THE LAISSEZ FAIRE TRADITION : A FICTION?
Like Jack Smith and Bill Jones, thousand of businessmen and government officials today are deeply concerned about government-business relationships. Also, like these two men, most of these same people enjoy a vast variety of benefits which stem directly from the free enterprise system and from government participation in the system.
A Dual Ideology
John R. Bunting has pointed out that most businessmen are victims of dual economic ideology. They are, according to bunting, happily inconsistent, arguing on the one hand for a pure form of free enterprise and decrying unrestrained competition on the other. To illustrate, he contrasts two speeches given before a convention of businessmen. In the first speech a businessman thoroughly denounced ‘price chiselers’ and accused them of ‘leading us back to cutthroat competition.’ ‘The only way to ensure profits. The speaker continued. Is to stick together. Keep prices high, and may be push them higher. Bunting, then a Federal Reserve officer, followed with a speech entitled ‘Free Markets and the Federal Reserve System. In his speech. Bunting explained... how the Federal Reserve. By its decision to stop pegging government bonds, had helped to start a trend back to free-market principles. Although the speeches contradicted each other, the audience made no distinction. They agreed with both speakers.
Businessmen do appear to have a schizophrenic philosophy toward the roles of business and government in the national economy. The reason businessmen seem to be inconsistent is that modern business philosophies are a blend of those portions of classical and modern economic models which best fit their needs. When a businessman says he believes in the free enterprise system and laissez faire. He does not mean that he accepts Adam Smith’s laissez faire and pure competition. He is talking about something else. How a businessman feels about a particular act of government depends on how it affects him. For example, in a major Eastern city many businessmen who believe in free enterprise opposed the efforts of a large store to sell nationally labeled whiskeys at a price belows that set by the state liquor control agency. Apparently their own financial interests and other values in the situation took precedence over the value of free competition.
A Dual Ideology
John R. Bunting has pointed out that most businessmen are victims of dual economic ideology. They are, according to bunting, happily inconsistent, arguing on the one hand for a pure form of free enterprise and decrying unrestrained competition on the other. To illustrate, he contrasts two speeches given before a convention of businessmen. In the first speech a businessman thoroughly denounced ‘price chiselers’ and accused them of ‘leading us back to cutthroat competition.’ ‘The only way to ensure profits. The speaker continued. Is to stick together. Keep prices high, and may be push them higher. Bunting, then a Federal Reserve officer, followed with a speech entitled ‘Free Markets and the Federal Reserve System. In his speech. Bunting explained... how the Federal Reserve. By its decision to stop pegging government bonds, had helped to start a trend back to free-market principles. Although the speeches contradicted each other, the audience made no distinction. They agreed with both speakers.
Businessmen do appear to have a schizophrenic philosophy toward the roles of business and government in the national economy. The reason businessmen seem to be inconsistent is that modern business philosophies are a blend of those portions of classical and modern economic models which best fit their needs. When a businessman says he believes in the free enterprise system and laissez faire. He does not mean that he accepts Adam Smith’s laissez faire and pure competition. He is talking about something else. How a businessman feels about a particular act of government depends on how it affects him. For example, in a major Eastern city many businessmen who believe in free enterprise opposed the efforts of a large store to sell nationally labeled whiskeys at a price belows that set by the state liquor control agency. Apparently their own financial interests and other values in the situation took precedence over the value of free competition.
Modern Concepts of Competition and Laissez Faire
While businessmen, over time, have professed a belief in perfect competition and laissez faire, they have recognized, to an increasing degree, that these economic models simply do not fit the realities of today’s economic system.
Businessmen today have modified these theories to fit their needs. For the modern businessman, pursuit of self-interest means securing and holding a competitive advantage. Laissez faie means to him minimum interference with his pursuit of self-interest and maximum support of his endeavours. The modern businessman often views the problem emotionally, so that when he advocates cuts in government spending, he often means in all areas or regions except his own. Or when he encourages free trade and cutting tariffs, he usually means in all areas except his own. For example, when a recent decision to close a number of military establishments in various parts of the country as announce, floods of letters poured into Washington from businessmen in the affected areas protesting the closing of their installation.
Businessmen today have modified these theories to fit their needs. For the modern businessmen, pursuit of self-interest means securing and holding a competitive advantage. Laissez faire means to him minimum interference with his pursuit of self-interest and maximum support of his endeavours. The modern businessman often views the problem emotionally, so that when he advocates cuts in government spending, he often means in all areas or regions except his own. Or when he encourages free trade and cutting tariffs, he usually means in all areas except his own. For example, when a recent decision to close a number of military poured into Washington from businessmen in the affected areas protesting the closing of their installation.
Business efforts of the type described are not necessarily wrong. On the contrary, they add strength and vitality to the economic system. What is important is that both business and government, as two major agents of society, agree upon what kind of system is best. Businessmen thinking, reflected in their speeches and actions, appears to affirm their belief in monopolistic competition and their rejection of a pure laissez faire philosophy. On the other hand, government’s actions often appear to emphasize a belief in a eakly modified form of pure competition. What is needed by each is an understanding of the other’s basic philosophy. Failure to understand and respect the other’s point of view will result in continued conflict.
The focus of this chapter is on the general roles of government and business in the American free enterprise system. More and more, business is becoming involved in what have traditionally been considered nonbusiness problems of society. In the following section we discuss the growing concern in the business community regarding the business image and the growing role of business in coping with social problems. Then we proceed to various relations between government and business. Finally we discuss the roles of business and businessmen in politics and the separate and joint responsibilities of each for a strong national economy.
Businessmen today have modified these theories to fit their needs. For the modern businessman, pursuit of self-interest means securing and holding a competitive advantage. Laissez faie means to him minimum interference with his pursuit of self-interest and maximum support of his endeavours. The modern businessman often views the problem emotionally, so that when he advocates cuts in government spending, he often means in all areas or regions except his own. Or when he encourages free trade and cutting tariffs, he usually means in all areas except his own. For example, when a recent decision to close a number of military establishments in various parts of the country as announce, floods of letters poured into Washington from businessmen in the affected areas protesting the closing of their installation.
Businessmen today have modified these theories to fit their needs. For the modern businessmen, pursuit of self-interest means securing and holding a competitive advantage. Laissez faire means to him minimum interference with his pursuit of self-interest and maximum support of his endeavours. The modern businessman often views the problem emotionally, so that when he advocates cuts in government spending, he often means in all areas or regions except his own. Or when he encourages free trade and cutting tariffs, he usually means in all areas except his own. For example, when a recent decision to close a number of military poured into Washington from businessmen in the affected areas protesting the closing of their installation.
Business efforts of the type described are not necessarily wrong. On the contrary, they add strength and vitality to the economic system. What is important is that both business and government, as two major agents of society, agree upon what kind of system is best. Businessmen thinking, reflected in their speeches and actions, appears to affirm their belief in monopolistic competition and their rejection of a pure laissez faire philosophy. On the other hand, government’s actions often appear to emphasize a belief in a eakly modified form of pure competition. What is needed by each is an understanding of the other’s basic philosophy. Failure to understand and respect the other’s point of view will result in continued conflict.
The focus of this chapter is on the general roles of government and business in the American free enterprise system. More and more, business is becoming involved in what have traditionally been considered nonbusiness problems of society. In the following section we discuss the growing concern in the business community regarding the business image and the growing role of business in coping with social problems. Then we proceed to various relations between government and business. Finally we discuss the roles of business and businessmen in politics and the separate and joint responsibilities of each for a strong national economy.
