James Pethokoukis, writing for Reuters, makes an important distinction in an article entitled, “Obama Should Be Pro-Market, Not Pro-Business.” He writes:

…while a pro-business agenda may intersect at points with a pro-market one, they are not the same thing. Pro-market public policies make markets function fairer and more efficiently for everyone. They encourage competition and “creative destruction” and entrepreneurial capitalism. Pro-business policies often shift taxpayer money and other government goodies to favored companies, raise barriers to entry and otherwise defend the status quo.

For instance, the Chamber wants the government to cut spending by reforming the social insurance system. That sounds good – but how about also reducing the $90 billion a year in subsidies and tax breaks that the Cato Institute reckons businesses get every year? The oil and gas industries alone benefit to the tune of $4 billion annually. It would be better to eliminate such distorting political blessings and then lower the corporate tax rate for everyone.

It’s clear the 11,000 registered lobbyists working in Washington aren’t all there to foster competition and boost market forces. Their job is to gain an edge for specific corporate paymasters. During the healthcare reform debate, for instance, Wal-Mart actually lobbied for employers to be forced to provide employees with insurance coverage. The company knew it could more easily afford it than many smaller retailers.

Or take financial reform. While big banks may complain about the tidal wave of new regulation, they also know they got off easy in some respects. They weren’t broken up, nor were size limits put in place. In fact, the biggest banks have gotten bigger since the financial crisis and have every incentive to keep doing so since the bigger they are, the more likely Uncle Sam will see them as too big to fail. And what sort of climate change policy has Big Business pushed? Cap-and-trade whose size and complexity make it the perfect target for lobbying and rent seeking.

This is particularly important since frequently conservatives/free marketers are accused of supporting big business. But really what we are talking about is free markets, not the fate of any particular business.

When I’m a guest on Thom Hartmann’s radio program, almost inevitably we end up talking about the merits (or lack thereof) of Wal-Mart. Thom see Wal-Mart as the destroyer of mom-and-pop local stores and everything that was good about America. I defend Wal-Mart’s right to exist, highlight how many Americans benefit from the lower prices and diversity of goods that Wal-Mart offers, in addition to the thousands and thousands of jobs it creates.

But we aren’t really debating about Wal-Mart–we are debating the merits of the free market system that allows stores and businesses to compete with each other. 

Unfortunately, too often the free market system gets corrupted, and businesses end up not  competing on a level playing field.  Businesses-particularly big ones-end up using government to their advantage. I often wondered why deregulation wasn’t a bigger priority for corporate America until I realized that big companies don’t mind big regulations. Sure, it raises their costs, but it also creates barriers to entry which reduce competition by keeping smaller players out.  This is a big problem, and anyone who believes in the free market needs to call out big business when they trying to collude with big government.