Regulatory Capture in Industrial Age and Information Age Business

Posted: April 22, 2011 in Songs of Space and Nuclear War
Tags: , , ,

Legislation by regulation and crony capitalism are big problems.  They affect economic and personal freedoms, as well as national-level competitiveness. 

So with that throw-down as prolog, consider the following.

The National Labor Relations Board is trying to make Boeing keep an airplane manufacturing line open in Washington State.  Boeing wants to move the capability to South Carolina.

As the New York Times puts it

It is highly unusual for the federal government to seek to reverse a corporate decision as important as the location of plant.

The Washington facility is unionized and the South Carolina facility is nonunion.  Is this evidence of regulatory capture of the government by the union? 

…a Boeing executive said, “The overriding factor was not the business climate. And it was not the wages we’re paying today. It was that we cannot afford to have a work stoppage, you know, every three years.”

Of course Boeing has their own army of lobbyists, lawyers, and former government officials, but that was apparently not enough to hold back this bureaucratic advance.

Meanwhile, Facebook has learned the lesson, having hired government-connected heads away from Google, those with stints with the Council on Foreign Relations (ok, they’re “just” a think tank), the Treasury Department’s former chief of staff/member of the President’s Council for Jobs and Competitiveness, former White House economic advisor, and perhaps the former White House press secretary. 

Thing is, when it comes to dealing with the government, Facebook needs to get as cozy as it can. This company is gathering more personal information about more people than any other company ever, even more than Google. Suddenly it is dawning on everyone, including members of Congress, just how much power Facebook is amassing.

Of course, SpaceX recently increased its own National Capital Region presence as well.

I’m sure this is all some sort of weird coincidence, like tossing heads 37 times in a row.

It’s more than a bit suggestive of the bribery in Russia, one of the major costs of doing business.  How much of a major cost?  If the current HP case it true, over 20 percent.

At the end of the day, someone must pay that 20 percent, and while business may front the money, it’s the consumers/taxpayers who ultimately pay.

  1. […] Regulatory Capture in Industrial Age and Information Age Business ( […]

  2. […] my friends, is another example of regulatory capture in its full gory […]

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