Competition vs. Regulation

Regulation needed for competitive markets

Regarding the Oct. 6 op-ed "Your Turn" ["Man's right to enjoy the fruits of his labor"], the entire piece is a straw man polemic, filled with misrepresentations, false alternatives and sheer rhetorical fabrications.

First, no significant fraction of the American left believes that government should "guarantee happiness" or seek equality of outcome. I'm quite left of center and the author certainly doesn't speak for me or any Democrats I know. I want real equality of opportunity, and a humane safety net for the "losers" the editorial mentions.

Second, U.S. high earners and large businesses are paying historically low tax rates — both marginal and overall — while total tax revenue as a percentage of GDP has remained stable for 50 years (at about 25 percent). This is lower than dozens of other countries, many with healthy economies and excellent quality of life (higher per capita GDPs than the US). That these checkable facts are likely to surprise people is itself evidence of how much ideological fantasy has replaced fact in political debate.

Third, the editorial confuses free markets with competitive markets. Markets free of legal constraints allow unlimited anti-competitive and anti-social behavior by companies, leading to monopolies, cartels and myriad schemes to remove competitors, boost prices, capture labor, or deceive and restrict buyers. We had such markets in the 19th century, and they included company towns, deadly workplaces, child labor, wage slavery, rampant pollution and violent suppression of unions.

Do these observations make me an anti-capitalist? Or anti-competition? Hardly. I believe a vibrant private sector is vital to a country's economic health. But only laws and regulation create the level playing field required for competitive markets. "Market fundamentalists" always seem to forget that government creates the framework for productive, competitive markets (via currency, contracts and courts, business and banking regulation, police, transportation infrastructure, public education, etc.). Otherwise we should seek to emulate Somalia, a veritable free-market paradise with as minimal a government as could be imagined. Competitive markets efficiently produce goods and services from which we can all benefit. That result is the moral justification of private enterprise, not any innate right of owners to enrich themselves regardless of who they hurt.

There are certainly valid, valuable debates about trade-offs between tax rates, tax progressivity, economic growth, quality of life and individual liberty (for owners/stockholders, executives and workers). But the editorial falls far short of an honest discussion of anything.

John Hover
East Setauket
October 13, 2011