The importance of trade cannot be overstated in the world of business. Many businessmen understand the significance of free trade and the ability to buy and sell goods and services without hindrance. However, there seems to be a disconnect between the traditional role of businessmen as defenders of trade and the current state of affairs.
In economics, a businessman is typically defined as someone whose primary occupation involves making goods or services available to consumers or other businesses. This includes owners of business enterprises, corporate executives, and intermediaries like merchants or traders. Historically, merchants played a crucial role in the rise of the market economy, facilitating trade and contributing to the wealth and freedom of city-states and medieval cities.
Despite their historical role as proponents of trade and markets, many businessmen, particularly corporate executives, have been criticized for failing to defend these principles. Samuel Brittan, a renowned economist and columnist, noted that businessmen often defend questionable aspects of their activities while capitulating to collectivist opponents on essential issues. This lack of understanding and advocacy for free markets has led to a situation where businessmen are no longer seen as champions of economic freedom.
One possible explanation for this shift is the increasing complexity of the economy, making it more challenging for businessmen to navigate and understand. Additionally, public choice theory suggests that as the state grows in size and power, businessmen may engage in rent-seeking behavior to secure government contracts and subsidies. This dependence on the state for favors and privileges can erode their commitment to free market principles.
The prevalence of crony capitalism, where businessmen seek to curry favor with politicians and bureaucrats for personal gain, further undermines the integrity of free markets. While some argue that allowing businessmen to engage in bribery is preferable to stifling market demand, the costs of this corruption are significant. It creates a tax on the economy, distorts market incentives, and erodes the rule of law and ethical standards essential for a prosperous society.
In conclusion, the disconnect between businessmen and their historical role as defenders of trade and markets raises concerns about the integrity of the business community. To preserve the principles of free trade and economic freedom, businessmen must recommit themselves to advocating for a fair and transparent market system that benefits all stakeholders. Only by upholding these values can they truly fulfill their role as champions of trade and prosperity. As James Buchanan suggests in his article “Why I, Too, Am Not a Conservative,” the corruption of public morality can have a detrimental impact on private morality, ultimately weakening the social institutions that are essential for efficient cooperation. This degradation of public and private morality is exemplified by the behavior of certain automobile manufacturers who are seeking favor with politicians in order to avoid arbitrary tariffs on imports from Mexico and Canada.
In a recent article in the Wall Street Journal dated January 11, 2025, it is reported that Hyundai has embarked on an aggressive campaign to cultivate relationships with advisors to President Trump. The company is emphasizing its role as a job creator in the U.S. and a supporter of the American auto industry in an effort to sway decision-makers in their favor. Hyundai executives, including Muñoz and Vice Chair Jaehoon Chang, are even considering attending inauguration events and making significant donations in exchange for access to private dinners and receptions with the President and his cabinet picks.
This trend of businesses cozying up to politicians in order to secure favorable treatment is just one example of the perverse incentives that are created by this type of behavior. Instead of focusing on providing quality products and services to consumers, these companies are now more concerned with currying favor with those in power, even if it means compromising their integrity and values.
It is essential for society to recognize the dangers of allowing public and private morality to be eroded in this way. When businesses prioritize political connections over ethical business practices, it not only undermines the foundations of a free market economy but also erodes trust in our social institutions. In order to maintain a healthy and vibrant society, it is crucial that we uphold the principles of honesty, integrity, and ethical behavior in both the public and private spheres.
By being vigilant against the temptations of corruption and holding ourselves and our leaders to high moral standards, we can work towards building a society that is based on mutual respect, trust, and cooperation. Let us strive to resist the allure of power and privilege, and instead, focus on upholding the values that are essential for a flourishing and prosperous society.
