Charles Koch: Cronyism Distorts Economy, Undermines Small Business Potential

We’ve got a couple of issues with Mr. Koch, but he’s really excellent on many things. Of course former Senator Reid tried to smear the Kochs in recent years for political reasons. Reid was/is a first tier political crony capitalist. So this makes sense.

(From Real Clear Politics)

AW: And one thing I’d like you to just talk about is your opinion of how are we doing as a world, as a market? Do you think we have a free market right now?

CGK: No.

AW: How don’t we have a free market?

CGK: Because it’s full of cronyism. You look at all the rules and the protectionism—that are destroying opportunity for the disadvantaged. That are leading to this two-tiered society. For some of us, make a lot of money, and others can’t get started. Through regulations like occupational licensure, somebody starting with nothing, that create these huge barriers for them to get started. And then this distorts the whole economy. It distorts price signals—prices and profit and loss—people think of those, “OK, those are incentives,” but their main function—the least equal is their knowledge mechanism. That is, in a properly functioning economy, prices and profit and loss signal to the entrepreneur what will people value and what are the best uses of resources to satisfy those values? And when that gets distorted, then it undermines productivity, undermines a company’s ability to create value for others, to help improve people’s lives.

Click here for the article.