I know, my friends, that you are concerned about corporate power. So am I. So are many of my free-market economist colleagues. We simply believe, and we think history is on our side, that the best check against corporate power is the competitve marketplace and the power of the consumer dollar (framed, of course, by legal prohibitions on force and fraud). Competition plays mean, nasty corporations off against each other in a contest to serve us. Yes, they still have power, but its negative effects are lessened. It is when corporations can use the state to rig the rules in their favor that the negative effects of their power become magnified, precisely because it has the force of the state behind it.This is what I would want communicated to those friends of mine who think of me as pro-business. I am most decidedly not pro-business. I am in favor of institutions that effectively channel the self-interest of our entire society into social good. My friends on the left believe the only effective institution for that is the government. While I believe that the government is an extremely ineffective institution for this.
Government producing social good assumes that each individual in government can wield the power of forced taxation without becoming corrupted by it. Instead I think free markets do a much better job of producing social good. Because at the core, we are free not to fund the producers in that market. That puts a constraint on free markets that doesn't exist with the government. Instead, if government spending isn't serving us and we try to withhold that funding, the government shows up at our door with a policeman (with a gun) to arrest us for tax evasion.
In an environment where one institution is forced to serve our needs, and the other can force us to serve its needs, which one do you think will allow self-interest to become destructive?
Update: Here's the important closing paragraph of the letter:
Those of us who support free markets are not your enemies right now. The real problem here is the marriage of corporate and state power. That is the corporatism we both oppose. I ask of you only that you consider whether such corporatism isn't the real cause of this mess and that therefore you reconsider whether free markets are the cause and whether increased regulation is the solution.