Thursday, April 26, 2012

Pro-Market ≠ Pro-Business

Veronique de Rugy offers a reminder to those who often confuse being pro-market with being pro-business.  Being pro-market means wanting markets to allocate resources.  Often, being pro-business means handing out corporate welfare to favored industries, or carving out tax advantages that favor some activities over others.  But she takes it a step too far when she says that:
The real way to be pro-business and pro-market at the same time is to provide a low tax rate environment for every company, not just a few, a stable and light regulatory regime and put an end to the many subsidies flowing every year to many American companies at the expenses of their competitors and taxpayers.
Being truly pro-market means that you cannot be pro-business because being pro-business means that you favor business over some other concern, such as consumers or workers. The key component of being pro-market is that you are neutral towards all market participants.  As such, being pro-market implies nothing about the level of taxes or the heaviness of regulation.