Free Market vs. Pro Business

The terms “free market” and “pro business” tend to get jumbled together as if they are one and the same. 2012, a presidential election year pitting a titan of business against a career politician/academic, is no different. Democratically-aligned campaign staffers and left leaning columnists conflate the two terms with shocking regularity. Republicans, meanwhile, have done themselves no favors by too often falling into the same trap when crafting policy; they assume that pro business policies can all be justified as free market.

The problem, of course, is that, while not technically mutually exclusive, the terms are in practice often opposed. Consider, for example, a recent article in Tech Crunch about Google’s growth in lobbying spend. As the article notes, Google’s Q1 2012 lobbying spend was three times higher than it was in Q1 2011. The piece listed many of the areas in which Google lobbied:

“…Google’s lobbying strategy focused on SOPA, patent reform, data privacy and accountability, online advertising regulation, intellectual property and trademark issues, cyber security and online privacy, renewable energy, freedom of expression and censorship, immigration reform and the Startup Visa Act, science, technology and math education, free trade, broadband access, freedom of expression and intellectual property in international trade agreements, “openness and competition in the online services market,” cloud computing, tax reform, internet standards of service and more “

Two things struck me about this passage. First: Google probably pays more attention to public policy than congress. Secondly: for all the talk of “Silicon Valley libertarians”, Google is unabashedly looking out for its own interests with little concern for free-market purity.

As a brief intellectual exercise, I listed out the policy areas mentioned in the article, the likely goals of Google in those areas, and then whether those goals were free market or pro state (i.e. would lead to bigger government). This is by no means an exact science; I have no inside knowledge of, nor do I speak for, Google…the policy goals were determined from my understanding of digital marketing and politics. Finally, each policy area has more goals than I was able to list.

Rather than achieving methodological perfection, however, my objective was to examine the diversity of “pro business” lobbying activities even within one (albeit giant) firm. Here’s the result (click to enlarge):

As you can see, some of what Google is lobbying for is free market: lower taxes, self-regulation, etc. But as a technology firm, Google also pushes for many policies that are decidedly pro state and anti free-market: increased federal funding for education (in subject areas where Google needs more educated employees), renewable energy initiatives that would ultimately lower their server maintenance costs, etc.

Google is acting as a self-interested person would, pushing for its specific needs rather than voting on principle. This makes Google the rule rather than the exception, and it’s hardly surprising. The federal government has made it abundantly clear that to succeed, you have to play ball, both to avoid potential antitrust prosecution and to receive taxpayer money. Thus, the most innovative firm in the world spends an annualized $20.1 million on costs that are tangentially-if at all-related to actually improving their products and services.

Liberals may want to pause before lambasting big business, as they increasingly seem to support the growth of government. Conservatives should make a sharp distinction between pro business and free market policies if they are to ever be taken seriously as the party of limited government. All of us, meanwhile, should recognize the very real difference between the two descriptors.

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