Some free enterprisers who insist on no subsidies

Richard W. Wilcke is an economic purist. President of a new association of corporations and executives called the Council for a Competitive Economy, he believes strongly in the "free" aspect of free enterprise.

In other words, he is an advocate of what economists call "laissez faire" capitalism -- the type of economy urged in the 18th century by Scottish economist Adam Smith or in this century by economists of the Austrian school (Friedrich von Hayek and Ludwig von Mises) or the Chicago school (Milton Friedman).

Indeed, Mr. Wilcke saves his most scathing remarks for those businessmen who "on Monday bemoan government regulation and on Tuesday go to Washington to ask for government help." With some of the same fervor as a country preacher, Mr. Wilcke is "agin sin" -- that is, against having business get such government favors as subsidies, bailouts, protective tariffs, restrictive regulations, special tax breaks, and so on.

He is forgiving. He does not expect corporate members of the organization to be without such "economic sins." But they are expected to be desirous of reform, of wanting to see a less-regulated, freer business environment, with a shrunken role for the government.

Founded by some 50 businessmen in May 1979, the council has proved philosophically attractive enough to see its membership grow to 1,200.

The original members found that their own trade or business organizations were always trying to get it both ways -- seeking government restraint on a free market when it was to their advantage or decrying government interference in the market when that was beneficial to their industry or companies. These trade groups were willing to make the compromises necessary to get favorable legislation or regulation.

The Council for a Competitive Economy, however, takes a purist stand. "We are in a position to make arguments which are ideal rather than falling in the range of political feasibility," Mr. Wilcke said in an interview here. "We want to stand up for what is right without regard to its political reasonableness."

Mr. Wilcke hopes that through its lobbying efforts in Congress, such as testifying at congressional hearings, it will broaden the spectrum or what is actually politically possible.

The council's freedom-for-free-enterprise stand shows up in its positions. It opposed federal loan guarantees for Chrysler Corporation, for instance. Mr. Wilcke reckons that if Chrysler had gone bankrupt, it would merely have shrunk in size. It would have had to choose whether to become a small-car manufacturer , a maker of luxury cars, or whatever.

The group testified in favor of the deregulation of trucking. It opposed special protective measures for the auto or steel industries. If other nations want to dump goods in the United States at bargain prices, let them, the council argued. Its director of energy policy, Joe Cobb, has written a paper attacking gasoline rationing.

In testimony to the House Ways and Means Committee, Mr. Wilcke called for drastic tax cuts -- not to stimulate the economy but to let taxpayers keep their money to spend, save, or invest as they please.

He maintains that in fact a freer capitalism would help consumers. Using the rationale of Adam Smith, he said that entrepreneurs aim for profits by serving the consumer. "Anything which interferes with this process is a cost to consumers. Laissez faire capitalism ought to be more popular with consumers."

Of course, the modern "mixed economy" with its regulations regarding safety, the environment, consumer protection, and so on arose from what the politicians and the public considered abuses by business. Mr. Wilcke is convinced that many such abuses could be eliminated by means other than market restrictions. For instance, licensing systems that limit entry into such professions as medicine, law, teaching, or even (in California) dog training could be replaced by a system of merely certifying qualifications. An individual could practice law without a degree, for example, if he could find enough clients. he maintains that much licensing is designed not to maintain standards but to boost incomes by limiting the competition in a profession or trade.

Nonetheless, he does admit the need for some regulation.

The biggest advantage for genuine free enterprise, he says, is not its efficiency and productivity, characteristics increasingly recognized even in communist countries. It is that it is "the most just system," he says. Under genuine capitalism, consumers and businessmen are free to make purchases or investments freely, without coercion. The rewards go to those who do so wisely and who work hard or intelligently.

Here again some of today's restraints on capitalism were designed to limit the excess economic power won by some people under old-fashioned free enterprise.

Whatever, the Council for a Competitive Economy is undoubtedly performing a useful role by pointing to the economic hypocrisy of many business groups and executives.Pragmatism may rule out some of the capitalistic absolutes suggested by the council. In any case, the pendulum already appears to be swinging back toward a somewhat freer free enterprise system.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.