Freedom, Society, and State - Ludwig von Mises Institute

u n b a I a needin f a v0 r 0 f a ( we a I thy) min 0 r i t Y.n And, he
add s, pro b ab I y "a b 0 u t 90. per c e ot 0 f the peopIe cannot
get i n tot he pres sur e s ystem. " ( 57 ) This me an s t hat in ­
sofar as the government responds to the demands of int
ere s t g r 0 ups, and thosedema nds are mo reor I e s s r estricted
to a wealthy minority, government policies
will reflect the interests of this minority. Politicians,
wr i tes Al fred Cuzan, "have no incentive to redis
t ribute inc 0 mea n d we a I th from t t"h e rich t to' the
poor • 1 A po lit i cia n g a ins no t hi ng t ax i ng we 11 - or ganized,
well-informed, high-income groups and spending
the money among a larger number of unorganized lowincome
people who might not even realize the benefits
of the action. On the contrary, the organized, highinc
0 meg r 0 ups w i I lop p 0 s e him wh i lethe uno r gani zed
p 0 0 r w i I I don 0 t h i n g • " " Pol i tica I profit i s rna de, "
Cuzan continues, "by taxing the uninformed and the
unorganized and spending on the informed and organized."
The former tend to be poor; the latter the
ric h • C u zan t· e r ms t his the "i ron I a w 0 f po1 i t i ca I
redistribution."(58) .
Far from representing the interests of the public
at large, as claimed by the pluralists, the interest
group system is, in fact., almost ideally suited to the
interests of a wealthy elite. Thus, neither political
par tie s nor i n t eres t gr 0 ups preve n t the emerge nee 0 f a
r u lingel i t e • Nor, i t wo uIdse em, dothey preve n t t hat
elite from using its position to benefit itself.
From the foregoing one would expect that government
would make class lines more rather than less
fluid. A full scale test of this hypothesis would take
us too far afield. But a cursory review of the data
does lend support for it.
The standard interpretation of the Progressive
Period of the late 19th and early 20th centuries holds
that many businesses had achieved monopolistic positions
which they were using to gouge the public. Responding
to pUblic pressure government intervened to
subject business to regulatory control. Recent historical
and economic scholarship has largely discredited
this view by showing that the business elite actually
favored government regulation. Why? Far from tending
toward monopolism markets in practically every area
were becoming increasingly competitive. To cite a single
example, in 1894, A.T.&T. was the only company in
its field. By 1907 A.T.&T. found itself in competition
with over 22,000 companies. Similar, if less dramatic
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