Oct. 28, 2008

Businesses don't always back free market

In the October 21 issue, Eli Thorkelson (“Admitting Influence Is the First Step”) had some interesting observations on the influence of contributions by business interests on the work of the University.

However, he is wrong when he states that business interests always support free market policies. As Friedman and other Chicago School economists, especially George Stigler, have demonstrated, many business interests often seek monopoly positions for themselves, which can only be obtained by capturing regulators in order to stifle competition.

In fact, this line of economic analysis goes back to Adam Smith. The free market principles of the Milton Friedman Institute can be a threat to many business interests.

A good tangible and current example has been the work of Carlos Slim and Telmex in capturing the regulator and stifling competition since privatization around 1990. Slim is no supporter of free market policies, at least not for his own business in Mexico and other Latin American countries.

In fact, it is the common citizen, with little property except his labor, who most benefits from free-market policies, and established business interests often oppose such policies.

Eduardo Vidal

A.B. ’78, J.D. ’81

Scarsdale, NY