The Freeman 1972 - The Ludwig von Mises Institute

216 THE FREEMAN Aprillitical power rests in the purelyconsensual .character of economicpower as contrasted to the onlypartly consensual character of politicalpower. For no businessman,qua businessman, can ever compela nonconsenting minority to dealwith him. It is the very essence ofgovernment, however, to imposethe will of the majority upon thenonconsenting minority. The difference,then, lies not in the foundationsof economic power and politicalpower but in their respectiveeffects and modes of operation.The productive power of anybusiness has its beginning in theman or men who found it and whoare able to convince others to investtheir capital and their talentsin it. However, the business succeedsonly if the consumers approveits production. In a marketeconomy there is no way for afirm to compel anyone to deal withit or to purchase its goods andservices. As Ludwig von Mises hassaid so often, the consumers dailyvote for and against the productsof American business. Those firmswhich gain the patronage of theconsumers prosper; those whichdo not, lose ground. In rewardingthose who best serve the consumers,the profit system constantlyinsures that current allocation ofresources which best suits the currentwishes of the community. Itexpands the assets of those firmsendorsed by public opinion; it enhancestheir capacity to bid in themarket for other factors of productionand thus to increase theireconomic power - by which I meantheir power to produce.The secret of the so-called ambivalenceof American public policytoward big business resides inthe phenomena just described. Onthe one side, mainly from "intellectuals,"we hear much about theabuses, the evils, the dark powersof big business to destroy smallbusiness, to exploit workers, .andto impose its will upon consumers.But these charges, however oftenmade, and however well publicized,have only a limited effect, frequentlyno more than the cracklingof thorns under a. pot. They resoundhollowly against the prodigiousfact that business growsbig only because and to the extentthat public opinion favors it withits voluntary purchases. More thanthat, if the polls are correct, Americansfavor and admire big businessin "greater numbers than theydo any other institution, includingthe government. However, sincethe anti-business opinion has aneffect also, we emerge with fra.gmentary,inconsistent, and am15ivalentpolicies.It is impossible to understandproperly either the meaning ofeconomic power or the real stand':'ing of business in the community