posted at Liberty & Power.

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