Home Politics So How Do We Stop Big Business Lobbying Government?

So How Do We Stop Big Business Lobbying Government?

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Let’s assume that we actually want to stop business – big business if you prefer – from lobbying government. We do have to assume that because there is that argument that perhaps government should be, occasionally, informed by people who know what in buggery they’re doing. So, put that aside.

To work out how to stop the lobbying we do, clearly, have to work out why the lobbying:

In 2021, the US economy has now returned to a situation when lobbyists are influencing legislation to a degree that seriously impedes the health and vitality of society. This was brilliantly first described by Luigi Zingales in his book A Capitalism for the People: Recapturing the Lost Genius of American Prosperity. Again the proximity between society’s legislators and many of the labour market heavyweights is far too intimate, as demonstrated by the lobbyist circus in Washington. The fact that the labour market giants are every year dedicating millions to lobbying illustrates that buying influence remains entirely possible – otherwise, that kind of money would be directed elsewhere.

The proximity problem is even worse in Brussels where recordings of lobbyist dealings is often voluntary rather than mandatory. How could any EU voter keep up when a German energy or car company, an Italian bank or a French pharmaceuticals company lobbies a perhaps Romanian EU Commission desk officer answerable to a non-elected Spanish EU Commissioner? Who, in both Brussels and Washington, can tell what think tanks have been funded by lobbyists in exchange for supportive “independent” reports?

One explanation for the why is that as government becomes ever more intrusive into the detailed microeconomics of the markets then it’s necessary to lobby to make sure they don’t do something damn stupid. Which, given what the politicians do come up with means we must be missing some real stinkers.

Another, and one that I rather cleave to, explanation is that lobbying is the protection money that the political class demands from business. Got a nice business here, want to donate to the election funds? Or even, my nephew would like to write a report about how your business should be regulated. £100,000 sound like a fair fee for his report?

Perhaps not quite so nakedly Mafiosi. But there’s very definitely a current in politics which says “This is a big part of the economy, we must regulate it”. Which is why companies, when small and growing, don’t lobby. When they’re large they must in order to fend off the politicians’ grubby mitts.

It’s also possible to hold the traditional view. By influencing regulation and legislation people can make money. So, people lobby in order to make money.

The joy of all of these different explanations for why lobbying happens is that the solution to them – whichever one you think prevails and I assume that there’s a least a bit of each of them – is the same.

Reduce the amount of micromanagement of the economy by politics and you’ll reduce the amount of lobbying as to what the regulations should be. If people can’t make money out of twisting the regs then they won’t try. If they don;t need to protect themselves from shakedowns then they won’t.

The answer to lobbying is as with the answer to so many things – minarchy. Or, as every sensible person knows, don’t let the politicians actually do anything.

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1 COMMENT

  1. One notices an entertaining point in this article – it only seems to refer to business lobbying. In actual fact, of course, everyone lobbies governments.

    My pet peeve, since I find foreign affairs amusing, is the foreigners lobbying the government. And of course the NGO’s. Hard to say which is worse. The NGO’s push the most absurd policies, so they can take their customary 50% of the loot. The foreigners try to drag you into supporting utterly stupid policies that get you involved in an expensive war about something about which you care far less than nothing.

    I suppose, really, that the NGO’s are worse. They are always pushing you into supporting both (or perhaps all) sides in a war so the damn thing goes on forever. And thus so does the damn ‘crisis’ to justify their meddling.

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