The Harm Caused by Anti–Big Business Sentiment Is Significant

The public often views large corporations negatively. They are portrayed as greedy entities that take consumers’ money, and people sometimes call for regulations to weaken them. Are corporations really greedy? Or are human beings greedy? The answer is clear. Human beings possess primitive instincts such as greed and envy. Because such people make up corporations and live in a capitalist society, that greed is expressed through corporations, and at such times people say capitalism is the problem. But corporations are no more dishonest than government organizations or civic groups, nor is capitalism worse than socialism.

Politicians work hard to create regulations. But are such solutions really effective? Of course not. The reason is simple. Regulations only restrict the freedom to do business; they cannot restrain human greed. Then where does the power to discipline this come from? The key to a system that channels individuals’ passions into energy that benefits society lies in competition. Competition among firms exists for consumers and the public, and such competition should not be restricted. That competition is a process through which everyone moves toward a life in which all can win.

Corporations themselves are neither evil nor good. They are merely a means. Through the means of the corporation, people compete and create better outcomes. Those outcomes are more efficient and more just. That is why the term “system management” is vague. In any organization, it is not the system but people who manage. When a management method functions exceptionally well, people may call it system management, but that is only an ex post evaluation.

Reckless criticism is usually directed at large corporations that earn substantial profits. If the criticism were truly for the sake of companies, critics would offer advice to struggling firms. But they do not criticize unprofitable companies, because they have a hidden intention of exploiting anti-business sentiment to achieve their own political goals. They may also worry that if a company they criticize were to fail, they would be blamed. It is also difficult to propose solutions for firms that have lost competitiveness when one does not understand reality very well. From the critics’ point of view, targeting highly profitable firms is highly advantageous because they can gain a great deal without having to feel any responsibility.

Some may ask in return whether this means we should ignore problems in corporations even when they exist. Of course not. Because business activity is carried out by people, problems can arise. The point is that a greater problem is the formation of anti-business sentiment and the creation of anti-business institutions on that basis. The key is to refine institutions so that corporations produce good outcomes.

Resentment toward corporations is not a problem unique to Korea. Even in the United States, where business is thriving, there have been controversies over monopoly and oligopoly, and there are constant calls to force corporate breakups. In Korea, the phenomenon of institutionalizing hostility toward large corporations has already lasted for more than 30 years. The corporate economy has become the target of attacks institutionalized through political logic. Regulations on large corporations were incorporated into the Fair Trade Act, and countless other regulations followed. In a society overflowing with anti-business sentiment, businesses begin to leave. It is regrettable, but when capital not only turns its back on a society but actually exits it, that is a signal that the society’s future is growing bleak.

Creating and maintaining institutions that are favorable to business is not costless. Everyone benefits from them, but the zeal of those who want to protect them is weak. In the past, in a society that produced large corporations, the power of pro-business institutions was demonstrated remarkably, but hostile attitudes toward large corporations easily undermine the superiority of those institutions. If we are to increase the vitality of our society, now is the time to strive to create business-friendly institutions.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: 대기업에 대한 반감이 부르는 폐해는 크다

Author: Sung-no Choi

Date: 2021-12-01

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=24364